January 20 Airline News

[chipmunn]

[P align=justify][FONT face=Times New Roman size=3]Airlines' Pension Problems Growing - Industry's Woes Seen in Shortfalls [/FONT][FONT size=3][BR][BR][FONT face=Times New Roman]WASHINGTON (Washington Post) - First came the layoffs. Then the pay cuts. Finally, a slashing of health benefits. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]If times weren't tough enough for airline workers, now some employees at the major carriers face the prospect of a poorer retirement. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]The alarm sounded last week after a quasi-governmental agency that insures private pension funds said it would not permit the bankrupt carrier US Airways Group Inc. to stretch out payments on its squeezed pilot pension plan. The decision by the Pension Benefit Guaranty Corp. made it more likely that the fund could be terminated. That means pilots retiring in the future could find monthly checks in their mailboxes that are significantly smaller than what they were promised in more prosperous times. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Complete Story: [/FONT][/FONT][A href=http://www.washingtonpost.com/wp-dyn/articles/A19227-2003Jan20.html][FONT face=Times New Roman size=3]http://www.washingtonpost.com/wp-dyn/articles/A19227-2003Jan20.html[/FONT][/A][FONT face=Times New Roman] [/FONT][FONT size=3][BR][BR][FONT face=Times New Roman]Air Alliance Hits Antitrust Snag - Restrictions Threaten 3 Carriers' Plan [/FONT][/FONT][FONT size=3][BR][BR][FONT face=Times New Roman]WASHINGTON (Washington Post) - Two departments of the Bush administration ruled yesterday that, as proposed, the three-way marketing alliance between Delta Air Lines, Continental Airlines and Northwest Airlines was anti-competitive. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Both the Transportation Department and the Justice Department held out the prospect of approval for the alliance if the airlines can meet a variety of conditions. But airline executives said the restrictions proposed by Transportation officials were so onerous that a debut of the nation's largest airline marketing alliance was now in jeopardy. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Complete Story: [/FONT][/FONT][A href=http://www.washingtonpost.com/wp-dyn/articles/A8683-2003Jan17.html][FONT face=Times New Roman size=3]http://www.washingtonpost.com/wp-dyn/articles/A8683-2003Jan17.html[/FONT][/A][FONT size=3][FONT face=Times New Roman] [BR][BR][STRONG]U. [/STRONG][/FONT][/FONT][FONT face=Times New Roman size=3][STRONG]S. Approves Code Sharing by Three Airlines, With Limits [BR][/STRONG][/FONT][FONT size=3][BR][FONT face=Times New Roman]NEW YORK (New York Times) - The government approved a marketing partnership today among three airlines - Delta, Northwest and Continental - but only on strict conditions intended to limit anticompetitive behavior. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Complete Story: [BR][/FONT][/FONT][A href=http://www.nytimes.com/2003/01/18/business/18AIR.html?ex=1043557200&en=88cfe7719820bb13&ei=5040&partner=MOREOVER][FONT face=Times New Roman size=3]http://www.nytimes.com/2003/01/18/business/18AIR.html?ex=1043557200&en=88cfe7719820bb13&ei=5040&partner=MOREOVER[/FONT][/A][FONT face=Times New Roman size=3] [BR][/FONT][FONT size=3][BR][FONT face=Times New Roman]NWA-Delta-Continental alliance gets federal clearance [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]MINNEAPOLIS – ST. PAUL (Star Tribune) - Northwest Airlines' passengers soon could earn frequent-flier miles when they fly on Delta Air Lines flights -- one of the major consumer incentives in a three-way airline alliance approved Friday by the U.S. Department of Transportation. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Eagan-based Northwest and Continental Airlines have jointly marketed their flights since 1998, and now they have federal clearance to add Delta to their partnership. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]But the department imposed several restrictions on the three carriers, saying the airlines' original plan could adversely affect competition. [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]Complete Story: [/FONT][/FONT][A href=http://www.startribune.com/stories/535/3599387.html][FONT face=Times New Roman size=3]http://www.startribune.com/stories/535/3599387.html[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][FONT size=3][BR][FONT face=Times New Roman]DOT Approves Tri-Alliance [BR][/FONT][/FONT][FONT size=3][BR][FONT face=Times New Roman]ARLINGTON (theHub.com) - The U.S. Department of Transportation (DOT) Friday approved the code-share proposal by Northwest, Delta and Continental, but the Transportation Department has imposed a series of competitive restrictions. One restriction would force the airlines to give