American eyes anti-trust immunity in second half '09

By Mary Kirby

American Airlines in the second half of 2009 expects to receive regulatory approval for the anti-trust immunity application it filed with fellow Oneworld members.

Last year, American, British Airways (BA) and Iberia, along with Finnair and Royal Jordanian Airlines, applied for anti-trust immunity with the US DOT for a joint agreement on flights between North America and Europe.

The next step "requires the DOT to issue a scheduling order". Once that occurs, there is "a six month period for comments", said Tom Horton, CFO of American parent AMR Corp, during an earnings conference call today.

He says that while the carrier "can't make any promises about the outcome of the process", it believes it has made "a very strong case" and continues to expect approval in the second half.

With immunity, American, BA and Iberia plan to launch a joint business relationship "that will improve travel options and customer benefits on flights between North America and Europe", says American.

Previous attempts by American and BA to attain anti-trust immunity have been thwarted by regulatory demands for steep slot penalties at London Heathrow.

American posted a net loss of $375 million for the first quarter of 2009. Transcontinental routes saw steep unit revenue declines. The carrier also saw broad declines on the international front, with transatlantic operations showing the largest decrease.

Horton notes that there is "too much capacity on the international side driven by capacity increases we've seen around the industry".

It is too soon to tell how American will adjust summer capacity. "[We] want to see how bookings develop for the summer period but Tom [Horton] highlighted, and I would underscore, that if you look at capacity levels going back several years, we have been very consistent both domestically and internationally about constraining our capacity," says company CEO Gerard Arpey.