Delta Air Lines has applauded the U.S. Department of Transportation’s Show Cause Order and decision to approve antitrust immunity for six-way alliance activities in trans-Atlantic markets for the SkyTeam carriers of Air France, Alitalia, CSA Czech Airlines, Delta, KLM Royal Dutch Airlines and Northwest Airlines.Delta currently has antitrust immunity with Air France, Alitalia and CSA, while Northwest has antitrust immunity with KLM. The DOT’s ruling will allow these SkyTeam carriers to consolidate their alliance activities.
The closer alliance cooperation made possible by this decision is expected to lead to new and expanding nonstop trans-Atlantic services, more discounted seats available through increased capacity and better cooperation, expanded codesharing, resulting in more convenient routings, shorter travel times, and improved time of day coverage; and enhanced competition against rival alliances and improved opportunities to take advantage of the liberalization in trans-Atlantic marketplace made possible by US-EU Open Skies.
The DOT ruling concludes that the proposed combination of alliances will not adversely affect competition. It also finds that the proposed 4-way joint venture “is likely to result in the introduction of new capacity and greater availability of discount fares across the entire joint network.”
Commenting on the announcement, Glen Hauenstein, Delta’s executive vice president Network Planning and Revenue Management, said: “We are pleased the Department of Transportation recognizes once again that antitrust immunity offers significant advantages to customers including more choice in flight schedules, travel times, services and fares. This grant of immunity allows us to expand these benefits for our customers to two other airline partners and significantly strengthen the SkyTeam alliance.”
The DOT’s ruling is the first since the new European Union-U.S. Open Skies agreement went into effect on March 30, which created the largest, most important and fully liberalized air transport marketplace in the world. The DOT has approved more than 20 applications for antitrust immunity in the past, including the recent approval of immunity for nine Star Alliance members.
Air France and KLM also welcomed the DOT’s proposed decision about the position on anti-trust immunity. This preliminary decision seems to be a logical response to both the Air France KLM merger and the new EU-U.S. Open Skies agreement. Air France and KLM have been active supporters of the policy to open up the transatlantic market for the benefit of the air transport sector and the traveling public. The EU-U.S. agreement offers European and American consumers considerable new opportunities, with airlines now in a position to operate or market services between any point in the EU and the U.S. that came into force on 30 March 2008. Such immunity would also enable Air France, KLM, Delta and Northwest to set up a joint venture agreement among the four of them and ultimately integrate their trans-Atlantic operations.