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OST-00-7088

American Airlines, Inc., and The TACA Group

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com and Squire Sanders, Robert Papkin, 202.626.6600

American Airlines, Inc., and The TACA Group

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500

Continental Airlines, Inc.

Counsel: Crowell Moring, Thomas Newton Bolling, 202-624-2683, tbolling@cromor.com

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

Hereby moves the Department to require American Airlines, Inc. and the TACA Group to produce additional documents and information that are vital to the Department’s ability to make an informed decision, and for interested parties to comment, on the above -captioned applications for antitrust immunity and the renewal and expansion of American/TACA codeshare authority.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060

American and TACA’s "renewal" application seeks to eliminate substantially all of the necessary competitive safeguards that the Department insisted upon to try and mitigate the anticompetitive effects of this unhealthy codeshare arrangement. Moreover, the Department specifically stated that TACA's failure to enter into a competitive codeshare agreement with another U.S. airline – which TACA has not done -- would be considered a negative factor in deciding whether the American/TACA arrangement should be renewed.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060

American Airlines, Inc., and The TACA Group

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6000

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

By:  Bradley Mims

American Airlines, Inc., and The TACA Group

Delta’s motion is simply another in a long string of attempts by Delta and other airlines to frustrate and delay implementation of a viable TACA/American alliance, and it should be flatly rejected as such. The material Delta wants the Department to obtain from American and TACA would not only be extremely burdensome for the applicants to develop and produce (indeed, TACA literally could not produce much of the information as requested by Delta), it is also completely unnecessary for the Department’s review and consideration of the pending applications. Ironically, Delta’s request comes at a time when competition in U.S.-Latin American markets has never been stronger, and when consumers of air travel in those markets are benefiting as never before.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com and Squire Sanders, Robert Papkin, 202.626.6600

Continental  agrees with Delta that American and the TACA Group should be required to provide additional information to the Department on their proposal for antitrust immunity and renewal and amendment of codeshare authority and that all confidential information should be available for use in either proceeding. American and the TACA Group have failed to submit the information the Department must have to weigh the substantial anticompetitive impact of these applications for antitrust immunity and for removal of the Department's blocked-space condition on the Miami-Central America codeshare service by American and the TACA Group, although some additional information should be required.

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

American Airlines, Inc., and The TACA Group

Predictably, Continental Airlines, Inc. enthusiastically supports the Motion of Delta Air Lines, Inc. to burden The TACA Group and American Airlines, Inc. ("American") with additional evidence requests in connection with the captioned joint applications. See Answer of Continental Airlines, Inc. to Motion, filed April 12, 2000. Like Delta, Continental never misses an opportunity to frustrate and delay the implementation of a viable TACA/American alliance. even though their tactics inevitably prolong the day when consumers in U.S.-Central America markets will receive the full benefits of the Open Skies agreements signed in May of 1997.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com and Squire Sanders, Robert Papkin, 202.626.6600

American Airlines, Inc. and The TACA Group / American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

On April 3, 2000, Delta Air Lines, Inc. filed a motion asking the Department to require the Joint Applicants to produce additional documents and information that Delta claims are "vital" to our ability to make a decision, and for interested parties to comment on these applications. Delta also moved that the Department clarify that confidential documents produced by the Joint Applicants in either proceeding may be used in reference to the other proceeding; and that objecting parties should also have the opportunity to file new or supplemental answers to the two proceedings, once the requested material has been produced by the applicants.

By:  Bradley Mims

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

American and the TACA Group already provide more U.S.-Central America service than any other airline or combination of airlines, and they continue to dominate the critical Miami gateway. Allowing American to display codes of TACA Group members between the Dallas/Ft. Worth and Los Angeles gateways, which they already dominate, and additional U.S. points would spread the anticompetitive effects of the American/TACA Group codeshare alliance to more U.S. points beyond American's U.S. international gateways and increase the harm to the traveling and shipping public. Moreover, the proposed codesharing would be fully horizontal and not produce any meaningful public benefits since American already offers online Central America service between each of the U.S. points American proposes for additional codesharing with the TACA Group. Under these circumstances, the risks to competition are high and the public benefits are minimal. For these reasons, the Department should deny American's request.

