Travel Weekly quotes Jim Burnley on airline joint ventures

2 min

Venable Legislative and Government Affairs partner Jim Burnley was quoted in a March 23 Travel Weekly article on the value of global airline joint ventures SkyTeam, Star and the soon to be rolled out Oneworld.

The Star team alliance is led by United, Continental and Lufthansa; Skyteam is fronted by Delta and Air France and includes Northwest and KLM. Oneworld is a proposed partnership dominated by American, British Airways and Iberia.

While the U.S. Department of Transportation has granted antitrust immunity to these ventures - which allows airlines to share planes, routes, pricing, scheduling, policies and marketing efforts as if each were one big company - the U.S. Justice Department and some industry travel associations say the alliances give the carriers too much leverage in negotiations with travel buyers.

The Justice Department says that the new partnerships will curtail competition and raise ticket prices by as much as 15%. The DOT counters that the joint ventures actually boost competition by keeping the three major global alliances evenly balanced.

According to the article, the DOT has no minimum standards for successful alliances, beyond the requirement that airlines guarantee their partnerships will be "metal neutral" - sharing the risks and rewards no matter whose aircraft and crew fly the passengers.

Burnley, a former U.S. Secretary of Transportation, said the DOT "has criteria for reviewing each [alliance], but I don't believe there is a rigid, inflexible formula being used."