=09 US Air, United Win Approval To Proceed With Alliance=20 By Steve Lott/Aviation Daily=20 02-Oct-2002 6:24 PM U.S. EDT=20 =20 US Airways and United, despite heavy lobbying from their U.S. competitors, today won the green light to proceed with their code-share and marketing agreement, effective immediately.=20 The approval is crucial to US Airways gaining access to its federally backed loan guarantee and boosting its revenues during its reorganization.=20 The airlines will start code sharing in January, but it will likely be a slow process as US Airways is trying to reorganize under bankruptcy protection, and United has warned it might file for Chapter 11 by yearend.=20 Passengers of both airlines will be allowed reciprocal airport lounge access starting Oct. 14 and will be able to earn and redeem frequent flyer miles on both carriers starting in November.=20 DOT's decision comes about two months after the airlines first proposed the partnership and includes some expected route carve-out where the two airlines will not be able to cooperate.=20 Overall, DOT had few complaints of the alliance, noting, "the competitive issues presented by the agreements do not presently require further investigation."=20 Under an agreement with the Justice Department, the airlines will not be allowed to code-share on routes where both offer nonstop service, including their hub-to-hub routes, such as Philadelphia-Los Angeles.=20 The airlines will not be able to code-share on nonstop services operated to the same endpoint from either Washington Dulles or Washington National, except for Shuttle flights from Washington to New York and Boston.=20 It also required the carrier putting its code on the other carrier=92s flights in some markets to offer the same fare as the operating carrier in order to prevent price signaling and collusion. Each of the airlines will independently set the terms and conditions for its own frequent flyer program.=20 The approval from regulators comes only a year after the Justice Department blocked the proposed merger between the airlines.=20 "We have not yet seen evidence that the agreements will unreasonably restrict either airline's incentives and ability to compete independently or would be likely to result in collusion on fares or service levels," DOT said.=20