New York’s JetBlue Airways has urged the Trump Administration to make conditions to the future granting of antitrust immunity (ATI) between airlines “more robust”, as the carrier expressed concerns for the tentatively approved joint venture of Qantas and American Airlines.
In a submission to the US Department of Transportation (DOT), JetBlue said it “takes no position” on the likely granting of ATI between Qantas and American, but indicated a green light will likely stifle any new competition.
“It is undeniable, however, that such a grant will substantially reduce competition in relevant markets and concentrate a huge level of market share and power in the hands of immunised alliances”.
JetBlue said that should Qantas and American Airlines be granted final approval, that pact, along with those of Virgin Australia and Delta Air Lines, and United and Air New Zealand, will have a combined market share of 86% on US-Australasia routes, and a whopping 93% of capacity on the Los Angeles-Sydney route.
“The granting of ATI for these alliances, which are typically led by the largest carriers that already hold the largest market shares, is an awesome governmentally conferred benefit. Therefore, it is essential that the department’s generosity toward the most powerful carriers and alliances be matched by a similar commitment to protecting and promoting competition from smaller carriers that are not a party to one of these immunised alliances,” JetBlue said.
The non-aligned US carrier urged the DOT to cap joint venture agreements at five years and subject to a de novo review to determine if the grant should be renewed. The US Government said in its recent draft decision it would require Qantas and American Airlines to carry out a self-assessment after seven years.
Further, JetBlue insisted that the ATI bar exclusivity provisions and impose an obligation to provide interline access, as well as assure airport access in the form of suitable gates and slot at commercially viable times of day for new entrants and other airlines competing with the immunised joint ventures.
In the meantime, Qantas and American Airlines told the DOT this week that they agree with the regulators detailed analysis of the proposed joint business and its conclusions.
“The Parties agree that the Proposed JBA with antitrust immunity will ‘align . . . economic incentives’ of the Parties to open complementary networks and inventory to each other, unlocking hundreds or thousands of connecting flight options that are not available through simple codesharing,” they said.
Image credit: Anchorage Daily News