(RTTNews) - The U.S. Department of Justice raised strong opposition on airline operator Continental Airlines Inc.'s (CAL: News ) broad request for antitrust immunity to work more closely with United Airlines (UAUA: News ) and other nine members of the Star Alliance group of carriers.

The Department rejected the airline's pursuit of global immunity from antitrust laws, arguing that broader immunity could hurt competition on other routes between the U.S. and China and raise fares within the U.S. The Star Alliance group also includes US Airways (LCC: News ), Lufthansa and Air Canada.

According to the Justice Department, Continental and United plan to sell seats on each other's U.S. flights, combine customer lounges, consolidate operations at airports, and work together on procurement. Such an arrangement would go beyond normal "code-sharing" deals that involve reciprocal sales and mileage programs.

The Department also said that the two airlines' plan closely resembles a merger, although they assert that they will maintain their separate domestic networks and make independent pricing, scheduling and sales decisions in the U.S.

United and Continental held merger talks last year. However, Continental stepped back from the discussions when United's financial stability dropped.
The final decision on Continental's request rests with the U.S. Department of Transportation, or DOT, which already granted tentative approval to much of the application from Star members. However, the Justice Department's opposition reflects tensions between the agencies and the tougher stance on antitrust enforcement pledged by the Obama administration. The Department of Transportation will continue its deliberations following a period for public comment on the DOJ's conclusions.

Houston-based Continental expects to switch to the Star global airline alliance in October from the SkyTeam alliance.

CAL closed trading at $8.86 on Monday, up $0.08, on a volume of 4.54 million shares.

UAUA ended Monday's trading at $3.47, down $0.01, on a volume of 3.58 million shares.

To receive FREE breaking news email alerts for Continental Airlines Inc. and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com