When the Department of Transportation (DOT), over the objections of the Department of Justice (DOJ), approved the Continental/United Airlines antitrust immunity deal this wasn’t included. DOT needs to take another look, now.
These two airlines have announced that they are building a new common IT platform that will serve as the backbone of their joint operations. This is the kind of cooperation that Delta is now implementing with Northwest. But Delta had to merge with Northwest before starting such integration.
Continental and United are attempting to take this merger-like step outside of a merger. They are using the antitrust immunity grant as a merger-in-fact agreement and are beginning to cooperate in ways never envisioned by the luminaries in the DOT alliance offices.
Unless these IT changes and cooperation are limited to international flights, Continental Airlines and United Airlines have a lot of explaining to do. They are simply breaking the law by cooperating intimately on on everyday domestic airline operations.
Domestic collusion is strictly forbidden in the antitrust immunity/airline alliance agreements that DOT allowed to go forward. United is pushing the envelope to see how far they can go before the administration reigns them in. Continental is probably going along since they are with a lame-duck CEO who is also interested in seeing how far airline can push the limits of the law.
Star Alliance, to which both Continental and United will belong, currently uses Amadeus to provide blended international IT services.
This IT cooperation according to Continental and United is only for international endeavors, but that is hard to believe. The algorithms and inside information to create a blended IT system goes far beyond the limited antitrust immunity currently in force.
Plus, the Amadeus platform, based in Europe, and dominate there, can serve any IT needs the airlines require for international interoperability.
DOT should take a close look at what Continental and United are tinkering with under the disguise of international antitrust immunity. This is a step too far.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
