The concession comes amid a Competition and Markets Authority (CMA) investigation into the Atlantic Joint Business Agreement (AJBA); a set of binding competition commitments agreed a decade ago with the European Commission, and which are due to expire this year.
Five airlines are currently signed up to the AJBA: IAG carriers BA, Iberia and Aer Lingus, along with American Airlines and Finnair, who have together agreed not to compete on routes between the UK and the US.
However, with the UK set to leave the EU, the CMA launched an investigation into the agreement in October 2018 as the European Commission would no longer have responsibility for competition on five of the six routes, finding competition concerns on all five – London-Boston, London-Chicago, London-Dallas, London-Miami and London-Philadelphia.
To alleviate these concerns, the CMA confirmed on Thursday (7 May) BA and AA were prepared to release additional slots at Heathrow or Gatwick to enable competitors to launch, or increase, direct flights from London to Boston, Dallas and Miami.
The carriers also agreed measures to support competing services on London-Chicago and London-Philadelphia routes, which include "access to connecting passengers on preferential terms".
The CMA is putting the measures out to consultation until 4 June while it market tests them, but has stressed it will allow additional time for responses, if required, owing to the impact of the coronavirus crisis on the aviation sector – and with airlines "emphasising the importance of certainty about the future availability of slots".
It has also left scope to further review the AJBA if new competitive conditions prevail once the sector emerges from the pandemic.
Ann Pope, senior director, antitrust, at the CMA, said: "The CMA launched this investigation because we were concerned, with the expiry of the current commitments, consumers might lose out since – without some kind of mitigation - the Atlantic Joint Business Agreement reduces competition on key routes between the UK and the US. On some of these routes, there are either few or no other airlines offering direct flights to passengers.
"We therefore welcome the offer from BA and American Airlines to find a way of addressing the CMA’s concerns. Their suggested resolution has the potential to increase competition and deliver lower fares for customers, while also preserving the benefits that joint airline agreements offer passengers.
"We are acting now as the current commitments expire this year, but can review the agreement in the future if the market does not return to its pre-Covid state.
