The US Justice Department opposes blanket antitrust immunity for Continental Airlines United Airlines and other carriers in the Star Alliance, documents show.
But the companies expressed confidence on Monday the application would be approved, with industry experts saying the bid would now certainly be reworked with conditions to address the concerns of antitrust enforcers.
"I think they'll cooperate well enough. They're not going to tell Justice to take a hike," according to one aviation consultant familiar with Transportation Department thinking on regulatory matters.
In comments delivered to transportation officials late on Friday, the Justice Department raised a number of concerns with Continental's 2008 application to join the Star Alliance, including overseas and domestic service.
Antitrust immunity would permit carriers to share pricing, scheduling and other information within the Star Alliance.
Antitrust chief Christine Varney and her deputies recommended approval of limited immunity, saying the bid as proposed would eliminate competition between United and Continental for transpacific and Latin American service. Varney said full immunity would "substantially lessen" competition between US cities and Beijing where United and Continental provide substantial connecting service.
"A (Transportation Department) grant of immunity for two US carriers to coordinate their international operations outside of an explicit joint venture with foreign carriers would be unprecedented," Varney wrote.
The Justice Department also raised concerns about future competition on routes between the United States and Canada, as well as likely "competitive harm" for consumers in several transatlantic markets, including New York-Stockholm, New York-Lisbon, Dulles-Frankfurt and Chicago-Frankfurt. |
