Unions bid to block alliances

Unions bid to block alliances

U.S. airline unions have intensified their calls for greater scrutiny of industry alliances in a move that could create major problems for both existing and proposed deals.

The Allied Pilots Association (APA), certified collective bargaining agent for the 11,500 pilots of American Airlines, have urged the U.S. Department of Transportation to decline American Airlines’ application for worldwide antitrust immunity with British Airways and Iberia, citing European Commission concerns and the airline’s refusal to address job-security, anti-competitiveness and national-security issues.

“As a result of two significant developments during the past several days, we urge the DOT to decline American Airlines’ application for worldwide antitrust immunity,” said APA President Captain Lloyd Hill.

“The first of those developments was the EC’s announcement earlier this month that American Airlines’ plans may violate rules governing restrictive business practices. Given those stated concerns, we question the advisability of granting approval to a deal that may fail to pass muster with the DOT’s European counterparts.

“Closer to home, American Airlines management has refused to provide industry-standard job protections for our pilots, despite APA’s concerted efforts,” Hill said. “We can only conclude that our worst fears would be realized in the event American Airlines is permitted to proceed with what amounts to a virtual merger with British Airways and Iberia.

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“For those reasons, we must now state our unequivocal opposition to American Airlines’ application for worldwide antitrust immunity and related joint business agreement.”

Before these two latest developments, APA had been urging policymakers to proceed with caution and conduct full due diligence before making any decision on the airline’s plans, citing concerns about the negative impact on the airline’s workers, the inherently anti-competitive nature of antitrust immunity and the implications for national security. On the latter point, U.S. carriers must remain ready to be deployed as needed for Civil Reserve Air Fleet duty. That readiness could be compromised by cross-border airline alliances or a relaxation in foreign ownership restrictions.

“The same concerns we have expressed regarding American Airlines’ plans apply to all immunized airline alliances,” Hill said. “These alliances have cost American jobs and they have proven detrimental to consumer interests around the world.”

Hill noted that the EC has been investigating the oneworld Alliance which includes American Airlines, British Airways and Iberia as well as the Star Alliance for possible illegal conduct.

“The EC’s ongoing investigation is yet another indication that the DOT should step back from the brink of permitting ever more collusive behavior in the airline industry,” he said. “Otherwise, airline workers and customers will pay a high price indeed.”

The call was echoed by the ALPA who represent flight crew at Delta and United, two leading members of immunized alliances. ALPA stopped short of calling for a ban on broader alliances, but pushed for “fairness” in the treatment of U.S. airline workers.