The long-awaited ABI (American-British Airways-Iberia) tango became official today when the trio said it will seek antitrust immunity for its trans-Atlantic flying. My colleague Kerry Capell has a thorough post today on the deal. The oneworld alliance’s dominance at Heathrow is the prime sticking point in the craw of some, namely Virgin boss Sir Richard Branson, who put out a new statement today calling the deal “a monster monopoly” which would decrease competition and raise fares.
Naturally, BA and American argue that the Open Skies treaty has exposed Heathrow to further competition and that their bid to coordinate fares and capacity will not harm the traveling public. Indeed, executives took the exact opposite tack in their statement. Said BA chief Willie Walsh: “This strategic relationship strengthens competition by providing consumers with easier journeys to more destinations with better aligned schedules and frequencies.” Ah, the benevolence. Of course, Delta, Northwest and Air France KLM enjoy the same perks in Paris and Amsterdam, while Lufthansa (with United) essentially owns Germany via antitrust immunity. The five oneworld airlines involved with the effort have also launched a new site to help sell the deal and encourage travelers to write to U.S. transportation officials to lobby for approval.
Still and all, I prefer to think about this in a common-sense fashion, more along the lines of how the Wall Street Journal expressed it …
... in an Aug. 11 article about the proposal. “The approval, for what is known as antitrust immunity, allows airlines to cooperate internationally on pricing, scheduling and marketing in ways normally deemed collusive and illegal.” In other words, what is now illegal may be deemed legal, because aviation circumstances change and a greater good may be achieved.
Now, one can argue forcefully that such a change in the current trans-Atlantic situation is net good or net bad, depending on where you sit and your particular political and economic bents. The greater good is… higher fares to strengthen oneworld airlines’ poor financial health? Branson, who stands to bear a direct hit if the proposal is granted, says fiscal turmoil for AMR and British Airways should not be a factor. Or should we consider, and I mean seriously consider, the prospect of greater passenger choice on connections? That may now be a problem. I have no idea, not being a regular international jetsetter connecting through Heathrow. Better use for all those miles frequent travelers accrue? It’ll be interesting to watch this play out. Regulators are likely to demand some concessions, as they have in the past, and the alliance will strive to keep those to a minimum. But my hunch is that the third time will be much more charming for oneworld.
Naturally, BA and American argue that the Open Skies treaty has exposed Heathrow to further competition and that their bid to coordinate fares and capacity will not harm the traveling public. Indeed, executives took the exact opposite tack in their statement. Said BA chief Willie Walsh: “This strategic relationship strengthens competition by providing consumers with easier journeys to more destinations with better aligned schedules and frequencies.” Ah, the benevolence. Of course, Delta, Northwest and Air France KLM enjoy the same perks in Paris and Amsterdam, while Lufthansa (with United) essentially owns Germany via antitrust immunity. The five oneworld airlines involved with the effort have also launched a new site to help sell the deal and encourage travelers to write to U.S. transportation officials to lobby for approval.
Still and all, I prefer to think about this in a common-sense fashion, more along the lines of how the Wall Street Journal expressed it …
... in an Aug. 11 article about the proposal. “The approval, for what is known as antitrust immunity, allows airlines to cooperate internationally on pricing, scheduling and marketing in ways normally deemed collusive and illegal.” In other words, what is now illegal may be deemed legal, because aviation circumstances change and a greater good may be achieved.
Now, one can argue forcefully that such a change in the current trans-Atlantic situation is net good or net bad, depending on where you sit and your particular political and economic bents. The greater good is… higher fares to strengthen oneworld airlines’ poor financial health? Branson, who stands to bear a direct hit if the proposal is granted, says fiscal turmoil for AMR and British Airways should not be a factor. Or should we consider, and I mean seriously consider, the prospect of greater passenger choice on connections? That may now be a problem. I have no idea, not being a regular international jetsetter connecting through Heathrow. Better use for all those miles frequent travelers accrue? It’ll be interesting to watch this play out. Regulators are likely to demand some concessions, as they have in the past, and the alliance will strive to keep those to a minimum. But my hunch is that the third time will be much more charming for oneworld.
http://businessweek.com/lifestyle/travelers_check/archives/2008/08/should_ba-ameri.html
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