The U.S. Department of Transportation (DOT) proposed to allow United Airlines and a number of its international Star Alliance partners to add three carriers to their immunized alliance and to…
The U.S. Department of Transportation (DOT) proposed to allow United Airlines and a number of its international Star Alliance partners to add three carriers to their immunized alliance and to permit expanded cooperation between United and alliance member Air Canada. This action, if made final, will provide the carriers with immunity from U.S. antitrust laws to the extent necessary to enable them to plan and coordinate services over their entire international route systems, as well as pave the way for implementation of the U.S.-Canada Open-Skies agreement.
The Department tentatively decided to allow Swiss International Air Lines, LOT Polish Airlines and TAP Air Portugal to join the alliance with antitrust immunity. It also would expand the current grant of immunity between United and Air Canada to all their international operations.
In addition to United and Air Canada, the European members of the Star Alliance with immunity are Austrian Airlines, Lufthansa German Airlines and Scandinavian Airlines. All of the airlines will continue to be independent companies and retain their separate corporate and national identities.
In its show-cause order, the Department tentatively concluded that the proposed alliance was in the public interest because the partners’ increased ability to cooperate would allow them to provide consumers with additional service options such as more nonstop flights, expanded code-sharing and new online services. The United States has Open-Skies aviation agreements – which eliminate regulatory restrictions on competition – in effect with all the home countries of the European members of the Star Alliance. An Open-Skies agreement with Canada, reached in November 2005, is not yet in effect. An Open-Skies agreement assures that markets remain open to other competitors, the department said.
Interested parties will have 21 days to show why today’s tentative decision should not be made final. Replies to comments are due seven days afterward. After a review of these filings, the Department will issue a final decision.
Beginning with the immunized alliance between Northwest Airlines and KLM Royal Dutch Airlines, which was approved in 1993, the DOT has granted antitrust immunity to a number of international airline alliances where it found that the alliance benefited the public and did not substantially reduce competition.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
