Aviation competition: international aviation alliances and the influence of airline marketing practi

In Sections 4, 5 and 6, we describe the available data and provide newer evidence on the fare effects of antitrust immunized alliances.

Aviation Law

We define a variable ATI equal to the number of additional ATI carriers in a route over and above the number of independent competitors. Given the clear benefits of competition in terms of lower prices for consumers, regulators should be wary of calls to further decrease competition in pursuit of increasingly uncertain benefits.

Delta customers will see a Delta flight number and a Delta code on both segments of the itinerary even though Delta operates the Atlanta-Paris flight and Air France operates the Paris-Toulouse flight.

Airline alliances can also offer benefits to the consumer by offering seamless travel and services between a more extensive range of city pairs, reduction in travelling time, joint lounges and co-ordination of FFPs. Representative Experience Representing Delta Air Lines in litigation and various regulatory matters, including in its ongoing dispute with the City of Dallas regarding limited gate space at Dallas Love Field.

This practice, known as code-sharing, allows an airline to market to its customers flights to destinations served by its partner s without having to operate additional aircraft.

Morrison and Winstonfor example, show that customers dislike interline flights, and Park shows how alliances may enhance flight options and customer welfare.

The question whether and to what extent indirect flights should be included in the relevant market for the assessment of the different transatlantic air alliances is not yet finally settled.

Department of Transportation aspects of its Aer Lingus acquisition and in applying for antitrust immunity grant.

The carrier effects control for carrier-specific factors, such as service or cost differences, that may explain some fare differences across tickets.

With team members in Washington, DC, Houston, New York, London, Los Angeles, San Francisco, Hong Kong and Tokyo, we serve clients on all continents and are linked by advanced communications technology, enabling us to offer comprehensive services to the international aviation industry efficiently and globally.

This type of arrangement was adopted by the domestic alliances between Delta, Northwest, and Continental over the period and United and Continental over the period Consider for instance the Star alliance.

We have also represented clients in petitions for review in the U. DOT collects these data under its Orders granting antitrust immunity to alliances e. Foreign carrier data are not reported in DB1B. The parties to immunized JVs also argue that seat inventory management will be improved in a metal neutral JV that has a common bottom line.

Handled pre-delivery payment financing for eight A aircraft, the first Airbus financing for Ethiopian Airlines, which has been an all Boeing airline. Our Aviation Regulatory practice covers certification, licensing, administrative adjudication, rulemakings, legislation, enforcement, air service negotiations, antitrust, environmental, export licensing, customs and tax matters, and airline safety and accident investigations.

The Antitrust Division encourages independent research by its economists. Our work includes all aspects of: Exemptions to Antitrust Immunity Grants The harm as a result of antitrust immunity grants to international alliances is to customers in trans-Atlantic non-stop overlaps.

With antitrust immunity, the JV partners thus have commercial incentives to expand the set of routes in their agreement to include routes where they compete, irrespective of whether the JV delivers any benefits to consumers in these routes.

Numerous economic studies of the domestic U. At the same time, Continental Airlines may join the alliance. For instance, major carriers have regional alliance agreements at their hub airports with commuter carriers that serve smaller cities, and some major U.

Aviation Security Pillsbury lawyers have experience in virtually all matters related to airport security. If the presence of an additional ATI carrier lowers fares, then the ATI variable will have a strongly negative and statistically significant effect on fares.

First, DOT determines whether an agreement "substantially reduces or eliminates competition. If the JV partners include in their agreement routes where they offer competing flights, then they may collude, raise prices, and earn incremental profits in these routes simply as a result of the lessening of competition.

Available Data We define a route as a non-directional city-pair with an endpoint in the U. The carriers may collude on fares to these local passengers at non-U. Granting antitrust immunity to carriers in an alliance agreement eliminates competition between these carriers in their non-stop overlaps, which are the routes where they principally compete see Section 2.

Antitrust Pillsbury lawyers regularly advise aviation industry clients on the full range of antitrust and competition issues. Despite the differences in the respective competition laws and procedures, co-operation in the application of EU and US competition law in other global industries has been successful avoiding the potential problems of diverging decisions or inconsistent remedies.

Lack of appropriate jurisdictional and procedural framework While the Community competition rules i. Liberalisation and competition enforcement are mutually reinforcing policies. Without immunity, carriers might prefer to allocate seats to their own passengers rather than alliance passengers to maximize revenues.

We use quarterly data for the period data are available through quarter three for a total of 23 quarters of data. Represented airlines in more than 30 countries on the purchase, sale or financing of U.

It is incumbent upon the Applicants to substantiate their claims, in part because much of the information relating to efficiencies is uniquely in their possession.

Airline industry

Orders,but these data are not made publicly available. Fare data for tickets ticketed by foreign carriers are not reported in the publicly available DB1B data when they include no flights operated by U. A ticket is an online ticket if all of the coupons in the ticket are operated and marketed by a single airline including its regional affiliates.Although no explicit definition and delineation exists for global airline alliances, according to the report published by IATA and the report jointly published by The United State Department of Transportation ("DOT") and Europe Commission, airline alliances are generally classified into the following three categories.

approve the proposed American Airlines/British Airways alliance until the United States successfully negotiates an open skies agreement with the United Kingdom. • The proposed alliance of American Airlines and British Airways—the two largest carriers in the U.S.-U.K.

markets—raises significant competition issues. The global aviation industry can be turbulent. We help clients find clear skies. Our aviation practice spans every facet of the industry, including regulatory, aviation finance and leasing, antitrust, airline alliances and joint ventures, litigation, legislative/lobbying, M&A, and environmental.

fic across the Atlantic. They are: International Airline Group (BA merged with Iberia) and virtually merged with American; to intra-alliance competition and/or con - flicts of interest.) Importantly, the US DoJ contests the looking for an alliance intro – see Aviation Strategy, Jan/Feb ).

Looking at the North Atlantic from a. Among our clients are more than 80 airlines worldwide and many of the world’s largest aerospace companies, including aircraft, engine and component manufacturers; top cities and airports; major domestic, foreign and cargo air carriers; new entrants; charter operators; large repair stations; international banks; and leasing companies and brokers.

IATA Economics presents analysis of economic and policy developments affecting the financial performance of the global airline industry mint-body.com homepage.

Antitrust Immunity And International Airline Alliances

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Aviation competition: international aviation alliances and the influence of airline marketing practi
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