Today's opinion by the U.S. Department of Justice opposing giving antitrust immunity to American Airlines, British Airways and three smaller memberts of the oneworld alliance of airlines stands on shaky ground. Similar immunity - which allows airlines to cooperate by coordinating flight schedules, fares and marketing and allowing travelers to move more smoothly from one carrier's routes to another - has already been granted to members of the two other alliances, SkyTeam and Star Alliance.
American and BA have attempted to expand their association twice before this decade, but backed off when U.S. authorities wanted them to give up coveted landing slots at London's busy Heathrow airport in exchange for antitrust immunity. Since then, the airlines argue, a U.S.-E.U. open-skies pact, which has opened up trans-Atlantic travel and Heathrow slots to previously excluded competitors, has rendered this objection moot. Still, Justice disagrees.
It's hard to see what the grounds are for this objection, in an era in which competition between the three big airline alliances is replacing competition between individual airlines. The global alliances may not themselves be permanent fixtures on the international aviation scene, but until national governments around the world lower the barriers to foreign ownership and cross-border mergers between airlines, alliances are likely to be important players.
Justice's position may not matter anyway, as the U.S. Department of Transportation has the final say on AA, BA and partner airlines Spain's Iberia, Finland's Finnair and Royal Jordanian's proposal. All are oneworld members. According to media reports, DOT has put off making its decision, originally expected in October, so it could hash things out with the Justice Department.
Given the double standard employed by U.S. regulators, it's hard to see a compelling reason why DOT shouldn't grant antitrust immunity, as requested. Anything that can promote greater ease of travel for passengers and help airlines shore up their finances in the grip of a stubborn and deep global recession sounds reasonable.