What’s the Department of “Justice” smoking? According to this Reuter’s article, “the U.S. Justice Department opposes broad antitrust immunity for Continental Airlines Inc (CAL.N) to join UAL Corp’s (UAUA.O) United Airlines and other members of the Star alliance, documents showed.”
That doesn’t make any sense to me, but I’m sure they have a plausible explanation, especially since the airline industry lost over five billion dollars ($5,000,000,000) last year, right?
antitrust enforcers said approval is likely to harm competition on some international routes, including flights between U.S. cities and Canada and China.
Well, yeah, that’s kind of the point of partnerships, isn’t it? At the same token, I don’t see why they singled out Canada and China. I don’t see any massive capacity reductions to either of those destinations as a result of Continental entering a partnership with United and joining the Star Alliance.
The proposed agreements also could harm domestic competition and raise fares on some routes, Justice Department lawyers wrote in public comments.
So what are ya’ll proposing, that we continue to let the airlines run their course in a recession and probably top last year’s losses? Yeah, that sounds like a plan. After all, we could just bail them out if that doesn’t work.
The DOJ also said Continental, United and the other carriers have offered “little in the way” of consumer benefits arising from the alliance.
Well, yes and no. There are certainly more benefits to them than to us, but I wouldn’t call the deal completely one-sided. Consumers have a lot to gain from alliances” Just look at all the reciprocal benefits we get out of alliances, from reciprocal award availability to reciprocal lounge access to priority boarding on other airlines to more direct flights. I’d say the development of alliances is the best thing to come out out of the airline industry in the past ten years.
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