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US green lights Aer Lingus membership in American-British Airways partnership

Nov. 16, 2020
3 min read
Heathrow stock
US green lights Aer Lingus membership in American-British Airways partnership
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Aer Lingus is on track to become part of the expansive tie up between American Airlines, British Airways and others covering flights over the North Atlantic.

The U.S. Department of Transportation tentatively signed off on the Irish carrier joining the American, British Airways, Finnair, Iberia and OpenSkies joint venture between the U.S. and Europe on Monday Nov. 16. If the airlines agree to certain conditions, final approval could be in hand by early in the new year.

The addition of Aer Lingus to the joint venture should mean more travel options between the U.S. and Europe for flyers. Such pacts often include full frequent flyer mile reciprocality, elite benefits and lounge access. In some cases, they even include upgrade availability for a partner's top flyers on each other's flights.

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The tentative nod is the second major antitrust approval from the DOT in as many months. The regulator signed off on Delta Air Lines' planned tie up with Canadian carrier WestJet in October.

Aer Lingus' membership in the partnership has been years in the making. The carriers applied to add the Irish airline to the pact in late 2018 as part of what former Aer Lingus CEO Stephen Kavanagh called an obligation of its parent International Airlines Group (IAG) who bought the airline in 2015. IAG also owns British Airways and Iberia.

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In their 2018 application, the partners argued that the addition would allow Aer Lingus to expand flight options to North America from its Dublin (DUB) hub. This added service and increased connectivity would create $67 million in incremental benefits for consumers, they argued.

Related: Aer Lingus Unveils Brand Refresh, Featuring New Logo and Livery

However, both the application and DOT analysis are based on the pre-coronavirus pandemic U.S.-Ireland market in 2019. For example, the U.S. analysis cites the presence of low-cost carrier Norwegian on the routes as alleviating competitive concerns. Norwegian ended flights between Ireland and the U.S. in 2019 citing losses and the impact of the Boeing 737 MAX grounding.

Aer Lingus has suspended all but three of its 13 U.S. routes as a result of COVID-19. The airline will only serve Boston (BOS), Chicago O'Hare (ORD) and New York JFK in November, according to Cirium schedules.

The airlines must agree to several conditions before the DOT will grant its final approval. They must drop Royal Jordanian from the regulatory pact even though the carrier does not participate in the joint venture. In addition, the carriers must continue making slots available at London Heathrow (LHR) for other airlines in cooperation with the UK Competition and Markets Authority.

American, Aer Lingus, British Airways, Finnair and Iberia have 14 days to respond to the DOT's conditions.

Related: Norwegian Air Dropping Flights Between North America and Ireland

Featured image by PA Images via Getty Images