The U.S. Department of Transportation on Wednesday tentatively approved transatlantic antitrust immunity for six SkyTeam members and gave the nod to a four-way joint venture for Air France, Delta, KLM and Northwest.
DOT on Wednesday issued a show cause order, giving interested parties two weeks to submit comments, then seven days to submit reply comments, before granting final approval. The decision would extend antitrust immunity to those four carriers and Alitalia and CSA Czech Airlines.
Final approval would set the stage for Air France, Delta, KLM and Northwest to integrate transatlantic operations and tie together two separately held joint ventures. Air France and Delta last year initiated a joint venture agreement, modeled after a similar transatlantic venture KLM and Northwest established a decade ago. The four-way agreement, however, would supersede those two separately held joint ventures
(BTNonline, Oct. 22, 2007).
Upon final approval, the four carriers have 18 months to establish a four-way joint venture and submit evidence of full implementation, DOT said. "If, within 18 months of the issuance of a final order, they have not submitted verified statements attesting to the full implementation of the joint venture, the antitrust immunity will expire," DOT said in the filing.
The carriers said the four-way joint venture is "not yet ready for implementation," according to the DOT filing, since Air France, Delta, KLM and Northwest must engage in further discussions to structure a deal. Those negotiations are "contingent upon a grant of antitrust immunity," the DOT filing said. However, the carriers envision that "committees and working groups, composed of senior representatives from each airline, will jointly plan and manage capacity, pricing, and financial settlement."
The four carriers were quick to applaud DOT's decision. Delta in a statement said final approval would yield new transatlantic service and increased capacity; more discounted seats; expanded codesharing; "shorter travel times and improved time of day coverage;" and further competition.
DOT said its tentative approval of the request was predicated on a U.S.-EU Open Skies agreement, which went into effect late last month.