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Competition watchdogs probe airline alliances

22 April 2009

Competition authorities on both sides of the North Atlantic are struggling to respond to the growing efforts by some of the biggest airlines in Europe and the US to deepen their transatlantic cooperation.

The decision this week by the European Commission to launch two formal antitrust proceedings against planned airline deals among core carriers in the Star and Oneworld alliances, respectively, highlights the confusion and the very different approaches being taken by US and European Union competition agencies.

The alliances are aimed at allowing airlines to enhance their networks well beyond their own resources by offering customers “seamless travel” among members supported by code sharing deals, common frequent flier programmes and reciprocal access to business lounges.

The processes for securing approval for transatlantic cooperation deals, which include most features of a joint venture short of common equity stakes, are very different in the US and the EU.

In the US, carriers must first apply and be granted permission to collude in joint ventures, before they can start operations.

In Europe, they inform the authorities of their intentions, but they can start operations at once – at their own risk.


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