But Green Light Comes With Some Strings Attached

The U.S. DOT has granted antitrust immunity to American Airlines and four international partners in "oneworld" to form an integrated global alliance, but also imposed several conditions that DOT says will protect consumers and preserve competition. Tuesday's action makes final the Department's tentative decision of Feb. 13.
 
As a result of the Department's action, American and its oneworld alliance partners British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines will be able to more closely coordinate international services.
 
The Department found that granting antitrust immunity to the oneworld alliance will provide travelers and shippers with a variety of benefits, including lower fares in some markets, new nonstop routes, improved services and better schedules. The Department also said that the alliance will enhance competition around the world by enabling the oneworld alliance to compete more vigorously with Star Alliance and SkyTeam, which operate similar immunized alliances.

While the Department found that the alliance, on balance, was pro-competitive, it noted that the alliance could harm competition on select routes between the United States and London's Heathrow Airport, a major hub for oneworld, where the availability of landing and takeoff slots is limited. To remedy this potential problem, the Department required the applicants to make four pairs of slots at Heathrow available to competitors for new U.S.-London service, with two pairs to be used for Boston-London service and the other two for service from any other U.S. cities.
 
The Department also required changes to the alliance to ensure capacity growth, and required the carriers to submit traffic data and to implement the proposed alliance within 18 months. The carriers also must resubmit the alliance agreements for review within five years.

In response to the DOT announcement, the unions representing the pilots that fly for American Airlines, British Airways, Iberia and Finnair issued the following joint statement:

"We anticipate that trans-Atlantic regulatory approval of antitrust immunity will now lead to the implementation of the joint business agreement (JBA) between American Airlines, British Airways, Iberia, Finnair and Royal Jordanian.

"In response, the Allied Pilots Association (APA), British Airline Pilots Association (BALPA-BA Company Council), Sindicato Español de Pilotos de Lineas Aereas (SEPLA) and Suomen Liikennelentäjäliitto/Finnish Airline Pilots’ Association (SLL) have been working closely to develop a mutual approach to promoting the job security and career prospects of all our members in the United States and Europe.

"We acknowledge that our employers have a legitimate interest in seeking significant economic benefits from a JBA, which has also been described as a ‘virtual merger’ - including sharing revenue on specific routes, cooperating on pricing and jointly marketing their services. In turn, it is essential that our employers acknowledge our respective members' legitimate interests in job security and in ensuring the fair distribution of any economic benefits.

"To achieve our aims, we are committed to maintaining and furthering the close cooperation between APA, BALPA-BACC, SEPLA-Iberia and SLL - all founding members of the Oneworld Cockpit Crew Coalition - while simultaneously respecting the autonomy and rights of each association.

"We have also agreed to meet regularly and establish an ongoing exchange of information relevant to the proposed JBA, including details of our collective bargaining agreements, national laws and regulations and current and proposed flying in the area covered by the JBA. Finally, and most importantly, we have agreed to develop and implement a mutual approach to protect the interests of all APA, BALPA-BACC, SEPLA-Iberia and SLL members."

FMI: www.dot.gov