In a bureaucratic battle between the Department of Transportation and the Department of Justice, members of the Senate Judiciary committee have raised their voices once again. They are warning about the pending antitrust immunity for the American Airlines/British Airways/Iberia OneWorld Alliance.

Two senators from the Judiciary Committee, one a Democrat and the other the ranking Republican, sent a letter to the DOT today stating that the proposed American Airlines-British Airways antitrust immunity request raises “significant competition issues.” Both senators are part of the Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Consumertraveler.com has been covering this issue carefully with the political infighting that has the Senate Judiciary Committee and the Senate Committee on Commerce, Science, and Transportation at odds. There are also severe disagreements between the Senate and the House committees responsible for airlines and transportation.

Here’s the latest salvo from the Senate Judiciary Committee sent last week to the Department of Transportation.

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October 13, 2009

Dear Secretary LaHood and Assistant Attorney General Varney:

We write regarding the Department of Transportation’s (DOT) consideration of applications for antitrust immunity for international airline alliances. As we stated in our letter of June 8, it remains our view that the DOT should only grant antitrust immunity applications sparingly and only upon a determination that the immunity sought will not harm competition. We also urge the DOT to give substantial deference to the Justice Department’s recommendations about the competitive effects of antitrust immunity applications.

At the time of our June 8 letter, the DOT was considering the antitrust immunity application of Continental Airlines to join United, Lufthansa and other airlines in the Star Alliance. Prior to our letter, the DOT had granted tentative approval to the Star Alliance antitrust immunity application in its April 7, 2009 Show Cause Order.

We were pleased, therefore, that the DOT modified its original order after receiving our letter and after the Justice Department filed its Comments on June 26, 2009. These Comments expressed serious concern regarding several aspects of the Star Alliance’s antitrust immunity application. While not completely adopting the Justice Department’s recommendations, in its July 10 final decision approving the application, the DOT adopted some of the conditions sought by the Justice Department. Specifically, at the request of the Justice Department, the DOT carved out nine international routes from the grant of antitrust immunity, routes in which the Justice Department found a significant loss of competition from the immunized alliance. We are encouraged by this cooperation and appreciate DOT’s efforts to incorporate some of the Justice Department recommendations.

The antitrust immunity application of American Airlines and British Airways in the OneWorld Alliance is now under consideration by the DOT. While not expressing any views on the ultimate merits of this application, we believe this alliance application raises significant competition issues and we reiterate our views that the DOT act cautiously and only approve the antitrust immunity application should it determine that the granting of antitrust immunity will not significantly harm competition. We implore both agencies to continue to work together when analyzing these applications. It is particularly important that the DOT not act on this alliance application until the Justice Department has had an opportunity to assess the impact a grant of antitrust immunity is likely to have on competition and consumers. And, since the DOT has ultimate authority to grant or deny the applications, we ask that it pay substantial heed to the Justice Department’s recommendations about the competition concerns raised by the application.

We will continue to closely examine international aviation alliances, antitrust immunity applications, and their likely effects on competition in the Antitrust Subcommittee. Specifically, we will examine where the DOT is the appropriate agency to have final authority over the grant of antitrust immunity for international airline alliances, or whether legislation should be drafted to give greater authority to the Justice Department, the agency tasked with enforcement of the antitrust law with respect to this industry. Our paramount consideration will be the preservation and enhancement of competition so that consumers will be best served in international aviation.

Thank you for your attention in these matters.

Sincerely,

Herb Kohl, Chairman, Subcommittee on Antitrust, Competition Policy and Consumer Rights

Orrin Hatch, Ranking Member, Subcommittee on Antitrust, Competition Policy and Consumer Rights