Cheaper Flights to Boston, Chicago, Miami, and Dallas? - When Competition Watchdogs Actually Bite

Will your flights be cheaper in the future? Sometimes the Competition and Markets Authority does something that makes you sit up and think "they actually do something!", today was one of those days.

Today, 6th August, the CMA has just wrapped up its investigation into what we might politely call the "cosy arrangement" between American Airlines and the International Consolidated Airlines Group (that's British Airways, Iberia, and Aer Lingus to you and me, plus Finnair for good measure). All of these airlines form a profit sharing venture, where all the profits on routes across the Atlantic are shared between each of these airlines. Rather than drag everyone through a lengthy legal battle that would enrich only the lawyers, these airlines have agreed to some commitments that could actually help you as travellers.

These tails will take some of you back... - Photo courtesy of Aviation Week Network

If you're so way inclined, you can find the full report from the CMA here.

What Was the Problem?

So, you want to fly from London to Boston, Miami, or Chicago. In the eyes of the CMA, your choices were essentially limited to this transatlantic airline club, who could set prices with the kind of confidence that comes from knowing your competitors are, well, your partners. Meanwhile, on the London to Dallas route, there were concerns about service reductions, that in turn raises the prices of fares - you know, the kind of thing that may happen when you don't have to worry about actual competition.

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So What Have These Airlines Offered?

Here's what's the airlines have agreed to:

Giving up the goods - Competitor airlines are to get slots at Heathrow/Gatwick for the Boston, Miami, and Chicago routes, operating up to once daily on each of these routes. So, British Airways and American Airlines are to lose slots in London to facilitate this.

The slots for Boston and Miami can go to another airline already operating this route, whilst the slots needed to fly to Chicago are to go to a new entrant. Due to the scarcity of slots at airports like Heathrow, the CMA had to force that door open that was previously locked.

The CMA determined that if BA, AA etc were allowed to continue to dominate these routes that they would be "likely to have a sufficient degree of market power on each of the relevant markets on the Routes of Concern such that it is liable to appreciably restrict competition on those relevant markets."

In my assessment though, I am surprised that Boston was included on this list of routes, as there are currently five airlines flying this route, with BA flying up to 3x daily, AA 1x daily, Virgin Atlantic 2x daily, JetBlue 2x daily, and Delta 1x daily. Although Virgin and Delta also have a joint venture in the same way BA and AA operate, so there are only really three airlines competing in essence. The only real remaining candidates to fly this route would be United, where Boston is not a focus city for them, or Norse Atlantic, who are in the process of pivoting their business to have more focus on leasing aircraft. Both of these airlines have previously flown between London and Boston.

Just to offer some comparison, flying between London and Chicago, BA/AA dominate flying up to 6x daily, with the only competition coming from United who fly 3x daily, so I can see why the CMA would want to assist consumers by breaking up this cosy relationship. I would expect to see Virgin Atlantic go for these slots on offer, or, and this is purely speculation, Southwest Airlines have a big hub at Chicago's Midway airport, and have ruminated about flying over the Atlantic, could this be their chance to get slots at the most valuable airport in the world?

Put their money where their mouth is on Dallas - British Airways/American Airlines must carry a minimum number of "local passengers" annually – people actually traveling between London and Dallas, not just connecting through. This stops them from quietly degrading the route into a glorified shuttle service between Heathrow (BA's hub), and Dallas (AA's hub), while jacking up prices for point-to-point travellers who may just want some BBQ, or afternoon tea.

Actually help their competitors -  Perhaps most surprisingly, they've committed to supporting competing airlines through preferential access to connecting passengers on the Boston, Chicago, and Miami routes. That's like Tesco helping Sainsbury's with their supply chain – it simply doesn't happen unless someone with regulatory authority makes it happen.

Photo courtesy of David Kernan, Flickr

Why This Matters

The tender process for Summer 2026 slots kicks off this autumn, which means we'll see relatively quickly whether these offerings have any real takers in the form of airlines wanting to fly these routes. In this case, the CMA didn't need to make a formal finding that competition law was broken. Sometimes the threat of investigation is enough to extract meaningful concessions.

This is competition policy working as it should: identifying problems before they become entrenched, and securing solutions that benefit consumers without years of legal wrangling. The airlines get to avoid a formal breach finding and hefty fines; travellers get more choice and better prices; the CMA gets to close another case with tangible outcomes.

It's almost enough to make you optimistic about regulation. Almost.

So hopefully, come the summer of next year, when you're booking that transatlantic flight, you might just find cheaper flights to Boston, Chicago, Miami, and Dallas. That's not an accident, it's the direct result of competition authorities doing their job properly.

Hopefully this isn't just the shuffling of deck chairs on the Titanic...

Sam

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