These JVs potentially create a a far more powerful commercial entity than their competition - such could lead to bullying behaviour (e.g. BA's attempts to undermine Virgin Atlantic), more capacity to sustain a fare war with weaker competitors (e.g. QF running a capacity war against VA), increased risk of fare collusion, homogenisation of product /services, etc.

As to why such JVs may not be viewed favourably, perhaps, we can look to DOTs own assessment.

Note comments on impacts of existing JVs (including transatlantic market and DL/VA):


Source : Australian Aviation

“...the combined Qantas-American network would represent 60 per cent of all seats between the US and Australia, while the pair would have the largest market share in about 200 city-pair markets...

...this would be sufficient for the alliance to “exert market power”, with the DOT noting the US-Australasia market featured “long, thin markets that are isolated from other global traffic flows”...

...few passengers connecting via intermediate points in third countries, which limited the potential for competing networks to “discipline” the proposed alliance, as well as limited flow within Australasia or to other countries beyond Australasia.

...there is a high risk of competitive harm from approving and granting antitrust immunity,”

...DOT also questioned some of the claimed consumer benefits ...that would result from having their anti-trust immunity approved.

..."based upon information in the record, the proposed alliance is unlikely to grow capacity over the next five years faster than what the Department would expect based upon the historical growth rate,” the DOT said.

...“Additionally, many public benefits from customer service coordination could be obtained through traditional arms-length cooperation such as codesharing.

...the proposed alliance would substantially reduce competition and consumer choice, without producing sufficient countervailing public benefits.”

....ACCC decision meant that while Qantas and American were able to align pricing on tickets sold in Australia, the pair was not able to do so on outbound US fares without the green light on the alliance from the DOT.

...Hawaiian in particular was one of the strongest voices against the alliance it argued immunised alliances made it more difficult for independent carriers to reach arm’s length, pro-competitive codeshare or interline agreements with international alliance members.

....revenues from its arms-length relationship with Virgin Australia “dropped precipitously” after the Virgin established its alliance with Delta and believed its arms-length relationship with Qantas would “similarly suffer” should the ATI be granted.

...The Honolulu-based carrier also cited research it produced on what happened to fares and customer choice on the trans-Atlantic market between the US and Europe following tie-ups such as American-British Airways, United-Lufthansa and Delta-Air France-KLM, as part of its submission...."