AARON KARP / WASHINGTON DC
Delta Air Lines, Continental Airlines and Northwest Airlines are preparing for a potentially protracted regulatory battle with the US Department of Transportation (DoT) over their proposed codesharing agreement. The airlines plan to implement their three-way alliance without adhering to certain conditions imposed by the DoT, which says it will challenge the legality of the unprecedented pact.
The DoT conditionally sanctioned the alliance on 17 January, but placed numerous restrictions on the arrangement. The alliance carriers last week declared these conditions "unacceptable" and "above and beyond" US anti-trust law. They say they will move forward with the alliance, adhering to less restrictive terms set forth by the US Department of Justice (DoJ), but ignoring some of the DoT's requirements.
The alliance carriers say it is necessary to go forward with their plans to remain competitive with US Airways and United Airlines, which had a codesharing deal cleared by the DoT last year.
The DoT plans to initiate a formal enforcement proceeding to challenge the three-airline alliance, which would be the largest-ever domestic US arrangement of its kind. The DoT says it "intends aggressively to enforce its statutory authority to challenge the transaction and require such conditions as it deems necessary to preserve competition".
The DoT enforcement proceeding is the first step in what the alliance airlines acknowledge could be a long and bitter legal battle. The airlines have vowed to appeal to the US federal court over the issue if the DoT's ruling is not in their favour.
Delta chief executive Leo Mullin calls the DoT's conditions "intrusive and constraining".
Conditions the airlines found untenable include the DoT having the right to confiscate what it deems to be "underutilised gates" at the carriers' hub airports; the DoT's plan to limit permanently the scope of their codesharing; and restrictions on the carriers' ability to sign joint contracts with corporate customers.
Source: Flight International
