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OST-00-7248

Scandinavian Airlines System and Flugleidir H.F.-IcelandAir

Joint Application of Scandinavian Airlines System ("SAS" or "SK") and Flugleidir H.F.-IcelandAir ("IcelandAir" or "FI"), and their respective affiliates, pursuant to 49 U.S.C. Sections 41308 and 41309, applies for approval of and antitrust immunity for their agreement between the applicants referred to herein as the "Cooperation Agreement".

Counsel:  Silverberg Goldman, Michael Goldman, and Baker Hostetler, Joanne Young

Scandinavian Airlines System and Icelandair

Counsel:  Silverberg Goldman, Michael Goldman, 202.944.3305

Scandinavian Airlines System and Icelandair

Counsel:  Baker & Hostetler, Joanne W. Young, 202.861.1532

Scandinavian Airlines System and Flugleidir H.F.- Iceland Air

By:  Bradley Mims

Scandinavian Airlines System and Icelandair

By scheduling Notice served on June 21, 2000, the Department of Transportation ("Department") set July 12, 2000 as the due date for answers to the application and July 21, 2000 as the due date for any reply by SAS and Icelandair. No answers were filed. SAS and Icelandair now urge the Department to act expeditiously to issue a final order approving the application and granting antitrust immunity.

Counsel:  Silverberg Goldman, Michael Goldman, 202.944.3305 and Baker Hostetler, Joanne Young, 202.861.1500

Scandinavian Airlines System and Icelandair

Counsel:  Northwest, Megan Rae Rosia, 202-842-3193 / Zuckert Scoutt, Charles Simpson, 202-298-8660 for Malaysia

Scandinavian Airlines System and Flugleidir H.F.- Iceland Air

Icelandair and SAS, and their respective subsidiaries, have applied for approval of and antitrust immunity for a Cooperation 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 Cooperation Agreement should be approved and granted antitrust immunity, to the extent provided below. The United States, Iceland, Denmark, Norway and Sweden are five of the growing number of nations that now support and promote international aviation liberalization. Liberalization has encouraged many open-skies agreements between the U.S. and European nations. Our decision in this case rests in large part on the substantial public benefits provided by our transatlantic open-skies agreements.

Icelandair is the only provider of U.S.-Iceland nonstop scheduled passenger service. It provides daily nonstop roundtrip flights between Reykjavik and Boston, Baltimore, New York, Minneapolis/St. Paul. Icelandair code shares on certain Scandinavia-Reykjavik and Scandinavia-Europe flights operated by SAS.

SAS offers nonstop service between Copenhagen and Chicago, Newark, and Seattle; between Oslo and Newark; and between Stockholm and Newark and Chicago. SAS code shares on certain U.S.-Reykjavik and Reykjavik-Scandinavia flights operated by Icelandair.  SAS and Icelandair both serve the U.S. -Scandinavia market. SAS provides almost 50 nonstop flights a week in the U.S.-Denmark/Norway/Sweden markets. Thirty-five of those flights serve Denmark and Norway. Icelandair provides almost 80 flights a week in those markets. Fifty-six of those flights serve Denmark and Norway. All of Icelandair's flights are one-stop via Reykjavik, Iceland. The Joint Applicants' Scandinavia services overlap at one important gateway, New York City. SAS provides 28 nonstop flights a week from New York's Newark Airport to Scandinavia, including 21 to Denmark and Norway. Icelandair provides 21 one-stop flights from New York's JFK Airport to Scandinavia, including 14 to Denmark and Norway. United offers nonstop codeshare service on flights operated by SAS in the Chicago/Newark/Seattle-Copenhagen, Newark-Oslo, and Chicago/Newark- Stockholm markets. Other U.S. airlines rely on partnerships with European airlines to serve Denmark and Norway via European gateways, and several foreign airlines operate connecting services between the United States and Scandinavia.

By:  Fransicso Sanchez

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