Star Crafting Confidentiality Rules
Jan 20, 2009
By Andrew Compart
The Star Alliance, still seeking U.S. Transportation Dept. approval to expand its antitrust immunity to Continental, has crafted confidentiality guidelines that United, Lufthansa and Continental would follow to address conflict of interest concerns about Lufthansa’s ownership stake in JetBlue.
Star is seeking approval not only to expand immunity to Continental, but also provide it for a four-way joint venture among Air Canada, Continental, Lufthansa and United. Under the joint venture, the airlines would coordinate service and share revenue — but not costs — on transatlantic routes.
Lufthansa owns 19% of JetBlue and has two representatives on its board of directors. Delta, in particular, has argued that the DOT should be wary of granting the expanded immunity because JetBlue is Continental’s biggest domestic competitor in nonstop markets out of New York.
“The extent to which Lufthansa and its immunized alliance partners will have a direct marketing control and/or influence upon JetBlue is therefore directly relevant to any expansion of this immunized relationship to Continental,” Delta said in an earlier filing.
The alliance has dismissed such concerns in its responses, but in a Jan. 14 filing it provided the DOT with “confidentiality guidelines” already agreed to by Lufthansa and United, and which Continental would subscribe after getting immunity within the alliance. The guidelines have been reviewed by the Justice Dept.’s antitrust division, it said, and “are intended to address domestic antitrust issues” regarding Lufthansa’s ownership interest in JetBlue and participation on its board.
The deadline for filing comments on the alliance’s immunity application has passed, but Delta responded to the alliance’s notice of those guidelines by calling on the DOT to reopen the docket so Delta and other interested parties can review and comment on the guidelines.
“The joint applicants — who had long claimed that Lufthansa’s investment in and representation on JetBlue’s board was irrelevant to this proceeding — have now reversed course and effectively admitted that this is a serious issue that requires legal safeguards and conditions,” Delta said.
“These issues go to the core of one of Delta’s numerous material objections to the application,” it added. “The submission of this new evidence, after the record has already been declared complete, and after the close of the comment period, renders any further consideration of the joint application procedurally deficient.”
Photo: Embraer
