New Concerns about the OneWorld Alliance

by Abbey on 28/10/09 at 9:34 am

New concerns appeared about the planned alliance between American Airlines, British Airways and Spain’s Iberia as all three carriers suffered losses this year.The International Air Transport Association forecasted that the overall loss of the airline industry would be $11bn in 2009.

According to Giovanni Bisignani, IATA chief executive, $80bn will vanish from the industry’s top line and it will take years in order to retrieve 15 per cent of lost revenue.

Airline companies try to merge but as a matter of fact they are confronted with normative barriers. For that reason the have decided to coordinate schedules and ticket prices on busy routes that can help them strengthen their businesses

One should say that during 30 years the airline industry has been unsteady. This fact can be explained by the following reason – the price of an airline seat has dropped estimably. In order airline companies do not file for bankruptcy, the new alliances were built up.

Two alliances such as Star and SkyTeam received antitrust immunity by the US Department of Transportation. At the end of this week the third alliance known as OneWorld will be given a preliminary ruling on its application for immunity.

It became known that the Star Alliance has 41 per cent of the market when at the same time SkyTeam has 29 per cent and OneWorld has 20 per cent.

Willie Walsh, BA chief executive, was sure that the alliance OneWorld would receive the permission despite the fact that it had 2 attempts to forge an alliance that was in 1996 and 2001 but were discarded as according to regulators the companies had to give up a big numbers of slots in order the carries could prosper.

The only way for BA, AA and Iberia to prove to Brussels that they have the financial benefits is that the planned alliance OneWorld will not depend on the expense of consumers.

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