Monday, October 12, 2009

Labor Contra oneworld

The Allied Pilots Association, which represents over 11,000 American Airlines employees, is calling on the U.S. Department of Transportation to withhold approval and antitrust immunity for the oneworld Alliance.  See Karl West, Bid to Block British Airways' Alliance with American Airlines, Daily Mail, Oct. 12, 2009 (available here).  The APA warns that the alliance could cost U.S. jobs and harm consumers.

The two-part complaint issued by the APA is nothing new.  It's also spurious.  Taking the latter first, the transatlantic market already has two major alliances operating with antitrust immunity: SkyTeam and Star.  Assuming that increased competition confers unqualified benefits on consumers, how is adding one more allinace into the mix going to hurt?  The fact is that it won't.  If oneworld is granted approval and antitrust immunity, there will be real competitive parity in the transatlantic market.  Consumers who value the network benefits alliances provide will have another viable option. 

As for the first complaint, the APA conveniently ignores the fact that if American Airlines and its alliance partners are facing a serious disadvantage by having to compete without antitrust immunity.  The potential result could be a loss in marketshare which, in turn, means layoffs or worse.  The APA should be trying to find ways to help American Airlines strengthen its competitive position, especially given the current tough operating environment.  If the APA pushes too hard on this issue, it may end up selling down the river the airline employees whose interests its supposed to represent.

http://lawprofessors.typepad.com/aviation/2009/10/labor-contra-oneworld.html

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