Monday, April 20, 2009

EU Probes Coziness of Star Alliance, Oneworld Airlines

Continental plans to exit the SkyTeam Alliance "promptly" and join the Star Alliance, according to a Continental email I received, when the airline's last flights are on the ground Oct. 24.

But, now comes word that the European Commission launched two investigations of Air Canada, Continental, Lufthansa and United regarding their agreements in the Star Alliance, and the EC also is probing American Airlines, British Airways and Iberia over similar issues in Oneworld.

The Reuters story quoted EU spokesman Jonathan Todd as saying: “When you have cooperation between airlines in such areas as pricing, schedules and capacity, we have to make sure that the consumer actually benefits."

Reports indicated that the level of cooperation/coordination envisioned in some of these agreements exceeds what has been the norm in airline alliances.

Continental's email to OnePass members stated: "In June 2008, Continental announced plans for extensive commercial cooperation with United Airlines and Star Alliance, linking our networks and services worldwide to deliver new benefits to our customers. On April 7, 2009, the U.S. Department of Transportation tentatively approved the application for Continental to join the existing antitrust immunized alliance between United and eight other Star Alliance member carriers on international routes."

It doesn't appear that the EC probes would endanger Continental's planned "smooth as possible" transition from SkyTeam to the Star Alliance.

But, it remains to be seen -- and the EC investigations reinforce the urgency of the issue -- whether this alleged degree of "extensive commercial cooperation" among the airlines in question actually will benefit travelers or give the airlines more power to reduce competition.

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