mhermann596
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http://online.wsj.com/article/SB123913242990197939.html?ru=yahoo&mod=yahoo_hs
Continental Airlines Wins Approval to Join Star Alliance
more in Politics »
By CHRISTOPHER CONKEY and PAULO PRADA
WASHINGTON -- The U.S. Transportation Department on Tuesday gave Continental Airlines Inc. preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances.
The administration's decision will allow Continental to join the Star Alliance with UAL Corp.'s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.
But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.
The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn't be reached to comment, says these alliances limit competition and hurt consumers.
A DOT spokesperson declined to comment on Mr. Oberstar's proposal.
The Transportation Department also said it will allow Continental, United, Air Canada and Deutsche Lufthansa to form a new joint venture called Atlantic Plus-Plus. Under the venture, the carriers will be permitted to jointly manage sales, capacity, marketing and revenue, allowing them to eliminate some competing flights and instead steer passengers onto a partner's plane. This approval doesn't apply to domestic service.
The Star Alliance competes with two other alliances. One is SkyTeam, an alliance that currently includes Continental, Delta Air Lines Inc. and Air France-KLM SA. AMR Corp.'s American Airlines, part of the oneworld alliance with British Airways PLC and Spain's Iberia Lineas Aereas de Espana SA, has also asked the government for antitrust immunity to cooperate more closely with those carriers on trans-Atlantic flights. The Transportation Department is expected to make a decision on that petition in the autumn.
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta. By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.
In a statement, the Transportation Department said the alliance would "be in the public interest because it would support increased levels of service in international markets served by the carriers, give consumers more travel options and shorter travel times, and reduce fares."
Write to Christopher Conkey at [email protected] and Paulo Prada at [email protected]
Continental Airlines Wins Approval to Join Star Alliance
more in Politics »
By CHRISTOPHER CONKEY and PAULO PRADA
WASHINGTON -- The U.S. Transportation Department on Tuesday gave Continental Airlines Inc. preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances.
The administration's decision will allow Continental to join the Star Alliance with UAL Corp.'s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.
But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.
The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn't be reached to comment, says these alliances limit competition and hurt consumers.
A DOT spokesperson declined to comment on Mr. Oberstar's proposal.
The Transportation Department also said it will allow Continental, United, Air Canada and Deutsche Lufthansa to form a new joint venture called Atlantic Plus-Plus. Under the venture, the carriers will be permitted to jointly manage sales, capacity, marketing and revenue, allowing them to eliminate some competing flights and instead steer passengers onto a partner's plane. This approval doesn't apply to domestic service.
The Star Alliance competes with two other alliances. One is SkyTeam, an alliance that currently includes Continental, Delta Air Lines Inc. and Air France-KLM SA. AMR Corp.'s American Airlines, part of the oneworld alliance with British Airways PLC and Spain's Iberia Lineas Aereas de Espana SA, has also asked the government for antitrust immunity to cooperate more closely with those carriers on trans-Atlantic flights. The Transportation Department is expected to make a decision on that petition in the autumn.
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta. By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.
In a statement, the Transportation Department said the alliance would "be in the public interest because it would support increased levels of service in international markets served by the carriers, give consumers more travel options and shorter travel times, and reduce fares."
Write to Christopher Conkey at [email protected] and Paulo Prada at [email protected]
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