British Airways’ Chief Executive Willie Walsh has called publicly for the U.S. Department of Transportation (DOT) to approve the airline’s proposed joint venture with American Airlines and Iberia, claiming it would strengthen competition on transatlantic flights.
In a speech to the International Aviation Club in Washington D.C. on October 14, Walsh called for parity among transatlantic global alliances by granting the oneworld alliance the anti-trust immunity that its rival alliances, Star and Skyteam, already enjoy.
“If approved, this agreement will bring substantial benefits to US-EU customers by offering an expanded route network, improved schedules and connectivity, greater access to discounted fares, fully reciprocal frequent flyer programs and integrated corporate deals,” Walsh said in his speech.
“Above all, it will provide customers with choice. The Star and Skyteam alliances already operate across the Atlantic with the benefit of anti-trust immunity. But surely a market of 800 million potential consumers deserves a choice of more than two network providers,” said Walsh. “If Star and Skyteam remain the only immunized alliances across the Atlantic, we could end up with an untouchable duopoly. I do not believe that customers would want that.”
Walsh took issue with claims that access for new competitors to London Heathrow was restricted, noting that the US-EU Open Skies agreement (which came into effect on March 30, 2008) enables any US or EU airline to fly from Heathrow to America.
“Some people had argued that it would be impossible for competitors to gain access to Heathrow. They were wrong,” declared Walsh. “The first phase of the US-EU Open Skies deal made Heathrow an open airport. As soon as it came into effect, the number of operators flying between Heathrow and the US more than doubled.”
Added Walsh: “Slots at Heathrow are available ― just ask the Star alliance. Star already possesses more than a quarter of Heathrow slots, far more than any other alliance at a competitor’s European hub. Yes, Heathrow is busy. But that is a consequence of the fact that it is the most competitive hub in the EU, with more airlines and more flights on transatlantic routes than any other airport.”
The U.S. DOT is expected to rule on the oneworld anti-trust immunity application by the end of October. BA says DOT approval would enable British Airways and its oneworld partners American Airlines and Iberia to operate a transatlantic joint business, subject to European Union approval.
BA’s biggest rival at Heathrow, Virgin Atlantic Airways, has fought for months to try to persuade the DOT and European Union not to approve BA’s proposed JV with American Airlines and Iberia, claiming it would create what effectively would be a monopoly on several routes to the United States from Heathrow.
However, the already-approved joint venture between Air France-KLM and Delta Air Lines boasts a high degree of market dominance on U.S. routes from Paris Charles de Gaulle Airport and Amsterdam Schiphol.
Additionally, the already-approved ‘Atlantic-Plus-Plus‘ joint venture among several Star Alliance members including Lufthansa, Air Canada, United and Continental holds a high degree of dominance on transatlantic routes from Frankfurt-Main International Airport. These are Europe’s three other busiest international-hub airports.