Hoffa Speaks Out Against Proposed American/British Airways Pact

Hoffa Speaks Out Against Proposed American/British Airways Pact

Hoffa Sees Negative Impact On 50,000 Teamsters Airline Industry Employees

November 29, 2001

(Washington, D.C.) – Consideration of a proposed alliance between two of the world’s largest airlines should be suspended until the worldwide aviation crisis stabilizes, according to James P. Hoffa, General President, International Brotherhood of Teamsters.

In a letter to U.S. Secretary of Transportation Norman Mineta, Hoffa said there is no realistic way to evaluate the impact of the proposed American Airlines/British Airways alliance given the current crisis facing the airline industry.

“In these circumstances, there should not be any rush to conclude an accord that may prove to be harmful to U.S. airlines, their employees, and consumers,” Hoffa said.

Earlier this week, 20 U.S. senators sent two separate letters to the transportation secretary and the secretary of state urging that the alliance be rejected.

American Airlines and British Airways have asked the U.S. Department of Transportation for antitrust immunity, in order to form an alliance that would allow them to operate between the U.S. and the U.K. as though they were a single, merged entity.

American and British Airways are two of only four airlines allowed to serve London’s Heathrow airport from the United States. The U.S. is considering entering into an “Open Skies” agreement with the U.K. that theoretically would open Heathrow to other airlines.

However, Heathrow is severely congested and could not accommodate new carriers under current conditions.

“Given the severe restrictions at Heathrow, any 'Open Skies' agreement would prove hollow—U.S. airlines not now serving Heathrow would be effectively barred from adding U.S. service to Heathrow,” Hoffa wrote.

Specifically, Hoffa cited restrictions on Northwest and Continental Airlines, which together employ 15,000 Teamsters-represented flight attendants and mechanics. Due to a lack of available take-off and landing rights at Heathrow—known as “slots”—as well as airport facilities, Northwest would be precluded from transferring its Detroit-Gatwick or Minneapolis-Gatwick services to Heathrow, and would be barred from entering the Seattle-Heathrow or Memphis-Heathrow markets. Similarly, Continental would be unable to provide Heathrow services from its strategic hubs at Houston and Newark/New York.

In his letter, Hoffa also reminded Secretary Mineta of a pending decision by European officals that could make any new "Open Skies" agreement moot. “At a time when the European Court of Justice is considering the very legitimacy of United States Open Skies agreements reached with European Union member nations, it would be ill-advised and contrary to United States national interests to approve an anti-competitive, immunized alliance between American and British Airways in order to secure hollow ‘Open Skies’ treaty rights, when even those hollow rights would be subject to abrogation, renegotiations, and changes by the European Commission.”

Hoffa also stated that indications are that an AA/BA alliance would lead to fare increases of 30 percent in the U.S.-U.K. market, but stressed that its true effects are difficult to predict in the current climate.

Hoffa wrote to Secretary Mineta: “These factors compel me to urge you, on behalf of the 50,000 Teamsters employees in the airline industry, to suspend consideration of the AA/BA application until a more appropriate time when its competitive effects can be objectively analyzed and the current emergency that is confronting aviation worldwide abates.”

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States and Canada.