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OST-2005-22922 - Austrian Group, bmi, Lufthansa, LOT, SAS, Swiss, TAP and United - Antitrust Immunity
OST-2001-10575 - United, bmi, Austrian, Lufthansa and SAS Antitrust Immunity
OST-2000-7828 - United, Austrian, Lauda, Lufthansa and SAS Antitrust Immunity
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The Austrian Group / British Midland Airways Limited / Deutsche Lufthansa AG / Polskie Linie Lotnicze LOT S.A. / Scandinavian Airlines System / Swiss International Air Lines Ltd. / TAP Air Portugal / United Air Lines, Inc. OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement November 4, 2005 Joint Application - Bookmarked
With more than forty carriers offering transatlantic service, the U.S.‑Europe market arguably is the most competitive international air service market in the world. Since 1993, when the Department granted antitrust immunity for Northwest and KLM's transatlantic alliance, competition in this market has continued to develop from a market in which a limited number of carriers competed in individual city pairs to one driven by network‑to‑network competition supported by inter‑carrier alliances, code‑share arrangements and grants of antitrust immunity. With this evolution, and, in part as a result of European airline industry consolidation, the role of the small, non‑aligned European carrier has been declining, as such carriers increasingly have moved to participate in global alliances that offer the full range of transatlantic services sought by most travelers. In light of these changing market conditions, three relatively small European carriers -- LOT, TAP and Swiss -- seek to join the existing antitrust-immunized alliance of United, Lufthansa, SAS, Austrian (and bmi). Swiss' participation in this joint application is a direct result of a transaction, announced on March 22. 2005, pursuant to which Swiss is being acquired by Lufthansa and integrated into the Lufthansa Group. Under the Swiss/Lufthansa business model, Swiss will remain a separate airline and brand, with its own management team, fleet and crew, headquartered in Switzerland. In July 2005, the European Commission and the U.S. competition authorities completed their respective merger review processes and approved the Lufthansa/Swiss transaction. While Swiss' role in this joint application is a direct result of its acquisition by Lufthansa, the participation of LOT and TAP is an indirect product of the ongoing process of consolidation in the European airline industry. For some time, European regulators, industry leaders, and analysts have recognized the need for consolidation. The Air France-KLM transaction was a watershed event, not only due to the size of the carriers involved, but also because it combined two major carriers from competing alliances. Lufthansa/Swiss, by contrast, is a smaller transaction involving the incorporation of Swiss, a non-aligned carrier, into the Lufthansa Group. Although LOT and TAP have not been parties to a merger transaction with another carrier, their respective decisions to join the Star Alliance and seek authorization to join the Immunized Alliance are, in significant part, a competitive response to the European consolidation trend, which has increased the incentive for smaller, non-aligned carriers to merge and/or seek to join an integrated alliance. Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com for Austrian, British Midland, Lufthansa, LOT, SAS, Swiss International, TAP and United / Silverberg Goldman, Michael Goldman for SAS / Condon & Forsyth, Evelyn Sahr for Swiss
November 4, 2005 Motion of Swiss International Air Lines d/b/a Swiss for Confidential Treatment Under 14 CFR 302.12 Swiss is submitting highly sensitive internal corporate documents and data which should be accorded limited access. Such access should be granted only to counsel and outside experts who file Rule 12 affidavits stating that the affiant will (1) use the information only for the purpose of participating in this proceeding, and (2) not disclose such information to anyone other than counsel or outside experts who have filed a valid affidavit. The subject materials contain highly sensitive comnicrcial infoi-niation relating to Swiss’ inteniational planning and strategic decision-making. The information contained in these documents has not been publicly released. If released, competitors would gain valuable insights into Swiss’ internal strategies and objectives with respect to the most competitively sensitive matters . Counsel: Condon & Forsyth, Evelyn Sahr, 202-289-0500
November 7, 2005 Motion of Scandinavian Airlines System for Confidential Treatment Scandinavian Airlines System hereby requests the Department of Transportation withhold from public disclosure certain confidential, proprietary and commercially sensitive information being submitted concurrently under seal in connection with the above-referenced proceeding. SAS also requests that access to all such documents be limited to counsel and outside experts for interested parties who have filed an affidavit as described in 14 C.F.R. § 302.12(d)(3). SAS is submitting highly sensitive internal corporate documents, studies, surveys, analyses, reports and data that should be accorded limited access. Such access should be granted only to counsel and outside experts for interested parties who file affidavits pursuant to 14 C.F.R. § 302.12(d)(3) affirming that they will: (1) use the information only for purposes of participating in this proceeding; and (2) not disclose the information to anyone other than counsel or outside experts who have also filed such an affidavit. Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305
November 8, 2005 Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com; Bruce Wark
November 8, 2005 Confidentiality Affidavits for Northwest Airlines - Megan Rosia, Andrea Newman, Peter Kennedy Counsel: Northwest, Megan Rosia, 202-842-3193
November 16, 2005 Before a decision can be entertained allowing Star, already the largest global alliance, to shore up ATI with three additional European partners, the Department must make a decision on the future direction of its alliance policy with respect to participation by more than one U.S. airline in a single global alliance with antitrust immunity. The public interest would not be well served by an antitrust immunity policy that effectively closes the door on full global alliance participation to all but three U.S. airlines. Instead, the SkyTeam ATI Applicants urge the Department to promote global alliance competition and effective U.S. carrier participation by allowing multiple U.S. airlines to participate in a single alliance with immunity for international transportation activities. For the foregoing reasons, the SkyTeam ATI Applicants urge the Department to issue a decision in their pending matter, which will define U.S. policy with regard to full and effective global alliance participation by U.S. carriers, before entertaining this application by Star to add three more European ATI partners. Counsel: Northwest - Boies Schiller, James Denvir / KLM - Skadden Arps, John Nannes / Delta - Hogan & Hartson, Robert Cohn, 202-637-4999 / Air France - Jean-Michel Barthelemy / Alitalia - Zuckert Scoutt, Richard Mathias, 202-898-8660 / Czech Airlines - Sher & Blackwell, Allan Mendelsohn, 202-463-2508
