Continental, Northwest and Delta Codeshare Agreement Approved
||:: Late-Breaking News
(Posted: Jan 17, 2003)
The Department of Transportation has given conditional approval to a proposed marketing agreement between Continental, Delta and Northwest Airlines, effectively creating the largest codesharing alliance in U.S. aviation history.
DOT officials claimed that the agreement encourages better service to smaller communities while maintaining competitive opportunities for low-fare carriers and others. For example, under the DOT provisions, the alliance carriers would have to make surplus airport gates available to other carriers, and 60 percent of any new code-sharing flights resulting from the alliance would have to be operated to unserved, underserved or smaller communities.
The DOT said the restrictions that would be imposed on the carriers, summarized briefly below, are intended to address competitive concerns raised by the joint venture.
- The carriers may not coordinate or agree among themselves on matters such as fares, route entry or exit, or capacity.
- At their hub airports and at Boston, the carriers must, at the airport authority's request, return gates that are used less than six turns per day.
- Delta may place its code on no more than 650 each of Continental's and Northwest's flights, while Continental and Northwest each may place their codes on no more than 650 Delta flights.
- Restrictions will be placed on the carriers' ability to offer joint bids to corporate customers and travel agencies.
- The carriers must request that their services be listed under no more than two codes in computer reservations systems (CRS) until the department completes its pending revision of the CRS rules.
- The carriers may not enforce any provisions in their agreements that would restrict a partner's ability to enter into a marketing relationship with any other airline after the agreements have been terminated.
The specific impact on OnePass, SkyMiles and WorldPerks members has yet to be determined, though a merger of the three programs is highly unlikely, given the restrictions imposed by the DOT.
Does this signal the end of the United/Delta partnership? How exactly will this impact each carrier's frequent flyer program? Will unhappy SkyMiles Medallion members benefit from the agreement?
Stay tuned for the answers to these questions, and many more, as more details become available.
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