The US Department of Transportation has blocked Northwest Airlines and Continental Airlines from merging their frequent-flier programmes until at least early December while it continues to review all provisions of a planned wider tie-up.
Meanwhile, the USA's second-largest pilots' union has asked the Clinton Administration to block Northwest from purchasing a controlling stake in Continental.
The Allied Pilots Association, which represents 9,000 pilots at American Airlines, sees domestic codesharing as a prelude to a full-scale merger.
The pilots fear erosion of jobs if competing air carriers are allowed to sell seats on partner airlines with lower operating costs.
Northwest plans to buy 51% of Continental's voting stock owned by David Bonderman's Air Partners investment house, creating a so-called "virtual merger" that will link route networks and involve broad codesharing, but maintain separate identities, fleets, management and workforces.
The arrangement is now being scrutinised by US Government agencies.
Source: Flight International
