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GAO-02-293R 1 (2001-12-21)

handle is hein.gao/gaobaalxe0001 and id is 1 raw text is: £ Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 December 21, 2001 The Honorable Ernest F. Hollings Chairman The Honorable John McCain Ranking Minority Member Committee on Commerce, Science, and Transportation United States Senate Subject: Proposed Alliance Between American Airlines and British Airways Raises Competition Concerns and Public Interest Issues In August 2001, two of the world's largest airlines, American Airlines (AA) and British Airways (BA), announced their intention to form an international alliance and applied for immunity from antitrust laws in the United States and Europe. These airlines had proposed a similar alliance in 1997. However, DOT did not process the application because significant progress was not made in negotiations with the United Kingdom (U.K.) to open London's airports to new and expanded service by U.S. carriers. Concerned about the impact that international alliances might have on aviation competition and on the fares U.S. passengers may pay and the service they may receive, you asked us to evaluate the impacts that the proposed alliance between AA and BA (AA/BA alliance) might have on aviation competition. Specifically, you asked us to determine (1) the possible consumer harms and benefits that the AA/BA alliance may create; and (2) the potential public interest issues that may arise from the proposed alliance. This letter summarizes the information we provided to Committee staff during our December 13, 2001, briefing pursuant to your request. The briefing slides, which provide more details about our analysis, are attached as enclosure I. Background In August 2001, AA and BA applied to the U.S. Department of Transportation (DOT) and the relevant U.K. and European regulators for antitrust immunity and for rights to code share' on ' Code sharing refers to the practice of airlines applying their names-and selling tickets via reservations systems-to flights operated by other carriers. GAO-02-293R American Airlines/Brtish Airways Alliance

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