Apply For Antitrust Immunity; APA Expresses Doubts
It's official. On Thursday, American Airlines announced it has
signed a joint business agreement with British Airways and Iberia
on flights between North America and Europe.
The companies later filed for worldwide trust immunity with the
US Department of Transportation, and declared their
intent to include fellow "oneworld" alliance members Finnair
and Royal Jordanian in the immunity agreement. Similar filings with
regulatory authorities in the European Union are planned.
"Today's announcement is a significant step towards
strengthening customer choice," American Airlines stated. "This
agreement will enable oneworld to compete effectively with rival
global air alliances that have already received transatlantic
antitrust immunity. Currently, six airlines in SkyTeam and nine
Star Alliance airlines have such immunity."
Arpey, Chairman and CEO of American parent company AMR, added "We
believe our proposed cooperation is an important step towards
ensuring that we can compete effectively with rival alliances and
manage through the challenges of record fuel prices and growing
economic concerns. In addition, we believe we will be more
effective competitors with greater ability to invest in our
products and services. As a result, this business agreement will
create positive outcomes for our customers, shareholders, employees
and the communities we serve."
British Airways CEO Willie Walsh cited the recent "Open Skies"
agreement as his reason for opting for the alliance. "We are
applying for EU-US antitrust immunity in a changed regulatory world
where London Heathrow is open to any US or EU airline that wants to
fly to the United States and where rival alliances have immunity,"
Not everyone welcomed news of the proposed alliance, however.
The Allied Pilots Association, which represents 12,000 pilots at
American Airlines, termed the news "problematic on several
"The scope clause in our current collective bargaining agreement
does not include an exception for a joint business agreement
between American Airlines and another airline," said APA President
Captain Lloyd Hill. "Management therefore needs APA's consent
before this joint business agreement can go forward."
Hill then pointed out his union's current struggle to negotiate
a new contract with American. "Today's announcement illustrates
that American Airlines management can negotiate complex agreements
on a timely basis when they want to do so," Hill said. "It's
indicative of management's misplaced priorities that they aren't
willing to apply the same sense of urgency toward negotiating new
collective bargaining agreements with their employees."
"That said, we understand clearly why the other carriers would
want to link up with American Airlines. The US aviation market is
the world's largest and most lucrative," he said. "And that's
precisely why we have such serious concerns... Make no mistake, we
want American Airlines to succeed, but that success cannot come at
the expense of the employees."