Review Under 49 U.S.C. 41720 of Delta/Northwest/Continental Agreements

AGENCY:

Office of the Secretary, Department of Transportation.

ACTION:

Extension of waiting period.

SUMMARY:

Delta Air Lines, Northwest Airlines, and Continental Airlines have submitted code-sharing and frequent-flyer program reciprocity agreements to the Department for review under 49 U.S.C. 41720. That statute requires such agreements between major U.S. passenger airlines to be submitted to the Department at least thirty days before the agreements' proposed effective date but does not require Department approval for the agreements. The Department may extend the waiting period for these agreements at the end of the thirty-day period. The Department has determined to extend the waiting period for the Delta/Northwest/Continental agreements for an additional thirty days.

FOR FURTHER INFORMATION CONTACT:

Thomas Ray, Office of the General Counsel, 400 Seventh St. SW., Washington, DC 20590, (202) 366-4731.

SUPPLEMENTARY INFORMATION:

As required by 49 U.S.C. 41720, Delta, Northwest, and Continental submitted code-sharing and frequent-flyer program reciprocity agreements to us for review on August 23, more than thirty days before the airlines planned to implement these agreements. The statute requires certain kinds of joint venture agreements among major U.S. passenger airlines to be submitted to the Department at least thirty days before they can be implemented, including the code-sharing and frequent-flyer reciprocity agreements proposed by Delta, Continental, and Northwest. We may extend the waiting period by 150 days for code-sharing agreements and by sixty days for other types of agreements. At the end of the waiting period (either the thirty-day period or any extended period established by us), the parties may implement their agreement, since doing so would not require our approval. To block the airlines from implementing their agreements, we would normally need to issue an order under 49 U.S.C. 41712 (formerly section 411 of the Federal Aviation Act) in a formal enforcement proceeding that determined that the agreements' implementation would be an unfair or deceptive practice or unfair method of competition that would violate that section.

We are informally reviewing the agreements submitted by Delta, Continental, and Northwest under 49 U.S.C. 41720. Although our review is informal, we have invited interested parties to submit comments on the agreements. 67 FR 56340 (September 3, 2002). We are considering their comments, the agreements, and other information in our possession, and we will be consulting with the Justice Department, which is responsible for enforcing the antitrust laws in the airline industry.

We have concluded that we need additional time to analyze the issues presented by the agreements. Those issues are important and require careful consideration. We have therefore determined to extend the waiting period by thirty days, from September 22 to October 22. We took similar action on the United/US Airways joint venture agreements. 67 FR 54525 (August 22, 2002). We understand the need to complete our review as promptly as possible, so that the three airlines will know our views on whether and under what terms they may go forward with the agreements.