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Airline alliance antitrust immunity granted

DOT grants antitrust immunity to American Airlines, foreign partners

Jul 22, 2010

NEW YORK — The Transportation Department has given antitrust immunity to American Airlines and foreign partners, which will let the airlines work together to set fares and schedules across the Atlantic.

The other airlines are British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines.

DOT said Tuesday the move will give travelers and cargo shippers benefits including lower fares in some markets, improved service and better schedules.

The government is requiring the airlines to give up four takeoff and landing slots at London's Heathrow Airport, where British Airways and American are deeply entrenched. Regulators said otherwise immunity could hurt competition on routes between Heathrow and the U.S.

The other major airline alliances, Star Alliance and SkyTeam, already have similar immunity.

American and British Airways have been trying for 14 years to work more closely together, only to back off in the face of opposition by regulators.

Executives at American said antitrust immunity would help them strengthen their route network, boost revenue and compete better against other airline alliances that already have immunity, including ones with Delta, United and Continental.

"This is an important day for the customers, employees and shareholders of American Airlines and our joint business partners in the oneworld alliance," said Gerard Arpey, chairman and CEO of American and parent AMR Corp.

British Airways CEO Willie Walsh said his company has argued all along that the Europe-U.S. travel market is very competitive, especially since an easing of restrictions at London's Heathrow Airport in 2008. "We are delighted that the U.S. and EU authorities have recognized this," he said.

The decision by the U.S. Department of Transportation was expected after regulators indicated tentative support for the American-BA proposal in February.

Last week, European regulators also approved antitrust immunity for the airlines after imposing similar concessions on some routes.

American is seeking approval for a similar deal with Japan Airlines on routes across the Pacific. American estimates that working more closely with the international partners could result in extra revenue and cost savings of $500 million annually within a few years.

The other alliances that already enjoy antitrust immunity on some routes are SkyTeam, which includes Delta and Air France KLM, and the Star Alliance, whose members include United, Continental Airlines, Lufthansa and All Nippon Airlines.

DOT grants antitrust immunity to American Airlines, foreign partners
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Source: AP

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