The Department of Transportation has granted final approval to antitrust immunity for Continental’s entrance into the Star Alliance.
The Department of Justice had opposed the move, despite being late to the party and despite strange objections about the risk of “monopoly profits” as though they hadn’t looked at an airline balance sheet in 8 years.
Naturally, DOT had to make some face saving concessions for Justice.
The limitations, also called “carve-outs,” affect four transatlantic markets, four markets between the United States and Canada, and all markets between the United States and Beijing, China, it said.
“The Star carriers may continue to serve these routes, but they will not be covered by the grant of immunity at this time.”
In addition to clearing the way for coordinating on frequent flyer benefits, the ruling permits Continental to join Air Canada, United, and Lufthansa in “joint pricing, sales and marketing, and revenue sharing for the transatlantic routes covered by the agreement.”
Contra the Department of Justice, this is good for consumers. First, Continental miles become worth tons more in the Star Alliance. Second, preserving the financial viability of domestic carriers means more competition, not less. Third, Continental would have been an alliance-stepchild without this, all their customers benefit from alliance participation — and in the strong alliance no less.