up underutilized gates at certain hubs if requested by local airport authorities. Another restriction limits code-sharing to 650 flights per two-carrier combination, and the airlines must allocate 60 percent of new code-share flights to unserved communities or small airports. The Transportation Department said the conditions couldn't be appealed and warned that legal action will be taken if the airlines go ahead with the marketing alliance but don't abide by the restrictions. The Transportation Department has asked the carriers for a prompt response, but did not specify a deadline. Airline officials have not yet responded to the Transportation Department’s conditions. [BR][BR][/FONT][FONT face=Times New Roman][STRONG]Chip comments:[BR][BR]Airline Combination Passengers Routes[BR][/STRONG][BR]DL, NW, & CO 58 million 3,214[BR]UA & US 15.1 million 543[BR]NW & CO 6.5 million 558 [BR][/FONT][BR][FONT face=Times New Roman]Union leader envisions consolidated airline industry [BR][/FONT][BR][FONT face=Times New Roman]MINNEAPOLIS – ST. PAUL (Star Tribune) - Steve MacFarlane, a 47-year-old Northwest Airlines mechanic, is not leaving office quietly as he finishes his tenure as the first president of Local 33 of the Aircraft Mechanics Fraternal Association (AMFA). [BR][BR]Complete Story: [/FONT][A href=http://www.startribune.com/stories/535/3596497.html][FONT face=Times New Roman]http://www.startribune.com/stories/535/3596497.html[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]United, US Air raise code-share perks [BR][/FONT][BR][FONT face=Times New Roman]CHICAGO (CBS.MW) - United Airlines and US Airways said Monday that starting March 1, high-level frequent fliers on the bankrupt airlines will have reciprocal status and benefits. [BR][BR]Complete Story: [BR][/FONT][A href=http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BAA2EA495%2D8124%2D4FA0%2DB1B5%2DF52E343F5086%7D][FONT face=Times New Roman]http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BAA2EA495%2D8124%2D4FA0%2DB1B5%2DF52E343F5086%7D[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]US Airways to Add Augusta Flights for Masters Golf Tournament [BR][/FONT][BR][FONT face=Times New Roman]ARLINGTON (PRNewswire-FirstCall) - US Airways announced today the expansion of service to Augusta, Ga., to provide customers greater access to one of the world's most renowned golfing events, the 2003 Masters® Golf Tournament. The new service will operate from April 7-14, 2003. [BR][BR]Complete Story: [/FONT][A href=http://biz.yahoo.com/prnews/030120/dcm014_1.html][FONT face=Times New Roman]http://biz.yahoo.com/prnews/030120/dcm014_1.html[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]US Airways, United Air Enhance Marketing Pact [BR][/FONT][BR][FONT face=Times New Roman]ARLINGTON (Dow Jones) - US Airways Group Inc. and UAL Corp.'s (UAL) United Airlines expanded their code-share agreement to include certain flights to and from Pittsburgh and Denver. [BR][BR]Complete Story: [/FONT][A href=http://biz.yahoo.com/djus/030120/1207000526_1.html][FONT face=Times New Roman]http://biz.yahoo.com/djus/030120/1207000526_1.html[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]US Air Gets Court OK For Bond Trustee To Disburse Funds [BR][/FONT][BR][FONT face=Times New Roman]WASHINGTON (Dow Jones)--A bankruptcy court has authorized US Airways Group Inc. to enter a settlement that will allow the trustee for some of its revenue bonds to disburse up to $19 million to bondholders. [BR][BR]Complete Story: [/FONT][A href=http://biz.yahoo.com/djus/030120/1403000588_1.html][FONT face=Times New Roman]http://biz.yahoo.com/djus/030120/1403000588_1.html[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]Bankruptcy kills US Airways' stock - Company-based 401(k)s now worthless [BR][/FONT][BR][FONT face=Times New Roman]CHARLOTTE (Charlotte Observer) - A bankruptcy hearing this week dealt another blow to US Airways employees who harbored hopes that the airline's moribund common stock might be revived. [BR][BR]The stock, which once traded for as much as $83.25, is now worthless, U.S. Bankruptcy Court Judge Stephen Mitchell reiterated Thursday in rejecting appeals by US Airways employees to preserve some of its value. [BR][BR]Complete Story: [/FONT][A href=http://www.charlotte.com/mld/charlotte/business/4976441.htm][FONT face=Times New Roman]http://www.charlotte.com/mld/charlotte/business/4976441.htm[/FONT][/A][FONT face=Times New Roman] [BR][/FONT][BR][FONT face=Times New Roman]US Airways Tidbits [BR][/FONT][BR][FONT face=Times New Roman][STRONG]Midway Airlines [/STRONG]– Reports indicate all future Midway pilot training classes will have 28 people. The company plans to have 18 aircraft operating by July and 30 aircraft by December 31. 85 percent of the flying will be based Washington National and 15 percent in Raleigh-Durham.[/FONT][/FONT][/P]

