Benefits and drawbacks of global strategic alliances in scheduled air transport – the view of the Kiel Institute (original publication in German)

In international aviation, new forms of cooperation of firms have emerged in recent years, with strategic airline alliances encompassing cooperation on a global scale in several instances. This cooperation of air carriers has called forth antitrust activities by the European Commission. A conspicuous case in point was the Commission's attempt to constrain the market share of the major alliances both in transatlantic air transportation links and with respect to the access to major European hubs (London and Frankfurt). Our paper aims at assessing the potential competitive threats of the global strategic alliances to the openness of international airline markets on the one hand and the prospects for enhancing the competitiveness of the participating airlines and the airports served by these airlines on the other. Both traditional competition policy and institutional economics approaches are used to find an answer to the question whether alliances should be tolerated in an increasingly deregulated air transportation system, whether they should be subjected to instruments of competition policy per se, or whether a rule of reason approach reaching to sanction an abuse of market power is warranted.