by Sally Peters December 23rd, 2009
Apparently the United States Department of Justice has come out and talked about their view on the British Airways and American Airways tie-up. The department went on to say that the proposed tie-up would result in competitive harm and lead to transatlantic fares rising by as much as 15 percent.
The Department of Justice recommended major concessions in return for granting the British Airways and American Airways antitrust immunity. This recommendation was given to the Department of Transportation, which will make the final decision on whether the deal can go through or not.
The Department of Justice went through and highlighted services between London and New York, Boston and Chicago as being the ones that are most likely to suffer a hike in fares. They went on to propose that the two airlines surrender slots at busy airports in these cities. This included Heathrow and JFK.
However, British Airways was very quick to brush off the report and say that the issues raised by the Department of Justice were very similar to those it filed for the United Airlines and Continental tie-up for the Star alliance. This is something that the Department of Transpiration ignored. He said that the Department of Transportation was very likely going to just reject the report from the Department of Justice.
Both airlines are denying that the deal would lead to a rise in fares. Of course, the airlines did point out that it did not matter what the Department of Justice thinks. In the end, it only matters what the Department of Transpiration says. Some critics were even so bold to say that the Department of Justice should keep their nose out of the Department of Transportation’s business, and let them do their job.