 

[chipmunn]

GP:[BR][BR]The information was taken from today's USA Today article at [A href="http://www.usatoday.com/travel/news/2003/2003-01-21-dot.htm"]http://www.usatoday.com/travel/news/2003/2003-01-21-dot.htm[/A][BR][BR]I couldn't cut and paste the information, so I typed out the table.[BR][BR]Chip

 

[GGpillow]

I don't think you're knowingly posting false data. Don't those numbers seem a lil out of whack to you? Maybe they aren't and DL does carry more pax then 4 other majors combined. Just looked odd to me.

 

[GGpillow]

[FONT size=3][FONT face="Times New Roman"][STRONG][BR][BR]Airline Combination Passengers Routes[BR][BR][/STRONG]DL, NW, & CO 58 million 3,214[BR]UA & US 15.1 million 543[BR]NW & CO 6.5 million 558 [BR][BR][BR][BR]Chip, is their an error here, or does DL carry 51.5 million customers a year, and run 2700 routes? [BR][BR]ie dl nw co--58mil[BR] nw co 6.5mil[BR] -------[BR] DL alone 51.5mil[BR][BR]Something is amiss if I'm not mistaken.[/FONT][/FONT]

 

[GGpillow]

AH. That would be where my confusion was coming from. Thanks for setting me straight.

 

[pk45cu]

[blockquote]
----------------
On 1/21/2003 1:25:41 AM GGpillow wrote:

[FONT size=3][FONT face="Times New Roman"][STRONG]

Airline Combination Passengers Routes

[/STRONG]DL, NW, & CO 58 million 3,214
UA & US 15.1 million 543
NW & CO 6.5 million 558



Chip, is their an error here, or does DL carry 51.5 million customers a year, and run 2700 routes?

ie dl nw co--58mil
nw co 6.5mil
-------
DL alone 51.5mil

Something is amiss if I'm not mistaken.[/FONT][/FONT]
----------------
[/blockquote]
The numbers that Chip posted are for overlapping city-pairs only. The DL/NW/CO overlap on 3,214 routes on which 58M pax fly every year.

DL carries ~100M pax per year by itself.