November 21, 2005 The undersigned hereby gives notice to the Department of Transportation and other interested parties that the representation of Scandinavian Airlines System in the above-referenced proceeding by the firm of Silverberg, Goldman & Bikoff L.L.P. is limited to matters related to the Motion of Scandinavian Airlines System for Confidential Treatment of Documents, filed on November 7, 2005, and the SAS confidential documents filed with the Department therewith. All communications and documents with respect to the Motion for Confidential Treatment should be sent to the attention of L. Jeffrey Johnson at the undersigned firm. Communications and documents relating to all other matters in connection with the Joint Application filed in this proceeding on November 4, 2005 should be directed to the firm of Wilmer Cutler Pickering Hale & Don L.L.P., counsel for the Joint Applicants. Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305
Served November 22, 2005 Notice Providing Access to Documents In order to afford interested parties prompt access to the documents under conditions agreed to by the Joint Applicants (including Swiss and SAS in their individual capacities) and imposed by the Department under similar recent circumstances, we will grant immediate interim access to all documents covered by the Rule 12 Motion to counsel and outside experts for interested parties who file appropriate affidavits with the Department in advance. Moreover, Parties will be permitted to make copies of the exhibits, at the Dockets facility, for use by persons who have filed confidentiality affidavits. 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. We expect all affidavits to state, at a minimum, that (1) the affiant is counsel for an interested party or an outside independent expert providing services to such a party; (2) the affiant will use the information only for the purpose of participating in this proceeding; and (3) the affiant will disclose such information only to other persons who have filed a valid affidavit in Docket OST-2005-22922. Affiants and interested parties must understand and agree that any pleading or other filing that includes or discusses information contained in the covered documents must itself be accompanied by a Rule 12 Motion requesting confidential treatment. Affiants having filed affidavits may examine the documents at the Department of Transportation at the Dockets location. Affiants must present a stamped copy of the affidavit filed with the Department of Transportation before examination of the documents. Immediately after the completion of any judicial review of our final decision in this docket or the expiration of the 60-day period within which a person may petition for judicial review, all persons who have filed confidentiality affidavits in this proceeding are hereby directed to file a further affidavit stating that all copies of the applicants’ confidential materials have been destroyed or returned to the applicants. Finally, when we have determined that the record of this case is complete, we will announce an appropriate procedural schedule. By: Michael Reynolds
November 15, 2005 Confidentiality Affidavit for Air France - Beryl Baldous, Maria-Claudia Vasquez Marazzani and Marion Geoffroy Counsel: Air France
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement December 23, 2005 Motion to Consolidate and Amendment #1 - Bookmarked Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com for Austrian, British Midland, Lufthansa, LOT, SAS, Swiss International, TAP and United / Silverberg Goldman, Michael Goldman for SAS / Condon & Forsyth, Evelyn Sahr for Swiss
December 27, 2005 Letter to Dorothy Beard - Additional Documents Please find enclosed an original and three copies of documents that the Joint Applicants are producing in conjunction with their December 23, 2005 filing of Amendment #1 to their November 4, 2005 joint application for approval of and antitrust immunity for alliance agreements. These documents are being produced under seal on a confidential basis pursuant to Rule 12 of the Departments Rules of Practice in Proceedings, 14 C.F.R. 302.12, on the understanding that access to the documents will be restricted in accordance with the procedures the Department established by Notice served November 22, 2005 in this docket. With respect to each of these documents, the Joint Applicants hereby incorporate by reference the Rule 12 motions previously submitted in this proceeding. The Joint Applicants will serve a copy of this letter and the attached index of the confidential documents on each of the parties named on the attached service list. Counsel: Wilmer Hale, Jonathan Moss
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement December 27, 2005 Motion of Air Canada for Confidential Treatment Under 14 CFR 302.12 On November 4, 2005, the Austrian Group; British Midland Airways Limited, doing business as bmi; Deutsche Lufthansa AG; Poiskie Linie Lotnicze LOT S.A.; TAP Air Portugal; and United Air Lines, Inc.; filed an application for approval of and immunity for commercial alliance agreements between United, LOT, TAP and Swiss, respectively, and to add LOT, TAP and Swiss to the larger STAR group which already enjoyed antitrust immunity for their various alliance activities. On Friday, December 23, 2005, the above-captioned airlines moved to amend their application for antitrust immunity so that Air Canada might become part of the larger STAR alliance grouping that has antitrust immunity. United and Air Canada also moved to modify their existing grant of antitrust immunity in order to remove the exclusion of all-cargo services and third country markets from their preexisting award of immunity that was made pursuant to Order 97-9-21. The impetus for these changes was the Open Skies Agreement between the United States and Canada which was signed on November 10, 2005, which is slated to take effect on or after September 1, 2006. To support these requests, Air Canada is submitting to the Department detailed materials concerning competition in the relevant markets that applicants for similar authority previously have submitted. These documents contain confidential, proprietary and commercially sensitive information. Pursuant to Rule 12 of the Department's Rules of Practice (14 C.F.R. § 302.12), Air Canada requests that the Department withhold from public disclosure the documents that Air Canada is filing herewith under seal in the above‑captioned proceeding. Counsel: Garfinkle Wang, Anita Mosner, 703-522-0900, ammosner@gwsmplc.com
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement January 10, 2006 Confidentiality Affidavit for Northwest - Paul Kunz Counsel: Northwest, Megan Rosia, 202-289-6834, megan.rosia@nwa.com
January 11, 2006 Confidentiality Affidavit for Continental Airlines - Bruce Keiner Counsel: Continental
February 2, 2006 Confidentiality Affidavit for Continental Airlines - Lorraine Halloway Counsel: Continental
