The U.S. Department of Transportation proposed to allow Delta, Northwest and four of their international partners in the SkyTeam alliance to combine their existing transatlantic alliances.
In a show-cause order issued April 9, the DOT tentatively decided to grant antitrust immunity and allow the two U.S. carriers -- along with Air France, Alitalia, Czech Airlines and KLM Royal Dutch Airlines -- to coordinate their services and act as a single carrier for U.S.-Europe services. Northwest has an existing alliance with KLM, while Delta has an existing alliance with Air France, Alitalia and Czech Airlines.
The DOT said it tentatively concluded that the proposed alliance is in the public interest because it features a “proposed new and highly integrated joint venture that will likely produce efficiencies and provide consumers with additional price and service options, such as lower fares and more nonstop and connecting flights.”
As a condition of obtaining antitrust immunity, the DOT proposed to require that the carriers implement the immunized alliance within 18 months. The DOT stressed that the carriers would remain subject to antitrust laws for domestic service and for international flights that are not covered by the alliance agreement.
Delta and Northwest first petitioned the DOT to allow the alliance in 2004. After an initial tentative denial, the airlines reapplied in June of last year with a revised agreement.
Interested parties will have two weeks to comment on the tentative decision. The parties will reply to all comments within seven days, and then the DOT will then issue a final decision.
The show-cause order, alliance application and public comments are available at http://www.regulations.gov, docket number OST-2007-28644.