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@cromor.com 

American and TACA's "renewal" application seeks to eliminate substantially all of the necessary competitive safeguards that the Department insisted upon to try and mitigate the anticompetitive effects of this unhealthy codeshare arrangement. Moreover, the Department specifically stated that TACA's failure to enter into a competitive codeshare agreement with another U.S. airline - which TACA has not done would be considered a negative factor in deciding whether the American/TACA arrangement should be renewed.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

American Airlines, Inc. and The TACA Group and American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

For the reasons explained above, none of Sabre's customers can support both a free-sale and blocked-space arrangement with the same carrier. For example, American has a blocked-space arrangement with China Eastern Airlines applicable to all routes and flights and cannot support a blend of blocked-space and free sale arrangements with China Eastern.

Commencing in January 1998, and continuing for a period of over eight months, American, TACA and Sabre undertook an extensive review of Sabre's codeshare capabilities to support DOT's blocked-space condition. The parties attempted to identify alternative solutions requiring the least extensive programming, and concluded that the only feasible solution was to modify the TCS AT table and related functions. Other alternatives were dismissed due to potential customer service shortcomings and safety and security concerns.

Sabre's most recent high level estimate for this work is approximately 5 person-years (8,050 hours) or $676,000. Depending upon the availability of technical resources, Sabre expects the project to take 12 to 15 months to complete.

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com, and Squire Sanders, Robert Papkin, 202.626.6601

In accordance with 14 CFR 302.12(d)(1)(i), American and the TACA Group have each attached an index of the documents for which we seek protection. The documents are being submitted in sealed envelopes labeled "Confidential Treatment Requested Under 14 CFR 302.39; Access Is Limited To Counsel And Outside Experts Who Have Filed Proper Confidentiality Affidavits."

For the foregoing reasons, the Department should grant this motion under Rule 12 to withhold certain proprietary and commercially sensitive confidential information from public disclosure, as requested herein.

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com, and Squire Sanders, Robert Papkin, 202.626.6601

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

By:  Randall Bennett

By:  Randall Bennett

American Airlines, Inc. and The TACA Group and American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

OST-96-1700 OST-00-7088

Served April 27, 2001

Notice Establishing Procedural Schedule

U.S.- Central American

By Order 2000-7-8, issued July 7, 2000, we directed the partners to submit additional information and documents that we found to be relevant to our assessment. On February 28, 2001, the partners individually and jointly submitted material in response to our Order. Based on our review, we found the material incomplete. By letter dated March 26, 2001, we clarified our evidentiary request, consistent with Order 2000-7-8, and directed the partners to provide us with a more comprehensive assessment of information Item 3. On April 11, 2001, they submitted material in response to our letter. Based on our review of this material, we find that the application is now substantially complete.

Therefore, we direct interested parties to file answers in Dockets OST-2000-7088 and OST-96-1700 no later than 21 days from the date that this Notice is served, and replies shall be filed no later than 7 business days after the last day for filing answers. Interim access to confidential materials is subject to the procedures and restrictions set forth in the Department's Notice of April 7, 2000, and Order 2000-7-8. We will serve this Notice on all persons on the service lists in both dockets.

By:  Susan McDermott

American Airlines, Inc. et al., and The TACA Group Reciprocal Code-Share Services Proceeding

In my capacity as counsel to Grupo TACA in Docket OST-2000-7088, I am writing in response to your letter of March 26, 2001.

Following receipt of your letter, Grupo TACA made a further search of its records. I have been informed that Grupo TACA has no studies, analyses, reports or information produced since May 20, 1998 consistent with the scope of the "clarification" set forth in your letter with respect to Item 3 of the DOT's order issued on July 7, 2000.

