US-UK Alliance Case

Order 2003-6-39
OST-2001-11029 - US-UK Alliance Case

Issued and Served June 30, 2003

Order

Order 2003-6-39 grant, in part, the June 11, 2003, Motion of United Air Lines, Inc., British Midland Airways Limited, d/b/a dmi British Midland, Austrian Airlines Osterreichische Luftverehrs AG, Lauda Air Lufftfahrrt AG, Deutsche Lufthansa AG, and Scandinavian Airlines System and their wholly-owned affiliates (United/bmi), to amend Order 2002-4-4, as amended by Orders 2002-10-6 and 2002-12-22

As we stated in Order 2002-12-22, we originally imposed the six-month condition, on our own initiative, in the interest of furthering our goal of reaching an Open Skies agreement with the United Kingdom that meets U.S. aviation policy objectives. With regard to the Unitedlbmi request that, in light of the Department's recent decision to approve certain code-share services between American and British Airways, the Department should remove the Open Skies condition to enable United/bmi to implement their Alliance Agreements, we note that American and British Airways were not granted antitrust immunity for their proposed code-share services. As we already stated in Order 2003-5-33, 12 "it has been our long-standing policy not to grant antitrust immunity in cases where an Open Skies aviation agreement does not exist between the United States and the foreign country involved." No such agreement now exists between the United States and the United Kingdom, and United/bmi have not presented evidence to convince us that it is in the public interest to depart from our normal policy in this matter.

Most recently, on June 5, 2003, the EC was granted a mandate to negotiate a U.S.-EU aviation agreement. The United States and the EU have agreed to begin negotiations of a comprehensive new agreement to maximize benefits for aviation services. Talks with the EU are expected to begin in early autumn. In these talks, the United States looks forward to building on and extending the Open-Skies framework that already exists with 11 of the current 15 member states.

By: Michael Reynolds