U.K. to investigate BA/Iberia/American/Finnair joint venture

The U.K. competition authority is investigating the airlines on six key routes. They claim that this is part of a routine investigation that will examine possible anti-competitive practices. There is no indication that any breach of the law has occurred.

The joint venture between the two IAG owned airlines, Finnair and American has been controversial, as all of these agreements should be.

While it makes it easy for some passengers to work out a flight from A to C via B and inter-line with ease, it’s often deceptively difficult to avoid one of the airlines you might not want to fly on, with few choices offered.

There are also inconsistencies that make certain offered tickets impossible. For example to fly on Finnair to and from SFO from London, you’re almost always forced onto a BA flight at some point, and if you choose Finnair luggage options they don’t always let you bring back the luggage you take with you on another airline inside the offered price.

There are also issues over the way the JV airlines funnel you – often without any way out into routes and combinations where passengers have no options to do anything else.

While these practices are not in themselves illegal, they are restrictive and remove competition on those routes over which they’re employed. This applies especially where few or no other airlines compete on the route.

Joint Ventures are very profitable for airlines and almost all routes across the Atlantic are divided up between three major operator groups. The JV is also widely spread across the Pacific and Australasia and rapidly growing between Middle Eastern and Chinese airlines.

IAG’s initial response was to spin the positive aspects saying how it makes life easier and more routes have opened because of it. It can make it easier for many passengers, but its doubtful many new routes happen just because of a JV.