Grupo TACA is concerned at the further delay that has resulted from both its effort, and what we understand to be the similar effort of American Airlines, to review all of their records in an effort to supply information that goes far beyond the original Item 3 of DOT Order 2000-7-8. Grupo TACA believes that the further request made in your letter of March 26, 2001 was in no sense a "clarification" of Item 3, but was a vast expansion of the request made last July to which Grupo TACA believed it responded fully in its filing of February 28, 2001.

Grupo TACA remains concerned at the further delay that has resulted from your expanded request. Grupo TACA has asked me to emphasize to your office the great iniportance to it of the further expeditious processing of its application for renewal and approval of its Alliance Agreement with American Airlines and for antitrust immunity so that Grupo TACA finally may enjoy the full benefits of the Open Skies agreements between the United States and the homelands of Grupo TACA's member carriers.

Counsel:  Squire Sanders, Robert Papkin, 202.626.6600 

American Airlines, Inc. and The TACA Group / American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

At long last, American and the TACA Group have provided the documents required by the Department, and those documents show why granting antitrust immunity to American and the TACA Group and removing the Miami-Central America blocked-space condition on their codeshare authority would harm competition and consumers. The Department should deny the American/TACA Group request for authority to eliminate competition between them through antitrust immunity and to remove the blocked-space condition on Miami-Central America routes the Department said was essential to "assure continued competition" on these routes. Finally, the Department should deny the requested renewal of the existing American/TACA Group codeshare authority between the dominant U.S.-Central America airlines.

American's application for antitrust immunity with the TACA Group is part and parcel of American's strategy to use its dominant position on U.S.-Latin America routes, including the critical Miami gateway, and its alliances with the largest airlines of numerous Latin American countries to eliminate competition and reduce consumer choice on U.S.-Latin America routes. The American/TACA Group request to remove the blocked-space condition on their Miami-Central America codeshare authority reveals contempt for the Department's efforts to address the serious concerns of the Department of Justice, Continental and other airlines about the American/TACA Group codeshare arrangement and to prevent a virtual monopoly by American and the TACA Group on Miami-Central America routes.

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500. rbkeiner@crowell.com 

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2500. rbkeiner@crowell.com 

Delta Air Lines, Inc. strongly opposes the application of American Airlines, Inc. and the TACA Group ("TACA") for approval of and antitrust immunity for their alliance agreement. This agreement is a follow-on to the codeshare agreement between American and TACA that was approved in 1998, notwithstanding the serious concerns raised by the U.S. Department of Justice, Delta and other airlines. It was only through the imposition of significant conditions that the Department was able to rationalize approval of the American/TACA codeshare agreement.

The instant application would eliminate all of the competitive safeguards that the Department insisted upon to mitigate the anticompetitive effects of American/TACA codesharing. Not only would the prior safeguards be eliminated, but antitrust immunity would expressly empower American and TACA to fix prices, pool revenues, coordinate service and capacity, and function generally as if they were a single merged carrier. Such a result would be harmful to competition and the public interest -- particularly at the critical Miami gateway.

Miami is by far the largest U.S. gateway to Central America. American and TACA are the principal competitors serving Miami-Central America routes, and the grant of antitrust immunity to this alliance would extinguish all meaningful competition for Miami-Central America passengers. As correctly observed by the Department: "Since no carrier besides American has a hub at Miami, it is unlikely that any other carrier could mount effective nonstop service in any of these Miami-Central America markets, even if the Joint Applicants charged supra-competitive prices or reduced service below competitive levels. " Order 97-12-35 at 26.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

If further equipped with antitrust immunity, the American-led alliance could be in a position to dominate the U.S.-Central America market in much the same manner that the "chosen instrument" of Pan American and its local affiliates once did.' Over the past decade, Houston and Continental have invested in building one of the nation's premier domestic hubs and international gateways at George Bush Intercontinental Airport (IAH). The airport is today the eighth-largest U.S. gateway for international passengers, and the second-largest gateway for traffic to Central America. But services between the U.S. and Central America are still overwhelmingly dominated by American and its Oneworld alliance partners from its Miami mega-hub - a network which American now proposes to integrate with TACA's services to Miami and other U.S. cities. Given the risks of such a throttlehold, the public interest would not be served by granting their alliance antitrust immunity; a grant of immunity likely would enable the American-TACA alliance to quash burgeoning competition from Continental and other carriers, and to maintain an overwhelming lock on services to the region.

