Emirates urges closer scrutiny of transatlantic airline alliances

The European Union should scrutinise more closely the competitive advantage enjoyed by transatlantic airline alliances to ensure they do not violate antitrust rules, Emirates airline said late on Monday. Airlines that spent years ramping up their global operations have been hit by the recession that has hammered demand for travel. In response, many major carriers are forging partnerships that allow them to cut costs and capacity. But such alliances and growing government support for consolidation to avert failures could have an adverse long-term impact on independent airlines, said Andrew Parker, a Senior Vice-President at Emirates. "From co-operative frameworks, alliances have today become sophisticated, interwoven, often immunised vehicles with enormous market power," he said. "The consequences of changing alliances are not fully considered. I would encourage policymakers to look deeply into this." Emirates is not a member of any airline grouping. The European Commission, which acts as competition watchdog for the 27-nation European Union, is now probing Star Alliance members Air Canada, Continental, Lufthansa and United Airlines over possible anti-trust breaches. It is also investigating whether co-operation between members of the oneworld alliance – American Airlines, British Airways and Iberia – on schedules, capacity and sales, may have restricted competition. Parker said the European Union executive should also scrutinise the effectiveness of anti-trust concessions offered by carriers hoping to win approval for mergers and acquisitions, which usually involve giving up routes or airport slots. "They should not be token remedies with questionable effectiveness," he said. The commission should also do more to enable carriers to fly to any US city from anywhere in the EU and vice versa, said Parker. "There should be a more aggressive pursuit of Open Skies," he said. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .