AIRLINE DEAL TAKES OFF DESPITE RESTRICTIONS

Continental, Delta and Northwest airlines are going ahead with a marketing alliance despite contention with the Department of Transportation over some terms of the deal. The U.S. Department of Justice approved the airlines’ plans on Jan. 17, allowing the three to share frequent-flier miles and airport lounges, and to codeshare for booking flights.

But the DOJ’s approval includes conditions that rankle the airlines: They’re asked to give up gates in some airports, limit the price and schedule info they swap in codesharing, and limit joint contract negotiations with corporate customers and travel agents. The airlines will give up 13 gates at four hub airports, restrict codesharing on new flights to 2,600 flights for the first year, with 1,564 of them serving small airports; and limit three-party bids for corporate contracts.

The alliance gives consumers more flights, more low-priced seats, access to lounges, frequent-flier reciprocity and “seamless service to thousands of new markets,” per the airlines.

“Our marketing agreement fully complies with applicable law. Should DOT bring an enforcement action regarding the marketing agreement, the carriers intend to defend their marketing agreement vigorously while continuing to implement it,” the airlines said in a joint statement.

This is the biggest airline marketing alliance in the U.S. The DOJ spent six months reviewing the deal to prevent antitrust problems, since the three airlines control about one third of U.S. air travel. A five-year-old deal between Continental and Northwest has brought consumers $1.5 billion in annual savings, the airlines claim. United Airlines and U.S. Airways began a similar deal last year.