UPDATE 1-U.S. DOT approves Continental joining alliance

WASHINGTON, July 10 (Reuters) - The Obama administration on Friday granted limited immunity from antitrust laws for Continental Airlines Inc to join United Airlines, a unit of UAL Corp, and other carriers in the global Star Alliance. The final U.S. Transportation Department order followed a provisional decision in April that granted more sweeping benefits to the carriers. The nearly two dozen members of the Star Alliance include US Airways Group Inc, Deutsche Lufthansa AG, Air Canada, Air China Ltd, and Thai Airways International. The immunity designation allows alliances to maximize revenues by operating crucial aspects of their businesses as one company, a practice normally prohibited by federal antitrust laws. The Star Alliance was created in 1997 with member airlines offering a combined 17,000 daily departures to 160 countries. The order, signed by Christa Fornarotto, an acting assistant secretary at the Transportation Department, limited antitrust immunity for some U.S. routes to Canada and to Beijing, acknowledging concerns raised by antitrust officials at the U.S. Department of Justice. "The venture, as well as the broader alliance, will create substantial new service options and fare benefits for consumers," said the 3O-page order.

"After careful consideration of DOJ's and other parties' arguments, we confirm our tentative decision that this application is not anti-competitive." Continental shares were up 3.7 percent to $9.74 after the order was issued. (Reporting by John Crawley and Julie Vorman; Editing by Tim Dobbyn) Keywords: CONTINENTALAIR/ALLIANCE ([e-mail]; + 1 202 898 8340) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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