EU likely to OK air alliances

BRUSSELS, July 26 (Reuters) -- The European Commission said on Friday its competition concerns had been met in two major airline alliances and that it was closing its twin probes.

The Commission will not take a formal decision on their immunity from competition rules for at least a month, but approval now looks almost certain, bringing an end to six years of wrangling.

The cases are the Star alliance between Lufthansa SAS and United and the Wings alliance between Dutch airline KLM and NorthWest of the United States, both of which have long been cleared by U.S. authorities and have been operating for several years.

"On both these transatlantic alliances there is no final Commission position yet... Third parties will have one month to comment. A Commission decision is expected soon after that period expires," said Michael Tscherny, spokesman for EU Competition Commissioner Mario Monti.

He added that the airlines concerned had offered to make concessions that would ease competition concerns, and the Commission was minded to grant its approval.

The Star alliance would give up some capacity on four routes from Frankfurt, Lufthansa's hub airport. The routes are to Washington, Chicago, Los Angeles and San Francisco. He gave no further details.

U.S. authorities rejected last April an alliance by the two biggest transatlantic players, British Airways and American Airlines, owned by AMR Corp. .

The Commission, which acts as the European Union's anti-trust watchdog, can allow airlines to agree pricing and flight coordination, freeing them from usual competition rules if it considers the alliance is in the interest of consumers.

Restrictions on foreign ownership prevent airlines from cross-border mergers. Obtaining competition exemptions for their alliances allows them to obtain some of the benefits of joint ventures without falling foul of those restrictions.