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American Airlines, Inc. and Swiss International Air Lines, Ltd d/b/a Swiss

The proposed American/Swiss alliance is a particularly suitable candidate for antitrust immunity because it will not substantially reduce competition in any relevant market. The U.S.-Europe market is highly competitive, and the market shares of American in combination with Swiss are modest, as shown in Exhibit JA-7. The only nonstop U.S.-Switzerland market served nonstop by both applicants is New York (JFK)-Zurich. Continental provides competition with nonstop flights between New York (EWR) and Zurich. The Delta/Air France immunized alliance offers multiple daily on-line routings from New York to Zurich via Paris, and the United/Lufthansa immunized alliance offers multiple daily on-line routings from New York to Zurich via Frankfurt. The Department should have no concerns that the arrangement proposed here will harm competition in any market.

Swiss serves six U.S. gateways (Boston, Chicago, Los Angeles, Miami, New York (JFK and EWR), and Washington), and operates eight daily transatlantic flights. Swissair served eight U.S. gateways (the six named above plus Atlanta and San Francisco), and operated 13 daily transatlantic flights. Swiss's transatlantic capacity on July 1, 2002 is 1,658 one-way seats, 43% below the 2,909 transatlantic one-way seats operated by Swissair on July 1, 2001. Accordingly, by aggregating the data for Swiss and Swissair, the joint applicants have substantially overstated the market position currently held by Swiss.

An immunized alliance between American and Swiss will not substantially reduce competition in the U.S.-Europe market. The combined U.S.-Europe annual passenger bookings of American and Swiss account for a market share of 11.22%, while United/ Lufthansa/SAS/Austrian/Lauda (the immunized European component of the Star Alliance) command a combined share of 22.05%, and Delta/Air France/Alitalia/Czech (the immunized European component of the SkyTeam alliance) have a combined share of 18.72% (Exhibit JA-7). Among all U.S.-Europe carriers, Swiss ranks 12th in market share, with 2.94% of annual bookings (id.), and among all European airports, Zurich ranks 15th, with 1.7% of annual bookings (Exhibit JA-6).

American serves Zurich nonstop from two U.S. gateways, New York (JFK) and Dallas/Ft. Worth. Swiss serves Zurich nonstop from six U.S. gateways, Boston, Chicago, Los Angeles, Miami, New York (JFK and EWR), and Washington (IAD), as well as Geneva from New York (JFK). Accordingly, there is only one nonstop overlap market at issue in this proceeding -- New York-Zurich.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com and Condon Forsyth, Evelyn Sahr, 202.289.0500

This motion supplements the joint motion for confidential treatment submitted by American and Swiss International Air Lines Ltd. d/b/a Swiss in this docket on June 28, 2002, in connection with their joint application for antitrust immunity. American is submitting additional confidential documents as identified and described in the attached supplemental index.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com

Counsel:  James Hoffman, Marie Chopra, 202.496.0500, mchopra@jamhoff.com

On June 28, 2002, American Airlines and its affiliatesl and Swiss International Air Lines Ltd. filed a joint application requesting approval of and antitrust immunity for (1) a cooperative agreement (Exhibit JA-1), and (2) all agreements among the applicants that implement any part of the cooperative agreement or are entered into by the applicants under the cooperative agreement (hereafter the "Alliance Agreement"). On June 28, the applicants filed a joint Motion under 14 C.F.R. 302.12 (Rule 12) of our regulations seeking confidential treatment for supporting documents and information. On July 2, American Airlines, Inc. filed a supplementary Motion under 14 C.F.R. 302.12 (Rule 12) of our regulations seeking confidential treatment for additional documents and information. Both Motions state that this material is proprietary, commercially sensitive, and confidential in nature which qualifies for being withheld from public disclosure. The applicants ask that access to this material be limited to counsel and outside experts for interested parties.

In order to afford interested parties prompt access to the documents under conditions agreed to by the 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, consistent with earlier determinations, Parties will be permitted, at the Dockets facility, to make copies of the exhibits for use by persons who have filed confidentiality affidavits.⁴ We also find it appropriate to grant interim access to any subsequent materials that may be filed in this case 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, when we have determined that the record of this case is complete, we will announce an appropriate procedural schedule. We shall serve this notice on all persons on the service list for this docket.

By:  Read Van de Water

We have now finished our initial review. We find the application is now substantially complete. We will require that answers to the application be filed no later than 21 calendar days from the issue date of this Notice, and that replies be filed no later than 7 business days after the last day for filing an answer.

By:  Read Van de Water

American Airlines, Inc. and Swiss International Air Lines Ltd. d/b/a Swiss hereby state their agreement to the following conditions to the antitrust immunity (ATI) they are seeking in this docket.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com / Condon Forsyth, Evelyn Sahr, 202-289-0500, esahr@condonlaw.com

The American/Swiss partnership will have the largest market share in the U.S.-Switzerland market. Nonetheless, based on our evaluation, we do not find that the proposed arrangement will enable the Joint Applicants to charge supra-competitive prices or to reduce service below competitive levels. Swiss carried about 79% of total passengers during the 12 months ended September 2001. Delta carried about 11.5%, followed by American (7.65%) and Continental (5.86%). American currently operates two nonstop flights to Switzerland (Zurich): one from Dallas and one from New York. Swiss provides nonstop service in the Boston/Chicago/Los Angeles/Miami/New York/Newark/Washington, D.C. -Zurich markets and the New York-Geneva market. Delta provides nonstop service in the Atlanta-Zurich market and Continental in the Newark-Zurich market. Other alliances between a U.S. airline and one or more foreign airlines offer competitive connecting services between the United States and Switzerland. For these reasons, we find that the proposed transaction would not result in any substantial loss of competition in the U.S. - Switzerland market.

By:  Read C. Van de Water

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

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