16 July 2009

STAR and CO get Green Light – but at what price?

Much has been made of the DOT’s decision to proceed with minimal restrictions on the approval of the enlargement of the Star Alliance with CO and the approval of the new A++ group.

It seems that the DoJ had little influence over the decision despite laying out very clear anti-competitive objections to the proposed (and now approved) action. This would indicate a clear differing of opinions in the matters of air transport amongst the new Administration.

Looking behind the scenes therefore we can expect that there will be a number of future issues where Airline related matters are brought before the two Departments. For example should UAL and CO decide to enter into a merger agreement – a matter that the DoT clearly did not address in their ruling – then Justice would likely form a distinct barrier to that smooth approval process.

I believe that this is going to be a war that will entail many battles and that neither department is likely to give quarter on the subject. There will be heightened sensitivity by DoJ to matters of competition in Aviation related actions in the coming 3 years before the next Administration takes office. That should be interesting for all of us.

Interesting Non?


No comments: