Things in the Sky

I’ve written plenty about Rep. Oberstar’s attempts to block airline alliances, and it seems that the EU is finally getting involved, as reported here:

The European Union has intensified its warning to the U.S. that efforts to deregulate the transatlantic aviation market could be “dangerously” impaired by proposed legislation before Congress, threatening talks slated for later this year.

Apparently, Oberstar doesn’t seem to be backing down, as he is quoted in this Reuters article:

“Is that what I voted for when I voted for (U.S. airline) deregulation in 1978?” Oberstar asked. “Hell no.”

And he’s still calling alliances “defacto mergers.” Well, that’s what they are, considering the U.S.’s restrictive ownership rules.

But I’m still waiting to hear what’s so bad about alliances. Yes, more carriers work together so the “less competition” argument certainly has some merit. But, there are still three alliances competing for business. Plus, having a truly open and deregulated transatlantic market would prevent any problems when it comes to fares. If the alliances started “gouging” passengers in a way that brought huge profits, those profits would encourage other carriers to enter the market.

Meanwhile, I know I’ve mentioned it before, but why do we still have that 25% limit on ownership? Why should we discourage capital from flowing into the United States? Why is it bad if Virgin Group wants to spend some of its resources in the United States as opposed to other markets and build an airline that Americans can use?

</rant>