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UK antitrust body reviews IAG units' route deal with American Airlines, Finnair

The U.K. Competition and Markets Authority launched a competition investigation into a transatlantic tie-up between American Airlines Group Inc.'s American Airlines Inc., Iberia Líneas Aéreas de España SA, British Airways PLC and Finnair Oyj.

The Atlantic Joint Business Agreement, which was first entered into in 2008, formed a revenue-sharing joint venture covering all passenger routes between Europe and North America, allowing the parties involved to cooperate in terms of pricing, capacity and scheduling on the transatlantic routes.

The European Commission had launched a competition probe into the agreement, and in 2010 approved commitments from the airlines to address potential competition concerns relating to six routes, five of which involve London. The commission may reassess the commitments when they expire in 2020 but is not required to do so, the CMA said.

"As five of the six routes subject to commitments are from the U.K., and to prepare for the time when the European Commission may no longer have responsibility for competition in the U.K., the CMA has decided to review afresh the competitive impact of the agreement in anticipation of the expiry of the commitments," the CMA said, noting that the case is at an early stage and no assumption should be made that the agreement infringes competition law.

International Consolidated Airlines Group SA, which owns Iberia and British Airways, said it will respond to the review.