Wed, May 11, 2011
Carriers Revised Application After Denial Last September
The U.S. DOT proposed on Tuesday to approve an application for
antitrust immunity made by Delta Air Lines and affiliates of the
Virgin Blue Group to operate joint services between the United
States and Australia. The carriers revised their application after
the Department tentatively denied an earlier request for immunity
last September.
Antitrust immunity allows airlines to closely coordinate their
international operations. In today's show-cause order, the
Department tentatively concluded that the revised application
demonstrated that the alliance would produce sufficient public
benefits to justify a grant of immunity without diminishing
competition.
The Virgin Blue Group includes V Australia, Virgin Blue and
Pacific Blue Airlines affiliates in both Australia and New
Zealand.
In today's order, the Department said Delta and its partners had
made substantial changes from their previous application,
addressing concerns that immunity would provide only limited
benefit to consumers. In the new application, the Virgin Blue Group
expanded the scope of the alliance to include service to more
passengers. It also said that it had completed an upgrade of its
reservation system to ensure compatibility with Delta's system,
providing consumers with a more seamless travel network. In
addition, the carriers said they would serve more cities and offer
more capacity at the start of their alliance than they originally
proposed, providing more benefits to consumers at the outset.
Interested parties are invited to provide comments as to why the
proposed decision should not be made final. Objections are due in
14 calendar days, and answers to objections are due seven days
afterward. Following the comment period, the Department will review
all filings and then issue a final decision. If the Department
grants final approval, the carriers must start their joint venture
within 18 months of a final order.
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