By Ann Keeton
Of DOW JONES NEWSWIRES
CHICAGO -(Dow Jones)- The Air Transport Association, the trade group for major U.S. carriers, has asked an E.U. regulator to come out in favor of global airline alliances currently under review in the European Union for antitrust issues.
In a letter to Neelie Kroes, European Commissioner for Competition, at the European Commission in Brussels, James May, president of the ATA, on Friday said all member airlines are urging the E.U. agency to find that existing alliances, oneworld, Star, and SkyTeam, are "compatible with European rules on restrictive business practices, and not anticompetitive."
May said that "indeed, a trans-Atlantic market with three alliances enhances competition and is pro-competitive, and thus pro-consumer."
In the U.S., American Airlines, a unit of AMR Corp. (AMR), British Airways Plc (BAIRY), and Iberia Airlines (IBLA.MC) are waiting to get antitrust approval from the Department of Transportation for a closer relationship on transAtlantic routes, something competing alliance members already enjoy.
But U.S. legislators have recently raised antitrust questions about alliances in general, worried that they limit competition and result in higher air fares.
Airlines began partnering in global alliances because they aren't legally permitted to make cross-border mergers. Over the years, the carriers have been able to cut costs and raise millions of dollars in additional revenue.
On the highly valuable transAtlantic routes, "no alliance holds a leading share of the U.S.-Europe market, and the three alliances have increased their combined share of that market by just 1% over five years," May wrote. He said alliances allow airlines to fly to new cities and create more jobs.
-By Ann Keeton, Dow Jones Newswires; 312-750-4120; ann.keeton@dowjones.com