U.S. Senators Join Fight Against American Airlines/British Airways Pact

Senators say pact will lead to fewer service options, higher prices for constituents

Twenty U.S. Senators today urged members of the Bush Administration to deny antitrust immunity to two of the world’s largest airlines. The senators are the latest among a growing number of officials expressing concern that a proposed alliance between American Airlines (AA) and British Airways (BA) would lead to less competition and higher fares for travelers.

The two airlines have applied to the U.S. Department of Transportation (DOT) for antitrust immunity to form an alliance that would allow them to operate between the U.S. and the UK as though they were a single merged entity.

In letters to Secretary of Transportation Norman Mineta and Secretary of State Colin Powell, the 20 senators expressed concern that an AA/BA alliance would make it even harder for them to improve their states’ airline service options to London’s Heathrow Airport.

“Heathrow is one of the most important international destinations for U.S. passengers and, in particular, is critical as one of the world’s key business destinations,” the letters state. “Long-standing efforts to obtain adequate service for our states, however, have been frustrated by aviation agreements that bar all but two U.S. airlines from serving Heathrow.”

Under a 1977 treaty, only two U.S. airlines – American and United – and two British airlines – British Airways and Virgin Atlantic – are allowed to fly between Heathrow and the United States.

Although London is also served by Gatwick Airport, Heathrow is preferred by business passengers and others that place a premium on travel time and convenience.

The senators say that a proposal to open Heathrow to other airlines in exchange for immunity would not solve the problem, because there are not enough take-off and landing rights—known as slots—and airport facilities to accommodate new competitors.

“This will lead to fewer service options and higher prices for our constituents, because airlines wishing to compete with the alliance will be unable to obtain the necessary slots and facilities at Heathrow to do so,” said the letters.

In the letters, the senators remind Secretaries Mineta and Powell of the United States’ long-standing policy not to grant antitrust immunity to airline alliances unless the country in question offers real and full competitive access for the airlines of both countries.

“We urge you not to disadvantage our states and consumers by deviating from that policy,” the letter says. “We do not want our states put in a position of having to compete against each other for a few, scarce opportunities for new service to Heathrow.”