NYTimes.com Article: EU Commission Can Review Airline Alliances

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EU Commission Can Review Airline Alliances

February 26, 2004
 By THE ASSOCIATED PRESS





Filed at 12:59 p.m. ET

BRUSSELS, Belgium (AP) -- European Union governments
authorized the group's antitrust regulator to review
alliances between European and non-European airlines that
stop short of full mergers.

The new rules take effect May 1 and close a gap in the
authority of the EU executive Commission. The Commission
previously had authority to scrutinize airline mergers
regardless of the carriers' country of origin, but could
review airline alliances only if they involve solely
European airlines.

The regulations, approved Thursday by the 15 EU
governments, also grant the Commission enforcement powers
to preserve competition when reviewing the looser
cooperation agreements.

Unlike its U.S. counterpart, the Commission currently can
only make recommendations to national governments in such
cases rather than issue a binding ruling.

``This is good for the airlines concerned as there will be
a clear and coherent regulatory framework,'' said EU
Competition Commissioner Mario Monti.

The Commission is scrutinizing the Sky Team alliance which
comprises Aeromexico, Air France, Alitalia SpA, CSA Czech
Airlines, Delta Air Lines Inc. and Korean Air Lines Co.

The Commission has been analyzing the alliance's potential
competitive impact since its inception in July 2000.

In recent months the case has taken on a new dimension
after Air France Group merged with KLM Royal Dutch
Airlines. KLM is also allied with Northwest Airlines Corp.
and has a codesharing agreement with Continental Airlines.

http://www.nytimes.com/aponline/business/AP-EU-Air-Alliances.html?ex=1078826781&ei=1&en=f58cc2c4f9625b7f


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