MARK PILING / LONDON
Air France and British Airways are heading a rush to get moving with transatlantic antitrust immunity and US open skies. The new sense of urgency is in part spurred by the risk of losing out in the alliance game if Brussels puts a stop to such deals.
British Airways and American Airlines reapplied for antitrust immunity at the beginning of August, with SkyTeam members Delta Air Lines, Air France, Alitalia and CSA Czech Airlines asking for a similar arrangement just days later. The timing of both applications has gained increased urgency because of a hearing in the European courts in mid-November over whether the European Commission (EC) has power to negotiate air-service-agreements rather than members states.
The race is now on to beat the November deadline, with France and the UK aiming to negotiate their own agreements with the US before handing negotiating authority to the EC if it wins out in court. These two states are the only large European countries without open skies agreements with the USA. The French are reportedly seeking to accelerate open skies with the US in order to support an early antitrust immunity application by Delta and Air France and their partners. The SkyTeam group, which has advanced its plans for immunity being in place by a year to early 2002, is keen to profit from the advantages it brings. Talks on US-French open skies are scheduled for mid-September.
BA and American detect a greater political impetus for a US-UK open skies deal, which is a necessity for their antitrust immunity. "The UK now appears ready to strike such an agreement after watching the explosive growth of other European markets that have implemented open skies," says BA/AA. They believe they have a much better chance of gaining approval for their alliance plans than when they first put them forward in 1996. The partners filed plans for their new alliance, which features wide-scale codesharing, with the US and UK authorities and the European Commission. The plan covers a profit-sharing deal covering nine transatlantic routes: London to Boston, Chicago, Dallas/Ft Worth, Los Angeles, Miami, New York, Raleigh/Durham, St Louis and San Francisco.
The first BA/AA application for immunity foundered on the issue of how many slots BA should give up at Heathrow to create more capacity for other carriers. The price demanded by the regulators for up to 300 weekly slots was too high for BA. The carriers hope the changed alliance environment will result in toned down slot demands.
American already has codeshare deals in place with Swissair and Sabena and analysts believe it is likely that these will be kept separate to the BA link up to placate regulators. There is, however, a chance, some believe, that Washington will ask American to drop these codeshares as part of the price to give the go ahead for BA/AA immunity.
Source: Airline Business