British Airways and American Airlines stated recommendations by the US Government to divest particular transatlantic services for approval of their antitrust immunity agreement are “unworkable and unnecessary”, and the US Department of Justice has failed to prove how the alliance would lead to increased fares and less choices for consumers (Reuters, 11-Jan-2010). The US Department of Transportation is expected to soon make a decision on the proposed alliance. [more - Perspective]
British Airways and American Airlines state US DoJ requests "unnecessary"
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787 network analysis: Boeing's 'hub-buster' is mostly used by airlines to feed, not bypass, hubs
Late in the past century, Airbus and Boeing established competing visions for the future of air travel and shaped their aircraft products accordingly. Airbus envisaged a future of strong hub-to-hub flying that would require its A380. Boeing foresaw the emergence of new long haul city pairs as airlines bypassed hubs to link small/medium cities directly point-to-point with its 787.
Both manufacturers were right – and wrong. Hubs dominate, yet most airlines prefer medium/large aircraft and not the very large aircraft category, consisting of A380s and 747-8s. A380 sales have lagged, raising questions about the aircraft's future, while Boeing is cutting 747-8 production again and has acknowledged that it may need to end production entirely.
Boeing positioned its 787 as a “hub-buster” that would not require passengers to transfer through hubs. Yet 73% of 787 flights are between hubs, among those operated by airlines with more than hub. Hub-to-secondary flights are few, but demonstrate some of Boeing's objectives with the 787: new routes and more frequencies. While hubs dominate, the 787 has given rise to smaller hubs like Denver and Calgary. Partnerships also help explain 787 network deployment: 66% of 787 flights are on routes without a partnership, perhaps indicating airline preference for a lower-risk aircraft.
Qatar Airways buys 10% of oneworld's LATAM, to add to its 15% in IAG
Enter Qatar Airways. As Etihad Airways looks to bed down its investments in other airlines, Qatar is gradually expanding its airline investment portfolio. Qatar's 15% stake in IAG is now being followed with a 10% stake in LATAM for USD613 million – nearly 1.5 times Qatar's net profit of USD446 million, disclosed (for the first time) on the day prior to the LATAM equity announcement. It is a safe investment; LATAM group has a strong market position and its share price has remained strong even in the face of a brutal downturn in Latin American economies.
Qatar gives LATAM needed cash and a distant shareholder. Latin America is the smallest market by far for Gulf airlines, but while currently in the economic doldrums, has a longer term potential for growth. It is also a key future market for US airlines, albeit very small on the Gulf airlines' networks. Qatar is spending nearly EUR2.5 billion on equity investments, still smaller than Etihad's but illustrating a willingness to acquire airline assets, for investment and strategic reasons. In this case the immediate strategic purpose for Qatar is less apparent.
Star Alliance's privately owned Avianca is also considering a strategic shareholder; that would mean five of Latin America's eight largest airline groups could have an airline investor from outside the region.