DOT May Seek Extra Safeguards For United, Continental Tie
April 07 2009 - 4:33PM
Dow Jones News
The U.S. Department of Transportation said Tuesday it may seek
additional conditions to protect domestic competition after giving
Continental Airlines Inc. (CAL) tentative approval to join the
global Star Alliance.
Continental received clearance from the DOT to join Star - led
by United Airlines, a unit of UAL Corp. (UAUA), and Deutsche
Lufthansa AG (LHA.XE) - later this year, after opting to defect
from the rival SkyTeam grouping.
Delta Air Lines Inc. (DAL), a leading member of SkyTeam, had
called on DOT to restrict the antitrust approval granted to
Continental and its new partners.
While the enlarged Star grouping focuses on international
routes, Delta had raised concerns about the impact of Continental's
entry on domestic routes.
Delta had even called, in a regulatory filing in December, for
Lufthansa to drop its board seats on JetBlue Airways Inc. (JBLU)
and "restructure" its 19% stake in the carrier to secure regulatory
approval for enlarging Star.
JetBlue is not a member of Star.
DOT referenced Delta's concerns in its show-cause order Tuesday
giving approval for Continental's switch, saying: "We will
therefore consider whether additional safeguards are necessary to
preserve domestic competition."
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com