SkyTeam upset by immunity ruling

Some SkyTeam alliance members say they are disappointed and surprised at the U.S. Department of Transportation (DOT) decision over anti-trust immunity (ATI) on trans-Atlantic route

The U.S. government has denied the application from a group of airlines in the SkyTeam alliance.

Delta said it is disappointed with DOT’s ruling on SkyTeam alliance ATI; Airline underscores alliance benefits for travelers worldwide.

Delta joins its SkyTeam partners Northwest, Air France-KLM, Alitalia and CSA Czech in expressing disappointment with today’s tentative determination by the U.S. Department of Transportation not to grant antitrust immunity (ATI) for a combined alliance among the six air carriers.

Delta believes the decision by the DOT is inconsistent with current U.S. policy that has repeatedly recognized the benefits of ATI in international markets.

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“The decision, if finalized, would be a step backwards in terms of U.S. efforts to liberalize the international aviation marketplace,” said Jorge Fernandez, Delta’s Vice President, International and Alliances. “This ruling undermines the administration’s effort to expand Open Skies with Europe.”

Delta notes that the Department of Justice has determined that “the requested immunity is not likely to lessen competition on the transatlantic routes.”

“A number of major U.S. corporations and local communities have weighed-in to support this application, citing the significant benefits to consumers of ATI and alliances, from improved flight schedules, to reduced travel times and new service with lower fares,” according to Fernandez. “Some of these benefits are simply not available through code-sharing arrangements alone.”

“Despite the ruling, Delta will continue to work alongside its SkyTeam alliance partners to continue to improve upon the wide range of benefits our passengers enjoy today,” said Fernandez.

“Delta will undertake a full review of the DOT decision published today and file a response within the 21 day comment period.”

Northwest disappointed and surprised by U.S. DOT’s denial of SkyTeam Airlines’ anti-trust immunity application; Decision inconsistent with DOT’s prior approval of other ATI applications and with Administration objectives.

Northwest Airlines expressed its disappointment and surprise at the United States Department of Transportations (DOT) decision to deny the application of a group of airlines in the SkyTeam alliance for international anti-trust immunity (ATI) on trans-Atlantic routes.

The application, filed in September of 2004, sought to bridge the ATI already held by Air France, Alitalia, CSA Czech Airlines and Delta Air Lines, with the ATI already held by KLM Royal Dutch Airlines and Northwest Airlines.

We are truly surprised and disappointed by the DOTs actions, said Andrea Fischer Newman, senior vice president of government affairs. The decision is inconsistent with all of the DOTs 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.

Northwest’s request was simple. Today, there are three global alliances. Members of one alliance, SkyTeam, asked the DOT for ATI for the integration of their intra-alliance operations.

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, Fischer Newman continued.

DOT decision places these benefits in jeopardy, and does not help Northwest’s efforts to emerge from bankruptcy.

It is also inconsistent with the DOTs recent efforts to obtain open skies between the U.S. and European Union (EU), as well as liberalization of airline ownership and control issues, she added.

At a time when the Administration is calling for further liberalization and consolidation, it is hard to see how this decision is consistent with that policy.

Northwest intends to respond to the DOTs show cause order and will review all of the companys options as it moves forward.

The SkyTeam alliance of airlines, which includes Aeromexico, Air France, Alitalia, Continental Airlines, CSA Czech Airlines, Delta Air Lines, KLM, Korean Air and Northwest Airlines, serves over 35 million passengers annually.

Northwest Airlines is the worlds fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the worlds most extensive global networks.

Northwest and its travel partners serve more than 900 cities in excess of 160 countries on six continents.
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