Headlines blared and statements flew this morning about European Union’s finding yesterday that the British Airways, American Airlines, Iberia OneWorld alliance, also being studied by the U.S. Department of Justice, may violate European antitrust laws. However, the ruling could not have been unexpected since BA/AA have failed twice to gain approval for its plan to coordinate fares and routes across the Atlantic. A DOJ ruling is expected by the end of this month.

But, the Wall Street Journal said observers expressed surprise at the fact that the EU actually sent the three airlines formal charge sheets last month, charging them with breaking antitrust rules. American told Reuters it had received routine charges would otherwise not comment pending complete review of the 400-page EU document.

Even so, BA indicated the charges were not a surprise although its position remains that the alliance would be beneficial to consumers providing lower fares and easier access to about 500 destinations. BA also argues that it is seeking a level playing field against the Star and SkyTeam Alliances. "Those alliances carry more traffic out of the UK regions to the US than Oneworld does," it said in a statement. "We merely want the same legal status to enable us to strengthen real competition."

But those alliances may be in jeopardy as well given the fact the European Commission has launched investigations into the Lufthansa/Continental/United/Air Canada Star Alliance as well as the Air France/Delta SkyTeam alliance. Meanwhile, in July, over objections from the Department of Justice, the US Department of Transportation, which has final say in such issues, granted antitrust immunity for Continental Airlines to join the Star Alliance which becomes effective this month.

The EU decision, which suggests the three-way airline deal will skew competition and create a cartel, to send charges to the three airlines is part of a broader investigation into airline alliances that has reached across the Atlantic to the U.S. where House Transportation and Infrastructure Chair James Oberstar voiced similar concerns and charged the General Accountability Office with investigating the partnerships. Airlines are using alliances owing to the regulatory restrictions on cross-border ownership and those involved in such alliances are hoping to take advantage of the more liberal EU/US open skies agreement.

Meanwhile, opposition leader Virgin Atlantic voice approval of the EU move, while Iberia indicated it is looking forward to explaining the deal it has with BA and AA which would ease EU concerns. Critics also want Heathrow slot divestiture to accompany any EU sanction. BA/AA would have 44% of Heathrow slots should such an alliance be approved, according to Virgin Atlantic.

"This alliance between British Airways and American Airlines is a monster monopoly which, if given the go-ahead, will allow these dominant carriers to increase their stranglehold at Heathrow by setting prices and agreeing schedules," said Virgin CEO Steve Ridgway in a statement. The US Department of Justice agreed in the decision that DOT overruled last summer.

Travel Daily News reported Virgin’s key objections included using antitrust immunity to dominate the market, destroy competition and raise fares. It also objected to the monopoly the alliance would become on the biggest routes between the U.S. and Heathrow.

Originally focused on the London-New York market, the EU document reviews not only that market but what the alliance would do to market dominance at Boston, Dallas, Miami to London as well as Madrid-Miami and Chicago. Beyond that, EU is also scrutinizing alliances involving destinations in Canada, Mexico, Puerto Rico, Norway and Switzerland are also under the microscope. Before final decision is made, American and BA must submit objections to the EU decision and/or changes to the deal that will alter EU’s perceptions and allow for approval.

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