March 28 - AAI Releases White Paper On Antitrust Immunized Airline Alliances


AAI Releases White Paper On Antitrust Immunized Airline Alliances

The American Antitrust Institute (AAI) today released an insightful white paper that argues the U.S. Department of Transportation (DOT) should regularly review antitrust immunity (ATI) for international airline alliances to protect competition and U.S. consumers. An excerpt and a link to the white paper are appended below. Next week, AAI President Diana Moss will be our guest on a special edition of BTC Radio to discuss this paper.

Business Travel Coalition Comments

From BTC’s perspective, at issue is that these antitrust-immunized alliances, made possible by Open Skies agreements, are premised on robust domestic and foreign carrier new entry and a market structure that evolves in a pro-consumer manner over time. Now, however, there is a protectionist movement underway on both sides of the Atlantic that, if unchecked, could fatally harm the Open Skies policy model and negatively impact consumer outcomes.

What’s more, now that the Delta Air Lines, American Airlines and United Airlines (BIG 3) have secured their antitrust immunities, and massively consolidated the domestic industry, their anti-competitive, anti-consumer policies and practices have greatly accelerated.

Consider that the BIG 3 have:

(1)  waged a scorched earth campaign against Norwegian Air UK Limited and the Gulf carriers (Qatar, Emirates, and Etihad) to fortify their monopoly market positions and protect their record-setting profits by blocking foreign competition and reducing consumer choice;

(2)  asked DOT to unwind virtually all consumer protections; and

(3)  withheld and restricted access to complete airfare, schedule and inventory availability information from metasearch platforms and third-party travel sites with whom the BIG 3 are direct competitors in the marketplace for travel services.

At a bare minimum, grants of ATI should have an end date and DOT should be transparent regarding criteria for reviews and establish a docket for public and industry comments for all considerations of renewals of ATI. Moreover, the U.S. Congress should legislate a robust authoritative role for the U.S. Department of Justice (DOJ) when such ATI reviews occur, or reverse the current roles giving DOT an advisory role and DOJ the decision-making authority.

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AAI White Paper

EXCERPT

Today, AAI issued the white paper "Revisiting Antitrust Immunity for International Airline Alliances." The paper makes the case for why the U.S. Department of Transportation (DOT) should revisit its policy surrounding grants of antitrust immunity for the international airline alliances. It describes the implications of immunized alliances for domestic competition and consumers, particularly in light of a decade of consolidation among U.S. alliance carriers.

A related issue is entry by non-allied foreign carriers on international routes that serve U.S. destinations. These include Norwegian Air UK Limited and the Gulf Carriers (Qatar, Emirates, and Etihad). The large U.S. legacy carriers have vigorously opposed entry into U.S. markets by these carriers. In parallel, domestic airlines are also expanding their stakes in foreign carriers. This is likely motivated by expansion opportunities abroad but also by gaining strategic control over foreign airlines' decisions regarding expansion into U.S. markets.

Download the white paper at https://btcnews.co/2Ggiev9.

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