 

[DCAflyer]

Here is a Continental press release this morning indicating that NWA, CAL and DAL will move forward with their codeshare, but do not accept certain conditions imposed. The three carriers object to conditions imposed on the three-way alliance but not on the US Airways/United two-way alliance.[BR][BR][BR]








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[P]WASHINGTON, Jan. 21 /PRNewswire-FirstCall/ -- Continental Airlines (NYSE: CAL), Delta Air Lines (NYSE: DAL) and Northwest Airlines (Nasdaq: NWAC) today issued the following response to the U.S. Department of Transportation's (DOT) notice last Friday proposing to impose certain conditions on the implementation of the carriers' marketing agreement:[/P]
[P]"We have decided to move forward with implementation of our marketing agreement at the earliest possible date. As planned, the three airlines will soon offer reciprocal frequent flyer and airport lounge benefits to consumers, and will begin codesharing as soon as practicable.[/P]
[P]"In recent days, we reached agreement with the U.S. Department of Justice on conditions related to our marketing agreement, and we were prepared to accept most of the additional conditions that DOT sought to impose on us. However, some of DOT's conditions are unacceptable, and we will not agree to them.[/P]
[P]"A similar marketing agreement between Continental and Northwest has lowered prices, increased service levels and brought as much as $1.5 billion of annual benefits to consumers since it started in 1998. The marketing agreement among Continental, Delta and Northwest will bring similar consumer benefits, including:[/P][PRE] -- Seamless service to thousands of new markets
-- Frequent flyer reciprocity, so customers can earn their favorite
frequent flyer miles whether they fly Continental, Delta or Northwest
-- Access to each carrier's private airport lounges
-- Increased frequency of flights, and better time of day coverage for
travelers
-- Broader availability of low-priced seat inventory

[/PRE]
[P]"Our marketing agreement preserves competition among Continental, Delta and Northwest, since each carrier will continue to independently price, schedule and make all other competitive determinations. The U.S. Department of Justice, the government agency with the principal responsibility and expertise in enforcement of U.S. competition laws, last Friday approved our marketing agreement, subject to conditions agreed to by the carriers with the Justice Department, stating, 'This alliance agreement, as conditioned, has the potential to lower fares and improve service for passengers in many markets throughout the country.' The Justice Department concluded that no other conditions were necessary to protect competition or to realize the consumer benefits of the carriers' marketing agreement. According to the Justice Department's statement: 'The alliance can benefit consumers by offering codeshare service to new cities, increasing frequencies or improving connections to cities already served by the carriers, and by permitting frequent flyers to earn and redeem their miles on any participating carrier. Corporations can also benefit from joint bids for contracts from alliance airlines where the airline partners offer complementary rather than competing service.'[/P]
[P]"Moreover, the DOT recently permitted a virtually identical marketing arrangement between United Air Lines, the world's second largest airline, and US Airways to proceed without any conditions imposed by the DOT.[/P]
[P]"While the three airlines were prepared to accept most of DOT's proposed conditions, there are several conditions that are not acceptable. In particular:[/P][PRE] -- Confiscation of 'underutilized' gates -- the DOT's proposed
requirement that the airlines surrender gates at their hub airports
that do not satisfy an arbitrary 'utilization' test created by DOT is
unacceptable because it is completely unrelated to the marketing
agreement, labels normal gate utilization as 'under-utilized,' will
put at risk the core assets on which the airlines depend to operate
their hub-and-spoke networks, raises complex questions about airport
financing arrangements, and jeopardizes the ability of the airlines to
continue to serve the full scope of communities they now serve.
-- Limitations on the scope of codesharing -- while the airlines are
willing to adhere to numeric limitations on the scope of codesharing
during the first year phase-in of service, the potentially permanent
limitation contemplated by the DOT is unacceptable as it would
severely restrict the availability of codeshare benefits to millions
of passengers and arbitrarily deprive the airlines of the much-needed
economic benefit of the marketing agreement.
-- Limitations on joint contracts -- the proposed restrictions on joint
contracts with corporate customers is unacceptable, as it will
arbitrarily and severely deprive corporate customers and travel agents
of the advantages of the airlines' expanded codeshare services. It
would also arbitrarily and unfairly leave the airlines unable to
compete effectively for corporate customer and travel agency business.

