- Dec 5, 2003
- 21,709
- 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) .
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) .
