Code-share alliances have become a prominent feature in the competitive landscape of the airline industry. However, policy makers are extremely hesitant to approve proposed code-share alliances when the potential partners’ route networks have significant overlap. The main concern is that...

The U.S. Department of Transportation (DOT) expressed serious reservations before ultimately approving the Delta/Continental/Northwest code-share alliance. The DOT's main fear was that the alliance could facilitate collusion (explicit or tacit) on prices and/or service levels in the partners'...