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Antitrust Immunity and International Airline Alliances

Author

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  • William Gillespie

    (Economic Analysis Group, Antitrust Division, U.S. Department of Justice)

  • Oliver M. Richard

Abstract

Most of the major carriers worldwide have joined one of three international airline alliances. The U.S. Department of Transportation has granted immunity from the U.S. antitrust laws to many carriers within these alliances. This article assesses the competitive effects and efficiencies associated with such grants. A grant of antitrust immunity to carriers in an alliance reduces competition in routes where these carriers offer competing flights, and the data show that fares paid by passengers for travel in non-stop trans-Atlantic flights are higher in routes with fewer independent competitors. The data also show that the alliances can produce pricing efficiencies for trans-Atlantic passengers who travel with connecting itineraries, but antitrust immunity within an alliance is not necessary to achieve such efficiencies.

Suggested Citation

  • William Gillespie & Oliver M. Richard, 2011. "Antitrust Immunity and International Airline Alliances," EAG Discussions Papers 201101, Department of Justice, Antitrust Division.
    • Handle: RePEc:doj:eagpap:201101
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    File URL: https://www.justice.gov/atr/public/eag/267513a.html
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    Cited by:

    1. Xing Hu & René Caldentey & Gustavo Vulcano, 2013. "Revenue Sharing in Airline Alliances," Management Science, INFORMS, vol. 59(5), pages 1177-1195, May.
    2. Morrison, William G. & de Wit, Jaap, 2019. "US open skies agreements and unlevel playing fields," Journal of Air Transport Management, Elsevier, vol. 74(C), pages 30-38.
    3. Zhang, Shengrun & Fuellhart, Kurt & Yang, Wendong & Tang, Xiaowei & Witlox, Frank, 2019. "Factors shaping non-stop airline services in the transatlantic air transport market: 2015–2017," Journal of Transport Geography, Elsevier, vol. 80(C).

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