Home | Search | Help
OST by Number | OST by Order | OST by Carrier | OST by Subject | OST by Day
OIA by Carrier/Subject | OIA by Day | FAA by Number | FAA by Subject | FAA by Day
Carrier Financials | Charter Office | Answer/Reply Calendar

OST-2000-6791

Malaysia Airlines and Northwest Airlines, Inc.

The Northwest/MAS alliance will offer consumers a myriad of benefits:

• A broad network of connecting services, making the world more accessible to consumers with new and convenient routings, which will compete with the other alliances already immunized by the Department.
• A wide choice of routings and schedules.
• Seamless, coordinated connections between alliance flights, including single tickets and through-handling of baggage and cargo.
• Service offered by two airlines known for their commitment to high quality service and innovation.
• Coordination between two excellent frequent flyer programs, offering a wide range of opportunities both for earning mileage credit and for enjoying travel awards.
• More value, made possible through the synergies and efficiencies that the alliance will create.

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660 and Northwest, Megan Rae Rosia, 202.842.3193

By:  Bradley Mims

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660 and Northwest, Megan Rae Rosia, 202.842.3193

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660 

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193

Counsel:  Zuckert Scoutt, James Ehrig, 202.298.8660 

As an initial matter, we find that the application is now substantially complete. Therefore, in order to provide all interested parties sufficient time to analyze Adequately and comment fully on all material in the record of this case, under conditions agreed to by the Joint Applicants and imposed by the Department under similar recent circumstances, we will grant immediate interim access to all documents covered by the Rule 12 Motions to counsel and outside experts for interested parties who file appropriate affidavits with the Department in advance.  Moreover, we find it appropriate to grant Interim access to any subsequent materials filed in this docket under a Rule 12 Motion to counsel and outside experts for interested parties who file appropriate affidavits with the Department in advance, unless the party filing the motion objects. Finally, we will require that answers to the application be filed no later than 21 days from the service date of this notice, and that replies be filed no later than 7 business days after the last day for filing an answer.

By:  Bradley Mims

Northwest and MAS have applied for approval of and antitrust immunity for a Coordination Agreement under 49 U.S.C. §§ 41308 and 41309, whereby they will plan and coordinate service over their respective route networks as if there had been an operational merger between the partners. We find that the Coordination Agreement should be approved and granted antitrust immunity, to the extent provided below. Our examination of their proposal leads us to find that the proposed alliance will enhance competition overall and allow the airlines to provide better service and enable them to operate more efficiently. We also find that it is unlikely that the Coordination Agreement - subject to the conditions included here - will substantially reduce competition in any relevant market. Finally, our actions here will allow the Joint Applicants to maximize fully the various pro-competitive and pro-consumer benefits associated with integrated alliances that we foresaw resulting from the fundamental liberalization of air services under the U.S.-Malaysia open-skies accords.

We find that the Coordination Agreement should not diminish competition in the U.S.-Far East market. During the 12 months ended December 1999, Northwest's nonstop passenger market share was about 18 percent. The proposed alliance's passenger market share was about 19 percent. In contrast, the Star Alliance partners (United Air Lines-All Nippon Airways- Singapore Airlines-Thai Airways) nonstop passenger market share was about 23 percent; Japan Airlines had about a 23 percent market share; the oneworld alliance partners (American Airlines-Cathay Pacific) had about a 5.5 percent market share; and Delta Air Lines and Continental Airlines had 3.1 and 1.3 percent market shares, respectively.

The Joint Applicants are currently the only U.S. and Malaysian airlines in the U.S.-Malaysia market. Nonetheless, based on our evaluation, we do not find that the proposed integration will enable Northwest-MAS to charge supra-competitive prices or to reduce service below competitive levels. Importantly, the record shows that the Joint Applicants do not directly compete against each other to any significant extent in this market. Neither airline operates nonstop service between the United States and Malaysia. Northwest offers single flight number, change-of-gauge service three times per week in the Detroit-Kuala Lumpur market, via Osaka. MAS operates single-plane service three times per week in the Kuala Lumpur-Newark market, via Dubai, U.A.E.; three times per week in the Kuala Lumpur-Los Angles market, via Tokyo; and four times per week in the Kuala Lumpur-Los Angeles market, via Taipei.

By:  Fransicso Sanchez

Order 2007-5-16
OST-1995-618 - Delta, Swiss, Sabena and Austrian - Antitrust Immunity
OST-1995-792 - American and Canadian - Antitrust Immunity - US-Canada
OST-1999-5674 - Alitalia, KLM and Northwest - Antitrust Immunity - U.S.- Italy
OST-1999-6528 - American, Swiss and Sabena - Approval and Antitrust Immunity for Agreements
OST-2000-6791 - Malaysia and Northwest - Antitrust Immunity - U.S.- Malaysia
OST-2001-10387 - American and British Airways - Approval of and Antitrust Immunity for Agreement
OST-2002-12688 - American and Swiss - Approval of and Antitrust Immunity for Alliance Agreement
OST-2002-13002 - Aloha and Hawaiian - Antitrust Immunity for Agreement
OST-2004-18613 - America West and Royal Jordanian - Approval of and Antitrust Immunity for Commercial Cooperation Agreement

Issued and Served May 24, 2007

Order Terminating Proceedings

The Department has identified several antitrust immunity proceedings as moot or inactive. In
each proceeding, applicants have terminated the alliance agreements for which they sought a
grant of immunity. Therefore, where a grant of immunity was made, it is no longer effective. It
is in the public interest for administrative management to terminate these proceedings and close
the corresponding dockets.

By: Andrew Steinberg

Home | Search | Help
OST by Number | OST by Order | OST by Carrier | OST by Subject | OST by Day
OIA by Carrier/Subject | OIA by Day | FAA by Number | FAA by Subject | FAA by Day
Carrier Financials | Charter Office | Answer/Reply Calendar