Thursday, October 15, 2009

Walsh Calls It Right

British Airways CEO Willie Walsh rightly noted yesterday that the transatlantic aviation market will turn into an "untouchable duoply" if the Department of Transportation fails to approve and grant antitrust immunity to the oneworld Alliance.  See Doug Cameron & Josh Mitchell, British Airways' CEO Warns of Transatlantic 'Duoply', Dow Jones Newswire, Oct. 14, 2009 (available here).  The remarks came during Walsh's speech to the International Aviation Club in Washington, D.C.  See Press Release, British Airways, Give Consumers Choice, Urges BA Chief (Oct. 14, 2009) (available here) (summarizing Walsh's speech). 

In the course of his talk, Walsh also stated the following:

If approved, this agreement [to further integrate the oneworld Alliance] will bring substantial benefits to US-EU customers by offering an expanded route network, improved schedules and connectivity, greater access to discounted fares, fully reciprocal frequent flyer programmes and integrated corporate deals.

Above all, it will provide customers with choice. The Star and Skyteam alliances already operate across the Atlantic with the benefit of anti-trust immunity. But surely a market of 800 million potential consumers deserves a choice of more than two network providers. If Star and Skyteam remain the only immunised alliances across the Atlantic, we could end up with an untouchable duopoly.  I do not believe that customers would want that.

Walsh is correct.  Consumers won't want a duopoly.  Thankfully they won't have to endure one if the DOT stays the course with its international aviation policy and immunizes the link-up.

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