COMPETITION LAW CONSIDERATIONS FOR AIRLINE ALLIANCES

Abstract

The deregulation and liberalization of the airline industry have led to increased competition in international commercial air transport services, resulting in the emergence of new business models by airlines. This paper investigates the merits and demerits of deregulation and the formation of international airline alliances (IAAs), focusing on their competition law implications. IAAs, which mimic mergers, allow airlines to circumvent domestic restrictions on foreign ownership and expand their market reach through cooperative agreements. These alliances present various forms of cooperation, such as code sharing and block spacing, and aim to integrate products, services, and standards between carriers to provide better service to consumers and eliminate double costs. However, the lack of uniform competition law rules globally means airlines must navigate different national regulations. This paper examines the impact of IAAs on competition, particularly in the European Union and United States, and the response of competition law authorities. It also explores the potential anti-competitive behavior in the aviation industry and the need for a multilateral approach to aviation competition law.