In the case of a code-share operation with a foreign carrier or that of an airline alliance with antitrust immunity, the ability to merge operations and make them seamless for travelers borders on the impossible. Consumers end up faced with alliances and codeshares of a Frankenstein nature.
Finally, a competition regulatory authority has taken action against the growing airline joint ventures. Nothing more than an attempt to totally control prices, scheduling, profits and marketing of airline routes, is now getting a closer look from the Canadian Commission on Competition.
Travelers are facing the first summer under the total influence of the airline alliances. They are not liking it. And it is only going to be getting worse — more crowded planes, higher prices and fewer choices of routes.
The airlines can claim a massive victory with their latest victory in the antitrust immunity grant to American, British Airways and Iberia as well as their other partners in Oneworld. They may now compare notes, fares, schedules and costs for their international routes.
If anyone didn’t think that the airlines were serious about taking advantage of the antitrust immunity awarded them by the Department of Transportation (DOT), think again.
Airline consolidation has been taking two tracks. First, airlines are merging. Second, antitrust immunity granted to airline alliances has created an international, government-approved oligopoly that controls 85 percent of the market.
Perhaps even more important that the merger agreements being considered here in the U.S.A., mergers in Europe are changing the landscape of international travel. This consolidation was just punctuated by the BA/Iberia agreement last week. During the past year or so, Lufthansa’s purchased Swiss, Austrian, Brussels and bmi. And before that, Air France and KLM created a jointly run airline.
“I think we are seeing an evolution, seeing these alliances become tighter-knit partnerships,” noted AMR, parent company of American Airlines, chief financial officer Tom Horton at a recent travel conference.
Those are words that should terrify passengers, suppliers, airports and travel agents. His words, current action within the antitrust-immunized alliances and the crumbling of the Open Skies treaties are cause for serious concern.
Over the weekend, the Department of Transportatin (DOT) announced that they have given the oneworld Alliance provisional antitrust immunity. This brings oneworld into line with SkyTeam and Star Alliance and is the final nail in the coffin of advancing competition between scores of airlines in the international arena.
In a bureaucratic battle between the Department of Transportation and the Department of Justice, members of the Senate Judiciary committee have raised their voices once again. They are warning about the pending antitrust immunity for the American Airlines/British Airways/Iberia OneWorld Alliance.