February 8, 2006 Motion of American Airlines to Require Submission of Additional Documents and Data - Bookmarked American Airlines, Inc. hereby moves the Department to require that the Joint Applicants submit additional documents and data before the Department deems the application complete and establishes a procedural schedule. Star's initial production raises questions about the proposed alliance similar to those raised in the recent SkyTeam antitrust immunity docket (OST-2004-19214). Given the decisional standard applied to SkyTeam in Order 2005-12-12, Star should be required to provide additional information demonstrating that the expanded alliance is in the public interest and does not substantially reduce or eliminate competition. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
February 17, 2006 Answer of Continental Airlines Continental supports fully American's motion asking the Department to require Air Canada, Austrian, bmi, Lufthansa, LOT, SAS, Swiss, TAP and United to provide additional documents and data in support of their request to incorporate LOT, Swiss, TAP and Air Canada into the antitrust-immunized Star Alliance, which is already the world's largest and most comprehensive immunized alliance. In addition, Continental urges the Department to require specific information regarding the Star Alliance plans and analyses related to potential developments in what the Department has described as a "regulatory framework governing transatlantic markets" that is "in flux" and all documents and information regarding denials of codesharing applications by airlines that are not members of the Star Alliance in the home countries of current or proposed Star Alliance members. Counsel: Crowell & Moring, Bruce Keiner
February 17, 2006 Answer of Delta Air Lines to Motion of American Airlines Delta hereby answers in support of the Motion of American Airlines, Inc. to require the Star antitrust immunity applicants to submit additional documents and data before this application is deemed complete. Star is already the world's largest immunized alliance. Nothing has been presented in the existing record to demonstrate that the modest online service benefits claimed by the Star ATI applicants are sufficient to offset the reduction in competition through the elimination of transatlantic competitors. The Department needs more data and evidence to understand the impact of the expanded Star ATI alliance on transpacific and Latin America overlap routes served by United and other Star members. The proposed new alliance affects not only the transatlantic, but also competition in other geographic areas as well. As noted by the Department in the SkyTeam Order, the U.S.-EU aviation regime is in a state of "flux" given the uncertain future of the draft U.S.-EU agreement, and the Department's policy initiative concerning foreign ownership and control. Given these uncertainties, a significant expansion of the world's largest global immunized alliance requires careful scrutiny by the Department that can only be conducted with a more thorough and complete evidentiary record. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999
February 17, 2006 Although Northwest disagrees with the new standard for antitrust immunity described in Order 2005‑12‑12, fundamental fairness requires that the Consolidated Star ATI Grouping be judged by the same standards the Department applied tentatively in denying expansion of the SkyTeam ATI alliance. In particular, interested parties and the Department must have information necessary to analyze the alleged benefits of the Consolidated Star ATI Grouping and consider the extent to which antitrust immunity, rather than code sharing and related cooperative arrangements not requiring antitrust immunity, is required to achieve the alleged benefits. In addition to American's request that the Joint Applicants provide additional information regarding the effects of the Consolidated Star ATI Grouping's expansion on Transpacific and Latin America markets, the Joint Applicants should also be required to provide complete information and data regarding the impact of their Consolidated Star ATI Grouping on the market for worldwide air transportation, including between points in Canada and points throughout the world via the United States. The Consolidated Star ATI Grouping also should be required to provide complete analyses and information regarding worldwide cargo traffic as well as passenger traffic. Thus, references to "fares" in the information sought should also incorporate references to "rates" and all references to "traffic" should include cargo traffic as well as passenger traffic. Counsel: Northwest, Megan Rae Rosia, 202-842-3193
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement February 17, 2006 Joint Answer of Star Alliance to Motion of American Airlines American's motion is without merit and should be denied. The scope of the Joint Applicants' document production was consistent with that of past document productions in a long line of similar applications. The Amended Joint Application bears no resemblance to the SkyTeam application, either factually or in the legal issues raised, and should not be subject to additional document and data requests similar to those imposed on the SkyTeam applicants. In the end, American's motion must he seen for what it really is: the latest gambit in a transparent, continuing effort to impede the legitimate advancement of competing alliances that, as the Department has consistently found, offer real public benefits. American has been unable to develop and maintain its own alliances; it apparently cannot agree with British Airways on whether to pursue immunity in the future.' It sees a commercial benefit from attempting to obstruct and delay the Joint Applicants' implementation of their alliance plans, and may be emboldened by its perceived success in opposing the SkyTeam application. It is also no coincidence that American is raising opposition to the Amended Joint Application given the pending Open Skies agreements with both Canada and the EU. American is well aware that the unjustified denial or delay of the Amended Joint Application would be inconsistent with prior applications, and could prevent the implementation of the pending Open Skies agreements (and interfere with future efforts to secure Open Skies agreements) by calling into question the Department's commitment to its long-standing international aviation policy regarding Open Skies, and immunity. The Department should not allow American to abuse its administrative processes in this way. The Amended Joint Application should be processed in a timely way consistent with similar applications in the past. American's unjustified motion must be denied. Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960 for Austrian, British Midland, Lufthansa, LOT, SAS, Swiss International, TAP and United / Silverberg Goldman, Michael Goldman for SAS / Condon & Forsyth, Evelyn Sahr for Swiss
