Int'l airline alliances benefit passengers: study

By Beyza Binnur Donmez

ANKARA (AA) - International alliances between airline carriers lower costs for passengers using indirect flights for overseas trips, according to a study led by the University of California, Irvine (UCI).

Research shows that those traveling nonstop between international hubs may face higher costs due to competition lost to alliances, according to the study published Tuesday in the American Journal of Transportation stated.

The report analyzed international fare trends between 1997 and 2016 -- the period that three major international airline alliances began to serve passengers: Star (United Airlines and Lufthansa), SkyTeam (Delta-Air, Air France and Dutch KLM) and Oneworld (American Airlines and British Airways).

It revealed that U.S. passengers traveling to certain foreign destinations often had to fly two separate airlines where there were no direct flights and that flights on alliance partners were 7% cheaper than those offered by two non-allied airlines.

If alliances were dissolved, the more competition would help lower costs for nonstop passengers, but the decrease would not outweigh the higher prices connecting passengers would have to pay, according to the study.

"On balance, alliances are favorable for international passengers, a conclusion that validates decades of U.S. regulatory policy," wrote the study’s lead author, Jan Brueckner who is a UCI distinguished professor of economics.

"The convenience benefits of alliances, such as one-stop check-in and connecting gate proximity, which the study did not consider, reinforce this conclusion," Brueckner added.