Tuesday, December 29, 2009

Time for Transpacific Alliances?

Despite the recent delay to the oneworld Alliance antitrust immunity application which will put a final decision off until at least late January, see "DOJ Comes Out Against oneworld," the Star Alliance is gearing up to take full advantage of the recently finalized U.S./Japan open skies agreement.  Star partners United Airlines, Continental, and Japan's ANA have filed for approval and antitrust immunity before the Department of Transportation in the hopes of "enter[ing] into a highly-integrated, metal-neutral joint venture agreement for the carriage of transpacific traffic[.]"  See Joint Application of All Nippon Airways Co., Ltd., Continental Airlines, Inc., and United Airlines, Inc., Dkt. No. OST-2009-0350 (Dec. 23, 2009).

Up until last year, there was something of an expectation among the airline and industry observers that an open skies agreement meant "automatic" antitrust immunization for international intercarrier agreements.  Now, with the Justice Department and lawmakers taking a greater interest in how these applications are approved, matters are less certain.  One of the recent complaints against immunizing the three transatlantic alliances is that it places over 80% of the market in their hands.  In the transpacific market, specifically between the U.S. and Japan, concerns have already been raised that a duopoly could form around Japan's two international airlines, ANA and JAL.  With ANA already part of Star, all eyes remain on JAL to see if it will stick with oneworld or be lured away by the promise of greater rewards from SkyTeam.

http://lawprofessors.typepad.com/aviation/2009/12/time-for-transpacific-alliances.html

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