Northwest CEO Urges Anti-Trust Immunity

Northwest Airlines president
and chief executive officer Doug Steenland urged the United States Department
of Transportation to approve the application of a group of airlines in
the SkyTeam alliance for international anti-trust immunity.In a speech Tuesday before the International Aviation Club in Washington
D.C., Steenland said approval of the application involving Air France,
Alitalia, CSA Czech Airlines, Delta Air Lines, KLM Royal Dutch Airlines and
Northwest Airlines is necessary to both preserve and expand the many benefits
that the alliance offers consumers, communities and the carriers involved.
  “The Air France-KLM merger is the genesis for our pending application with
DOT”, Steenland explained.  The application “brings together two successful
and first-rate alliances (Northwest/KLM and SkyTeam) with proven
consumer-friendly track records.”
  “In order to fully preserve the efficiencies and consumer benefits of the
existing alliances, it is necessary to bridge the immunities held by
Northwest/KLM and SkyTeam,” continued Steenland.  “Linking the Northwest/KLM
and SkyTeam alliance networks will generate substantial new benefits
including: new and expanded trans-Atlantic nonstop service; new online
connecting service in almost 9,000 markets not currently served by either of
the alliances; increased pathway options benefiting 16,280 city pairs that
account for almost 80 percent of trans-Atlantic travel; greater discount
opportunities by allowing passengers to choose from numerous itineraries;
improved time of day coverage; and reduced travel time in over 4,000 markets,
representing 18 percent of the transatlantic traffic.”
  Northwest and KLM operate a highly integrated joint venture which was
granted anti-trust immunity by the U.S. Department of Transportation in
January, 1993.  Air France operates an alliance with Delta, Alitalia and Czech
(members of SkyTeam) under anti-trust immunity granted by DOT in January 2002.
Air France and KLM received merger approval in early 2004.  In September 2004,
Northwest joined the SkyTeam alliance of airlines as a marketing member.
SkyTeam includes Aeromexico, Air France-KLM, Alitalia, CSA Czech, Delta and
Korean Air.  The pending application with DOT seeks to bridge the existing
anti-trust immunity of Northwest/KLM and the SkyTeam carriers Air France,
Alitalia, CSA Czech and Delta Air Lines.

SkyTeam Application Receives Broad Support From Communities, Corporate
Customers, Labor and Consumers
  Northwest’s application has received an unprecedented array of support
from a diverse group of parties including communities, corporate customers and
consumers who today are already benefiting from immunized alliances among
SkyTeam partners.  The Air Line Pilots Association (ALPA) and the Business
Travel Coalition have also filed with the DOT in support of the application.
  The Wayne County Airport Authority, which manages Detroit Metropolitan
Airport, has seen its nonstop service between Detroit and Amsterdam grow from
zero daily flights to five daily flights this summer as a result of
Northwest’s immunized alliance with KLM.  According to a news release from the
Wayne County Airport Authority, Northwest service from Detroit could well be
enhanced and upgraded if the DOT approves and immunizes the agreements as
requested by Northwest and SkyTeam.
  At Northwest’s Twin Cities hub, the airport, the cities of Bloomington,
Burnsville, Eagan, Minneapolis and St. Paul, as well as many local
organizations, also expressed their support.
  As an example of the benefits that anti-trust immunity can bring to a
region, Jeff Hamiel, executive director of the Metropolitan Airports
Commission, which operates Minneapolis-St. Paul International Airport pointed
out in a news release that before Northwest and KLM received anti-trust
immunity, there were no nonstop flights between Minneapolis-St. Paul
International Airport and Amsterdam. This summer, the Northwest/KLM joint
venture offers three daily non-stops, totaling 807 seats.
  Additionally, Twin Cities’ leaders argued that, with anti-trust immunity,
Northwest Airlines would be in a position to provide additional European
nonstop services to the community and to continue to generate economic value
and jobs.
  Memphis, which recently celebrated the 10th anniversary of nonstop service
to Amsterdam, said in a strongly worded filing to the DOT that the Northwest
hub continues to be critical to the economic health of Memphis and the entire
region.  As a major contributor to the success of the community, Northwest
also is essential to Memphis’ entry into the global economic market.
  The Business Travel Coalition (BTC), which seeks to lower the long-term
cost structure of business travel, believes the proposal, which seeks
anti-trust immunity and codesharing authority, is in the best interest of
large buyers of commercial aviation services.  Over ninety members of the
Coalition have signed a letter to DOT in support of the application.
  According to the Coalition, the SkyTeam proposal eliminates unnecessary
and costly restrictions and addresses current competitive imbalances which
limit service options.  For example, the SkyTeam proposal will establish
additional pathways to international destinations for travelers by directly
linking U.S. and European hubs.  As a result, travel times and costs for many
trips will drop.
  Additionally, Northwest has received support from the Air Line Pilots
Association (ALPA) as well as substantial corporate customer support from
highly esteemed companies nationwide who conduct business in the international
arena including FedEx, Ford Motor Company, General Mills, General Motors and
Medtronic, to name a few.
  As General Motors said in its letter of support, “The Sky Team Alliance
partners and other airline partnerships are a critical support to General
Motors’ international travel demands. If Northwest/KLM and the Sky Team
applicants are allowed to operate international service with global anti-trust
immunity and code-sharing, we believe the opportunity for convenient, cost-
effective air transportation should be increased, and could result in
advantages that should include improved flight schedules, reduced travel
times, new nonstop service, and additional low fare choices.”
  General Motors states in its filing that, “The importance of increased
international travel opportunities to our country, our communities and
airports, and to those of us who have business dealings with customers and
suppliers throughout the world cannot be understated.”
  In its filing to the DOT in support of anti-trust immunity and speaking
specifically of Northwest and Delta Air Lines, ALPA says that, “it is
concerned that the denial of the joint application could have a severe
negative effect on at least one of these two carriers, and thus on the
livelihood of that carrier’s pilots.”
  ALPA continues that the “loss of these [international] services, would
have in addition to the negative consequences identified by the airports and
communities in their answers, obvious critical adverse consequences for the
carriers and their employees as well.”
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