Tag Archives: star alliance

Continental/United Antitrust Immunity Granted: With a Few Strings

Continental Airlines logo 020708.jpg

Continental Airlines was granted limited antitrust immunity today by the U.S. Department of Transportation — a move that will allow it to join United Airlines and other airlines in the Star Alliance in creating schedules and determining fares.

The order did, however, set limits on the antitrust immunity in regards to some international routes.

The order excludes rights between the U.S. and Beijing. In addition, the order also does not grant immunity for those flights between U.S. and Canada, and to those flights between New York and Copenhagen, Geneva, Lisbon, and Stockholm.

These “strings” were more or less foreshadowed in the recent Department of Justice filing, in which the DOJ discussed the possibility of “harm to consumers” on routes between the U.S. and China, Canada, Denmark, Portugal, Sweden and Switzerland.

The decision did, however, give the green light to a proposal that will see Continental, United, Lufthansa and Air Canada create a joint venture for some international flights.

This was the right call for the DOT to make, although the DOJ ruling last week was a bit troubling. As I have said for years, if U.S. ownership laws continue to hamstring U.S. carriers from linking up directly with international counterparts, then antitrust immunity — which allows them to participate more fully with international carriers — is the answer.