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Alliance Monitoring Overview

 

The Department of Transportation maintains ongoing monitoring of airline alliances through several different means.  Alliances that have formed revenue-sharing joint ventures (JVs) are specifically required, as a condition of granting antitrust immunity, to provide annual reports to the Department.  These reports address questions posed by the Department to validate the implementation of the partnerships and the use of ATI to bring about public benefits that would not otherwise be possible.  Generally, the Department’s questions explore joint venture strategy and operations in areas including network planning, revenue management, marketing, financial performance, and customer service policy details. 

Annual Reporting for Joint Ventures

Each report includes an annual summary by the joint venture partners covering important strategy and implementation details.  These reports are supplemented with internal presentations and working documents that provide both evidence and additional insight into joint venture development, implementation, and monitoring.  The annual reports also include a matrix of customer service policies.  These matrices offer details about elements including:  baggage policy alignment; frequent flyer program alignment; upgrade policies; and lounge access policies.  These matrices enable the Department to easily validate promised alignment in customer service policies indicating that joint venture partners are indeed treating customers as if they were flying a single, integrated airline.   

O&D Survey Data Reporting

Additionally, all alliances granted ATI are required to submit origin-destination (O&D) survey data for all itineraries touching a U.S. point.  This provides the Department with a robust data set that includes full itinerary details (including fares) for all alliance passengers.  The dataset allows the Department to monitor industry competition to ensure that carriers with ATI continue to provide important consumer benefits that could not otherwise be obtained.

Ongoing Monitoring with Each New Case

The Department also revisits the state of competition with each new application for ATI.  Cases occur within a temporal context.  Each application requires the Department to assess market conditions at the time of the application, which necessarily requires verifying that the markets are suitably competitive to allow additional airline partnerships.  In making this determination, the Department collects booking data from applicants, which provides a detailed picture of market competition and supplements the Department’s existing O&D survey data.

Independent Research

Last updated: Friday, November 8, 2019