[/PRE]
[P]"These proposed DOT conditions would undermine the value of the marketing agreement to consumers, and, therefore, to the participating airlines.[/P]
[P]"Although the carriers will not agree to certain of the conditions that DOT seeks to impose, Continental, Delta and Northwest have committed nonetheless to:[/P][PRE] -- Release to local airport authorities a total of 13 gates at four of
the carriers' hub airports that become surplus as a result of the
carriers relocating their gates in order to make connections between
the carriers more convenient for travelers, and offer to release in
the future any gates at their hub airports or at Boston that become
surplus as a result of similar airport gate relocations related to the
marketing agreement
-- Restrict for a one-year period the total number of new domestic,
Canadian and Caribbean codeshare flights between Northwest and Delta
and between Continental and Delta to 650 flights per two carrier
codeshare (for a total of 2,600 flights), and specify that at least
391 of each marketing carrier's new codeshare flights (a total of
1,564 flights) must be to or from underserved or small airports, with
a provision to notify the DOT if the carriers desire in the future to
increase the number of those new codeshare flights
-- Restrict three-carrier joint bids for corporate or travel agency
contracts to those companies that request them; prohibit joint bids to
companies headquartered or with a principal place of business in a
carrier's hub city or other cities for domestic service originating
from that city if the combined market share of the three carriers
exceeds 50 percent at that city, and restrict the content of joint
bids unless otherwise requested by the company or in a good faith
response to a competitive bid.

[/PRE]
[P]"None of these additional commitments was required by the Department of Justice when it approved the carriers' marketing agreement last Friday, nor were similar conditions imposed by DOT when it approved a virtually identical agreement between United Air Lines and US Airways. None of these additional commitments is necessary to preserve competition as part of the carriers' marketing agreement, which is designed to maintain the competitive independence of each of Continental, Delta and Northwest. Nonetheless, each carrier has made these commitments during the pendency of any enforcement proceeding brought by DOT.[/P]
[P]"Now that DOT's regulatory review period has terminated, Continental, Delta and Northwest intend to move forward with implementation of their alliance (subject to the commitments outlined above).[/P]
[P]"Our marketing agreement fully complies with applicable law. Should DOT bring an enforcement action regarding the marketing agreement, the carriers intend to defend their marketing agreement vigorously while continuing to implement it, in order to protect the pro-competitive, pro-consumer benefits identified by the Justice Department, and to prevent the DOT from placing Continental, Delta and Northwest at a competitive disadvantage during a time of unprecedented crisis in the airline industry." [/P]
[P][Note to editors: Attached to this press release is a letter from the three carriers to the Department of Transportation dated Jan. 21, 2003.][BR][/P][PRE] January 21, 2003


Honorable Read Van de Water
Assistant Secretary for Aviation and International Affairs
Department of Transportation
400 Seventh Street, S.W., Room 10232
Washington, DC 20590


CO/DL/NW Marketing Agreement


Dear Secretary Van de Water:

