American Airlines in a regulatory filing this week raised concerns that the U.S. Justice Department's recent involvement in airline antitrust proceedings could result in lopsided transatlantic aviation competition.
Filed as part of the Star Alliance antitrust immunity proceedings—in which DOJ has played an active role in delaying and criticizing
(BTNonline, July 7)—American said, "We have serious concerns about DOJ's request that the Department depart from the precedent set" in the approval of antitrust immunity for several SkyTeam carriers last year
(BTNonline, April 10, 2008).
Concerned about DOJ's stance regarding antitrust immunity—as it relates to the Star case, but also to the carrier's own quest for immunity approval with British Airways and Iberia, still awaiting a DOT decision
(BTNonline, Aug. 14, 2008)—American said, "The lack of consistent grants of antitrust immunity would distort competition among Star, SkyTeam and Oneworld," as authorities allow SkyTeam to "fully integrate," Star to "partially integrate, leaving Oneworld without any transatlantic integration."
In the filing, American argues that applying different standards to each alliance denies consumers the competition DOJ ostensibly is seeking to preserve. American also said that "changing course on immunized alliances would place existing—and future—open skies agreements in jeopardy," noting European constituents—particularly those in Spain and the United Kingdom, home to American's would-be immunized partners—regard the first-phase agreement as "one-sided in favor of U.S. carriers."
American notes in the filing, "DOJ appears misinformed about the current state of interalliance competition," particularly regarding the degree to which American and BA already cooperate on codesharing, frequent flyer benefits, airfares and joint corporate contracting, noting the two carriers don't offer such services jointly on a "comprehensive level," nor would they be able to without immunity.
"While DOJ's comments appear to claim that all alliances are equal in their ability to compete for transatlantic traffic, the reality is that some are now more equal than others," American concludes, noting that, "It is important for the Department to apply consistent decisional standards in its adjudicatory proceedings. Ruling on one application inconsistently with the others would tip the scales and deny consumers the benefits of full interalliance competition."