Aviation Competition: Effects on Consumers From Domestic Airline Alliances Vary

摘要

Early in 1998, the six largest U.S. airlines, which account for nearly 70 percent211u001eof domestic airline traffic, announced their intentions to form three alliances, 211u001ein which the partners---Northwest and Continental, Delta and United, and American 211u001eand US Airways---would cooperate on some aspects of their business. These 211u001ealliances vary from a limited marketing arrangement, such as reciprocal frequent 211u001eflyer programs, to more complex agreements, such as those involving 'code-211u001esharing' or one partner's ownership of an equity share in the other partner's 211u001ebusiness. The airlines say that these alliances will benefit consumers through 211u001eexpanded route networks and combined frequent flyer programs. Others, however, 211u001esay that the alliances will decrease competition, ultimately reducing passengers' 211u001echoices and increasing fares. Concerned over the potential anticompetitive 211u001eeffects of the alliances, the Department of Transportation is reviewing them, and 211u001ethe Department of Justice filed suit in October 1998 to prevent Northwest from 211u001eacquiring voting control of Continental. Justice did not, however, request a 211u001etemporary injunction precluding the transfer of voting control.