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement February 24, 2006 Contingent Motion for Leave to File and Joint Reply of Star Alliance The Joint Applicants do not intend to engage competitors in an endless debate over whether they have filed sufficient documents and information for the Department to find the Amended Joint Application substantially complete. Certainly, Continental, Delta and Northwest (like American) have not made their requests over concern for the public interest or the interests of consumers. Rather, each carrier's motive is both cynical and transparent -- Delta and Northwest, bitter about the denial of their application to merge their respective immunized alliances, seek to soften the sting of that ruling by preventing the Joint Applicants from further integrating their alliance and by pressuring the Department into making the process as burdensome and protracted as possible. Continental looks to use this case as another opportunity to remind the Department of Continental's displeasure with its lack of access to Heathrow, and to entangle consideration of the Amended Joint Application with the pending U.S.-EU agreement and the proposed "actual control" policy statement. The Department should not allow competitors to abuse its administrative processes in this way. For their part, as stated above, the Joint Applicants do not intend to engage in endless, repetitive debate with regard to the issues raised in American's motion and echoed in the answers of Continental, Delta and Northwest, which the Joint Applicants have fully addressed. Such repetitive exchanges add nothing of value to the record, and are intended only to delay and raise the costs of this proceeding. The Department should put an end to such efforts now, find the Amended Joint Application substantially complete and set a procedural schedule for the filing of answers and replies, which will afford all interested parties a full opportunity to address the merits of the Amended Joint Application. Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960 for Austrian, British Midland, Lufthansa, LOT, SAS, Swiss International, TAP and United / Silverberg Goldman, Michael Goldman for SAS / Condon & Forsyth, Evelyn Sahr for Swiss
Order 2006-4-25 Issued and Served April 27, 2006 Order Consolidating Proceedings and Requesting Additional Information We agree that the proceedings pending in dockets 1434 and 22922 are closely related and, further, that consolidation serves the public interest of administrative efficiency. We hereby consolidate United's and Air Canada's request for expanded immunity into docket 22922, to be considered together with the Joint Applicants' request for new immunity with LOT, Swiss, and TAP. Several parties - American, Continental, Delta, and Northwest -- dispute that the Joint Applicants' filings meet the substantially complete standard, and they each move separately to require the Joint Applicants to submit additional documents and data. To the extent provided by the Attachment to this Order, we grant the Motion of American Airlines, Inc. to require submission of additional documents and data, submitted on February 8, 2006, the Answer of Continental Airlines, Inc., submitted on February 17, 2006, the Answer of Delta Air Lines, Inc., submitted on February 17, 2006, and the Answer of Northwest Airlines, Inc., submitted on February 17, 2006. The Department directs the Joint Applicants to provide the Department with the additional data and evidentiary information set forth in the Attachment. This information should be filed in the consolidated docket, Docket OST-2005-22922, in accordance with Department rules. To the extent that the Joint Applicants deem it necessary, they may seek confidential treatment of the information as set forth in the Department's regulations. We emphasize that we do not seek duplicative filings by the Joint Applicants; to the extent that the Joint Applicants affirm that information sought in the Attachment has already been filed in the docket, they need only identify which documents satisfy the request. By: Michael Reynolds
June 15, 2006 Confidentiality Affidavit of Northwest Airlines - Alexander Van der Bellen Counsel: Northwest, Alexander Van der Bellen, 202-842-4184
June 19, 2006 Supplemental Information Response - Bookmarked In response to Order 2006-4-25 in the above-referenced proceeding, enclosed are five copies of: (i) the Joint Applicants' answers to the Clarification Questions; (ii) the supplemental document production of the Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., TAP Air Portugal, and United Air Lines, Inc. (along with an index and certifications); (iii) updated exhibits from the Joint Application dated November 4, 2005; updated exhibits from the Motion to Consolidate and Amendment #1 to Joint Application dated December 23, 2005; and updated exhibits from the Joint Motion of United Air Lines, Inc. and Air Canada dated December 23,2005; (iv) a written explanation of all redacted or withheld documents and (v) an index of previously submitted documents that are responsive to the information request contained in Order 2006-4-25. The documents and data being submitted are confidential business information and are being provided under seal in boxes. The Joint Applicants hereby incorporate by reference their Joint Motion for Confidential Treatment filed on November 2005 requesting confidential treatment for documents filed earlier in this proceeding. Counsel: Wilmer Hale, Jonathan Moss
June 19, 2006 Motion of Swiss for Confidential Treatment - Bookmarked Swiss International Air Lines Ltd. d/b/a Swiss, under 14 CFR 302.12, hereby moves that the Department withhold certain proprietary and commercially sensitive confidential information from public disclosure. Swiss is submitting with this Motion confidential information in response to the Department's Order of April 27, 2006 requesting additional information, and in connection with the above captioned joint application for approval of and antitrust immunity for the above-referenced alliance agreements. The confidential documents are identified and described in the attached index. Swiss respectfully requests that access to these documents be limited to counsel and outside experts for interested parties. Counsel: Eckert Seamans, Evelyn Sahr, 202-659-6622
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement June 16, 2006 Motion of Air Canada For Confidential Treatment On April 27, 2006, the Department issued Order 2006-4-25, which directed the Austrian Group, British Midland Airways Limited, doing business as bmi, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., TAP Air Portugal, United Air Lines, Inc., and Air Canada to submit certain additional information to the Department concerning their request for antitrust immunity for their various alliance activities. Specifically, the Department directed the Joint Applicants to respond to certain questions set forth in the Order, and to submit certain documents concerning their competitive plans and activities. In response to this Order, Air Canada is submitting to the Department numerous documents concerning its relationships with the other Joint Applicants, as well as materials concerning competition in the relevant markets. These documents contain confidential, proprietary and commercially sensitive information. Pursuant to Rule 12 of the Department’s Rules of Practice, Air Canada requests that the Department withhold from public disclosure the documents that Air Canada is filing herewith under seal in the above-captioned proceeding. Counsel: Garfinkle Wang, Anita Mosner, 703-294-5890
