First the JAL decision to stay with Oneworld, now this....
(Updates with comments from British Airways, American and Virgin.)
By Josh Mitchell and Kaveri Niththyananthan
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Department of Transportation Saturday approved an antitrust waiver that would allow AMR Corp.'s (AMR) American Airlines and British Airways PLC (BAIRY, BAY.LN) to cooperate on trans-Atlantic routes with conditions much less onerous than the last time it ruled on such a deal.
The ruling was immediately criticized by rival Virgin Atlantic Airways whose president Richard Branson described the draft conditions imposed by the DOT as "a complete joke" and urged the European Union to impose tougher ones to protect consumers.
American Airlines and British Airways welcomed the decision.
One key condition is that the alliance gives up four pairs of slots at London's Heathrow Airport, Oneworld's primary hub, where the availability of landing and takeoff slots is limited.
A previous alliance attempt in 2002 collapsed when regulators demanded 16 slot pairs--four times this total--be given up.
Slots at Heathrow are much prized. The airport is the world's busiest international airport measured by passengers and is highly congested.
Virgin's Branson said that following the deal American and British Airways would between them have 47% of the slots at London Heathrow.
The DOT said it granted antitrust immunity to members of the Oneworld alliance--American, British Airways, Iberia Airlines, Finnair and Royal Jordanian Airline. The approval carries certain conditions the airlines must meet "to protect consumers and preserve competition," the agency said in a statement.
If the decision becomes final after a public-comment period, the Oneworld airlines would be able to more closely coordinate international operations in trans-Atlantic markets.
In the DOT's ruling, regulators tentatively found that granting antitrust immunity to the Oneworld alliance would provide travelers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times. The department also said the proposed alliance would enhance competition globally by creating a new competitor for the Star Alliance and the SkyTeam alliance, which have antitrust immunity.
The DOT, however, also noted that the Oneworld alliance could harm competition on select routes between the U.S. and London's Heathrow Airport, Oneworld's primary hub, where the availability of landing and takeoff slots is limited. As a condition of approval, the department proposed that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service.
Virgin's Branson said that the decision to force only four pairs of slots to be given up "is a complete joke and those responsible for this decision should hang their heads in shame."
The DOT also would require changes to the agreement to ensure capacity growth and require the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision.
The proposed tie-up has yet to get the green light in Europe and Branson said the European Union should "continue its more consumer focused approach when it takes its decision in the coming weeks."
-By Josh Mitchell and Kaveri Niththyananthan, Dow Jones Newswires, 202-862-6637; [email protected].
(Updates with comments from British Airways, American and Virgin.)
By Josh Mitchell and Kaveri Niththyananthan
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. Department of Transportation Saturday approved an antitrust waiver that would allow AMR Corp.'s (AMR) American Airlines and British Airways PLC (BAIRY, BAY.LN) to cooperate on trans-Atlantic routes with conditions much less onerous than the last time it ruled on such a deal.
The ruling was immediately criticized by rival Virgin Atlantic Airways whose president Richard Branson described the draft conditions imposed by the DOT as "a complete joke" and urged the European Union to impose tougher ones to protect consumers.
American Airlines and British Airways welcomed the decision.
One key condition is that the alliance gives up four pairs of slots at London's Heathrow Airport, Oneworld's primary hub, where the availability of landing and takeoff slots is limited.
A previous alliance attempt in 2002 collapsed when regulators demanded 16 slot pairs--four times this total--be given up.
Slots at Heathrow are much prized. The airport is the world's busiest international airport measured by passengers and is highly congested.
Virgin's Branson said that following the deal American and British Airways would between them have 47% of the slots at London Heathrow.
The DOT said it granted antitrust immunity to members of the Oneworld alliance--American, British Airways, Iberia Airlines, Finnair and Royal Jordanian Airline. The approval carries certain conditions the airlines must meet "to protect consumers and preserve competition," the agency said in a statement.
If the decision becomes final after a public-comment period, the Oneworld airlines would be able to more closely coordinate international operations in trans-Atlantic markets.
In the DOT's ruling, regulators tentatively found that granting antitrust immunity to the Oneworld alliance would provide travelers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times. The department also said the proposed alliance would enhance competition globally by creating a new competitor for the Star Alliance and the SkyTeam alliance, which have antitrust immunity.
The DOT, however, also noted that the Oneworld alliance could harm competition on select routes between the U.S. and London's Heathrow Airport, Oneworld's primary hub, where the availability of landing and takeoff slots is limited. As a condition of approval, the department proposed that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service.
Virgin's Branson said that the decision to force only four pairs of slots to be given up "is a complete joke and those responsible for this decision should hang their heads in shame."
The DOT also would require changes to the agreement to ensure capacity growth and require the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision.
The proposed tie-up has yet to get the green light in Europe and Branson said the European Union should "continue its more consumer focused approach when it takes its decision in the coming weeks."
-By Josh Mitchell and Kaveri Niththyananthan, Dow Jones Newswires, 202-862-6637; [email protected].
