Two-and-a-half years later, those alliance hopes have been dashed by the US Department of Transportation (DoT), and a US-UK open skies deal remains a distant prospect. If anything, American's former chairman, Bob Crandall, and BA's chief executive, Bob Ayling, misread the cards from the beginning.
Ayling once joked that the only reason he could think why this proposed alliance was being treated differently from others - which have all won immunity as part of open skies' deals - was because regulators had a grudge against people called "Bob". The real cause was different.
With the pro-competition debate increasing in Washington, and the DoT pledged to support better competition in the airline industry, it would have been difficult to justify an immunised alliance for two of the most powerful players in the transatlantic market.
Moreover, once each airline head realised the concessions they would have to make in order to win immunity, the prospect of an open skies deal no longer seemed as attractive. Airline Business understands that, on the UK side at least, there has been considerable pressure put on the government by BA in recent weeks not to sign for US open skies.
In a brief statement, after announcing its dismissal of the antitrust immunity application on 30 July, the DoT reiterated its continued commitment to an open skies agreement with the UK. "The DoT's dismissal will not result in any change in US Government policy," says DoT Secretary Rodney Slater. "The goal remains a US-UK open skies agreement."
American's chairman, Don Carty, describes the conditions sought by regulators as "onerous". He adds that the alliance will evolve "somewhat differently" than originally proposed. Both sides remain committed to the alliance, however, and a senior airline source says that the DoT's decision makes no difference to the future of oneworld. Not all analysts agree. A report by Merrill Lynch's Candace Browning points out that oneworld would have been "by far the most powerful alliance" if it gained immunity under an open skies deal, without which, it will trail Star.
That still leaves American and BA in a position where they have lost nothing so long as an open skies deal is kept at bay and London's Heathrow airport remains closed to new competition.
Source: Airline Business
