Delta Objects to Continental's Ties to Other Airlines
Thursday, November 27, 2008
Delta Air Lines yesterday formally objected to a request by Continental Airlines for antitrust approval that would allow Continental to deepen ties with major airline partners in the United States and overseas.
Continental is seeking immunity from antitrust rules so it can partner with United and Lufthansa on transatlantic flights, and eventually on trips to Latin America and Asia. Without clearance from the Department of Transportation, Continental would be breaking U.S. laws that forbid airlines from sharing information on schedules, costs or the prices they plan to charge.
Delta is complaining that Continental's application would allow unfair dominance on routes to Brazil and China, where Continental and its partners are already strong players.
Delta has sought and won similar clearances in the past. In May, the Transportation Department granted Delta similar immunity with European airline partners on transatlantic routes. Delta last month also won U.S. government approval for its merger with Northwest Airlines, a deal that created the largest airline in the world.
Continental attributed Delta's filing to industry rivalry.
"From what we have seen, there's nothing new here," Continental spokeswoman Mary Clark said in a prepared statement. "It looks like another attempt by the world's largest airline to prevent others from competing with it. We are confident the government will see through Delta's attempt to suppress competition."
The Delta-Continental rivalry isn't limited to the United States. The airlines are members of dueling global alliances. Continental, Lufthansa and United are part of the Star Alliance, which includes more than 25 airlines from around the world. Delta is a member of SkyTeam, which includes Air France, KLM and Korean Air, among others.
Alliance-related antitrust fights are becoming increasingly common in the highly competitive airline world. Airlines see alliances as one of the few tools the industry has to bring about consolidation across borders.
American Airlines is seeking immunity to enter an alliance with British Airways and the Spanish carrier Iberia on transatlantic routes. Major rivals immediately denounced the deal, saying it would give the airlines dominance over competitors.
The Delta-Continental fight comes as the United States and the European Union are negotiating the Open Skies treaty, which seeks to liberalize rules on flights between the United States and Europe. The talks have been on hold since the presidential election. Aviation officials around the world are waiting to see what course the Obama administration will chart.