DOT Set to Approve Oneworld Antitrust Immunity Bid

The U.S. Department of Transportation (DOT) on Feb. 13 said it would tentatively grant antitrust immunity to American Airlines and four international partners to form a global alliance.

Under the proposal, the airlines must agree to conditions to protect consumers and preserve competition. If the decision is made final, American and its Oneworld alliance partners – including British Airways, Iberia Airlines, Finnair and Royal Jordanian Airlines would be able to more closely coordinate international operations in trans-Atlantic markets.

In its show-cause order, the DOT tentatively found that granting antitrust immunity to the Oneworld alliance would provide travelers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times.

The DOT also said the proposed alliance would enhance competition around the world by creating competition with the existing Star Alliance and the SkyTeam alliance, which already have been granted immunity.

At the same time, the DOT also noted that the alliance could harm competition on select routes between the United States and London’s Heathrow Airport, Oneworld’s primary hub, where the availability of landing and takeoff slots is limited. As a condition of approval, the DOT is proposing in its show-cause order that the applicants make four pairs of slots available to competitors for new U.S.-Heathrow service.

The DOT also would require changes to the agreement to ensure capacity growth, and require the carriers to submit traffic data and implement the proposed alliance within 18 months of a final decision.