Aer Lingus applies to join IAG/American Airlines joint venture

Carriers claim addition of airline could generate $96m in annual consumer benefits

The motion from Aer Lingus, American Airlines, British Airways, Iberia and Finnair indicates a number of potential benefits arising from the Irish airline joining the venture

The motion from Aer Lingus, American Airlines, British Airways, Iberia and Finnair indicates a number of potential benefits arising from the Irish airline joining the venture

 

Aer Lingus has formally applied to join the transatlantic joint venture operated by its parent, IAG, and American Airlines in a move that could result in a number of benefits including lower fares to and from North America.

In a motion filed with the US department of transportation by Aer Lingus and existing members of the partnership in late December, the carriers said the revenue-sharing deal could generate up to $96 million (€84 million) in annual consumer benefits.

The joint motion from Aer Lingus, American Airlines, British Airways, Iberia, and Finnair indicates a number of potential benefits arising from the Irish airline joining the venture. These include lower fares and more connectivity options for travellers due to increased codesharing. The carriers said the expanded joint venture would result in 72 new unique codeshare destinations for Aer Lingus in North America and 12 for American Airlines beyond Dublin.

The airlines also said the move would unlock new routes for Aer Lingus in North America and could stimulate demand for up to 16,800 extra passengers per year and lead to lower fares.

Regulators in the UK launched a new investigation into the joint venture late last year over competition concerns. However, in its filed motion, the carriers’ said adding Aer Lingus would not lead to less choice for consumers.

“The joint business agreement will generate significant consumer benefits not achievable through other means and will not result in any lessening of competition, the carriers said.

Capacity

The arrangement includes pricing, capacity and scheduling co-ordination as well as revenue sharing on services between Europe and North America.

It was initially agreed between American Airlines, British Airways and Iberia, commenced in July 2010 as a transatlantic revenue-pooling agreement aimed at strengthening the carriers’ Oneworld Alliance, of which Aer Lingus was previously a member. Finnair joined the venture in 2013.

According to the filed motion, the addition of Aer Lingus to the joint-venture would not automatically see the carrier rejoining the Oneworld Alliance, which now stretches to 13 airlines and around 30 affiliates.

Details of the application for Aer Lingus to become part of the joint venture was revealed by American Airlines representatives in Dublin on Friday as they revealed more details about its new Dublin to Dallas/Fort Worth summer service.

American Airlines’ country sales manager for Ireland, Catriona Toner, said the addition of Aer Lingus to the venture would give the customer more choice, as well as other benefits such as allowing them to earn loyalty points.

The new route to Dallas/Fort-Worth run from early June to late September and will be flown on a Boeing 787-9 aircraft, which Ms Toner, said “is so new it comes straight out of the hanger”.

Positive response

She said there had been a positive response from the public over the new service with strong advance bookings. Ms Toner added that with a lot of Texans having Irish ancestry, the airline also expects it to be popular with travellers in the Lone Star state.

Dallas/Fort Worth is the home hub of American Airlines and is one of the busiest airports in the US with 900 daily departures to destinations across North America, the Caribbean, Latin America and Canada.

In addition to the Dallas route, American also flies from Dublin to Charlotte, Chicago O’Hare and Philadelphia. It also operates a service from Shannon to Philadelphia.