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Differences between the U.S. Department of Transportation and Department of Justice are contributing to delays in the Transportation Department's ruling on a proposed alliance between AMR Corp.'s (AMR) American Airlines, British Airways PLC (BAY.LN) and Spain's Iberia Lineas Aereas de Espana SA (IBLA.MC), according to people familiar with the case.

The Department of Transportation, or DOT, will not issue a preliminary ruling on the three carriers' application for antitrust immunity by its original Oct. 31 deadline, these people said. The delay will be at least two weeks and could push a final ruling into early next year, these people added.

AMR Chief Executive Gerard Arpey said last week that the DOT may not decide by its Oct. 31 deadline, but he gave no details and said he was optimistic that regulators will approve the airlines' request.

American, BA and Iberia have applied to antitrust authorities in the U.S. and the European Union for permission to cooperate on marketing and strategic planning in ways normally deemed illegal collusion. The trio, which cooperate in the oneworld airline-marketing alliance, argue they should be granted antitrust immunity because their rivals in the Star Alliance and the SkyTeam alliance have already received similar status from the U.S.

"We remain hopeful that we will get a decision by the statutory deadline but, having said that, the decision in the Star Alliance case was issued after the deadline had passed," said a spokeswoman for British Airways.

"Obviously we don't control the timing but, regardless of that, we believe we have made a strong case and remain confident that our application will be approved," she added.

E.U. officials in Brussels are reviewing all three alliances. On Sept. 30 they sent the three oneworld airlines a 400-page document spelling out a number of concerns with antitrust issues in their proposed link-up. The three are now preparing a response to the report, known as a statement of objections, and are scheduled to begin negotiations with E.U. competition officials in coming weeks. The trio hope to assuage E.U. antitrust concerns by offering to make frequent reports on their market share and other competitive data, according to a person familiar with the discussions.

U.S. officials want to coordinate their response with the E.U.'s findings, which has added to the DOT's delay, several people close to the case said.

In Washington, a debate among regulators over how to assess the proposed alliance and what regulatory price should be demanded of the airlines is slowing the review, said the people familiar with the situation. In recent years, the DOT, which regulates airlines, has been more tolerant of alliances than the Justice Department, which generally views them as harmful to consumers.

When Continental Airlines Inc. (CAL) earlier this year applied for antitrust immunity with several members of the Star Alliance, the Justice Department objected, but was overruled by the DOT, which approved the waiver. Similar differences are now delaying the application by oneworld members.

The bid by American, BA and Iberia has become highly political in the U.S., with a parallel debate between congressional committees handling transportation and justice.

The application is the third time over the past decade American and BA have requested an antitrust waiver for closer cooperation. The past two times they were told they would need to relinquish a significant number of take-off and landing slots at London's Heathrow Airport to foster new competition. Both times, the pair said the proposals were onerous and abandoned their applications.

Industry officials widely expect competition authorities on both sides of the Atlantic again to exact a regulatory price in Heathrow slots, although perhaps fewer than in the past because the airport is now more competitive. The exact number is likely to be a key point of negotiations in coming weeks.

BA Chief Executive Willie has said repeatedly that the airlines should not be required to surrender any slots at Heathrow because of changes in the competitive landscape in recent years. BA will instead offer to provide antitrust authorities with reports of market data and commitments to limit harmful market dominance, according to one person familiar with the discussions.

By Daniel Michaels, The Wall Street Journal; 0032-2-741-1325; daniel.michaels@wsj.com; and Kaveri Niththyananthan, Dow Jones Newswires; 4420 7842 9299; kaveri.niththyananthan@dowjones.com

(Peppi Kiviniemi in Brussels contributed to this article.)