US threat to airline alliances

Congressman questions anti-trust role

A US congressman is trying to launch an investigation into airline alliances to assess whether they operate in the public interest.

James Oberstar, a member of the US House of Representatives and chairman of its transportation committee, is concerned that alliances which also have anti-trust immunity do no benefit the public.

The 75-year-old Democrat has co-authored a clause in forthcoming aviation legislation which calls for a government study into the alliances.

But his move has been opposed by lobbyists working for airlines, hotels and travel organisation

They have written a protest letter to US transport secretary Ray LaHood claiming the alliances have benefitted both airlines and the public.

Mr Oberstar was quoted by Reuters as telling the International Aviation Club that alliances "sure work in the corporate interest."

He said he thought the three major alliances, Sky Team, oneworld and Star Alliance whose members include many of the world's major carriers, amounted, in effect, to monopolistic mergers which are unfair to the public.

"Is that what I voted for when I voted for (US airline) deregulation in 1978? Hell no," he said.

His claim comes as BA, American Airlines and Iberia, all members of oneworld, have applied to Mr LaHood for anti-trust immunity so they can work more closely on transatlantic routes.

Continental Airlines is aiming to join the Star alliance and wants to be able to work more closely with existing members Lufthansa and United Airlines.

Sky Team members Delta Air Lines, which merged with Northwest Airlines last year, and Air France signed a join venture in 2007 to pool revenues and marketing on transatlantic routes.   

Antitrust immunity lets alliance members to operate effectively as one airline on certain routes by enabling them to share prices, scheduling information and ticketing facilities.

The lobbyists told Mr that ending the alliances would cost jobs and weaken an industry already suffering badly the global downturn.

"The emergence of global alliances - which are defined by their core European/US airlines partnerships - have eliminated inefficiencies, promoted best practices and fostered vigorous competition," the letter said.

http://oberstar.house.gov   www.dot.gov   www.oneworld.com   www.staralliance.com   www.skyteam.com