United States Department of Transportation
i
International Aviation: Competition Issues in the U.S. - U.K. Market
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1997-06-04
[PDF-87.77 KB]
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TRIS Online Accession Number:00740680
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NTL Classification:NTL-AVIATION-Airports and Facilities;NTL-AVIATION-Aviation Economics and Finance;NTL-AVIATION-Aviation Planning and Policy;
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Abstract:Access to London's Heathrow Airport is important to any airline that desires to
be a major participant in the transatlantic market. Current U.S. bilateral
aviation agreement with the United Kingdom restricts the number of U.S. airlines
that can serve Heathrow to two carriers-American Airlines and United Airlines.
In June 1996, American Airlines and the United Kingdom's largest airline,
British Airways, announced that they intended to form an alliance that would
allow both carriers to market each other's flights as their own (referred to as
"code-sharing") and that they would seek immunity for the alliance from U.S.
antitrust laws. Such alliances must be approved by the Department of
Transportation (DOT), and as a matter of U.S. policy, DOT only grants antitrust
immunity to such alliances if there is an "open skies" agreement. Since
July 1996, DOT has been negotiating with the British government but the two
sides have yet to agree on such an accord. In this statement before Congress,
John H. Anderson, Jr., Director, Transportation Issues, Resources, Community,
and Economic Development Division of the General Accounting Office discusses
the (1) current status of airline competition in the U.S.-U.K. market and of
negotiations between the United States and the United Kingdom, (2) potential
competitive impacts of the proposed alliance between American Airlines and
British Airways, and (3) obstacles that might prevent U.S. airlines from having
adequate access to Heathrow. 20p
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