DOJ Points To More Details In United, Continental JV Plan
30 June 2009 - 7:12AM
Dow Jones News
The U.S. Department of Justice shed more light on a proposed
joint venture between United Airlines, a unit of UAL Corp. (UAUA),
and Continental Airlines, Inc. (CAL), when it commented on their
plan.
"Continental and United hope eventually to codeshare on nearly
all of their domestic flight segments, combine customer lounges,
consolidate their operations at common airports, provide frequent
flyer reciprocity, cooperate on ticketing, reservations and
check-in and perform joint procurement," the DOJ wrote Friday. With
codesharing, the airlines can sell tickets for each other's
flights.
The nation's third-largest and fourth-largest airlines held
merger talks but last year decided to form a close, but less
costly, union. The airlines haven't provided details on the
business deal they said would allow them to add revenue and cut
costs.
While some U.S. airlines have formed partnerships with other
carriers, the deal between United and Continental would be unique
among major U.S. carriers.
The Justice Department didn't comment on that plan in a document
that mainly focused on the carriers' request to the U.S. Department
of Transportation for anti-trust immunity on international routes.
The DOJ said the anti-trust immunity request should be denied.
It said an international partnership not subject to antitrust
laws would limit international competition and could have
implications for the U.S. market.
The airlines said Monday that they still expect to get antitrust
immunity.
Continental has already arranged to switch in October to the
Star global airline alliance - where United is a major player -
from the SkyTeam alliance.
The airlines' domestic pact wouldn't depend on whether they get
antitrust immunity. Continental and United haven't given a
timetable for rolling out a domestic partnership.
When Delta Air Lines Inc. (DAL) last year merged with Northwest
Airlines to become the world's largest carrier, United and
Continental also held merger talks but called them off as the
economy turned sour.
Most airlines have joined alliances to further international
business, since cross-border mergers are barred by national
laws.
Following a period for public comment on the DOJ's conclusions,
the Department of Transportation will continue its
deliberations.
-By Ann Keeton; Dow Jones Newswires;
312-750-4120;ann.keeton@dowjones.com