Delta Air Lines Inc. (DAL) and Australia's Virgin Blue Holdings (VBA.AU) said they would drop plans for an alliance unless granted anti-trust immunity for at least five years.

The planned pact is the first time that Delta, the world's largest airline by revenue, has sought immunity with a partner outside the global SkyTeam alliance it leads.

Delta and Virgin Blue - which would drop existing partner United Airlines on U.S.-South Pacific routes - have called for "prompt" approval of their application, made to U.S. and Australian regulators. United Airlines is a unit of UAL Corp (UAUA).

In a filing with the U.S. transportation department, they also asked that antitrust approval have "a duration of at least five years."

The unusual request comes against a backdrop of probes into airline alliances and antitrust policy on both sides of the Atlantic. One U.S. lawmaker's proposal could see existing immunities withdrawn within three years if found to be against the public interest.

Delta and Virgin Blue said in the filing that "they cannot and will not proceed ... without a grant of immunity from the threat of costly and burdensome private antitrust litigation."

The airlines also noted that fines for violation of cartel rules in the air cargo sector "have made airline managers around the world all the more cautious with regard to communications and information sharing with direct competitors, and, indeed, assuming any potential antitrust risk."

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com
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