[/PRE]
[P]Continental Airlines, Inc., Delta Air Lines, Inc. and Northwest Airlines, Inc. (collectively the "Alliance Carriers") hereby advise the Department of Transportation (the "Department") of their intent to implement the Marketing Agreement, subject to certain commitments to which the Alliance Carriers will adhere during the pendency of any enforcement proceeding should one be initiated. (1) [/P]
[P]These commitments are responsive to each of the six categories of concerns set forth in the Department's January 17, 2003 Notice. Modifications to the Department's language were made either for the purpose of technical clarification or to provide substantially comparable results without undermining the efficacy and proconsumer benefits of the Marketing Agreement. [/P]
[P]The commitments that the Alliance Carriers describe herein are in addition to those set forth in our letter to the Department of Justice (the "Justice Department Letter") dated January 17, 2003. Because the Marketing Agreement is designed to maintain the competitive independence of each Alliance Carrier (such that each airline will independently establish fare levels and capacity levels in its city pair markets and "each airline [will have] an incentive to compete with its partner by operating its own flights"(2), the Alliance Carriers believe that neither the conditions set forth in the Justice Department's Letter nor these additional commitments are necessary to preserve competition. Nevertheless, we have offered these commitments to be responsive to the concerns of the Department as discussed in the Notice issued on January 17, 2003 terminating review of the Marketing Agreement. [/P]
[P]The following sets forth these commitments3) [/P]
[P]1. Steering Committee: The Alliance Carriers shall not establish the Steering Committee as defined in Section 10.1 of the Marketing Agreement.(4) The Alliance Carriers shall not coordinate or agree upon pricing, scheduling (except for minor schedule adjustments to existing schedules to improve connectivity), capacity, route entry or exit, revenue/inventory management, frequent flyer terms, or upon any other matter as to which an agreement among competitors would be unlawful under 49 U.S.C. section 41712. To ensure compliance with this section, counsel shall maintain a compliance program for Alliance Carrier personnel including guidelines for the proposed activities of the alliance advising them that counsel are available to confer with them and to monitor any communications concerning the above-specified topics. Monitoring by counsel shall not confer attorney-client privilege upon such communications. The Alliance Carriers shall retain all written records of communications among themselves regarding the Marketing Agreement for a period of three years following the creation of such records. [/P]
[P]2. Airport Facilities: The Alliance Carriers agree that due to co- location the following gates, along with related facilities (including overnight positions), shall be released to the airport sponsor upon its request for lease to domestic non-Alliance Carriers or for common use: (a) four gates at IAH, (B) two gates at DTW, © five gates at CVG, and (d) two gates at DFW. Additionally, if the Alliance Carriers choose to co-locate additional gates at any of the hub airports(5) of any Alliance Carrier or Boston (BOS), the relocating carrier will promptly notify the Department, and if such co-location creates additional surplus gates (in a manner comparable to the situation at IAH, DTW, CVG or DFW), the Alliance Carriers agree to release, within sixty (60) days of the notice to the Department, upon the request by an airport sponsor at an airport that does not have a gate available for use on reasonable and competitive terms, any such surplus leased gates, along with related facilities (including overnight positions) but excluding gates used only for international flights, for use by a domestic non-Alliance Carrier or for common-use. Subleases to non-Alliance Carriers shall not be cancelled to release gates under this condition. No Alliance Carrier shall be required to release a leased gate (or related facilities) pursuant to this condition if it will be required to continue to pay rentals or charges therefor. [/P]
[P]3. Codesharing: As referenced in the Marketing Agreement, Domestic, Canadian, and Caribbean codesharing between Delta and Continental and between Delta and Northwest shall be limited to six hundred fifty (650) flights per two-carrier combination for a total of twenty-six hundred (2,600) flights during the first year following the Closing of the Marketing Agreement. Not less than one hundred sixty three (163)(6) of each marketing carrier's new codeshare flights must be to or from airports the carrier and its regional affiliates either did not directly serve or served with no more than three daily roundtrip flights as of August 2002. An additional two hundred twenty eight (228)(7) of each marketing carrier's new codeshare flights must either meet the above requirement or be to or from small hub and non-hub airports.(8) Beginning one year after the Closing of the Marketing Agreement, the Alliance Carriers shall provide the Department with sixty (60) days advance notice of an increase in codesharing beyond the 650 per two-carrier combination. [/P]
[P]4. Joint Corporate and Travel Agency Contracts: If the Alliance Carriers wish to offer three carrier joint bids to corporations or travel agencies, the corporation or travel agency shall be given the option of dealing with each Alliance Carrier separately or of receiving a joint bid from two or more of the Alliance Carriers. Only after the corporation or travel agency has requested a joint bid in writing shall such a bid be developed and submitted. In addition, the Alliance Carriers shall not offer a three carrier joint bid to any corporation or travel agency that has a principal place of business or headquarters in a city listed in Exhibit A for domestic traffic originating from that city. In any three carrier joint bid, the Alliance Carriers shall not make the contractual discounted fares or commissions dependent on satisfaction of minimum purchase or booking requirements, whether based on threshold or percentage, for specific domestic O&D city pair markets offered by one of the Alliance Carriers unless requested by the corporation or travel agent in writing or in a good faith response to a competitive bid. [/P]
[P]5. CRS Displays: In the current CRS rulemaking the Department is soliciting comments on whether it should limit the number of times that codeshare services are displayed (67 FR 69396-97). The European Union CRS rules limit the number of codes displayed on a flight and CRSs operating in EU member states must comply with that limit. The Alliance Carriers shall make a good faith request in writing to each CRS that the CRS, during the pendency of the CRS rulemaking, not display an Alliance Carrier's service under more than two codes in any integrated display offered by the CRS. The requests and any responses thereto shall be submitted to the Department by the Alliance Carriers. [/P]
[P]6. Exclusivity Provisions: After the termination of the Marketing Agreement, no Alliance Carrier shall attempt to enforce any provision of the Marketing Agreement that would restrict any other Alliance Carrier from entering into a marketing relationship with any other carrier.[BR][/P][PRE] Sincerely,

