The U.S. Department of Transportation today turned down a request from six carries of the SkyTeam alliance for immunity from antitrust laws. DOT rejected the application after it "tentatively concluded that the carriers failed to demonstrate sufficient public benefits that would result from a grant of antitrust immunity," according to an agency release.
The agency noted the objection of the U.S. Department of Justice, based on the potential for anticompetitive conduct, to the carriers' application
(BTN, Sept. 5).
DOT proposed to grant broad codesharing authority to the six carriers, including bankrupt Delta and Northwest airlines, noting that code sharing would allow the carriers to achieve most of the benefits they are seeking, such as being able to provide new and more convenient service," according to a release.
The six carriers—Air France, Alitalia, CSA Czech, Delta, KLM and Northwest—last year applied to DOT for antitrust immunity
(BTN, Sept. 20, 2004). The application drew objections from some, but not all, legacy domestic carriers
(BTN, Sept. 19), as well as from DOJ.
Northwest released a statement expressing "surprise and disappointment" at the ruling.
"The decision is inconsistent with all of the DOT's prior decisions wherein they have consistently granted ATI to other global alliances, especially when, as here, the proposal is pro-competitive and will greatly benefit consumers," said Andrea Fischer Newman, senior vice president of government affairs.
"Approval is critical for SkyTeam to provide maximum benefits to both U.S. consumers and the participating airlines. A more fully integrated SkyTeam offers significant advantages. Major corporations, which are sophisticated consumers of airline services, support SkyTeam's request. These companies, including General Motors, General Mills, Ford, and FedEx, say that an expanded SkyTeam will improve flight schedules, reduce travel times, add new service and lower fares," she said. "Today's DOT decision places these benefits in jeopardy, and does not help Northwest's efforts to emerge from bankruptcy. It is also inconsistent with the DOT's recent efforts to obtain 'open skies' between the U.S. and European Union, as well as liberalization of airline ownership and control issues."