NYTimes.com Article: Plan for Airline Alliance Delayed

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Plan for Airline Alliance Delayed

December 20, 2002
By BLOOMBERG NEWS






WASHINGTON, Dec. 19 (Bloomberg News) - Delta Air Lines, the
Northwest Airlines Corporation and Continental Airlines
must wait 30 more days for a federal ruling on whether they
can sell tickets to one another's flights, a plan that
regulators have said raises competitive concerns.

The Department of Transportation extended its review a
fourth time, into next month, and said in a filing that it
had discussed the issues in detail with the airlines,
without providing specifics. The agency can decide to allow
the alliance to go forward or begin a legal proceeding to
try to block it.

"The D.O.T. may be saying, `Don't think just because you
guys are losing money we're going to let you carve up the
industry by lessening competition,' " said Clifford
Winston, a Brookings Institution economist who specializes
in airlines. The department may force the three airlines to
exempt from the alliance some routes where they are
dominant, analysts have said.

Delta, the third-largest airline in the United States;
Northwest, No. 4; and Continental, No. 5; applied in August
to share passengers and to coordinate routes and schedules.
The alliance is intended to increase sales, which have been
depressed since the 2001 terrorist attacks.

Opponents have said the alliance, which expands an existing
Northwest-Continental link, would bring a total of $600
million in revenue to the three carriers.

The Transportation Department review may be extended one
more time until late February as Continental continues
talks with the department, said Dave Messing, a spokesman
for the airline, which is based in Houston. Continental
completed talks with the Justice Department and expects to
be able to begin the alliance in the first half of next
year.

http://www.nytimes.com/2002/12/20/business/20AIR.html?ex=1041401234&ei=1&en=343ece218d46f0c8



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