EC REQUESTS COMMENTS ON LUFTHANSA, SAS, BM ALLIANCE

EC REQUESTS COMMENTS ON LUFTHANSA, SAS, BM ALLIANCE    The European Commission has invited interested parties to comment on the proposed co-operation agreement between Lufthansa, Scandinavian Airlines System and British Midland.
   The regulator said that it wants to give interested parties the opportunity to comment before it takes a position over the proposed alliance.
   “The Commission has not at this stage reached any conclusions on the agreement despite the fact that the three airlines have submitted undertakings to address potential competition concerns,” a spokesman for the EC said.
   On March 1, 2000, British Midland, Lufthansa and SAS notified to the EC a co-operation agreement, applying for an exemption under Article 81 (3) of the EC Treaty. The airlines have entered into a tripartite joint venture agreement which, according to the parties, allows British Midland to reorganize and extend its network services out of London and Manchester to new routes within the EU, in particular from London to Madrid, Barcelona and Rome. British Midland has already started flying these routes.
   Lufthansa and SAS are members of the Star alliance.
   “The agreement will improve their competitive position in the U.K. market,” the EC said. It also offers them improved access to London Heathrow, Europe’s largest and most congested airport.
   “As a result, the Star alliance expects to compete more vigorously with the OneWorld alliance of British Airways,” the EC added.
   Following preliminary discussions with the EC, the airlines have proposed a set of remedies to address competition concerns raised by the co-operation agreement. Under EC procedures, the Commission has 90 days following the publication of a notice to decide whether to raise serious doubts. Third parties have 30 days to submit their views also from the publication date.
   If the EC agrees not to raise objections, the joint venture will be automatically exempted for a period of six years.