Perspectives: Archive
March 12, 2010
The Benefits of Alliances — for our Employees and United
Several months ago United Airlines, All Nippon Airways and Continental Airlines applied with the U.S. Department of Transportation (DOT) for antitrust immunity. Building on United’s extensive and growing international network this immunity will offer our customers and employees significant benefits by providing jobs, destinations and revenue-generating opportunities we would not otherwise have.
Alliances have been a crucial component of United’s global strategy for many years, and while some people have expressed that such alliances have a negative impact on employees, our alliances have created several benefits for our employees.
Alliances have created 15,000 U.S. airline jobs for network carriers. At United alone, almost 3,000 jobs have been created or preserved as a result of our alliance partnerships.
In a recent filing by the DOT for preliminary approval of the Oneworld application for transatlantic antitrust immunity, the DOT specifically addressed concerns by the unions at American Airlines about jobs, and reinforced that ATI would provide incentive for these airlines to increase their own flying, which is beneficial to labor:
“…While it is true that the joint venture involves revenue sharing, the joint venture partners must maintain their networks and execute their business plans to remain profitable under the venture. In short, we believe that American, like its partners, has the incentive to increase its flying if possible, which could provide more opportunities for its pilots and other labor groups.”
Our goal in expanding our alliance relationships is to strengthen United’s network for the benefit of our customers and our employees, and enabling United to compete in the global marketplace.
This additional antitrust immunity would only improve our competitive position and pave the way for a stronger United. It will enable us to compete in an increasingly global aviation environment and provide our customers new opportunities to fly with our partners and, most importantly, with United.
On a monthly basis, our partners put more than 650,000 passengers on United operated flights, and have generated $2.4 billion in annual revenue for United.
Our antitrust-enhanced relationship with Lufthansa led to substantial new international flying by United, because we were able to develop markets over time. Bahrain, Dubai, Geneva, Kuwait and Moscow are all markets that United now serves direct that were developed in part through our relationship with Lufthansa.
We estimate our antitrust immunity with Continental and ANA combined with the Pacific Joint Venture will provide similar benefits, generating more than $50 million for United in annual revenue, and an opportunity for new international flying by United. Just last week we applied for authority to initiate new service between San Francisco and Haneda. But we will not be able to operate this new service, even if we are successful in obtaining the route authority from DOT, unless our ATI application is approved.
Until very recently, none of United’s antitrust immunity applications have been opposed to by any of our labor groups. In fact, during our last application, the principal opponent was Delta, our largest competitor. They of course already had immunity with Northwest and Air France-KLM and their opposition was a means to prevent or at least delay our ability to compete aggressively with their heft and breadth in international markets.
At United, we want to build on our progress, and vigorously compete with the world’s top airlines. We will continue to look for new opportunities with all of our partners through alliances and codeshares to extend United’s global reach for the benefit of our customers and our employees.
Sincerely,
Mark Schwab
Senior Vice President – Alliances, International & Regulatory Affairs