Alliances, Immunity, and the Future of Aviation

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Seventeen years after the U.S. Department of Transportation (DOT) granted antitrust immunity (ATI) to an innovative KLM-Northwest joint venture, ATI has become one of the most controversial issues in current aviation law and policy. This article reviews the history of ATI and its statutory foundation and attempts to place airline alliances in a more contemporary perspective. Criticism of the alliance/ATI development appears to be predicated on a misunderstanding of both the role of alliances as an essential element in the liberalization of international air services and the importance of ATI as a factor in that success. The article suggests that the criticism of DOT’s handling of alliances and ATI fails to understand the evolution of the international air transportation networks and puts at risk a major aviation policy success story. DOT’s approach to international airline alliances and ATI, the article concludes, has been prescient and insightful, has benefited both the industry and its customers, and should not be disturbed.

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Published In: Antitrust & Trade Regulation Updates, Transportation Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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