DOT Extends Oneworld Comment Period After DOJ Filing

In examining a oneworld alliance antitrust immunity application highlighted by a proposed American Airlines/British Airways/Iberia joint venture, the U.S. Department of Transportation on Dec. 22 "established a supplemental comment period--through January 11" for interested parties "to respond to late-filed pleadings." One such late filing, submitted by the U.S. Department of Justice, argued that the proposed agreements "would result in competitive harm on certain transatlantic routes serving 2.5 million passengers annually" and increase fares "up to 15 percent."
Having urged caution in June 2009 regarding the Continental-Star Alliance immunity request (with suggestions that DOT largely dismissed) DOJ recommended that DOT impose conditions on the oneworld carriers--"slot divestitures or carveouts, as appropriate"--to protect competition.

DOJ wrote that an antitrust immunity grant for oneworld "is likely to result in significant competitive harm in six transatlantic markets where American currently competes with British Airways and Iberia." Those markets are:

• Dallas-London and Miami-Madrid (where current nonstop service only is offered by the applicants);

• New York-London (where "Delta and Continental lag far behind American, British Airways, and Virgin in the share of the nonstop business traffic they carry between New York and London," according to DOJ);

• Boston-London; Chicago-London; and Miami-London.

The expected increases in fares on those six routes "are directly attributable to the loss of nonstop competition," DOJ wrote.

As it did in its filing on the Continental-Star Alliance immunity application, DOJ wrote that "few, if any" of the corporate travel managers it interviewed "stated a desire for increased inter-alliance competition."

DOJ's involvement in such DOT deliberations has drawn Congressional interest. A U.S. House of Representatives subcommittee in 2009 scheduled a hearing titled "Competition Concerns with International Airline Alliances: Should DOJ Co-Pilot the Airline Antitrust Immunity Process?" It was postponed twice, and never occurred.