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement June 23, 2006 Scandinavian Airlines System Supplemental Information Response and Motion for Confidential Treatment of Documents - Bookmarked SAS hereby requests the Department of Transportation withhold from public disclosure certain confidential, proprietary and commercially sensitive information being submitted concurrently under seal in the above-referenced proceeding in response to the Department's Order Consolidating Proceedings and Requesting Additional Information (Order 2006-4-25). SAS also requests that access to all such documents be limited to counsel and outside experts for interested parties who have filed an affidavit. The Joint Applicants submitted to the Department on June 19, 2006 a Supplemental Information Response to the Clarification Questions contained in Order 2006-4-25, which SAS hereby incorporates by reference. Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305
June 23, 2006 Confidentiality Affidavit for US Airways - Howard Kass Counsel: US Airways, Howard Kass, 202-326-5153
Order 2006-7-15 Issued and Served July 12, 2006 Order Establishing a Procedural Schedule In this consolidated case, the Joint Applicants seek new or expanded authority to enhance their commercial cooperation in an eight-way global immunized alliance. Our last procedural order (Order 2006-4-25) required the Joint Applicants to submit additional documents and information. Beginning on June 16, 2006, the Joint Applicants submitted information responses, documents, data and indices to comply with the procedural order. No party commented on the Joint Applicants' June submissions. We must now determine whether the record as it stands today is substantially complete and ready for comment and adjunctation. We have finished our initial review of this record. With the recent submissions by the Joint Applicants, we find that the Joint Application is now substantially complete. We therefore establish the following procedural schedule: answers to the application must be filed no later than Wednesday, August 9, 2006. Replies must be filed no later than Friday, August 18, 2006. The usual answer period for antitrust immunity proceddings is 21 calendar days. The answer period for this proceeding, however, has been extended by five business days. The purpose of the extension is to allow the Joint Applicants an opportunity to file additional information. We also order the Joint Applicants to submit all future documents in English, or with an English translation, and to submit within five business days English translations for all existing documents in the record that are not currently available in English. By: Michael Reynolds
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement July 17, 2006 Re: Additional Information Request By Order 2006-7-15, the Department requested that the Joint Applicants in the above-captioned proceedings take certain further steps in their document production to support their request for approval of and antitrust immunity for their various alliance agreements. Specifically, the Department asked the Joint Applicants to check whether there might be further documents concerning Joint Alliance Committee meetings or other inter-carrier meetings that had not already been submitted in the docket. Air Canada has performed a supplementary search to determine whether there might be further documents that might be responsive to the Department’s requests, and has found that there are no additional documents that are responsive to Order 2006-4-25. Counsel: Garfinkle Wang, Anita Mosner
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement July 17, 2006 Re: Additional Information Request In response to Order 2006-7-15, Scandinavian Airlines System is submitting in the enclosed sealed envelope five copies of English translations of certain documents originally filed with the Department in the above-referenced Dockets on June 23, 2006 This submission includes English translations of documents the Department specifically identified in Order 2006-7-15 (SK-0504-06, SK-0514-16, SK-0524, SK-0525-26 and SK-0534-35) as well as translations of other non-English documents originally filed with the Department on June 23, 2006 (SK-0529-30, SK-0536, SK-0539-40 and SK-0541). Each translation bears the Bates range numbers of the document it is a translation of in the upper right-hand corner. SAS hereby incorporates by reference its June 23rd Rule 12 Motion for Confidential Treatment and requests that the enclosed documents be accorded confidential treatment. Counsel: Silverberg Goldman, Michael Goldman
July 19, 2006 Re: Swiss International Air Lines Confidential Documents Please find enclosed five (5) copies of confidential documents in sealed envelopes. This information is being filed under seal subject to a Motion for Confidential Treatment pursuant to Rule 302.12. Swiss International Air Lines, Ltd. hereby incorporates by reference its Motion for Confidential Treatment filed on June 19, 2006 requesting confidential treatment for documents filed earlier in this proceeding. The documents are filed in response to the Department's Order of July 12, 2006 establishing a procedural schedule and requesting additional information. Sensitive commercial price information has been redacted in some instances. Counsel: Eckert Seamans, Philip Livingston, 202-659-6600
July 19, 2006 Second Supplemental Document/Information Response of Star Alliance In response to Order 2006-7-15 in the above-referenced proceeding, enclosed are five copies of the second supplemental document production of the Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., TAP Air Portugal, and United Air Lines, Inc., along with an index. The documents being submitted are confidential business information and are being provided under seal in envelopes marked "Confidential Treatment Requested Under 302.12" consistent with the Department's Rule 12 procedures. The Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., TAP Air Portugal, and United Air Lines, Inc., hereby incorporate by reference their Joint Motion for Confidential Treatment filed on November 4, 2005 requesting confidential treatment for documents filed earlier in this proceeding. Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement July 19, 2006 Response of Scandinavian Airlines System In further response to Order 2006-7-15, specifically ordering paragraph 3 thereof, Scandinavian Airlines System states that it has no additional documents or information responsive to Order 2006-4-25 other than those submitted already by SAS or the other Joint Applicants. Counsel: Silverberg Goldman, Michael Goldman
July 28, 2006 Confidentiality Affidavit of The Brattle Group - James Reitzes
July 28, 2006 Confidentiality Affidavits of The Brattle Group - Dorothy Rohyn, Steven Chambers and Sandeep Vaheesan
August 1, 2006 Confidentiality Affidavit of The Brattle Group - Adam Schumacher
