DOT set to deny Delta, Virgin Blue venture
Atlanta Business Chronicle
Wednesday, September 8, 2010, 3:49pm EDT
U.S. Department of Transportation
The U.S. Department of Transportation (DOT) on Wednesday tentatively decided to deny an application for antitrust immunity made by Delta Air Lines Inc. and Virgin Blue Airlines Group to start joint services between the United States and Australia.
DOT said Atlanta-based Delta (NYSE: DAL) and its partners have “only recently entered the U.S.-Australia market, have not shown developed plans to operate as commercial partners, and have limited their cooperation to a handful of routes, thereby limiting the public benefits their alliance might produce.”
DOT also argued Delta and the Virgin Blue Group failed to show their alliance would have positive effects for consumers, such as lower fares or increased capacity.
The Australian Competition and Consumer Commission (ACCC) stamped its approval on the joint venture in December 2009. The parties filed their joint application to DOT in July 2009.
The alliance would help Delta and Virgin Blue Group to more strongly compete in the U.S. and South Pacific markets, the carriers have said.
Objections by Delta and Virgin Blue Group are due in 14 calendar days, and answers to objections seven days afterward. Following the comment period, DOT will review all filing