Signed By Rebecca G. Cox

Rebecca G. Cox
Continental Airlines, Inc.


Signed By Scott Yohe

Scott Yohe
Delta Air Lines, Inc.


Signed By Andrea Fischer Newman

Andrea Fischer Newman
Northwest Airlines, Inc.




Exhibit A (9)

[/PRE]
[P]The following is a list of cities where the Alliance Carriers will not offer a three carrier joint bid to corporations or travel agents pursuant to paragraph[/P][PRE] 4 of the letter:


1) AEX Alexandria Louisiana
2) ATL Atlanta Georgia
3) BTR Baton Rouge Louisiana
4) CHS Charleston South Carolina
5) CLE Cleveland Ohio
6) CVG Cincinnati Ohio
7) DTW Detroit Michigan
8) GPT Gulfport Mississippi
9) GRR Grand Rapids Michigan
10) GSP Greenville/Spartanburg South Carolina
11) HSV Huntsville Alabama
12) IAH Houston Texas
13) LEX Lexington Kentucky
14) LFT Lafayette Louisiana
15) MEM Memphis Tennessee
16) MLU Monroe Louisiana
17) MOB Mobile Alabama
18) MSP Minneapolis/St. Paul Minnesota
19) PBI West Palm Beach Florida
20) PNS Pensacola Florida
21) SAV Savannah Georgia
22) SHV Shreveport Louisiana
23) SLC Salt Lake City Utah
24) TYS Knoxville Tennessee


[/PRE]
[P](1) Capitalized terms used in this letter agreement without definition have the same definitions assigned to them in the Marketing Agreement.[/P]
[P](2) See DOT Notice Ending Waiting Period, Review under 49 U.S.C. 41720 of United/US Airways Agreements (October 2, 2002) ("UA/US Notice"). The Marketing Agreement provides, among other things, that the fares paid by passengers on flights operated under the codeshare agreement will go to the Alliance Carrier operating the flight (less reimbursement for certain costs of sale), even if the passenger bought the ticket under another Alliance Carrier's code (where the Alliance Carrier operating the flight is the operating carrier and the other Alliance Carrier is the marketing carrier).[/P]
[P](3) The commitments in this letter do not limit Continental and Northwest activities pursuant to the NW/CO Master Alliance Agreement.[/P]
[P](4) For the purposes of these conditions, the term "Marketing Agreement" includes all of the exhibits to the Marketing Agreement.[/P]
[P](5) For the purposes of this condition, "hub airports" are defined as Atlanta (ATL), Cincinnati (CVG), Cleveland (CLE), Dallas/Ft. Worth (DFW), Detroit (DTW), Houston (IAH), Memphis (MEM), Minneapolis/St. Paul (MSP), Newark (EWR), and Salt Lake City (SLC).[/P]
[P](6) This represents approximately twenty-five percent (25%) of the 650 flights per two-carrier combination.[/P]
[P](7) This represents approximately thirty-five percent (35%) of the 650 flights per two-carrier combination.[/P]
[P](8) For the purposes of this notice, "small hub" and "non-hub" airports are defined by the Airport Activity Statistics published by the Department of Transportation, Bureau of Transportation Statistics.[/P]
[P](9) This is a list of cities where all three carriers (themselves or through regional affiliates) operate scheduled service and their combined market share exceeds fifty percent (50%) as of August 2002 (Note: for purposes of this list New York City is defined to include Newark Airport). [/P]
[P]SOURCE Continental Airlines, Inc.; Delta Air Lines, Inc.; Northwest Airlines,[/P]
[P class=halfSpace][/P][BR]

