A decision on the antitrust immunity application for Delta Air Lines, Swissair, Austrian and Sabena could be hampered by a similar request from American and Canadian Airlines International.

The US Department of Justice finished its analysis of the Delta proposal in early November, and the application is now in the consultation stage. This is a good sign for Delta as the DoJ's approval is critical to Department of Transportation clearance.

Whether this indicates a strong support of antitrust immunity for other airline alliances remains to be seen. But immunity is now seen as the key to unlocking the full potential of codesharing.

Lufthansa, which has completed the initial stage of its alliance with United Airlines, is now pushing for open skies with the US so the alliance can obtain antitrust immunity.

For American, the lack of a large transatlantic or transpacific partner is temporarily being overlooked as it concentrates on its codesharing pact with Canadian. The partners need immunity to develop fully a seamless hubbing system between the US and Canada. This will not be ignored by American's unions, which have opposed such alliance-building, as it gives American a direct link to the Pacific through Canadian's services.

But not everyone sees American's application in that light. Washington aviation officials speculate that American is pursuing a spoiling strategy in a bid to scare regulators about the potential wave of immunity applications should Delta gain approval. American would rather see 'no-one else with immunity until they have a [transatlantic] partner,' says one source.

Mead Jennings

Source: Airline Business