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factsonly
Topic Author
Posts: 3122
Joined: Mon Aug 06, 2012 3:08 pm

AF/AZ/DL/KL Offer Tatl Concesssions To EU

Tue Oct 21, 2014 11:43 am

News today that the Joint Venture AF/AZ/DL/KL is ready to give capacity concessions at three airport (AMS,JFK, FCO) to concerned EU competition officials to try to settle an EU antitrust investigation, the European Commission said on Tuesday.

The carriers found themselves in the EU Commission's sights in January 2012, after the EU competition authority said their alliance, involving profit-sharing and joint management of prices and capacity, may push up prices on the Paris-New York, Amsterdam-New York and Rome-New York routes.

http://www.reuters.com/article/2014/...es-antitrust-idUSKCN0IA0Y020141021

Question: is this just SkyTeam or are the other Alliance Joint Ventures also under investigation?

And..............perhaps DL will now have to operate B744 on JFK-AMS instead of 2xdaily B76W.
Who knows?
 
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enilria
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RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Tue Oct 21, 2014 11:52 am

The problem is that you allow a super-powerful alliance on a hub to hub route like CDG-JFK and then you expect somebody to be able to compete with it. The solution is to force the carriers to cut capacity even further which they love as they can jack up fares higher. I don't think the solution does anything. They should carve the routes out of the JV. That is the only solution that would really work.
 
delta2ual
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RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Tue Oct 21, 2014 3:00 pm

Quoting factsonly (Thread starter):
Question: is this just SkyTeam or are the other Alliance Joint Ventures also under investigation?

I believe the other two alliances already gave concessions. I know UA/AC/LH gave concessions to get their JV approved. Plus a few years back, AA and BA gave up quite a few slots to get their approvals. I think now it's SkyTeam's turn.
Unfortunately, these gov't interventions seem to hurt more in the long run than help anyone. We'll see how this one goes.
From the world's largest airline-to the world's largest airline. Delta2ual
 
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lesfalls
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RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Wed Oct 22, 2014 2:14 am

This isnt good. KLM is offering such good fares and now there rasing them.  
Lufthansa: Einfach ein bisschen besser.
 
76er
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Joined: Mon Mar 12, 2007 8:04 pm

RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Wed Oct 22, 2014 7:12 am

The fact that it seems there will be no concessions at CDG will not help the sentiment at the folks of the northern part of AFKL.
 
factsonly
Topic Author
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RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Wed Oct 22, 2014 8:00 am

Quoting 76er (Reply 4):
The fact that it seems there will be no concessions at CDG will not help the sentiment at the folks of the northern part of AFKL.

That would be very unreasonable as the market between CDG-NYC and AMS-NYC is significantly different.

The reason the EU Commission does not demand concessions for CDG-NYC is that UA and AA/US operate multiple daily flights in competition with SkyTeam. This is not the case on AMS-NYC were UA only operates 1x B757 in competition with DL/KL, while AMS-JFK is a full Skyteam monopoly.

So very different market conditions, and nothing to do with AF/KL Management decisions.
 
BA0197
Posts: 392
Joined: Wed Jul 13, 2011 5:09 pm

RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Wed Oct 22, 2014 11:22 am

Quoting factsonly (Reply 5):
AMS-JFK is a full Skyteam monopoly.

A possibly restart of BA's Openskies route?

To me this screams at only two contenders UA/LH and BA/AA.
 
r2rho
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Joined: Tue Feb 27, 2007 10:13 pm

RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Thu Oct 23, 2014 7:07 am

Quoting enilria (Reply 1):
The problem is that you allow a super-powerful alliance on a hub to hub route like CDG-JFK and then you expect somebody to be able to compete with it. The solution is to force the carriers to cut capacity even further which they love as they can jack up fares higher. I don't think the solution does anything. They should carve the routes out of the JV. That is the only solution that would really work.

Agree - no matter now many frequencies are given up, no airline would dare to fly between the fortress hubs of another alliance. Though CDG-JFK is not too bad in this case, it is rather AMS-JFK.
 
crosswinds21
Posts: 169
Joined: Fri Jun 05, 2009 10:46 pm

RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Thu Oct 23, 2014 7:30 am

Quoting factsonly (Reply 5):
while AMS-JFK is a full Skyteam monopoly.

Yes, but there is also UA on AMS-EWR, which often offers very competitive fares. I've used both UA and KL/DL and I generally don't find the fares unreasonable.

Quoting r2rho (Reply 7):
Agree - no matter now many frequencies are given up, no airline would dare to fly between the fortress hubs of another alliance. Though CDG-JFK is not too bad in this case, it is rather AMS-JFK.

See, I don't fully understand this. In the case of AMS-NYC, if this resulted in astronomically high fares, that would be one thing. But in realisty, regardless of the fact that the only nonstop competition is UA on AMS-EWR, the fares are not high. In fact, KL often offers very good sales on this route (under 500 Euros, or sometimes even as low as 350 Euros) all throughout the year. So if this near-monopoly on AMS-NYC is such a bad thing, where's the harm?

This entire situation is different from, say, AMS-MSP. Take a look at the fares on that route. If there's ever a good example of high fares resulting from monopoly hub-hub routes, this would be it.
 
crAAzy
Posts: 558
Joined: Tue Jan 29, 2008 12:02 am

RE: AF/AZ/DL/KL Offer Tatl Concesssions To EU

Thu Oct 23, 2014 8:29 am

Quoting r2rho (Reply 7):

Agree - no matter now many frequencies are given up, no airline would dare to fly between the fortress hubs of another alliance. Though CDG-JFK is not too bad in this case, it is rather AMS-JFK.

Only benefit would be gaining a prime slot times at JFK during peak ours and taking it away from the competition. Not sure it can be done and not sure it would be worth the effort.

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