Northwest Drops SkyTeam Antitrust Request

Northwest Airlines Corp. is withdrawing a request for antitrust immunity for its SkyTeam airline alliance, saying the Transportation Department had signaled it would reject the request anyway.

Separately Wednesday, the parent of Northwest regional feeder Mesaba Aviation Inc. said its fleet may be halved to just 49 turboprop aircraft because of Northwest's reorganization.

Northwest entered SkyTeam last year after its partner, KLM Royal Dutch Airlines, merged with SkyTeam member Air France. Northwest has antitrust immunity to coordinate routes and pricing with KLM, but not with other SkyTeam members, which also includes Delta Air Lines Inc., Alitalia, Continental Airlines Inc. and CSA Czech Airlines. The request was submitted by all the carriers, and Northwest said its withdrawal request would apply to the full alliance.

Northwest and Skyteam members can still codeshare, which makes it easier for passengers to book trips on a single ticket with multiple airlines. But the Transportation Department had said the Skyteam routes overlap so much that little new service was likely to result from an antitrust waiver.

In a statement, Northwest called the initial Transportation Department finding "arbitrary, capricious and inconsistent with established DOT precedent and U.S. international aviation policy.

"Northwest is at a loss to understand this decision by the same DOT officials claiming to strongly support deregulation and an Administration which espouses a free market philosophy," Northwest said. "The U.S. airline industry is in a state of crisis. Four major air carriers, including Northwest and Delta, are operating under Chapter 11, as are several national carriers."

Regional feeder Mesaba is also in Chapter 11, having filed just one month after Northwest, which provides all of Mesaba's planes, revenues, and passengers.

Earlier this year Mesaba operated a fleet of 100 planes for Northwest, including 35 Avro regional jets that seat 69 passengers. But on Wednesday, parent MAIR Holdings Inc. said Northwest told Mesaba that all of Mesaba's Avro jets will be removed by December 2006. Mesaba also said Northwest is removing three of its Saab turboprops, leaving it to built its bankruptcy plan on a fleet of 49 Saabs.

"The four-engine Avros are very expensive to operate, especially in the current high fuel cost environment," Northwest said in a recent employee newsletter.

Northwest has asked regional carriers including Mesaba to bid on flying 76-seat jets, such Mesaba's handful of Canadair Regional Jets. The MAIR statement said Northwest will remove those jets, too, if Mesaba doesn't win that bid. Mesaba spokeswoman Elizabeth Costello said the bid was being submitted this week.

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