Delta Air Lines Inc. yesterday asked the Department of Transportation to conduct an in-depth review of proposals that would transfer prized transatlantic routes from Pan American World Airways to United Airlines and from Trans World Airlines to American Airlines.
"Never before has such an enormous restructuring of the international air travel market been proposed," wrote Delta Chairman Ronald W. Allen. He said he was concerned about how the proposed transfer of routes from U.S. airports to London's Heathrow Airport would affect his airline. The DOT said it is reviewing Delta's request, which, if granted, could delay the route transfers.
Delta has been seeking new international routes in recent years but not with the same aggressiveness as American and United, airline industry analysts said. The right to fly into Heathrow, London's premier airport, has been out of the reach of all three airlines until the recent proposed transactions were announced.
Pan Am, and then later TWA, hungry for cash, sold those rights to the nation's two strongest airlines, United and American. But the transactions require the approval of both the DOT and the British government. Unless the approval is received quickly, cash-strapped Pan Am may be forced to seek protection from creditors under federal bankruptcy laws.
"It is regrettable that any air carrier at this late date proposes to deprive Pan Am of urgently needed resources," said UAL Corp. Chairman Stephen M. Wolf. UAL is United's parent corporation.
U.S. negotiators have been trying to persuade Britain to transfer the right to fly into Heathrow -- now available only to Pan Am and TWA under a bilateral treaty -- to the stronger carriers. British Airways has had the benefit recently of competing against two weak carriers for transatlantic traffic and would face stiffer competition from United and American.
Delta said yesterday that the British government has made it clear that it will approve the route transfers only in exchange for concessions that benefit British carriers at the expense of U.S. carriers, including airlines other than United and American. The DOT should not approve the applications for transfer until it knows what that price will be, Delta said.
Shearson-Lehman Brothers Inc.'s Robert J. Joedicke said that Delta might have tried to bid for TWA's routes after Pan Am and United announced their deal. "In a sense they sat and watched it unfold rather than being an activist," he said. "If that's their approach, there's nothing wrong with it, but then you can't complain."