Slots at London’s Heathrow and Gatwick airport are widely sought over by airlines around the world. With American Airlines and British Airways expanding their partnership, it created an issue. An unfair advantage. The 2 airlines being partners meant that they would be unfairly competing with other airlines. Specifically, the Competition and Markets Authority (CMA) was concerned about the US to UK sector. So what needed to be done? Give slots up.
Many airlines fly across the Atlantic Ocean. In fact, London to New York is one of the world’s busiest routes. American Airlines, United Airlines, Delta Airlines, British Airways and Virgin Atlantic were the original 5. Then came the low cost airlines. Those such as Norwegian and Wow Air through Iceland began to compete. Soon to come? JetBlue. Fact is, the market is large. And, it is competitive. However, American Airlines and British Airways have entered into a large partnership which gives them an unfair advantage at airports in London.
The CMA decided that enough was enough. They identified problem routes. Specifically, those between London and Boston, Chicago, Dallas, Miami, and Philadelphia had competition concerns. Now, the 2 airlines have agreed to give up slots. This includes slots at both Gatwick and at Heathrow. This is big because all these airports are big hubs, and specifically, American Airlines stronghold. With the exception of Chicago, American is the largest legacy airline at all these airports.
The problem wasn’t with just London itself. A joint venture between American, British Airways, Iberia, Finnair, and AerLingus created an obvious stronghold. Together as a a group, this is a very dominant share of the market. It makes sense why the CMA decided to do something. On top of giving up the slots, the CMA has ruled that courses of actions need to be taken to allow for competition.
Of course, this is a very interesting ruling as it comes in the middle of the pandemic. There are significantly less people flying transatlantic. However, the investigation by the CMA began prior to the pandemic itself. It is also understandable.
While some may ask why a monopoly is not allowed on this sector, just think about the price surge. Imagine American Airlines and British Airways creating a stronghold. Together, they could lower ticket prices so that no one could compete. Then, they could take all the transatlantic slots and dominate. We as travelers would have little alternatives. Luckily, this would likely every happen. However, it is understandable why the CMA decided to investigate. This is to ultimately not only benefit other airlines but passengers as well. Competition allows ticket prices to remain lower and more attractive than competition.
Pretty much every major American city now has service to London either through Gatwick or Heathrow Airport. Mid-sized cities such as Austin, TX and Charleston, SC are also beginning to see transatlantic flights on British Airways. This is all thanks to the new 787 Dreamliners. Now, with the CMA ruling, travelers and other airlines can feel more assured. This comes at a time when some airlines are hanging with one foot over the cliff. Virgin Atlantic is ringing the alarm bells. Every other airlines is bracing for a large loss for years to come. But, with the CMA ruling, travelers can rest easy. When the time comes, ticket prices will remain competitive. We will still have our choice of airlines to fly. And the debate about who has the best transatlantic service will continue to rage on.