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Continental approved for Star Alliance

THE United States Transportation Department said Tuesday it plans to let Continental Airlines join an alliance of other carriers, including United, that enjoy antitrust immunity in working together on pricing and schedules for some flights.

Continental announced last year that it planned to join the Star Alliance and leave the SkyTeam group that includes Delta and Northwest. The shift could give Continental a larger share of its new team's trans-Atlantic traffic while also allowing it to benefit from United's strong routes to Asia.

Members of a third major alliance, including American Airlines and British Airways, are awaiting word on their own application for antitrust immunity. Those carriers have complained that they are at a disadvantage to Star and SkyTeam members who already have antitrust immunity, which lets each group function as one big airline on international routes.

Additional review

Airlines and other groups have three weeks to object to the US Transportation Department's tentative decision, which could trigger additional review by regulators.

US Representative James Oberstar, chairman of the House Transportation Committee, has proposed legislation to require review and possible cancellation of the immunity grants, arguing that they reduce competition instead of increasing it. The airline industry has opposed his bill.

Continental Chairman and Chief Executive Lawrence Kellner said Continental's ability to join the Star group will benefit consumers and preserve competition and jobs. Continental plans to switch alliances in October, and Kellner said quick final approval would let that process proceed smoothly.


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