Transatlantic carveouts and tougher antitrust

In a decision that pretty much rejects the attorney general's new approach to competition policy, the Transportation Department said it would 'carve out' or take off the list for antitrust immunity some transatlantic routes operated by the Star Alliance now that it's going to grant the immunity to Star once Continental joins it.
For better or worse, antitrust immunity for alliances, which lets members meet and set fares and service levels, is relatively common, and the Transportation Department said in early April it was inclined to give the expanded Star what it wanted. Then came the Justice Department.

After staying silent on the request for immunity, the Justiciaries waited until late June to come in with a set of massive objections. Star's whole plan was anti-competitive, said Justice, urging the regulators at DOT to 'carve out' a slew of routes if it is to give the antitrust permission.
After some consideration, Transportation agreed to remove from the exemption such really big routes as New York to Copenhagen, Stockholm, Geneva and Lisbon, but reversed its earlier thinking and said that two routes into Frankfurt, from Washington and New York, would get the antitrust shield. Which of these sets of routes strike you as more important? Let us also note that all Star Alliance routes between the US and Beijing, China, would also be without the immunity. But as for the larger Justice objections, the Transportation guys seem to be saying, 'buzz off.' All of which says that while there may be a 'new spirit of antitrust enforcement' over at the Justice Department, it hasn't yet spread throughout the government.

Bankruptcy beat: Chapter 10 and counting down

Could the industry be headed back to bankruptcy court? People like to say 'yes' anytime they see a trend that they don't like. Take, for instance, an opinion writer at The Wall Street Journal who said that the Justice Department was pushing the airlines toward the edge with its opposition to an antitrust immunity for the Star Alliance now that Continental is joining that group. Next thing you know, the airlines will be looking for a bailout like the auto industry, he says.
Maybe not, but let's not rule out another trip to the courthouse. Consider: United is now paying one of the highest interest rates anywhere on a financing it just did, while American had to beg its creditors to restructure a loan. The fall travel season looks anemic at best, and carriers, led by Southwest, have put autumn fares on sale already - months before they usually do. Consumer confidence is down again after a brief uptick, and people just don't want to spend money. Phil Baggaley from S&P says that we're still at Chapter Ten in the book of business but won't rule out Chapter Eleven as early as next winter.