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ASTA Opposes SkyTeam, NW/KLM Request to Collude on Transatlantic Service

ASTA Opposes SkyTeam, NW/KLM Request to Collude on Transatlantic Service ( Antitrust immunity should be deferred for international joint venture
Alexandria, VA- ASTA has filed a request with the U.S. Department of Transportation asking it to defer a decision regarding a request to grant sweeping antitrust immunity to a major international joint venture which also includes Delta and Northwest Airlines, two airlines that have recently announced their intention to merge pending U.S. government review.

In a 13-page objection to a Show Cause Order issued by the Department of Transportation, ASTA explained that the Society's objections to antitrust immunity include potential price fixing and unfair negotiating advantages with travel agencies.

“The Order, if finalized as it stands, would allow these multiple large airlines - including for the first time ever two U.S. domestic carriers - to collectively fix prices, determine capacity, set customer service standards, and negotiate with travel agencies and other travel intermediaries with complete impunity," ASTA noted in its pleading.

The Society believes these types of airline marketing and operational practices should be the subject of fierce competition between the two alliances, rather than immunized collusion.

The SkyTeam alliance, which includes Alitalia, Czech Airlines, Delta and Air France and the Northwest/KLM alliance are seeking a broad grant of antitrust immunity from DOT to coordinate transatlantic operations with each other.

In addition to serious concerns regarding unfair competitive advantages, ASTA has asked DOT to defer its decision whether to grant antitrust immunity in light of Delta and Northwest's recently announced intention to merge.

“If immunity is granted before the Justice Department inquiry has been completed into the Delta/Northwest merger, and the airlines begin to implement the integration of their transatlantic operations, the competitive impact of the merger will be skewed, needlessly complicating the Justice Department analysis," ASTA stated.

ASTA's pleading also mentions the March announcement that the United States and EU are undertaking a joint study of the effect of transatlantic joint ventures on consumers and competition - matters directly relevant to a grant of antitrust immunity.

In its comments, ASTA stated: “Approving this sweeping grant of antitrust immunity both before finishing this joint study and before the Delta/Northwest merger has been thoroughly reviewed by DOJ makes no sense. DOT should resist overtures to hurry the approval of this immunity application before all the ramifications can be carefully considered. Consumers deserve nothing less.

“With all of these factors in play, we urge the DOT to suspend further proceedings and allow DOJ to conduct its review of the merger proposal and the United States and the EU to complete their study of joint ventures. Now is absolutely the wrong time to grant antitrust immunity to these carriers."

The mission of the American Society of Travel Agents (ASTA) is to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. ASTA seeks a retail travel marketplace that is profitable and growing and a rewarding field in which to work, invest and do business.

Contact: Ms. Kristina Rundquist VP, Communications American Society of Travel Agents Phone: (703) 739-8710 E-Mail: PR@ASTA.ORG

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