Delta Air Lines' plans to launch a three-way codeshare with Continental Airlines and Northwest Airlines, and adding the carriers to its SkyTeam alliance, have been set back by delays in securing government approval.
Delta persuaded its pilots' union last week to authorise the deal, but could not convince the US Department of Transportation (DoT) to approve the agreement by its 21 November deadline. Instead, the DoT has set a new deadline of 21 December to review claims that the codeshare would reduce competition. Together, they would control 38% of the domestic market, compared with 26% controlled by United Airlines and US Airways, and 22% by American Airlines. The airlines also need authorisation from pilots' unions at Continental and Northwest, plus approvals from Delta partner Air France and Continental/Northwest partner KLM, before the codeshares are launched. The three US majors had set a contractual deadline of 5 December to secure all approvals and planned to begin codesharing in the summer, but the delay has forced them to resume talks in a bid to extend their contract and schedule.
Delta says the alliance will boost its annual revenues by $150 million to $200 million and improve its financial situation. The carrier lost $326 million in the third quarter, compared with a combined loss of $83 million at Continental and Northwest, and fears its losses could escalate after United Airlines and US Airways launch their already approved codeshare next quarter. "This potential alliance provides a strong strategic response which defends our market share," says Delta vice-president of flight operations Joe Kolshak.
Source: Flight International
