US Department of Transportation (DoT) tentatively granted (23-Oct-2020) approval and antitrust immunity for the proposed alliance between Delta Air Lines and WestJet, subject to conditions. Delta Air Lines and WestJet plan to expand the existing relationship between the two carriers to create a seamless metal neutral JV for US-Canada travel, whereby both carriers intend to share profits. If such a proposal were approved, Delta and WestJet would take a combined 27% share of scheduled air carrier transborder capacity, while Air Canada would hold 45%. The DoT finds the proposed application will likely restrain competition and thus not be in the public interest. Consequently, the agency proposes a number of remedies and conditions to the proposed alliance, including:
- Removal of any prohibitions or requirements for consensus decision making from all cooperative agreements between the joint applicants to engage in third party commercial relationships;
- Removal of Swoop from the JVA, such that Swoop will exist as an independent carrier that transacts with the joint applicants' alliance on an arms length basis;
- Divestiture of 16 slots at New York City LaGuardia Airport by means of an auction to the highest bidder, with slot recipients required to agree to operate their own services or sublease slots only to new entrant or limited incumbent carriers. Slot divestiture should be completed within eight weeks after the issuance of a final order;
- Provision that WestJet enter into an interline agreement with a US carrier that is not part of an immunised alliance with a Canadian carrier and operates aircraft between the US and Canada, upon written request. [more - original PR]