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Airline Alliances

Emirates wants more scrutiny of transatlantic airline alliances

Jul 29, 2009

BRUSSELS - The European Union should scrutinise more closely the competitive advantage enjoyed by transatlantic airline alliances to ensure they do not violate antitrust rules, Emirates Airlines said late on Monday.

Airlines that spent years ramping up their international operations have been hit by the recession that has hammered demand for overseas travel. In response, many major airlines are forging partnerships that allow them to cut costs and capacity.

But such airline alliances and growing government support for consolidation to avert corporate failures, could have an adverse long-term impact on independent airlines, Andrew Parker, a senior vice president at Dubai-based Emirates, told Reuters.

"From cooperative frameworks, alliances have today become sophisticated, interwoven, often immunised vehicles with enormous market power," he said in an interview. "The consequences of changing alliances are not fully considered. I would encourage policyholders to look deeply into this."

Emirates is not a member of any airline grouping.

The European Commission, which acts as competition watchdog for the 27-nation European Union, is now probing Star Alliance members Air Canada, Continental, Lufthansa and United Airlines over possible anti-trust breaches.

It is also investigating whether cooperation between members of the Oneworld alliance, American Airlines, British Airways and Iberia, on schedules, capacity and sales, may have restricted competition.

Parker said the European Union executive should also scrutinise the effectiveness of anti-trust concessions offered by carriers hoping to win approval for mergers and acquisitions, which usually involve giving up routes or airport slots. "They should not be token remedies with questionable effectiveness," Parker said.

The Commission should also do more to enable carriers to fly to any U.S. city from anywhere in the EU and vice versa, he said.

"There should be a more aggressive pursuit of Open Skies," he said.

Emirates wants more scrutiny of transatlantic airline alliances
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