Does Code Sharing Mean Caring for Air Travelers?

"We want to encourage service to new markets, rather than just allow them to combine their operations in existing markets," said Bill Moseley, spokesman for the DOT. "The aim is to increase competition, not reduce service and increase prices all over, which would harm consumers."

Michael Boult, COO of eCLIPSE Advisors, which advises corporations on their travel needs, said that the code-share agreement would give the code-sharers the ability to raise prices because they'd control more of the market. "Delta and Northwest aren't going to act in the best interest of travelers, they're going to act in the best interest of shareholders and maximize profits," he said. "It's pretty thin to say this will be good for travelers."

One region where an immediate impact could be felt is in the lucrative market between the major Northeastern cities and Florida's many tourist destinations. For years, the North-South route has been a source of intense competition, with carriers unable to raise prices because a single rival is willing to play the spoilsport. Northwest burned its future code-share partners last spring as the only carrier unwilling to raise prices.

But Northwest and Continental counter that their current code-sharing agreement lowered prices and increased service levels, adding that bringing Delta into the mix wouldn't hurt consumers, either. In a joint news release, Northwest and Continental said their joint marketing agreement "brought as much as $1.5 billion in annual benefits to consumers since it started in 1998." They did not outline how that figure was reached.

The Justice Department, which reviewed the code-share agreement and found it acceptable from an antitrust standpoint, agreed that consumers will benefit. "The alliance agreement, as conditioned, has the potential to lower fares and improve service for passengers in many markets throughout the country," said R. Hewitt Pate, acting assistant attorney general, in a statement.