US: Airline venture should clear antitrust hurdle
A plan by American Airlines, British Airways and other carriers to work more closely together coordinating schedules and sharing revenue on trans-Atlantic flights should win approval, the U.S. government said Saturday.
But to protect competition, the joint venture must make four pairs of takeoff and landing slots available to competitors for new service between the U.S. and London’s Heathrow Airport, the Department of Transportation said.
There’s been a surge over the last few years of U.S. carriers seeking joint ventures with foreign airlines to share costs and revenue on certain flights, regardless of which company owns or flies the aircraft. Those tie-ups could affect fares.
The Justice Department has said that allowing the American-British Airways venture could cause fares to rise up to 15 percent on some trans-Atlantic routes. A final decision by the DOT on the carriers’ antitrust immunity application will follow a 60-day public comment period.
Despite the antitrust concerns, the DOT said that it believes allowing the deal between American, British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines would provide travelers and shippers with lower fares on more routes, increased services, better schedules and reduced travel and connection times. It would also create competition with other carrier alliances.
Delta Air Lines Inc., the world’s biggest airline, and Air France-KLM already have antitrust immunity as part of their trans-Atlantic joint venture.
Joint ventures differ from codesharing agreements where one airline bears all the costs but another might get a share of the revenue for booking a customer on a flight.
American said in a statement Saturday it was pleased with the decision, though it didn’t specifically address the conditions the DOT said it would require. American said it would respond in more detail later. It added that it is continuing discussions with European regulators.
The American plan could harm competition on select routes between the U.S. and Heathrow, where the availability of takeoff and landing slots is limited, the DOT said. That’s why the department is requiring some of the carriers’ slots be given up.
A slot is an interval of time during which an airline can takeoff or land its aircraft at an airport.
DOT 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.
Separately, American, a unit of AMR Corp., based in Fort Worth, Texas, is seeking antitrust immunity with Japan Airlines to form a joint venture across the Pacific. Delta had tried to lure JAL to join its SkyTeam alliance, but was unsuccessful.