Counsel:  Leftwich Douglas, Rebecca Taylor, 202.434.9100, rltaylor@ldpllc.com

American Airlines, Inc. and The TACA Group / American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

Counsel:  Delta, James Coblin

American Airlines, Inc. and The TACA Group and American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

Counsel:  Wilmer Cutler, David Heffernan, 202.663.6960

American Airlines, Inc. and The TACA Group and American Airlines, Inc. et al, and The TACA Group Reciprocal Codeshare Services Proceeding

It is hardly surprising that Continental and Delta oppose the American/TACA Group immunity application. They have been the principal beneficiaries of the 1997 open skies agreements between the United States and the TACA Group's Central American homelands, while the TACA Group carriers, lacking meaningful access to vital flow traffic, remain unable to compete effectively in U.S.-Central America markets. The status quo favors Continental and Delta, and they wish to keep it that way. The public interest, however, requires that American and the TACA Group receive immunity without delay.

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com, and Squire Sanders, Robert Papkin, 202.626.6601

American Airlines, Inc. and The TACA Group

American Airlines, Inc. and the TACA Group hereby jointly move to dismiss their application for antitrust immun­ity, submitted in this docket on March 17, 2000. American and the TACA Group continue to seek renewal and amendment of their codesharing authority, as requested in their joint application in OST-1996-1700, also submitted on March 17, 2000. Approval of the codesharing application should be granted forthwith.

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com, and Squire Sanders, Robert Papkin, 202.626.6601

Termination of Dockets

Order 2005-6-16
38184
38562
38571
38570
38978
38883
38885
39700
39783
40201
41061
41072
45234
OST-1996-1486
46928
OST-1999-5850
OST-2000-7088
OST-2002-12201
OST-2003-14447
OST-2003-16289
OST-2003-16592
OST-2004-17122
OST-2004-17594

Issued June 23, 2005 | Served June 28, 2005

Order Terminating Proceedings

Dockets 38184, 38418, 38562, 38570, 38571, 38586, 38720, 38978, 38883, 38885, 39700, 39783, 40201, 41061, 41072 and 45234: Applications under the Employee Protection Program mooted by Congressional repeal of the program in 1998.

Docket 1996‑1486: Part of the preceding group of dockets.

Docket 46928: Review of approval and antitrust immunity for traffic conference procedures of the International Air Transport Association, Agreement CAB 1175, as amended. Inactive since 1992.

Docket OST‑2000‑7088: Joint application of American Airlines and the TACA Group for antitrust immunity for an alliance relationship encompassing certain codesharing relationships in other dockets. Pending motion by applicants to dismiss the application for immunity.

Docket OST‑2003‑16289: Application for exemption authority. Applicant Pan American Airways, Inc. stated on record that it withdraws its application.

Docket OST‑2003‑14447: Application for exemption authority submitted by American Airlines, Inc. The requested route authority is unavailable. Accordingly, the application is moot.

Docket OST-2003-16592: Application for exemption authority submitted by America West Airlines, Inc. Applicant has orally infonried staff that it no longer wishes to prosecute its application.

Dockets OST‑1999‑5850, OST‑2002‑12201, OST‑2002‑12258: Applications of Aeromar C por A for renewal of various exemptions. Mooted due to revocation of its exemption authority. (See Docket OST‑2004‑19610.)

Docket OST‑2004‑17122: Application of Cornair, Inc. for exemption authority. Applicant has orally informed staff that it no longer wishes to prosecute its application.

Docket OST-2004-17594: Application of Express.Net airlines, LLC for blanket U.S.-Mexico certificate authority. Mooted because applicant is no longer a designated allcargo carrier serving Mexico.

By: Karan Bhatia

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