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Transatlantic competition could hot up further if a new six-way alliance - tentatively proposed by the US Department of Transportation (DOT) yesterday (9 April) ” gets the go-ahead.
The antitrust immunity (ATI) grant would allow US carriers Delta and Northwest to co-ordinate services with international SkyTeam partners Air France, Alitalia, Czech Airlines (CSA) and KLM Royal Dutch.
DOT said in a statement this is in the public interest as a ”new and highly integrated joint venture (JV) will likely provide consumers with additional price and service options, such as lower fares and more nonstop and connecting flights.”
”Today”s decision by DOT is a win for our customers, employees, and the communities we serve,” said Northwest Airlines president and CEO Doug Steenland. ”The expanded SkyTeam alliance activities will lead to more convenient service for our customers with shorter travel times, expanded growth opportunities for the airline which equates to more stability and job security for our own employees, and more nonstop transatlantic flight options for the communities we serve.”
Delta executive vice president Glen Hauenstein added: ”Antitrust immunity offers significant advantages to customers including more choice in flight schedules, travel times, services and fares. This grant allows us to expand these benefits for our customers to two other airline partners and significantly strengthen the SkyTeam alliance.”
DOT has approved more than 20 ATI applications in the past ” including to SkyTeam rival Star Alliance ” where it found there would be no substantial threat to competition. In 2002 British Airways turned down an ATI agreement with oneworld partner American Airlines because DOT ruled that 222 slot pairs per week at Heathrow would have to be given up as part of the deal. A BA spokeswoman told ABTN another application is ”something we can look at and review.”
This SkyTeam alliance would be the first granted since Open Skies freed up the transatlantic market, extending JVs already in place - between Northwest and KLM, plus Delta and Air France - so that all split the costs and revenues on routes.
A Delta spokeswoman told ABTN: ”Star Alliance has ATI already ” so in some ways we”ve been unable to compete effectively with them.
”I think this [alliance] will increase the quality that”s being offered to customers. If you”re doing business between various cities, it will be better to do it through one seamless transaction ” this is to create a one-stop shop, it”s a customer-focused objective. It can get very confusing otherwise.”
The deal is not yet done ” interested parties have a fortnight to comment, and then issues will be discussed for a further week before a final decision is made. If passed, the carriers must implement the alliance within 18 months.
Delta and Northwest first petitioned DOT for this alliance back in 2004 and were turned down, before reapplying in June last year.