Brazil says LATAM, IAG airline deal could pose competition problems

Brazil's competition regulator Cade said Monday that a deal between LATAM Airlines, British Airways and Iberia could have a negative impact on routes between Brazil and Europe. LATAM signed joint business agreements in January to deepen its ties with American Airlines Group and IAG's British Airways and Iberia, all members of the Oneworld Alliance. If cleared by competition authorities, the agreements would help the airlines coordinate schedules and prices for flights, similar to the North Atlantic revenue-sharing agreement which already exists between IAG and American Airlines. Cade's superintendency-general said it would appeal against the deal before the top decision-making tribunal of the competition watchdog. "The superintendency believes this concentration has the potential to generate competitive problems in the market for air transportation of passengers between Brazil and Europe, especially on the routes Sao Paulo-London and Sao Paulo-Madrid," Cade said. It added that the companies already have 70 to 80% of the market between Sao Paulo and London, and 50 to 60% between Sao Paulo and Madrid. Cade said that new competitors were unlikely to enter these routes under such conditions and the existing level of competition was not sufficient to alleviate its concerns.<br/>