A thinned out Team

Delta and Northwest Airlines will have to work the corridors of power through the dog days if they are to get what they want in Washington. In addition to the usual laundry list – pension reform, tax relief, help on security mandates – they have a new task.

These two of the three US players on the SkyTeam Alliance are working on their game plan now that the Justice Department’s competition bureau has come out against their alliance’s attempt to win antitrust immunity for five members, including Delta and Northwest in the US. (Continenental wasn’t part of the plan but is on the Team.) A grant of immunity would allow these two plus Air France/KLM, Alitalia and CSA Czech to co-ordinate prices much as Delta and Air France and Northwest and KLM have for years.

But the antitrust lawyers at Justice said no, it would squelch domestic competition and wouldn’t spur new service or open skies across the pond.

The final decision lies not with the competition lawyers at Justice but with their buttoned-down counterparts at the Transportation Department. And those guys do not usually ignore a Justice Department recommendation: when DoT overruled Justice in 1987 and cleared the US Air takeover of Piedmont, it provoked a firestorm.

Making it harder this time: Northwest, trying to survive a strike, has already used up political capital in the Capitol in persuading the White House not to intervene in the dispute. And Delta, struggling to avert bankruptcy, is calling in its chits on the pension reform it says it needs to stay solvent. Delta’s also down one good man as its Washington honcho, Scott Yohe, takes an early retirement along with a host of other Delta execs. Yohe, a life-long Delta man, will help out as a consultant but the Team’s ranks are thinned.

And just ahead is a cold winter of low fares, light traffic, and pernicious fuel costs.

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