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DOT tentatively approves Delta-Air France-KLM-Virgin deal

The US Department of Transportation has tentatively granted antitrust immunity to the joint venture proposed by Delta Air Lines, Air France, KLM and Virgin Atlantic Airways.

A show cause order the agency filed on 2 August begins a public comment period about the deal, which would enable the carriers to coordinate their operations between the US and Europe. During the comment period the airlines may begin making arrangements to expand their cooperation, the order says.

US Transportation Secretary Elaine Chao in a statement says if regulators grant final approval after reviewing any objections and competition risks, the new joint venture "will offer consumers the same benefits from the prior ventures, such as increased capacity and frequent flyer cooperation".

Delta previously had a joint venture with Air France, KLM and Alitalia, and another with Virgin Atlantic.

In July 2018, Delta, Air France, KLM and Virgin Atlantic filed for approval of an amended joint venture that excluded financially troubled Alitalia.

The department has limited its immunity immunity until January, during which time the applicant airlines expect the expanded venture to be approved.

To review competition and consumer interest effects of this new venture, Chao says "the department is proposing that the carriers report annually on the progress of their commercial cooperation and provide a detailed assessment after five years".

Opponents of the expanded joint venture listed in the department's order include JetBlue Airways, which argues the deal "would reduce and foreclose competition" because airline alliances SkyTeam, Oneworld, and Star Alliance already control 90% of US-Europe air travel. JetBlue also urged the DOT to "proceed with caution" owing to uncertainty stemming from the UK's exit from the European Union.

Consumer organisations mentioned in the order include Travelers United and the American Antitrust Institute, which oppose the deal because the new venture "will have greater impacts to competition" than the airlines claim, and that "concentration in the transatlantic market is too high".

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