05.20.98

BTN Newsflash

BTN Current Issue

Wednesday, May 20, 1998

United Invests In ITN
United Airlines has made a "significant investment" in Internet Travel Network, the independent software firm that developed the booking engine for United's Website and is working on Galileo International's corporate booking offering.

Impressed by the work ITN has done for the airline over the past year, United executives asked how it could strategically support their business. "The timing of our interest was right because ITN was in the process of securing capital through a scheduled round of private financing," said David Coltman, United's senior vice president of marketing. ITN raised $10.7 million in two prior rounds of financing. United is the sole investor in the third round and has a minority equity stake in ITN.

Feds Promise To Probe Air Alliances
Washington - Justice Department Antitrust Chief Joel Klein told members of the House Judiciary Committee this week that his office will carefully review the actual terms of proposed domestic airline alliances, including US Airways/American, Delta/United and Northwest/Continental, to determine whether they are likely to divide and allocate markets or produce high fares.

Klein testified that airline alliances can take many different shapes and forms, adding that "the antitrust consequences of an alliance depend both upon the terms of the alliance and the carriers involved." He said, "Certain kinds of alliances may deal with matters that are not competitively troublesome."

Meanwhile, Transportation Department General Counsel Nancy McFadden assured the committee that DOT will analyze the potential effects of these large domestic alliances and gauge whether they will reduce competition or impair the competitive capabilities of other major airlines, of new entrants and of regional carriers.

Corporate Buyer Group Testifies On Negative Impact Of Alliances
Business Travel Coalition chairman Kevin Mitchell said the alliances recently announced by major airlines "will accelerate market concentration, reduce choices and increased costs for business travel," in today's testimony before the U.S. House Judiciary Committee.

Mitchell's group, which represents a number of large business travel buyers such as Black & Decker, Chrysler, Ford, General Motors and Proctor & Gamble, cited the a 40-84 percent premium paid by corporate travelers at fortress hubs as an example of the negative impact of reduced competition.