Continental Airlines (NYSE: CAL) is seeking immunity from antitrust laws to work more closely with United Airlines (NASDAQ: UAUA) and others on international routes. And, since airlines operate in a state of seemingly perpetual turmoil, what's the harm? According to the Justice Department: plenty.
The airline sought broad immunity as part of an effort to join Star Alliance, which includes US Airways, Lufthansa (OTC: DLAKY), and Air Canada -- along with United. Continental believes that it needs to join Star Alliance in order to remain competitive, especially with airlines that have this type of immunity already.
The Justice Department, which provided preliminary approval to the request, claims that limited immunity would be more appropriate, as opening the gates could impair competition on some international routes (including the United States to China), ultimately pushing fares higher on domestic flights ... as if that weren't in the cards already. The final decision belongs to the Department of Transportation, and Continental remains confident that the request will be granted.
A major concern for the Department of Justice is that a relationship between Continental, the fourth largest airline in the United States, and United, which is third, could affect competition within the country. Other areas targeted include partnering Beijing, Canada, Geneva, and Frankfurt.
Continental's request is not unprecedented, as Delta Airlines (NYSE: DAL) and Air France have already secured it for routes across the Atlantic. American Airlines (NYSE: AMR) has filed a request similar to Continental's to work with British Airways and Iberia and anticipates approval.
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