DOT proposes to deny antitrust immunity for Delta/Virgin Blue Alliance

Antitrust immunity allows airlines to closely coordinate their international operations. In today's show-cause order, the Department tentatively concluded that Delta and the Virgin Blue Group had not demonstrated that the alliance would produce sufficient public benefits to justify a grant of antitrust immunity.

The Virgin Blue Group includes V Australia, Virgin Blue, and Pacific Blue Airlines affiliates in both Australia and New Zealand.

In reaching its tentative decision, the Department noted that Delta 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. The Department also said that Delta and the Virgin Blue Group had failed to show that their alliance would have positive effects for consumers, such as lower fares or increased capacity.

Interested parties are invited to show cause why the proposed decision should not be made final. Objections are due in 14 calendar days, and answers to objections seven days afterward. Following the comment period, the Department will review all filings and then issue a final decision.

Today's proposed decision, comments and other documents in the case are available on the Internet at www.regulations.gov, docket DOT-OST-2009-0155.