August 9, 2006 Answer of American Airlines - Bookmarked Once again, the Department is confronted with an application for antitrust immunity that is a wolf in sheep's clothing. Just as SkyTeam sought to eliminate competition between competing European networks in exchange for a modest network expansion to a small number of cities, Star now appears before the Department with the same request. The facts here are largely the same - fares in Star's hubs are going up, the proposed alliance would do more to consolidate than to expand networks, and there is simply no important public benefit that granting Star's request to eliminate competition would achieve. The Department should deny the application. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
August 9, 2006 Motion of American for Confidential Treatment American Airlines, Inc., under 14 CFR 302.12, hereby moves the Department for confidential treatment of the accompanying confidential answer to the Star Alliance application for antitrust immunity. As provided by the Department's rules, our confidential answer is in a sealed envelope labeled "Confidential Treatment Requested Under 14 CFR 302.12." Our confidential answer makes reference to confidential materials submitted in this docket by the Star Alliance applicants. This material is protected from public disclosure by the Department's notice issued on November 22, 2005. We will provide our confidential answer to counsel of record for the Joint Applicants (Bruce Rabinovitz, David Heffernan, and Jonathan Moss) and to holders of valid confidentiality affidavits on file in this docket. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
August 9, 2006 Answer of Continental Airlines Further expansion of United's web of global immunized alliances by including Air Canada (creating the first immunized global alliance between two North American airlines), LOT, Swiss and TAP in the existing alliance between United, Austrian, Lufthansa and SAS, will likely provide far more benefits to United and its foreign partners than to the traveling and shipping public, at the expense of independent competitors such as Continental. In particular, Continental opposes approval of the expansion insofar as it would apply to air transportation between the U.S. and London and between the U.S. and Poland, markets in which Continental is disadvantaged by its inability to offer competitive service at London's Heathrow Airport, which is served by all of the Star Alliance applicants, and to codeshare with Air France on flights operated between France and Poland. For these reasons, any approval for expansion of the Star Alliance to include LOT, Swiss and TAP should carve out immunity for any services offered between the U.S. and London and between the U.S. and Poland. Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com
August 9, 2006 Northwest agrees that important public benefits can be achieved through antitrust immunized alliances that are not possible through arms-length codesharing. Indeed, the potential for deeper integration, a more seamless customer experience, improved frequency, new path options and new time of day channels are the primary benefits that are likely to be attained by approval of this application. Because the Star is already a fully mature transatlantic alliance with multiple hubs in Europe and in the United States, there are comparatively few “new” online benefits to be gained in this case than in prior grants of antitrust immunity. Northwest does not dispute that important public benefits could result from the approval of the Joint Application - even if it does not to produce the type of “end-to-end” network expansion benefits that typified the Departments’ earlier grants of antitrust immunity. Northwest also does not dispute the Joint Applicant’s good-faith representations that they are unwilling to proceed with implementing their alliance in the absence of immunity. The Department must decide whether the benefits claimed by the Joint Application will exceed those that can be produced under arms-length codesharing, and whether those incremental benefits are sufficient to justify the extraordinary relief of antitrust immunity. Northwest takes no position on that determination. However, if the Department acts favorably on this request to add four new antitrust immunized members to Star’s existing network, due process and fundamental fairness require the Department to give favorable consideration to future alliance expansion applications by other carriers that can make the same showing. Counsel: Northwest, Alexander Van der Bellen, 202-842-8184, sascha.vanderbellen@nwa.com
August 10, 2006 Confidentiality Affidavits of Delta Air Lines - Robert Cohn, Patrick Rizzi, Scott McClain
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement
August 18, 2006 Joint Consolidated Reply of Star Alliance - Bookmarked Neither American nor Continental has provided any valid reason for denying the Amended Joint Application. The record is clear that the Alliance Agreements satisfy the applicable standard for approval and antitrust immunity under the Department's established policy and criteria and that such approval will promote the public interest. Accordingly, since the Joint Applicants will not implement the Alliance Agreements without immunity, the Department should move expeditiously to approve the Amended Joint Application and grant the requested immunity. Counsel: Wilmer Hale, Jonahan Moss, 202-663-6655, jonathan.moss@wilmerhale.com
August 18, 2006 Letter of Star Alliance Indicating Confidential Material Enclosed are five copies of the Confidential Joint Consolidated Reply of Air Canada, the Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., Scandinavian Airlines System, Swiss International Air Lines Ltd., TAP Air Portugal, and United Air Lines, Inc. The documents being submitted contain confidential business information and are being provided under seal in envelopes marked "Confidential Treatment Requested Under § 302.12" consistent with the Department's Rule 12 procedures. Air Canada, the Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Poiskie Linie Lotnicze LOT S.A., Scandinavian Airlines System, Swiss International Air Lines Ltd., TAP Air Portugal, and United Air Lines, Inc., hereby incorporate by reference their Motions for Confidential Treatment previously filed in this docket requesting confidential treatment for documents filed earlier in this proceeding. Counsel: Wilmer Hale, Jonahan Moss, 202-663-6655, jonathan.moss@wilmerhale.com
August 18, 2006 While the interests of American/oneworld and United/Star may be benefited by creation of a Chicago-on-the-Thames at London Heathrow, domination of London Heathrow by two such powerful alliances would create all the harms American complains of in its answer, and then some, at London Heathrow. Since U.S. airlines such as Continental are now de jure excluded from operating at London Heathrow and would be de facto excluded from operating competitive flights at London Heathrow unless any open skies agreement covering London Heathrow provides competitive slots and facilities at London Heathrow on economically-viable terms for carriers such as Continental. If American has been forced to operate in the regulatory equivalent of a DC-3, however, that is because American has picked alliance partners in the world's most restricted markets, where they benefit more from the exclusion of competitors than from being the "best run" airlines as American claims for them. By selecting British Airways and the fortress hub at London Heathrow for the focus of its primary transatlantic alliance, American has consigned itself to the DC-3 era of regulation. Since American has now made its ambitions plain and since United and British Midland have already sought antitrust immunity at London Heathrow, when the Department considers antitrust immunity for any alliance with a hub at London Heathrow it must consider the spectre of a Star/oneworid duopoly and all of the adverse impacts on consumers and competition such a prospect entails. Thus, as Continental's answer advocated, the Department must carve out from any grant of further immunity to the Star Alliance all services offered between the U.S. and London. Continental urges the Department to disapprove, at the very least, antitrust immunity for the Star Alliance carriers for traffic between the U.S. and London and between the U.S. and Poland. Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com
