The US Department of Transportation (DOT) has issued final approval for a grant of global antitrust immunity to the transatlantic joint venture (JV) between Delta Air Lines, Virgin Atlantic and Air France-KLM. 

By Ben Goldstein

Air Transport World

November 22, 2019


The US Department of Transportation (DOT) has issued final approval for a grant of global antitrust immunity to the transatlantic joint venture (JV) between Delta Air Lines, Virgin Atlantic and Air France-KLM. 

The deal finalizes the department’s tentative approval issued Aug. 2. The DOT said in its final order that the JV will “remove the existing gaps preventing full coordination between Delta’s two existing immunized parallel joint ventures with Virgin, on the one hand, and Air France/KLM on the other.”

“Air France-KLM, Delta Air Lines and Virgin Atlantic welcome the US Department of Transportation’s decision to approve the airlines’ expanded transatlantic joint venture,” a Delta spokeswoman said in an emailed statement. “This is the final regulatory step for the airlines to begin to work together to offer customers the best streamlined travel experience across the Atlantic. The expanded joint venture will be launched in the near future and will build on the success of the previous joint ventures between Air France-KLM and Delta and Delta and Virgin Atlantic.”

As part of the transaction, announced in July 2018, Air France-KLM agreed to purchase a 31% stake in Virgin Atlantic from Virgin Group, while the parent company retained a 20% stake in its UK-based subsidiary. Delta, for its part, owns a 49% stake in Virgin Atlantic.

The order was approved despite New York-based JetBlue Airways’ request that DOT conduct a de novo review of the arrangement, which would have required the department to perform a predictive analysis of the amended alliance’s future benefits. DOT, in its response, dismissed JetBlue’s request, reasoning that its job was simply to approve updated agreements between existing partners that have already produced benefits “uncontested by JetBlue or others.”

The DOT did, however, agree with a request submitted by the Delta Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) that the Department expand the scope of the JV’s proposed five-year review to include the arrangement’s impact on US aviation jobs. The Delta MEC, in comments submitted to DOT in August, said that although Delta pilots strongly supported the proposed JV with Virgin in 2013, their stance had changed after promised US job and career opportunities seemed to have gone almost entirely to Virgin crews. As a result, the DOT will require the carriers involved in the JV to address the arrangement’s impact on US aviation jobs during their periodic self-assessment every five years.

The department also rejected a request from consumer group Travel Fairness Now (TFN) urging it to impose special conditions that protect the public’s access to fare and schedule data through third-party services. DOT said in its response that TFN failed to demonstrate that Delta’s restrictions on global distribution services and online travel agencies have caused consumers harm that outweighs the benefits of the JV.

TFN executive director Kurt Ebenhoch told ATW in response that his organization did provide extensive evidence of consumer harm, which Delta has never disputed. 

“DOT’s belief that the consumer can just go to one airline’s website incorrectly assumes the consumer already knows all of the existing flight options. They often do not. Comparison shopping sites are how travelers find out which carriers fly to their desired destination,” said Ebenhoch.

https://atwonline.com/airlines/dot-gives-final-approval-delta-virgin-air-france-klm-jv