BTC Supports Open Skies and Expanded Alliance Competition; Enhanced SkyTeam Alliance Would Improve Passenger Pricing and Service

U.S. Policy of Creating an ‘Open Skies World’ Further Promoted

RADNOR, Pa., July 6 /PRNewswire/ — The Business Travel Coalition (BTC) today called upon the U.S. Department of Transportation for speedy approval of the application of KLM, Delta, Northwest Airlines, Air France, Alitalia and Czech Airlines for antitrust immunity. Approval would enable effective integration of their international services as members of the SkyTeam alliance and further promote the objective of worldwide “Open Skies.” July 6 is the deadline for industry replies to filings in support of and against the SkyTeam proposal. Only American Airlines opposes the SkyTeam application.

Kevin Mitchell, chairman of BTC said, “The business community has long supported the need to expand international airline alliances to create new nonstop service options, shorter travel times, more affordable business airfares and the continued growth of worldwide airline competition. This proposal would establish more competitive service in thousands of markets of all sizes and allow business travelers to fly more directly and frequently at a time that they need to increase contacts with customers and suppliers throughout the world while reducing overall expenses.”

The Coalition has supported Department actions to establish Open Skies agreements since those efforts were initiated in the early 1990s. Despite thirteen years of negotiations and completion of approximately seventy U.S. open skies agreements, more must still be done since we do not have Open Skies agreements with a number of important nations.

In particular, our nation’s international businesses would achieve significant benefits if a U.S.-UK Open Skies agreement were reached. In a study published in December 2002, the Brattle Group estimated that U.S.-EU open skies would generate at least 2.2 million incremental annual transatlantic passengers and increase consumer benefits by up to $1.5 billion a year, largely flowing from opening U.S.-UK routes. BTC believes approval of the pending SkyTeam proposal would increase the likelihood of U.S.-EU open skies.

In 2001, BTC supported the American Airlines – British Airlines proposal for antitrust immunity and codesharing authority because it would have created a more competitive alliance and strengthened network competition. Since then, BTC has supported all steps taken to open new markets and allow alliance partners to more closely coordinate service and airfares since these actions have been proven to improve consumer choices, to strengthen established alliances and carrier members, and most importantly, to improve competition.

The KLM, Delta, Air France, Northwest, Alitalia, and Czech Airlines proposal is fully consistent with the positive benefits the Department has said, during the past thirteen years, would come about as international carriers increase codesharing and alliance partnerships. By approving the SkyTeam proposal, the Department would move closer to its objectives and take a major step to complete its primary international aviation goal of an “Open Skies World.” The BTC urges that the Department move forward with this mission and not abandon it.

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