Major Win: DOT Approves oneworld Antitrust Immunity

In a big win for the oneworld Alliance, the U.S. Department of Transportation (DOT) granted antitrust immunity to American Airlines and four international partners in “oneworld” to form an integrated global alliance. But the DOT also imposed several conditions that will protect consumers and preserve competition. Today’s action makes final the Department’s tentative decision of February 13.

As a result of the Department’s action, American and its oneworld alliance partners, British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines, will be able to more closely coordinate international services. The DOT said it found that granting antitrust immunity to the oneworld alliance will provide travelers and shippers with a variety of benefits, including lower fares in some markets, new nonstop routes, improved services and better schedules. The Department also said that the alliance will enhance competition around the world by enabling the oneworld alliance to compete more vigorously with Star Alliance and SkyTeam, which operate similar immunized alliances.

While the Department found that the alliance, on balance, was pro-competitive, it noted that the alliance could harm competition on select routes between the United States and London’s Heathrow Airport, a major hub for oneworld, where the availability of landing and takeoff slots is limited.

To remedy this potential problem, the DOT required the applicants to make four pairs of slots at Heathrow available to competitors for new U.S.-London service, with two pairs to be used for Boston-London service and the other two for service from any other U.S. cities.

The Department also required changes to the alliance to ensure capacity growth, and required the carriers to submit traffic data and to implement the proposed alliance within 18 months. The carriers also must resubmit the alliance agreements for review within five years.