Article from bizjournals.com: Northwest, Delta, Continental alliance approved with conditions

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Hello from bizjournals.com! David Mueller (dmueller7@lycos.com) thought you
might like the following article from The Business Journal:

The sender's comment about the article:

This article covers some of the conditions set by the DOT.


Northwest, Delta, Continental alliance approved with conditions


Benno Groeneveld  Web Reporter
------------------------------------------------------------
   The Department of Transportation on Friday approved the largest airline
   code sharing alliance in the U.S between Northwest Airlines Corp. of
   Eagan, Delta Airlines Inc. of Atlanta and Continental Airlines Inc. of
   Houston.

   The airlines will sell seats on each others' flights and allow members
   of their respective loyalty programs to get credit or use the facilities
   of each of the three partners.

   The approval came with restrictions. A "senior department official," who
   asked not to be named, said in a press conference that those conditions
   were put in so that the carriers would continue to compete and would not
   dominate the market.

   For example, the airlines may not collude about how much each will
   charge for a flight, or how much capacity each will use or what routes
   each will fly. Another limitation is that each airline may code-share no
   more than 650 flights with another alliance member.

   The three airlines are also not allowed to code-share flights between
   their hubs. If Northwest flies between Minneapolis and Delta's hub in
   Atlanta, "each carrier must fly it own planes," the official said.

   In order to encourage competition, the department also insisted that
   carriers must return airport gates if they are used less than six turns
   per day.

   Another condition is that the three airlines may not jointly bid on
   corporate travel plans, or approach travel agents as a group unless they
   are specifically asked to submit a combined bid.

   The three carriers submitted their request for code-sharing on Aug. 23.
   The department said the review took so long because it tried hard to
   reconcile the airlines' needs for the greater efficiencies offered by an
   alliance with the public's need to preserve competition.

   A spokeswoman for Northwest said the airline had no comment pending a
   review of the department's decision.

   The senior DoT official said the department will continue to monitor
   developments, to ensure that the alliance will not harm competition.

   "They will be operating in a goldfish bowl," he said.



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http://twincities.bizjournals.com/twincities/stories/2003/01/13/daily49.html

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