The Nos. 3, 4 and 5 airlines struck a more defiant tone in January, saying they would go ahead with the alliance and ignore government restrictions that would prevent them from dominating air travel in certain markets.
But instead of fighting, the airlines met with Department of Transportation officials and worked out a new proposal.
"We've had some very productive discussions," said Continental spokesman Rahsaan Johnson.
The public has 15 days to comment on the plan, and Transportation Department officials said they expect to finish reviewing it in a month.
Read C. Van DeWater, assistant secretary for aviation and international affairs, said in the official notice that transportation officials will monitor the airlines to make sure they comply with the conditions.
"We continue to believe, however, that if the alliance were implemented as originally presented to us, it would raise serious competitive issues," he wrote.
The carriers had objected to three conditions: that they give up leases on airport gates used fewer than six times a day over two months; that they limit the total number of flights that share codes to 2,600; and that they refrain from making joint bids on corporate or travel agency contracts.
Their new "code-sharing" plan calls for giving up leases at hub airport gates if a carrier moves flight operations to a gate used by one of the other two. Affected airports would be Boston's Logan International Airport, Dallas-Fort Worth International Airport, Cincinnati/Northern Kentucky International Airport, LaGuardia International Airport, Houston's George Bush Intercontinental Airport and Detroit International Airport.
The airlines also proposed phasing in 2,600 code-share flights for two years and notifying transportation officials six months before adding more. They've committed to making code-sharing agreements in small communities not presently served.
Finally, the airlines proposed giving travel agents and corporations the option of dealing with each carrier separately or receiving a joint bid for contracts. They've also agreed not to offer joint bids in markets that one carrier dominates.
By Leslie Miller