Also Announces Plans For Four-Way, Trans-Atlantic Joint Venture

Continental Airlines, United Airlines and eight other Star Alliance member airlines filed an application with the US Department of Transportation (DOT) this week, seeking the agency's approval for Continental to join the group of nine carriers that already hold antitrust immunity. Approval by the DOT would enable Continental, United and the other immunized Star Alliance carriers to streamline flight schedules, fares and services.

Separately, Continental, United, Lufthansa and Air Canada have requested DOT approval to establish a trans-Atlantic joint venture to create a more efficient and comprehensive trans-Atlantic network for the carriers' customers, offering customers more service, scheduling and pricing options and establishing a framework for similar joint ventures in other regions of the world.

The DOT has approved more than 20 applications for antitrust immunity in the past, including the recent approval of immunity for six-way alliance activities in trans-Atlantic markets for the SkyTeam carriers Air France, Alitalia, CSA Czech Airlines, Delta, KLM Royal Dutch Airlines and Northwest Airlines. The DOT ruling allowed Delta/Air France and Northwest/KLM to consolidate their alliance activities.

As ANN reported, Continental announced June 19 plans to join United in Star Alliance. In the United States domestic market -- where antitrust immunity would not apply -- the two airlines plan to begin broad code-sharing, allowing both carriers to sell flights on each other's airline and to honor each other's frequent flier programs, elite customer recognition and airport lounges.

Though not a full-fledged merger, such partnerships are still subject to notice to the DOT; both airlines say they will submit those notices separately in due course. To receive DOT's blessing for Continental to join Star Alliance, the airline must first end its current membership in SkyTeam.

Subject to that decision, Continental anticipates it will join Star Alliance, and begin broad code-sharing and other commercial cooperation with United, in the fourth quarter of 2009. The airline says there is little overlap between the Continental and United networks, which should help ease the DOT's fears of a monopoly.

FMI: www.continental.com, www.united.com