Siding with the airlines over objections from the Department of Justice, the Transportation Department on Friday
granted Continental Airlines Inc. antitrust immunity to coordinate trans-Atlantic service with its Star Alliance partners.
Continental last year had requested approval to coordinate its operations with Star airlines, a group that includes UAL Corp.'s (NADAQ:UAUA) United Airlines Inc., Air Canada Inc. and Deutsche Lufthansa AG. Transportation granted preliminary approval in April, but held up final approval at the request of the DOJ.
Justice objected to the broad scope of Continental's immunity request. The DOT in a statement announcing the final decision said in response to DOJ and other comments, it has placed carveouts on certain trans-Atlantic markets as well as markets between the U.S. and Canada and the U.S. and China that will not be covered by the grant of immunity.
Though Justice's concerns did not fully carry the day with the DOT, the agency did succeed in sending a clear message about how it views airline consolidation. With some
predicting that United and Continental could renew dormant merger talks if the economy does not pick up by year's end, DOJ antitrust officials might soon have another chance to weigh in on the issue.
Continental and United had argued they need the approval to compete more effectively with an alliance between Delta Air Lines Inc. (NYSE:DAL) and Air France/KLM that enjoys antitrust immunity. A third application by AMR Corp.'s (NYSE:AMR) American Airlines Inc., British Airways plc and Iberia SA is still pending. -
Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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