Oneworld, Without Antitrust Immunity, Ups European Small Business Sales

The Oneworld airline alliance enjoyed a significant increase in sales of its Businessflyer fares for small European businesses last year, but remains blocked from negotiating meaningful deals for larger corporations by lack of antitrust immunity.

Commercial director Filip Lemmens told EuroBTN that the current permission of antitrust immunity for rival alliances SkyTeam and Star Alliance, allowing them to negotiate as single entities with corporate clients, is unjust. "We have a global corporate sales solution but it is limited in reach and attractiveness because of lack of antitrust immunity," he said. "It is an unfair environment to compete. It is a lot easier for the other alliances to apply corporate offers. We should be allowed to do that too."

Oneworld expects to hear later this year the results of a review by the U.S. Department of Transportation as to whether it should be granted immunity. There are also investigations on both sides of the Atlantic into whether SkyTeam and Star Alliance should continue to receive immunity. "For now, our approach is very much based on Businessflyer," said Lemmens. "The rest will depend on the outcome of the antitrust immunity review."

Businessflyer is a program of discounted fares available to companies with too small a volume to negotiate a contract with a Oneworld carrier. It operates in Belgium, France, Germany, Italy, the Netherlands and Switzerland, all markets where the dominant carrier is not a Oneworld member. The majority of customers signed up to Businessflyer are small and midsize enterprises, but Lemmens said some are national branches of multinational corporations and others are companies that give the overwhelming majority of their business to the local dominant airline.

This week, Oneworld announced that in 2008 it increased its Businessflyer customer base by 12 percent to almost 10,000, including a 50 percent rise in France. Sales of all types of Oneworld fares rose 25 percent to $850 million in 2008, compared with an overall increase in revenues for Oneworld members of 3.5 percent. Total Oneworld interline revenues rose by 10 percent to $2.4 billion, with interline passenger numbers also up 10 percent to 8 million.

Oneworld claims that its members made a combined loss in 2008 of $1.7 billion, compared with losses of $8.8 billion for Star Alliance and $13.3 billion for SkyTeam. However, Oneworld does have fewer members than its two rivals.