The airlines can claim a massive victory with their latest victory in the antitrust immunity grant to American, British Airways and Iberia as well as their other partners in Oneworld. They may now compare notes, fares, schedules and costs for their international routes.
This victory for the monopolistic forces of the airline industry means that now more than 80 percent of international flights will be controlled by three giant alliances permitted to have a separate board of directors and officers and permitted to share the most intimate business secrets.
Bottom line for consumers — higher international prices coming in the near future. Though the airlines claim that they need this antitrust immunity to provide passengers a more seamless service and to provide customers more than they could individually, the real bottom line is more pricing power for the airline alliances.
I have absolutely no idea of what regulators at the Department of Transportation are smoking at their new headquarters on New Jersey Ave, but it must be potent to have them seeing this move to complete antitrust immunity for all alliances a good for consumers.
The only good news is that these alliances with antitrust immunity will soon come under fire from consumers and the Department of Justice and we may have rollback sometime in about a decade. Yes, it will take time to undo what has been created over the past decade.
Here’s the lineup with the major players:
Oneworld — American Airlines, British Airways, Iberia, Finnair, Royal Jordanian
SkyTeam — Delta, Air France-KLM, Alitalia, Korean Air, Aeroflot
Star Alliance — United, Continental, Lufthansa, Swiss, Air Canada, ANA
Still independent airlines — Virgin Atlantic, Emirates Airlines
The good news for consumers: Better coordination between many flights, sharing of airline club memberships and excellent sharing of frequent flier programs.
The bad news — less competition, higher prices, fewer flights, higher load factors.
More news coming as all of this develops further.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
