Friday, December 22, 2006

United Gets Tentative Antitrust Immunity for Alliances with Foreign Air Carriers

United Airlines and a number of its international Star Alliance partners received tentative approval on December 19 from the Department of Transportation(DOT) to add three carriers to their immunized alliance and to permit expanded cooperation between United and alliance member Air Canada.

The action, if made final, will provide the carriers with immunity from U.S. antitrust laws to the extent necessary to enable them to plan and coordinate services over their entire international route systems, as well as pave the way for implementation of the U.S.-Canada Open Skies air transport agreement.

The DOT tentatively decided to allow Swiss International Air Lines, LOT Polish Airlines, and TAP Air Portugal to join the alliance with antitrust immunity. It also would expand the current grant of immunity between United and Air Canada to all of their international operations. The European members of the Star Alliance with imunity are Austrian Airlines, Lufthansa German Airlines, and Scandanavian Airlines. All of the airlines will contune to be independent companies and retain their separate coporate and national identities.

In its December 19 show-cause order, the DOT tentatively concluded that the proposed alliance was in the public interest because the partners' increased ability to cooperate would allow them to provide consumers with additional service options, such as more nonstop flights, expanded code-sharing, and new online services. Interested parties were given 21 days to show why the tentative decision should not be made final, with replies due seven days afterward. After a review of these filings, the DOT will issue a final decision.

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