The UK Competition and Markets Authority (CMA) announced that it had launched an investigation into the transatlantic joint venture between British Airways (BA, London Heathrow), Iberia (IB, Madrid Barajas), American Airlines (AA, Dallas/Fort Worth), and Finnair (AY, Helsinki Vantaa).

The competition watchdog said that it had opened the probe on October 11, 2018, and expected to conclude it in March 2019. The investigation is conducted under the British Competition Act from 1998, as well as Article 101 of the Treaty on the Functioning of the European Union (TFEU) which regulates competition, joint ventures, and other forms of cooperation between companies that could adversely affect customers.

In particular, the investigation concerns restrictions imposed on the airlines participating in the joint venture, which are due to expire in 2020.

Upon the formation of the joint venture in 2010, the European Commission accepted commitments from the airlines in relation to six routes, namely from London to each of Dallas/Fort Worth, Boston, Miami Int'l, Chicago O'Hare, and New York, as well as from Madrid Barajas to Miami. The airlines committed to making slots for these routes at either London Heathrow or London Gatwick available to competitors. The commitment is binding for 10 years.

"On expiry of the parties’ commitments, due in 2020, the European Commission may re-assess the agreement, but there is no requirement for it to do so. As five of the six routes subject to commitments are from the UK, and to prepare for the time when the European Commission may no longer have responsibility for competition in the UK, the CMA has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments," the Authority said.

At this point, there is no indication that the JV in any way infringes competition law.

IAG International Airlines Group, the owner of British Airways and Iberia, issued a brief statement in which it said it would respond to CMA's review. The other two carriers involved in the JV did not yet comment on the review.