EU Says Oneworld Alliance May Be Illegal

BRUSSELS (TheStreet) -- The European Commission sent a letter last month to British Airways(BAY Quote), AMR's(AMR Quote) American Airlines and Iberia, saying the airlines' oneworld alliance may be in breach of European antitrust rules.

"The Commission's Statement of Objections concerns agreements concluded between British Airways, American Airlines and Iberia, regarding the coordination of the parties' commercial, operational and marketing activities in relation to passenger traffic on transatlantic routes (principally routes between the EU and North America)," the commission said in a statement.

A spokesman for Spain's Iberia told Reuters the airline is ready to explain to the EU its agreement to cooperate on schedules and prices with the other two airlines.

British Airways said the charges weren't a surprise and it looked forward to defending "the substantial benefits for consumers that would result from our trans-Atlantic joint business."

American Airlines said it also had received the "routine" charges, without providing further comment.

Regulators said they also were investigating plans to expand the alliance to jointly manage schedules, capacity and pricing on flights from the Canada, Mexico, Puerto Rico, Norway and Switzerland as well as the U.S. and EU.

The commission said its parallel investigations are still ongoing into the proposed cooperation of the Star Alliance of Lufthansa, Continental(CAL Quote), UAL's(UAUA Quote) United and Air Canada, and the Skyteam alliance of Air France/KLM and Delta(DAL Quote).

-- Reported by Joseph Woelfel in New York .

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