American Airlines Gets DOT Approval OneWorld Antitrust Immunity

American Airlines Gets DOT Approval OneWorld Antitrust Immunity <

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American Airlines Gets DOT Approval OneWorld Antitrust Immunity By Bill Goldston

		February 14, 2010 - Under proposed conditions, the Department of Transportation announced on Saturday it would grant antitrust immunity to American Airlines and four international partners to form a global alliance as long as the airlines agree to conditions to protect consumers and preserve competition. If the decision is made final, American and its “oneworld” alliance partners British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines would be able to more closely coordinate international operations in transatlantic markets. In today’s show-cause order, the Department tentatively found that granting antitrust immunity to the oneworld alliance would provide travelers and shippers with a variety of benefits.

Including lower fares on more routes, increased services, better schedules and reduced travel and connection times. The Department also said the proposed alliance would enhance competition around the world by creating competition with the existing Star Alliance and the SkyTeam alliance, which already have been granted immunity. However, the Department also noted that the alliance could harm competition on select routes between the United States and London’s Heathrow Airport, oneworld’s primary hub, where the availability of landing and takeoff slots is limited. As a condition of approval, the Department is proposing in its show-cause order that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service. The Department also would require changes to the agreement to ensure capacity growth, and require the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision. Interested parties are invited to show cause why the proposed decision should not be made final. Objections are due in 45 days, and answers to objections 15 days afterward. Following the comment period, the Department will review all filings and then issue a final decision. American Airlines announced it has received tentative approval from the United States Department of Transportation (DOT) for its trans-Atlantic antitrust immunity (ATI) request submitted in conjunction with fellow oneworld alliance members British Airways, Iberia Airlines, Finnair and Royal Jordanian, in addition to approval of a joint business agreement proposed by American, British Airways and Iberia.

American and its co-applicants, which submitted their application in August 2008, will review DOT's tentative order and will respond according to the time frame established for comments.

The provisional approval by DOT is an important step in the process that will allow oneworld alliance members American Airlines, British Airways, and Iberia to cooperate more effectively in competing with the Star and SkyTeam alliances, both of which already enjoy broad immunity from DOT. In addition, the oneworld alliance members are continuing discussions with the European Union Competition Directorate.

American, British Airways and Iberia plan to operate a joint business between North America and Europe. Their closer cooperation, made possible by antitrust immunity, will benefit customers with more travel choices and convenient schedules, expanded opportunities to earn and redeem frequent flyer miles, and greater availability of lower fares.

"We appreciate the thorough review that our request received from DOT and the U.S. Department of Justice," said Will Ris, American's Senior Vice President – Government Affairs. "We are pleased that DOT has agreed that it is in the best interest of the traveling public if American and other oneworld alliance carriers have an immunized relationship."

Ris added, "American also wants to publicly acknowledge the support that its proposal received from Sen. Kay Bailey Hutchison (R-Texas), the Ranking member on the Senate Commerce Committee; Sen. Majority Whip Dick Durbin (D-Ill.); House Transportation and Infrastructure Aviation Subcommittee Chairman, Rep. Jerry Costello (D-Ill.); the members of the Texas congressional delegation; and dozens of other U.S. Senators and U.S. Representatives, local elected officials, airport officials, business and community leaders, and tourism industry experts.

"American and its oneworld partners are looking forward to competing for business over the Atlantic on a level playing field. Meanwhile, over the Pacific, we will continue to focus on ensuring that competition among alliances remains as robust as it is today."

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