August 29, 2006 Motion for Leave to File and Response of American Airlines to Replies of Star Alliance and Continental - Bookmarked Immunized alliances are intended to facilitate the creation of broader end-to-end networks - not to consolidate overlapping networks. The Star applicants admit that many of the "new" city-pairs they claim this alliance would create are already served online by one or more of the applicants. In fact, most of the "new" online service claimed already exists or will never exist in reality. As a result, even the Star applicants' own expert, Prof. Brueckner, could find a mere fraction of the potential consumer benefits he has found from other alliances. Meanwhile, Kasper and Lee have failed to rebut The Brattle Group's work demonstrating the fact that while immunized alliance have the potential to benefit consumers, the lack of inter-alliance competition has resulted in higher fares. The Star applicants have failed to prove that antitrust immunity is necessary to achieve any important public benefit, and the Department should deny their application. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
August 29, 2006 Motion of American Airlines for Confidential Treatment American Airlines Inc. moves the Department for confidential treatment of the accompanying confidential motion for leave to file and response to the reply of the Star applicants. Our confidential motion and response makes reference to confidential materials submitted in this docket by the Star applicants. This material is protected from public disclosure by the Department's notice of November 22, 2005. Consistent with that notice we will provide our confidential motion and response only to counsel for the Star applicants and to holders of confidentiality affidavits on file in this docket. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
August 31, 2006 This is to inform the Department that the Joint Applicants do not intend to file a substantive response to the unauthorized surreply American Airlines filed in this docket on August 29, 2006, which was accompanied by a motion for leave to file. It is clear that American's objective in filing such an unauthorized surreply is simply to delay and raise the costs of this proceeding. The Joint Applicants do not intend to engage American in an endless, repetitive debate regarding the merits of their Amended Joint Application -- a debate not countenanced by the Department's Rules of Practice. American's surreply does no more than re-argue self-serving and largely conclusory claims American made in its answer in this proceeding and, as such, it adds nothing of substance to the substantial existing record in this case. The Joint Applicants have already demonstrated that American's arguments are utterly without merit, and fundamentally inconsistent with American's position in numerous prior cases where it has successfully sought antitrust immunity for alliance agreements with foreign air carrier partners. Accordingly, the Department should promptly deny American's motion for leave to file and proceed expeditiously to grant the Amended Joint Application. Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com
Order 2006-12-17 Issued and Served December 19, 2006 Show Cause Order - Bookmarked By this Order, the Department proposes to grant approval of, and antitrust immunity for, alliance agreements between and among Air Canada, Austrian, bmi, LOT, Lufthansa, SAS, Swiss, TAP, and United, subject to conditions. We are providing interested parties the opportunity to comment on our tentative findings before we reach a final decision. Parties have three weeks to submit comments and seven business days to submit reply comments. By: Andrew Steinberg
Janaury 9, 2007 Comments of American Airlines on Show Cause Order 2006-12-17 Hereby comments on show cause Order 2006-12-17, December 19, 2006, which proposes to confer antitrust immunity on Star's expanded global alliance. For the reasons set forth by our prior pleadings in this docket, American still has serious concerns about the impact that Star's continued expansion will have on the ability of other alliances (such as oneworld) to compete effectively. As a result, we do not believe that the public interest would be served by expanding Star's antitrust immunity in the absence of a regulatory framework which would allow vibrant inter-alliance competition. Without meaningful inter‑alliance competition, immunized alliances have a limited incentive to pass efficiencies on to consumers in the form of lower prices. American also notes the Department's statement that: "Where new online service is not the primary public benefit of a proposed alliance, we would expect applicants to demonstrate that other important public benefits will likely result from a grant of immunity." American assumes that one such important public benefit would be the inter-alliance competition referenced above, which is necessary for the benefits of immunized alliances to be enjoyed by consumers. However, while American would certainly prefer that the Department reshape the immunized alliance playing field in a single proceeding, we understand the statutory requirement to "move towards a decision in a timely fashion'. American remains a strong supporter of the Department's open skies policy, and hopes the regulatory obstacles to the formation of a third competing immunized alliance will soon be lifted. Counsel: American, Carl Nelson, 202-496-5647
January 10, 2007 By Order 2006-12-17, the Department proposed to grant approval of, and antitrust immunity for, alliance agreements between and among the Joint Applicants in the above-captioned docket, subject to certain conditions. Interested parties were given until January 9, 2007 to file objections to the Department's tentative decision and show cause why the Department should not make final those tentative findings and conclusions, and until January 19, 2007 to file replies. No objections were filed. Accordingly, the Joint Applicants request that the Department promptly issue a final order granting the proposed immunity "to enable the Joint Applicants to offer more attractive and efficient service to many travelers who use the Star network to reach destinations throughout the world." American Airlines submitted the only response to the Department's tentative decision, which it denominated as "comments." Those brief comments contained neither an objection to the Department's tentative findings or conclusions nor a relevant substantive discussion of them, and do not require a reply from the Joint Applicants. Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com
OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding February 7, 2007 Motion for Leave to File and Supplement to Objections of Northwest Airlines Northwest Airlines, Inc. hereby (i) moves for leave to file this Supplement to its Objections in the 2007 U.S.-China service proceeding, and (ii) requests reexamination of transpacific competition issues, including, at minimum, the exclusion of China from the proposed grant of global antitrust immunity to United and Air Canada in the Star Alliance proceeding. Substantial service and capacity will be added by Air Canada on the Toronto-Shanghai route, as well as new Beijing service at Vancouver. Altogether, Air Canada intends to add 50 percent more flights between North America and China. With its major hub at Toronto, and access to all of the largest and most important U.S. markets to China, Air Canada is a serious threat to Northwest’s one-stop U.S.-China service from Detroit. In addition, Air Canada’s new Vancouver-China services compete directly at all of the Western U.S. gateway cities Northwest serves via Narita. Because the Show Cause Order failed to award Northwest frequencies it requires to commence nonstop Detroit-Shanghai service without dismantling its western U.S.-China network, Northwest is powerless to respond to this substantial new foreign flag challenge. In light of the significant new U.S.-China and transpacific competition issues raised by Air Canada’s announcement, Northwest requests (1) leave to file this Supplement; (2) that the Department revise the analysis in Order 2006-12-17 to include the competitive effects of the alliance on U.S.-China and other transpacific markets; and (3) urges that Order 2007-1-4 be amended to grant Northwest the frequencies it requires to provide competitive U.S.-China service against United and Air Canada via Detroit. Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement February 9, 2007 Contingent Joint Answer and Motion for Leave to File Northwest's Objection provides no basis for the Department to reverse its tentative decision to approve and grant antitrust immunity for alliance agreements between and among the Joint Applicants, and should be denied. Stripped of its rhetorical window dressing, Northwest's claims are unsupported by any relevant evidence and utterly without merit. First, Northwest blows out of proportion the significance of Air Canada's increase in nonstop Canada‑China service, most of which is scheduled to operate for only a portion of the upcoming summer travel season. Indeed, it appears that once the summer season ends, Air Canada's service to China will revert to roughly the same number of nonstop frequencies it operates today (the only continuing increase being the introduction of three weekly frequencies on one route). Second, the Department carefully considered the competitive impact of United's expanded cooperation with Air Canada in third-country markets and tentatively concluded "that no substantial reduction or elimination of competition will occur as a result of this transaction."' The Department's conclusion was based on three core facts: United and Air Canada have no U.S.-third-country nonstop service overlaps; Air Canada would not obtain any meaningful fifth- or sixth-freedom rights until the pending open skies agreement takes effect; and Air Canada has a de miniinis share of U.S.-third-country traffic. Air Canada's planned (mostly seasonal) increase of Canada-China nonstop service will not change any of the findings on which the Department's conclusion was based. Air Canada's new service will not create any U.S.-third-country nonstop overlaps. And Northwest has not even attempted to demonstrate how or why these new services would allow Air Canada to carry more than the de minimis share of U.S.- China traffic the Department found it currently carries. In the end, Northwest's filing should be seen for what it is -- a desperate, last-minute attempt to protect itself from competition and, at the same time, an expression of its unhappiness with the Department's decision in the 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding (Docket OST-2006-25275). Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com
Order 2007-2-16 Issued and Served February 13, 2007 We grant approval and antitrust immunity, as limited and discussed by Order 2006-12-17, Order 1996-5-27 (concerning the United/ Lufthansa alliance and limited carve-out conditions), Order 1997-9-21 (concerning U.S.-Canada markets and limited carve-out conditions), Order 2002-4-4 (concerning U.S.-UK open skies), and Order 2003-6-39 (concerning U.S.-UK open skies), to the alliance agreements between and among Air Canada, the Austrian Group, British Midland Airways Limited, Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., Scandinavian Air Lines System, Swiss International Airlines, Ltd., TAP Air Portugal, and United Air Lines, Inc. in so far as the alliance agreements relate to foreign air transportation. We condition our grant of approval and global immunity to Air Canada on the implementation of the Protocol to the Air Transport Agreement between the Government of the United States of America and the Government of Canada, initialed on November 10, 2005, providing for full open skies between the United States and Canada. American believes that the public interest is not served by expanding Star’s antitrust immunity in the absence of a regulatory framework that allows for more inter-alliance competition. To the extent that American urges the Department to grant immunity for a future competing alliance, its comments are premature. No such case has been filed; we will consider any new case according to its particular facts and circumstances. To the extent that American indicates opposition to the present application, its comments are unsupported. American has not objected to any of the specific competitive or public interest findings upon which the tentative grant of approval and immunity is based. By: Andrew Steinberg
March 5, 2007 In accordance with the Department's Notice of November 22, 2005 in this docket, I hereby certify that all Star Alliance confidential documents in the possession of American's affidavit holders in this proceeding have been destroyed. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
March 8, 2007
Counsel: Crowell & Moring
March 20, 2007 Confidentiality Affidavit of US Airways - Howard Kass Counsel: US Airways, Howard Kass, 202-326-5153, howard_kass@usairways.com
March 27, 2007 Affidavits Concerning Destruction of Documents of Delta Air Lines Counsel - Robert Cohn, Patrick Rizzi, Scott McClain
April 10, 2007 Destruction of Confidential Documents Affidavit of US Airways Counsel: US Airways, Benjamin Slocum, 480-693-5782, benjamin.slocum@usairways.com
April 20, 2007 Confidentiality Affidavit of Northwest Airlines
April 30, 2007 Confidentiality Affidavits of Societe Air France - Beryl Baldous, Marion Geoffroy, Claudia Vasquez Marazzani
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