Doj Against Expanding Skyteam Ati

WorldTraveler

Corn Field
Dec 5, 2003
21,710
10,721
NW's worst nightmare is coming true. Air France has bought NW's partner, KLM. NW is dragged into Skyteam where DL already enjoys antitrust immunity (ATI) with AF. And on top of a strike, the DOJ says it doesn't support extension of Skyteam ATI to any more US carriers.


WASHINGTON, Aug 19 (Reuters) - The U.S. Justice Department on Friday urged against giving antitrust immunity to five members of the SkyTeam airline alliance, saying the carriers had failed to show the benefits would outweigh potential harms.

In comments filed with the U.S. Department of Transportation, the Justice Department said there was "a significant risk" of reduced competition if the airlines were allowed wide latitude to share information and coordinate their operations.

SkyTeam announced in September 2004 that Continental Airlines (CAL.N: Quote, Profile, Research) , Northwest Airlines Corp. (NWAC.O: Quote, Profile, Research) and KLM -- which merged with member Air France (AIRF.PA: Quote, Profile, Research) -- had joined the alliance.

Other members include Korean Air (003490.KS: Quote, Profile, Research) , Italy's Alitalia (AZPIa.MI: Quote, Profile, Research) , Delta Air Lines Inc. (DAL.N: Quote, Profile, Research) , Czech Airlines and AeroMexico. Applying for antitrust immunity were Delta, Northwest, KLM-Air France, Alitalia and Czech Airlines.

The Justice Department said a previous Northwest-KLM alliance had competed with the SkyTeam alliance but last year's Air France-KLM merger, and the decision by Continental and Northwest to join, had created the current SkyTeam membership.

SkyTeam said last year that the expanded group would allow passengers to accrue frequent flyer miles interchangeably between members and offer an increased network of routes. It also said its members could benefit through streamlining their businesses and exploring synergies with partner carriers.

But the Justice Department said the promised benefits were modest and could be largely achieved by more limited cooperation in placing flight codes on each others' flights.

Unlike earlier requests for antitrust immunity between airlines, this one applied to largely overlapping routes, rather than extensions of routes, the department said.

"This situation increases the risk of harm and reduces the potential benefit to consumers," the Justice Department wrote.

The Department of Transportation will make the final decision on whether to approve antitrust immunity.

The Northwest-KLM partnership and SkyTeam had separately enjoyed antitrust immunity.

In the current application, Delta and Northwest had not sought antitrust immunity to coordinate prices, flights and marketing within the United States.

The biggest global airline partnership is the Star Alliance, with 16 members including United Airlines (UALAQ.OB: Quote, Profile, Research) , Lufthansa (LHAG.DE: Quote, Profile, Research) , Singapore Airlines (SIAL.SI: Quote, Profile, Research) , Air Canada (ACErv.TO: Quote, Profile, Research) and SAS (SAS.ST: Quote, Profile, Research) .
 

Stratocruiser

Member
May 11, 2004
46
0
WorldTraveler said:
NW's worst nightmare is coming true. Air France has bought NW's partner, KLM. NW is dragged into Skyteam where DL already enjoys antitrust immunity (ATI) with AF. And on top of a strike, the DOJ says it doesn't support extension of Skyteam ATI to any more US carriers.
WASHINGTON, Aug 19 (Reuters) - The U.S. Justice Department on Friday urged against giving antitrust immunity to five members of the SkyTeam airline alliance, saying the carriers had failed to show the benefits would outweigh potential harms.

In comments filed with the U.S. Department of Transportation, the Justice Department said there was "a significant risk" of reduced competition if the airlines were allowed wide latitude to share information and coordinate their operations.

SkyTeam announced in September 2004 that Continental Airlines (CAL.N: Quote, Profile, Research) , Northwest Airlines Corp. (NWAC.O: Quote, Profile, Research) and KLM -- which merged with member Air France (AIRF.PA: Quote, Profile, Research) -- had joined the alliance.

Other members include Korean Air (003490.KS: Quote, Profile, Research) , Italy's Alitalia (AZPIa.MI: Quote, Profile, Research) , Delta Air Lines Inc. (DAL.N: Quote, Profile, Research) , Czech Airlines and AeroMexico. Applying for antitrust immunity were Delta, Northwest, KLM-Air France, Alitalia and Czech Airlines.

The Justice Department said a previous Northwest-KLM alliance had competed with the SkyTeam alliance but last year's Air France-KLM merger, and the decision by Continental and Northwest to join, had created the current SkyTeam membership.

SkyTeam said last year that the expanded group would allow passengers to accrue frequent flyer miles interchangeably between members and offer an increased network of routes. It also said its members could benefit through streamlining their businesses and exploring synergies with partner carriers.

But the Justice Department said the promised benefits were modest and could be largely achieved by more limited cooperation in placing flight codes on each others' flights.

Unlike earlier requests for antitrust immunity between airlines, this one applied to largely overlapping routes, rather than extensions of routes, the department said.

"This situation increases the risk of harm and reduces the potential benefit to consumers," the Justice Department wrote.

The Department of Transportation will make the final decision on whether to approve antitrust immunity.

The Northwest-KLM partnership and SkyTeam had separately enjoyed antitrust immunity.

In the current application, Delta and Northwest had not sought antitrust immunity to coordinate prices, flights and marketing within the United States.

The biggest global airline partnership is the Star Alliance, with 16 members including United Airlines (UALAQ.OB: Quote, Profile, Research) , Lufthansa (LHAG.DE: Quote, Profile, Research) , Singapore Airlines (SIAL.SI: Quote, Profile, Research) , Air Canada (ACErv.TO: Quote, Profile, Research) and SAS (SAS.ST: Quote, Profile, Research) .
[post="290187"][/post]​

WorldTraveler:

Do you play any other tunes? All I remember ever seeing from you is "doom and gloom" about NWA.

BTW, so far the strike I'm sure you've had a couple of erections about has been a non-event.
 

PHX Flyer

Member
Sep 23, 2002
75
0
Phoenix, AZ
www.usaviation.com
My prediction is that eventually, one of the US-based Skyteam airlines- either Delta or Continental, probably the latter - will leave the alliance for a merger with United, and Northwest would then merge with the other Skyteam partner. United would in turn ditch US Airways as a Star partner. And when the dust settles, we will be left with three major full-service carriers: United, American, and an entity made up of Northwest and whoever else sticks with Skyteam - in all likelihood Delta.
The partnership between Northwest and KLM has worked well for many years, and Air France management would be foolish to give that up. Likewise, Delta and Air France seem to be a good match, whereas Continental was for the longest time hesitant to join any alliance, before they seemingly reluctantly joined Skyteam. I assume that Continental probably realized from the get-go that they would eventually run into unsurmountatle antitrust issues with their ménage à trois in Skyteam. The only reason why they did it anyhow was, because they did not want to be left out of the alliance game, after everyone else had hopped on the bandwaggon.
 
OP
WorldTraveler

WorldTraveler

Corn Field
Dec 5, 2003
21,710
10,721
strato,
you can be assured my sexual life has absolutely no connection with the airline industry. NW has real issues to address and some of us are willing to open the issues for discussion. Apparently, you don't have any positive contributions to make on the subject.

phx flyer,
CO is in Skyteam because it has an alliance with NW which is sealed by a golden handcuff. CO could easily get by without an alliance but will have to play along until it is freed from NW's grip - which will probably come only if NW is bought by another airline.