he airline alliance wars are heating
up again, so here's a quick refresher course about what's at stake.
American Airlines and British Airways are once again seeking
government approval to link their systems and strengthen their
fledgling Oneworld alliance. Oneworld, in case you lost your
program, also includes a half-dozen other carriers, but American
and BA claim that unless they have antitrust immunity to agree on
prices, capacity and scheduling, Oneworld is no match for the Star
Alliance (anchored by United and Lufthansa), Wings (Northwest and
KLM) or SkyTeam (Delta and Air France).
Clearly, the big international airlines believe (or at least they
tell their governments they believe) that they are no longer
competing against each other. Rather, their alliances are competing
against each other.
Here's another way to look at it: American and British Airways
want to stop being head-to-head competitors on nonstop routes to
London from New York, Chicago, Los Angeles and other U.S. gateways.
Instead, they want immunity from the antitrust laws to fix prices
and capacity on those routes, and operate them jointly.
They say consumers will be better off.
As you may have read, our government allows U.S. airlines to do
this sort of thing, but only if the partner airline comes from a
country that has an "open skies" agreement with the U.S. "Open
skies" means any U.S. airline can fly to and beyond the other
country from any U.S. gateway, with no government controls on
fares, routes, capacity or scheduling. The airlines of the other
country get the same freedom.
The idea is that an "open skies" environment guarantees that the
partner airlines will still face the rigors of a competitive
marketplace, even after they combine their operations. This idea
did not originate with the current Bush administration, but you
might still regard it as something of a "faith-based