US: Big airlines' foreign buying spree raises competition questions

The nation's biggest airlines, having consolidated control over most domestic flights, are buying big stakes in foreign carriers, a push they say gives fliers access to more international destinations but critics say only makes it harder for smaller foreign rivals to compete. "They see that as a way of solidifying their presence in these other markets," said Seth Kaplan, managing partner for the trade publication Airline Weekly. For the big US carriers, the strategy behind such deals has several benefits: The airlines can book passengers onto flights operated by their foreign partners and reap the profits when the partner carrier succeeds. In some cases, US carriers have purchased such a large stake in foreign carriers that they can influence the routes and the services that foreign carriers launch to benefit their own interests, industry experts say. Although US carriers have owned shares in foreign carriers for many years, the practice has grown dramatically in the last five years. US carriers have become such avid partners with foreign airlines that antitrust activists worry that smaller and lower-cost rivals are being squeezed out. "From a competition standpoint, it is a clear move to entrench the US legacy airlines' influence over foreign entry into the US," said Diana Moss, president of the American Antitrust Institute, a Washington, DC, nonprofit think tank.<br/>