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United Air Lines, Inc. and Asiana

United and Asiana are partners in a code-share and marketing alliance concluded earlier this year. Through their alliance, United and Asiana intend to expand the geographical scope of their online services, enhance the travel options that they hold out to the public, and develop more competitive global networks. In April 2003, United and Asiana plan to begin code sharing with United placing its code on Asiana's nonstop flights between Seoul (Incheon), on the one hand, and Los Angeles, San Francisco, New York (JFK), and Seattle, on the other; United will also place its code on Asiana domestic Korea flights between Seoul (Incheon) and Busan. Asiana will, in turn, place its code on United's flights operating between Seoul (Incheon) and Honolulu, San Francisco, and Chicago, via Japan, and on United domestic flights operating behind the U.S. gateways of Seattle, Chicago, San Francisco and Los Angeles for passengers traveling between these behind-gateway domestic cities and points in Korea., U.S.-Korea city pairs and increased traffic support for its network of U.S.-Asia services, while Asiana will significantly expand its access to the United States.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202 663-6960 for United / Patton Boggs, Gregory Walden,  (202) 457-6135 for Asiana

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202 663-6960

Counsel: Patton Boggs, Gregory Walden, 202 457-6135

United Air Lines, Inc. and Asiana Airlines, Inc.

Notice granting immediate interim access to all documents covered by Rule 12 Motion to counsel and outside experts for interested parties who file appropriate affidavits with the Department in advance.

By: Read Van de Water

Since filing the application, United has announced plans to upgrade the single-plane service it currently operates between San Francisco and Seoul via Tokyo to a daily San Francisco-Seoul nonstop, effective June 2, 2003.2 In light of this announcement, United and Asiana are submitting this supplement to update certain of the exhibits to their Joint Application, and to demonstrate that, even with the introduction of this new nonstop service to Seoul, extending antitrust immunity to the carriers' Alliance Expansion Agreement is fully supported by Department precedent and will not substantially reduce competition in any relevant market.

Competition in the local San Francisco-Seoul market will also remain robust after United upgrades its San Francisco-Seoul single-plane service to a daily nonstop. As noted above, the grant of immunity to United and Asiana will not reduce the number of carriers currently operating nonstop service between San Francisco and Seoul, which will remain at three. Rather, as also noted above, the upgrade will enhance competition on the route. This is because the United/Asiana alliance currently offers nonstop service on the route only four days per week, whereas the Korean Air/Delta alliance and Singapore Airlines each operates daily nonstop service. With the upgrade of United's indirect service to a daily nonstop, United/Asiana will be better able to compete with the daily nonstop services now being offered on the route by Korean Air/Delta and by Singapore Airlines. Moreover, Northwest, Japan Air Lines, and ANA will continue to offer indirect competition on the route via points in Japan, ensuring that the existing competition for local San Francisco-Seoul passengers remains robust.

Counsel:  Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202 663-6960 for United / Patton Boggs, Gregory Walden,  (202) 457-6135 for Asiana

United Air Lines, Inc. & Asiana Airlines, Inc.

Respectfully requests that the Department withhold from public disclosure the documents that United is filing herewith under seal in the above­captioned proceeding. These documents contain confidential, proprietary and commercially sensitive information. United is submitting these documents to facilitate the Department's processing of the Joint Application of United and Asiana Airlines, Inc. for approval of and antitrust immunity for an Alliance Expansion Agreement filed on January 3, 2003, in this docket.

United/Asiana Code Share and Regulatory Cooperation Agreement and an unredacted copy of page 1 and partially unredacted copies of pages l and 9 of the United/Asiana International Passenger Prorate Agreement. Redacted copies of these agreements were attached to the Joint Application as Exhibits JA-3 and JA-4. The specified pages of the agreements, produced by United in consultation with counsel, are confidential and proprietary.

Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmer.com

United Air Lines, Inc. & Asiana Airlines, Inc.

We have now finished our initial review. We find that 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 C. Van de Water

United Air Lines, Inc. and Asiana Airlines, Inc.

Issued and Served May 14, 2003

Order 03-5-18
OST-03-14202 - Approval and Antitrust Immunity for an Alliance Expansion Agreement

Order Granting Approval and Antitrust Immunity for an Alliance Expansion Agreement | Word

United and Asiana have applied for approval of and antitrust immunity for their Alliance Expansion 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 arrangement 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 arrangement - subject to the conditions included here - will substantially reduce competition in any relevant market. Finally, our actions here will allow the parties 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.-Republic of Korea open-skies accord.

Asiana currently operates nonstop flights between Seoul and Los Angeles, San Francisco, New York (JFK),18 and Seattle. United provides online single-connection service between Seoul (via Narita. Japan and Chicago, Honolulu, Los Angeles, New York, San Francisco, and Seattle. The partners also have authority to conduct code-share operations in the U.S.-Korea market (either nonstop or via third country points).

The Delta-Korean Air Lines immunized alliance operates nonstop flights between Seoul and Anchorage, Atlanta, Chicago, Dallas/Fort Worth, Honolulu, Los Angeles, San Francisco, and Washington, DC (Dulles Airport). They also provide one-stop service in the New York (JFK)Seoul market (via Anchorage).

Singapore Airlines provides daily nonstop service between San Francisco and Seoul.

By: Read C. Van de Water

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