Op-Ed: Proposed Legislation Would Freeze Airline Alliance Advances

It is common knowledge that no single airline's network is expansive enough to take every customer every place he or she wants to go. That's why it is critical for consumers to have access to three global air alliances—the Oneworld, Star and SkyTeam alliances—each consisting of multiple airline partners cooperating to create more seamless global networks and better travel options.

Yet, business and leisure customers could lose these options and the competition that alliances create under legislation proposed by chairman of the House Transportation and Infrastructure Committee, Rep. James Oberstar (D-Minn.). The legislation would require the General Accountability Office to undertake a year-long study of the competitive impact from alliances from so-called "antitrust immunity," and U.S. policy for granting immunity. It also would rescind existing authorizations for immunized alliances three years after enactment, forcing airlines to reapply.

Antitrust immunity is the catalyst that allows consumers to benefit the most from alliances. It is what permits participating airlines to align their networks, fares, schedules, services and amenities so that consumers get the best-possible travel experience and the airlines achieve financial benefits—such as revenue sharing—not possible absent this tighter relationship.

While we don't object to study, we believe the sunset provision will chill airlines' willingness to invest in these relationships, meaning fewer benefits for airline customers, shareholders and employees. If the goal of the legislation is more competition, the quickest way to do that is to give Oneworld antitrust immunity to take on Star and SkyTeam, which already have it, on a level playing field.

Five Oneworld airlines—American Airlines, British Airways, Iberia, Royal Jordanian and Finnair—have applied to the U.S. Department of Transportation for similar immunity. As part of the application, American, BA and Iberia plan to create an integrated joint business for flights between North America and Europe that will yield better schedules, travel options and frequent flyer benefits.

It is timely that Rep. Oberstar's legislation comes at the one-year anniversary of the U.S.-European Union Open Skies agreement, which let U.S. and EU carriers fly between any point in the United States and any point in the European Union. Indeed, air alliances have been largely responsible for significant new transatlantic service—more than 20 new routes—launched under Open Skies. In several cases, fellow alliance members have shared or traded the critical airport takeoff-and-landing slots.

Airlines need strong relationships and global reach to meet customers' demands for seamless travel and healthy competition. We believe DOT's existing review process is more than sufficient to ensure that consumers are protected.