Expanded SkyTeam Alliance Also Includes Four Int'l
Carriers
On Thursday, the US Department of
Transportation (DOT) said it will grant antitrust immunity to Delta
Air Lines, Northwest Airlines, and four of their international
partners to combine their transatlantic operations in an expanded
SkyTeam alliance.
The Department’s grant of antitrust immunity allows the
two US carriers -- along with Air France, Alitalia, Czech Airlines
and KLM Royal Dutch Airlines -- to coordinate their transatlantic
fares, services and capacity as if they were a single carrier in
these markets, subject to certain conditions. Northwest has
an existing alliance with KLM, while Delta has an existing alliance
with Air France, Alitalia and Czech Airlines.
Today’s action, which makes final the tentative decision
issued April 9, does not affect Delta's and Northwest's ongoing
plans to merge. The merger plans are subject to a separate
antitrust review by the Department of Justice.
In approving antitrust immunity, the Department concluded that
the proposed alliance is in the public interest because it features
a proposed new and highly integrated joint venture that will likely
produce efficiencies and provide consumers with additional price
and service options. The United States has negotiated an Open-Skies
Plus aviation agreement with the European Union (EU).
The US-EU agreement provides that transatlantic markets remain
open to other competitors because US and European airlines are now
able to serve any route between the United States and Europe.
The Department noted that the carriers have not yet put into
place the joint venture upon which many of the public benefits of
antitrust immunity would depend. For this reason, the Department
required the carriers to fully implement the proposed alliance
within 18 months as a condition of retaining immunity. The
Department also stressed that the carriers would remain subject to
antitrust laws for domestic service and for international flights
that are not covered by the alliance agreement.
Beginning with the Northwest-KLM alliance, which was approved in
1993, the DOT has granted antitrust immunity to a number of
international airline alliances where it found that the alliance
benefited the public and did not substantially reduce
competition.
Delta and Northwest first petitioned the Department to allow the
alliance in 2004. After an initial tentative denial, they reapplied
in June of last year with a substantially revised agreement. As ANN reported, the two
airlines announced their intention to merge operations April
14.
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