Wednesday, October 14, 2009

Senators Take Aim at oneworld's Application

As the date for an expected Department of Transportation decision on the oneworld Alliance's application for approval and antitrust immunity draws near, the litany of vague and redundant charges against the link-up is intensifying.  Yesterday, Senators Herb Kohl and Orin Hatch dispatched a letter to U.S. Transportation Secretary Ray LaHood expressing concerns that the alliance "raises significant competition issues" and calling on the DOT to "act cautiously."  See Josh Mitchell, Kohl, Hatch Raise Concerns on American Air, BA Plan, Dow Jones Newswire, Oct. 13, 2009 (available here).

Arguably, there are "significant competition issues" at hand, but they concern the disparity which still exists between oneworld--an alliance without antitrust immunity--and its two immunized competitors, SkyTeam and Star.  As for the DOT "act[ing] cautiously," both AA and BA have been waiting over eight years for a satisfactory resolution to their immunity application.  See Dkt No. OST-2001-10387, Joint Application of [AA] and [BA] for Antitrust Immunity (Aug. 10, 2001); see also Dkt. No. OST-2008-0252, Joint Application (Aug. 14, 2009) (renewing their application for antitrust immunity following the 2007 U.S./EC Air Transport Agreement).  Rivals such as Virgin Atlantic and naysayers at the Department of Justice have had their opportunity to provide concrete evidence that the alliance will have unduly anticompetitive effects and fail to serve the public interest.  Now it's time for the DOT to decide and, hopefully, decide in favor of adding a third robust competitor in the transatlantic aviation market--one that will be able to deliver more network benefits for consumers.

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