Six carriers of the SkyTeam alliance this month withdrew their request for antitrust immunity following last month's decision by the U.S. Department of Transportation to turn down the carriers' application. Although DOT rejected requests after it "tentatively concluded that the carriers failed to demonstrate sufficient public benefits that would result from a grant of antitrust immunity," the partners in the airline alliance said they would, at a later date, pursue their request.
"However, in light of the fact that the Department remains open to reconsidering a grant of immunity to the joint applicants in the future, the joint applicants have decided at this time to withdraw their request for approval of and antitrust immunity for the alliance agreements," counsel for various SkyTeam carriers filed in a docket with DOT this month.
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—in 2004 applied to DOT for antitrust immunity
(BTN, Sept. 20, 2004). Some, but not all, legacy domestic carriers and DOJ objected
(BTN, Sept. 19).While DOT noted the antitrust immunity request would yield little more benefit for consumers than would code sharing, Delta, in a statement this month, countered the assumption.
"ATI would benefit the traveling public by allowing Delta and its SkyTeam partners to offer international customers more transatlantic service, shorter travel times, more departure times and better opportunities to find discounted fares by choosing alternative routes to a destination."
Northwest echoed Delta's sentiment in a statement that expressed "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, Northwest Airlines 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," Newman said. "DOT's 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 United States and European Union, as well as liberalization of airline ownership and control issues."