 

[RowUnderDCA]

Regarding DL/CO/NW

This is very interesting. DLCONW declaring war on the DoT.

Why, do you think?

Possibly, DLCONW think that the DoT handed out a terribly political decision that they aren't going to back up, or

DLCONW want to pursue this for as long as possible to see if it affects US's projections with the ATSB to see if they can get US to liquidate?

It could be either. I don't know whether the Bush administration is going to stand up to this defiance. Hey, laissez-faire is probably where the politicos wanted to go anyway. But Dot has always had a hard on for hub gates from dominate carriers.

hmm?

 

[DLFlyer31]

[blockquote]
----------------
On 1/21/2003 1050 AM chipmunn wrote:

The three carriers have chosen a path that is risky because they're ignoring some of the objections outlined by Transportation officials, which in my opinion will create a signficant antitrust lawsuit.

Chip
----------------
[/blockquote]

The primary problem is that the DOT is overstepping its bounds and they know it. DL/CO/NW are just calling them on it.

In order to get an antitrust lawsuit going, you would have to get the DOJ involved. However, the airlines are complying with the DOJ requirements.

 

[chipmunn]

The decision by DL, NW, and CO to not agree to some of the DOT conditions may set up a legal fight between the regulators and the three airlines. In their approval the DOT said the alliance raised "serious competition concerns" and the regulators conditions could not be appealed. The three carriers have chosen a path that is risky because they’re ignoring some of the objections outlined by Transportation officials, which in my opinion will create a signficant antitrust lawsuit.

According to Bloomberg News, The airlines will defend the agreement "vigorously" if the federal government brings an enforcement action, the airlines said. "Our marketing agreement fully complies with applicable law," they airlines said.

Chip

 

[DCAflyer]

From CNN...[BR][BR]
[H1]Airlines go ahead with alliance, ignore conditions[/H1]
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[chipmunn]

NW & CO should be good at this litigation. This is the second time the U.S. government has brought up a legal proceeding against the two airlines.[BR][BR]Chip

 

[luv2fly]

"We have completed fully the DOJ review process," said Northwest Airlines CEO Richard Anderson during a conference call to discuss the company's quarterly results.

Northwest said that Justice Department approval should be all it needs to proceed, and that the Transportation Department was moving beyond its purview with the list of constraints it wanted to impose."



Reports have indicated that the three way alliance complies with the requirments and concerns set forth by the DOJ. I for one am glad the triad has decided to challenge the DOT's restrictions as there seems to be a true hypocracy developing amongst the other airlines.

 

[RowUnderDCA]

duplicate post, sorry

 

[luv2fly]

[blockquote]
----------------
On 1/21/2003 10:24:02 AM RowUnderDCA wrote:

I don't know whether the Bush administration is going to stand up to this defiance. .

hmm?
----------------
[/blockquote]
Who exactly does the DOJ represent as they appear ready to accept the proposed alliance?