The Path to Open Skies: Transcending Global AlliancesIssues in Aviation Law and Policy (2004)
This essay (Paragraph No. 25,051) discusses some of the basic legal and economic issues raised by international airline alliances. As of September 2000, there were more than 500 international alliances involving over 200 airlines. These cooperative arrangements can vary from basic agreements to honor each other's tickets to "strategic" global networks that link the big U.S. airlines with partners from Europe, Asia, and Latin America. International carriers have been seeking as a matter of high priority to become connected to one of these alliances. As the authors note, the launch of these alliances responds to a ten-year doubling in global air travel, but also has been a reaction to the constricted legal regime within which international air travel has operated for the past five decades. Taken together, these are powerful forces for change. The authors begin by considering why alliances exist, how they operate, and the advantages they create for both airlines and their passengers. This is followed by a review of the impact of American antitrust laws on alliances that include a U.S. airline, why these alliances value a grant of "antitrust immunity" from the U.S. Department of Transportation, and the U.S. government's linking of a grant of immunity to "open skies" with the foreign carrier's home country. The second part of the essay examines problems arising from the rapid growth of alliances and those created by DOT's hard-wiring of open skies agreements to antitrust immunity. The authors conclude that a new, treaty-based framework for international air transport would be an effective way to begin resolving these problems. A multilateral air transport agreement, ideally involving the United States and European Union as founding partners, would supersede the present bilateral treaties, characterized by the authors as a "straitjacketed system . . . laborious and sovereignty-obsessed." The proposed treaty would abolish the "cabotage" and "nationality" principles, and create global competition tribunals for civil aviation. In this new world order, alliances could retain their importance as a competitive weapon, but would not be used when a full-scale international merger (barred under existing laws) would be more economically desirable.
Publication DateJanuary 1, 2004
Citation InformationBrian F. Havel; Andrew C. Eastmond, The Path to Open Skies: Transcending Global Alliances, 2001 Issues Aviation L. & Pol'y 13101, 13132 (2001-2004)