The Alliance legal threat begins but from somewhere unexpected; application for new low cost on hold following AirAsia incursion

Victoria
By Victoria April 30, 2013 09:47

The Alliance legal threat begins but from somewhere unexpected; application for new low cost on hold following AirAsia incursion

 

Israel has this week seen its competition regulator propose legislation meant to expand the country’s ability to pursue antitrust cases against international airlines. The Israel Antitrust Authority said in a statement that it had proposed changes to the country’s competition law that would allow them to monitor agreements between foreign airlines that may pose a threat to competition and therefore consumers in Israel.

As the country’s competition law currently stands, Israel has allowed foreign airlines to enter restrictive agreements under certain conditions, exempting them from antitrust.

The alliances will come under increasing anti-trust scrutiny over the coming years and it may yet prove to be the death of the alliances as we know them, instead leading airlines into a round of mergers or down the path that Etihad has taken of late. Either way, it is worth keeping an eye on the Israeli moves for indicators.

Captain G R Gopinath, founder of Air Deccan has decided to hold fire on his application to launch a new Indian low cost airline. The reason was cited as being the launch of AirAsia India this year.

This is a wise move by the astute Gopinath and his foreign partners. The AirAsia venture has yet to secure any serious good faith from the Indian government despite the formidable political contacts of the Tata family being behind the venture, fuel prices in India are still far too high and lessors are staying away or charging a premium on the market at this time. So the logic is sound for Gopinath to sit back and see how the AirAsia venture pans out.

The Indian aviation ministry stated that Deccan already has a regional airline licence and should operate that first before applying for another licence. “Let him first run that well and then that licence can be extended to a national one,” a minister said.

Victoria
By Victoria April 30, 2013 09:47
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