Non-Subscriber Extract
Alliances come under scrutiny
By Alison Tucker
16 June 2009
The EC has opened formal antitrust investigations into certain members of the Star and Oneworld airline alliances following concerns that their agreements on transatlantic routes might breach competition rules.
Europe's competition regulator said in April that it is examining planned co-operation between Oneworld members American Airlines (AA), British Airways (BA) and Spanish flag carrier Iberia on the one hand and the "existing and planned co-operation" between Lufthansa, United Airlines, Air Canada and Continental Airlines of the Star Alliance on the other.
Within their respective alliances, these carriers have plans to jointly manage timetables, capacity, pricing and revenues on transatlantic routes, as well as share revenues and sell tickets on these routes without preference between carriers.
Airlines are vying to bolster partnerships on sales and scheduling to cut costs amid a slump in demand for air travel caused by the global recession. Airlines worldwide may lose a combined USD9 billion this year, according to figures published by the International Air Transport Association (IATA) on 8 June. The EC has voiced concerns that the degree of planned co-operation between alliance members appears "more extensive" on routes between North America and Europe than the joint approach used by alliance members on other routes.
The commission aims to determine whether the agreements may lead to competition restrictions and whether this specific kind of co-operation within alliances is genuinely of benefit to consumers.