BA/IB Approved

Yesterday’s news but still great:
***From Airwise***
British Airways and Spanish airline Iberia have won a six-year approval for an alliance across the European Union, the European Commission announced on Wednesday.

BA and Iberia asked the Commission in mid-2002 for antitrust exemption so they could share profits, agree on prices, combine sales forces and ground staff and coordinate connecting flights, all on a route-by-route basis.

“The Commission initially had concerns that the alliance would reduce consumer choice and increase prices on a number of routes where the two partners have a strong position,” regulators at the EU’s executive said in a statement.

But the Commission granted the standard six-year exemption after British Airways and Iberia agreed to open up competition on routes between London and Madrid, Bilbao, Seville and Valencia.

Competition on air routes is limited by the number of “slot pairs”, which grant airlines the right to take off and land at pairs of airports at certain times.

British Airways and Iberia would give up slots to allow competitors to run up to four extra services a day to Madrid, and one extra service from London to each of the other Spanish cities, the Commission said.

An Iberia spokesman said the airline welcomed the deal. “It’s good news for both companies and will expand our route network and increase profits,” he said.

British Airways Chief Executive Rod Eddington said: “This is a sensible step forward in our efforts to progress consolidation in Europe. It will also bring significant cost savings which will be passed on to customers in lower fares.”

The two airlines would be giving up slots at London Gatwick, the British capital’s second-largest airport, British Airways added.

Spanair, the Spanish airline owned by Scandinavia’s SAS, said it would request some of the take-off and landing slots at London and Madrid airports that Iberia and BA are set to relinquish as part of the deal.

“We are going to ask for slots at (London) and Madrid,” Spanair Chairman Gonzalo Pascual told a news conference.

Commission approval applies to Europe but the airlines need permission from other authorities to complete their proposal worldwide.

The deal falls short of a merger in that there is no exchange of shares, although BA already owns nine percent of Iberia.

“Cross shareholdings are not necessary. We are happy with the situation as is it,” an Iberia spokesman said recently.

Iberia and BA, both members of the oneworld alliance, have done limited code-sharing since 1999.
******
I like how close British Airways and Iberia are getting, I see them as very good partners for each other. The slots at Gatwick don’t seem to much to give up, Spanair don’t currently operate scheduled into LGW do they?