Friday July 10, 07:55 PM
US approves Continental joining Star Alliance
WASHINGTON (AFP) - The US government on Friday approved Continental Airlines (NYSE: CAL - news) 's bid to join the Star Alliance and granted partial antitrust immunity to a new joint venture within the group.
The Transportation Department announced final approval of the requests made by Star members and Continental (Frankfurt: A0XFTR - news) , confirming an April 7 finding that the proposed agreements would not hurt competition.
"I believe that the department's decision will benefit consumers, enhance competition, and preserve jobs in the airline industry," Transportation Secretary Ray LaHood said in a statement.
Continental, the fourth-largest US airline and currently a member of the SkyTeam Alliance, will join Star, a grouping of more than 20 US and international airlines.
The Transportation Department said that following comments from the Justice Department and other parties, it has placed "new limitations on the immunity in several markets to preserve competition."
The limitations, also called "carve-outs," affect four transatlantic markets, four markets between the United States and Canada, and all markets between the United States and Beijing, China, it said.
"The Star carriers may continue to serve these routes, but they will not be covered by the grant of immunity at this time."
The requests to US regulatory authorities were filed jointly by Continental and nine members of the Star Alliance in July 2008, seeking antitrust immunity that would protect them from potential lawsuits on competition grounds.
Continental is to join the Star ATI alliance, a subset of nine Star airlines that has US antitrust immunity, which includes United Airlines, the third-largest US carrier.
The department approved a petition for an integrated joint venture among Continental, United (UNC.TO - news) , Air Canada and Lufthansa -- "to be called Atlantic Plus-Plus" -- which would allow the four alliance airlines to engage in joint pricing, sales and marketing, and revenue sharing for the transatlantic routes covered by the agreement.
"We are pleased to receive final approval from the Department of Transportation," said Larry Kellner, Continental's chairman and chief executive.
"Continental is working to provide a seamless transition for its customers from the SkyTeam alliance to Star Alliance this fall. The DOT decision greatly benefits our customers, employees and shareholders. It ensures global competition with other antitrust immunized alliances while encouraging the retention and growth of open skies between the US and other nations."
The Justice Department late last month expressed concern that the plans would eliminate competition on several destinations, notably in Canada, and on several transatlantic routes between the United States and Europe.
The Justice Department noted that Continental is contractually obliged until October 24 to remain a member of rival alliance SkyTeam, structured around US and European giants Delta Air Lines and Air France (Paris: FR0000031122 - news) -KLM.
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