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Yes, but maybe not for the reason you thought.
BRUSSELS — Cooperation between airlines might be good for them, and perhaps for elite members of their frequent-flier programs. But is it good for the rest of us?
The announcement this week that the European Union’s antitrust watchdogs have started proceedings against members of two of the world’s largest airline alliances shows that regulators on both sides of the Atlantic are asking that question.
The European Commission’s decision to investigate European and North American members of the Star and Oneworld alliances follows the introduction in February of a bill in the U.S. Congress calling for greater scrutiny of Oneworld, Star and SkyTeam, the trio of alliances that dominate trans-Atlantic routes.
“We think that there may be breaches of the antitrust rules because of the very extensive levels of cooperation on transatlantic routes between these airlines,” a commission spokesman, Jonathan Todd, told reporters Monday.
Although there was no coordination between Washington and Brussels, Todd’s words echo the concerns of U.S. Congressman Jim Oberstar, who heads the Transportation and Infrastructure Committee in the House of Representatives.
“If these immunized mega-alliances are allowed to proceed unchecked, the end result may be trading government control in the public interest for private monopoly control in the interests of the industry,” the Minnesota Democrat said in a statement when he introduced the bill in February.
Together, the three alliances control 87 percent of traffic between Europe and the United States, Oberstar said.
The attack from both sides of the Atlantic risks taking the steam out of what had been seen as a cruise toward ever-closer airline cooperation within alliances that were expanding both in geographic range and market power.
“It’s quite problematic for the airlines. If you go back six months, the alliances seemed to be on an inevitable continuum, that would develop and deepen until sometime down the line you might see some king of mega-merger,” said Nick Cunningham, aviation analyst at Evolution Securities.
“Recently … there’s been more significant opposition evident, particularly in Congress,” he said in a telephone interview from London. “The Commission has added to that sense that maybe the alliance concept is going to be a lot more difficult to achieve.”