Continental: DOT holds 3-way alliance 'hostage'

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WASHINGTON -- Continental blasted the Transportation Department for again delaying a decision on the proposed alliance between Continental, Delta and Northwest.

Continental accused the DOT of an "attempt to hold our alliance hostage in order to support the unfounded allegations of an airline partly owned by the U.S. government."

But, the criticism appears to have missed the mark in at least one respect.

Continental referred to a complaint filed by America West that Continental responded unfairly when America West changed its fare structure in March. Continental said the DOT "is inappropriately linking its review [of the alliance] with unrelated, unfounded allegations of a competitor."

The government, however, does not own any of America West. America West, as a condition of its federal loan guarantee, did agree to give the government the option to buy as much as a 33% stake in the carrier.

The government, however, has not yet exercised any of that option, according to the DOT and America West.

Also, an America West spokeswoman said the airline has not filed a formal complaint against Continental. The airline did talk to the DOT about the response of several major airlines to its fare structure, however, and the DOT recently asked for more information, she said.

The DOT, in extending its review of the three-way alliance until Jan. 20, in part cited "complaints that the three airlines have allegedly engaged in anticompetitive conduct in the recent past."

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