Tuesday, July 20, 2010

DOT Clears oneworld

Less than a week after the European Commission announced that it was closing its investigation of the oneworld Alliance, see "Commission Clears oneworld," the Department of Transportation has issued its final order for the alliance's bid to win approval and antitrust immunity.  From the press release:

The U.S. Department of Transportation today granted antitrust immunity to American Airlines and four international partners in “oneworld” to form an integrated global alliance, but also imposed several conditions that will protect consumers and preserve competition. Today’s action makes final the Department’s tentative decision of Feb. 13.

As a result of the Department’s action, American and its oneworld alliance partners British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines will be able to more closely coordinate international services.

The Department found that granting antitrust immunity to the oneworld alliance will provide travelers and shippers with a variety of benefits, including lower fares in some markets, new nonstop routes, improved services and better schedules. The Department also said that the alliance will enhance competition around the world by enabling the oneworld alliance to compete more vigorously with Star Alliance and SkyTeam, which operate similar immunized alliances.

While the Department found that the alliance, on balance, was pro-competitive, it noted that the alliance could harm competition on select routes between the United States and London’s Heathrow Airport, a major hub for oneworld, where the availability of landing and takeoff slots is limited. To remedy this potential problem, the Department required the applicants to make four pairs of slots at Heathrow available to competitors for new U.S.-London service, with two pairs to be used for Boston-London service and the other two for service from any other U.S. cities.

See Press Release, U.S. DOT, DOT Approves oneworld Antitrust Immunity Application, DOT 140-10 (July 20, 2010) (available here).

A full copy of the final order is available here.


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