American, BA seek quick OK from US for air alliance

Mon Jan 11, 2010 9:07pm EST

* AMR, BA say DOJ recommendations unworkable

* Carriers call for quick approval of waiver

* Heathrow again flashpoint for BA, AMR plan

WASHINGTON, Jan 11 (Reuters) - American Airlines and British Airways believe U.S. government recommendations for them to divest flights in certain transatlantic markets to secure permission to deepen their ties are unworkable and unnecessary.

The carriers said late on Monday in a filing with transportation regulators that antitrust enforcers at the Justice Department had failed to prove in a challenge to the proposal last month that a stronger alliance would lead to fare increases and fewer choices for consumers.

"The proposed alliance should be approved and immunized without delay," the carriers said in their filing with the Transportation Department.

The transportation agency is expected to decide soon whether to grant a waiver, or immunity, from antitrust law to the Oneworld alliance led by American, a unit of AMR Corp AMR.N and British Airways BAY.L.

Officials from the Transportation and Justice departments have refrained from public comment during their review.

U.S. antitrust immunity waivers for airlines are routinely granted, often with conditions requiring divestments to ensure that routes remain competitive and fares do not increase.

Justice Department officials said the proposed alliance would give Oneworld an unfair advantage on six transatlantic routes, five of which serve London.

Access to Heathrow airport has been a sticking point for years for U.S. regulators and was the reason two previous immunity attempts by American and British Airways foundered.

American and British Airways, which currently operate a code-share marketing agreement, launched their third attempt for immunity in 2008 after the U.S. and Europe reached an agreement to further open Atlantic service, including more flights at Heathrow.

They contend the newly liberalized environment would remedy previous concerns about market dominance and allow Oneworld to win an immunity grant to compete more effectively with rival SkyTeam and Star alliances. (Reporting by John Crawley; editing by Carol Bishopric)

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