The US Justice Department has said an airline tie-up involving British Airways and American Airlines, among others, would lead to 'competitive harm'. It has called for restrictions on the deal.
The Justice Department's competition division made its recommendation to the Transportation Department, which will make a final ruling on closer co-operation between BA, American, Iberia and other carriers in the Oneworld alliance.
The request for competition immunity, which would allow closer co-operation among the carriers, 'would result in competitive harm on certain transatlantic routes serving 2.5 million passengers annually,' the Justice Department said.
It concluded that fares between six transatlantic routes could increase up to 15% under the proposed agreements.
'The applicants claim substantial benefits will flow from an expanded alliance, but they have not shown that immunity is necessary to achieve these benefits,' the review said.
The document recommends that the Transportation Department 'impose conditions' - including the removal of some slots for the affected airlines - to protect the public interest in competition.
Last year, American Airlines, British Airways and Iberia of Spain signed an agreement to co-operate over flights between North America and Europe to help them overcome soaring fuel costs and other industry troubles.
BA, AA and Iberia are part of the 11-airline Oneworld alliance, and are seeking, along with other partners Finnair and Royal Jordanian, competition law immunity from the US government on transatlantic flights.
In October, the European Commission had warned BA, AA and Iberia over the deal which it said could breach competition rules.
