Tuesday, February 2, 2010

oneworld's Approval and Future

The oneworld Alliance appears to have moved significantly closer to gaining regulatory clearance from the European Commission.  According to a story in yesterday's Financial Times, EU regulators are consulting with the alliance's rivals (most notably Virgin Atlantic) on commitments oneworld has made to assuage fears that it will harm competition.  See Nikki Tait & Pilita Clark, Three-Way Global Alliance Edges Nearer Regulatory Clearance, Fin. Times, Feb. 1, 2010 (available here). 

Winning approval in the EU is only half the battle, however.  A cloud of uncertainty still rests over the alliance's chances of gaining antitrust immunity from the U.S. Department of Transportation without being asked to surrender lucrative slots at London Heathrow.  The DOT could also choose to carve out certain routes from the immunity and thus potentially hinder the full network benefits the alliance is attempting to secure.  It's possible, however, that a favorable decision from the European Commission concerning oneworld's commitments could persuade U.S. authorities to approve the alliance's immunity application with few or no additional concessions.

Meanwhile, sitting against the backdrop of both approval processes is the future of oneworld's relationship with bankrupt Japanese airline JAL.  While many industry analysts believed that a jump to rival airline alliance SkyTeam was imminent for JAL, a final decision remains on hold.  See Tomoko A. Hosaka, JAL Says It Will Decide on Alliance Partner Soon, Assoc. Press, Feb. 1, 2010 (available here).  If oneworld is able to clear the regulatory hurdles on both sides of the Atlantic, it could go a long way toward persuading JAL to stay put.


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