Proposed Alliance Between American Airlines and British Airways Raises Competition Concerns and Public Interest Issues

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Correspondence issued by the General Accounting Office with an abstract that begins "As part of their plan to form an international alliance, American Airlines (AA) and British Airways (BA) have sought immunity from antitrust laws in the United States and Europe. The extent to which the alliance might come to dominate the routes between major U.S. cities and London will depend on whether other airlines are able to enter this market under an open skies agreement. Some passengers may benefit from the larger network created by an AA/BA alliance, but GAO believes that the overall benefits of such an alliance ... continued below

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United States. General Accounting Office. December 21, 2001.

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Description

Correspondence issued by the General Accounting Office with an abstract that begins "As part of their plan to form an international alliance, American Airlines (AA) and British Airways (BA) have sought immunity from antitrust laws in the United States and Europe. The extent to which the alliance might come to dominate the routes between major U.S. cities and London will depend on whether other airlines are able to enter this market under an open skies agreement. Some passengers may benefit from the larger network created by an AA/BA alliance, but GAO believes that the overall benefits of such an alliance may be limited for several reasons. First, continuing constraints in slots, gates, and terminal facilities at London's Heathrow Airport and BA's corporate strategy for reducing its overall capacity would limit potential benefits. Second, several carriers are already serving many of the markets that the AA/BA alliance plans to serve. Third, neither AA nor BA claim that the alliance would generate substantial operational savings that could be passed on to stockholders, employees, and customers. A full review of the competitive effects of this and other alliances is needed because GAO's analysis suggests that a grant of antitrust immunity could enable the alliance to enhance its market power on some routes. The United States and the United Kingdom may have different interests in expediting a bilateral open skies agreement and a decision on the alliance."

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Government Accountability Office Reports

The U.S. Government Accountability Office (GAO) is an independent, nonpartisan agency that works for the U.S. Congress investigating how the federal government spends taxpayers' money. Its goal is to increase accountability and improve the performance of the federal government. The Government Accountability Office Reports Collection consists of over 13,000 documents on a variety of topics ranging from fiscal issues to international affairs.

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  • December 21, 2001

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  • June 12, 2014, 7:50 p.m.

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United States. General Accounting Office. Proposed Alliance Between American Airlines and British Airways Raises Competition Concerns and Public Interest Issues, text, December 21, 2001; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc296445/: accessed December 12, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.