Will proposed airline alliances hurt travelers?

In the final hours of the Bush administration, airlines are quietly lobbying for approval of a new kind of alliance that could potentially change the way airline tickets are bought and sold. But are these corporate hook-ups good for passengers? Absolutely not, says a brief filed by two groups representing travel agencies.

If you’re a frequent flier, you’re probably familiar with entities like the Star Alliance and SkyTeam. If not, here’s what you need to know: These alliances let airlines share resources and flights, and allow passengers to collect highly-addictive award miles on each other’s respective airlines.

But the new alliances would go much further, say agents. According to their filing with the Transportation Department in response to the Star Alliance’s request for antitrust immunity, they could create de-facto monopolies.

The application would allow the airlines to integrate the way in which they pay agency commissions, jointly market to corporate, group and government customers, consolidate their sales and distribution and share “competitively-sensitive information” on bids for corporate travel contracts, among other things.

Essentially, these airlines would act as one — and with the government’s approval.

The brief cites evidence that even without antitrust immunity, airline alliances have led to higher air fares in certain markets. But the real downside would be that the new alliances could dis-empower travel agents, which would be bad for us.

Degradation or destruction of independent travel agents would have profoundly adverse consequences for consumers. As the alliance carriers are well aware, travel agents serve as neutral sources of comparative price and service information for consumers.

They are powerful forces for lower fares by developing and constantly improving technology that allows consumers to easily compare the fares of all airlines offering service on a particular route.

They have also pioneered technology that automatically alerts consumers to the availability of lower fares for their trip if they will consider alternate airports or alternate dates of travel.

I think this is one of those occasions when travel agents and consumers are on the same page. These proposed airline alliances shouldn’t be getting any kind of antitrust immunity from the government. Not now, during the final hours of a lame duck administration. Not ever.

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In fact, as a consumer advocate, I believe the government should end all of these alliances because they are not in the people’s best interests.

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

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