GAO Report on AA/BA Alliance.

7th Jan 2002

Northwest Airlines has said that the United States General Accounting Office (GAO) report issued on Friday afternoon, commenting on American Airlines (AA) and British Airways (BA) application for antitrust immunity, clearly proves that the proposed Atlantic alliance would choke-off competition with the American consumer being the real loser.
According to the airlines statement, the GAO concluded that, “Without some regulatory remedy, AA/BA would likely exercise considerable control over routes between major US cities and London, especially those routes that originate or terminate at London`s Heathrow airport-the preeminent airport in the United Kingdom.”

The report continued, “Because capacity is severely constrained at Heathrow airport, the ability of US airlines to increase US-Heathrow operations in a timely manner under an open skies agreement is limited.” The agency added, “Gains from the alliance and from negotiating an open skies agreement with the UK may not offset the harms from reduced competition.”

The federal agency completed an analysis at the request of Senators Ernest F. Hollings (D-SC) and John McCain (R-AZ), chairman and ranking minority member, respectively, of the Senate Committee on Commerce, Science and Transportation. An American Airlines spokeswoman, however, said the report was “very limited in its analysis, and its observations were qualified, recognizing the potential benefits as well as concerns.”

Northwest Airlines said, “We are pleased that the GAO has joined the Department of Justice, along with dozens of U.S. senators, congressional representatives, governors, airport officials and others who have asked the Department of Transportation to seriously consider the potentially grave consequences of the AA/BA alliance, before making a decision on immunity,” the carrier added.





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