Global airline alliances: transformed by antitrust immunity but confronted by uncertainty


In the latest edition of Airline Leader, the monthly journal for airline CEOs, CAPA examines the impact of antitrust immunity and metal neutrality on the shape of global airline alliances.

The report, which can be downloaded from the Airline Leader website, focusses on four main issues: (1) the role of metal neutral ATI and its global implications; (2) the specific impact of this ATI for the various members of the alliances; (3) the outlook for alliances, as emerging economies’ airlines become more active participants; and (4) the uncertainty of antitrust law as a foundation for a new world airline order.

The granting of antitrust immunity on certain key routes has enabled the immunised members of each alliance to act as metal neutral single entities, giving them massive advantages over other non-immunised alliance members, according to the report.

Metal neutrality has changed the original alliance concepts such that smaller member airlines, in many instances, have to compete against their larger alliance partners as though they are one entity.

The north Atlantic market is one example where the three “core” members of each of the three alliances operate with a high level of cooperation through integrated JVs. “Granting some airlines much greater market power in such a key market as the north Atlantic must necessarily overflow into making those airlines’ other (non-immunised) global operations more effective. In global terms, the two major aviation powers are thus incidentally providing their select few “strategic”-level member a great advantage over all other international airlines including their own alliance partners,” says the report.

The report also examines the parallel evolution of the Gulf airline concept and the impact it is having on European network airlines and global alliances. It states that the use of the level playing field argument by established carriers is a guise for curtailing liberalism and promoting protectionism. “The new Gulf airline concept – for it is a whole new model – has rocked the established industry, particularly the European network airlines, which see it as a threat to expanding their long-standing sixth freedom markets,” says the report.

The full magazine is available for download from airlineleader.com

Airline Leader is a monthly journal covering strategic global aviation management issues. It provides cutting-edge feature stories and analysis, the latest financial and traffic reports, regional wraps, exclusive contributions from industry thought leaders and interviews with leaders in the industry.

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