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OST-2007-28644 - SkyTeam - Antitrust Immunity
OST-2001-10429 - Delta, Air France, Alitalia and Czech
OST-2002-11842 - Delta, Korean, Air France, Alitalia and Czech
OST-2004-19214 - Delta, KLM, Northwest, Air France, Alitalia and Czech
Undocketed - Continental, Delta and Northwest
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Alitalia, Czech, Delta, KLM, Northwest, Air France (SkyTeam) OST-2007-28644 - Approval of and Antitrust Immunity for Alliance Agreements June 28, 2007 Joint Application for Approval of and Antitrust Immunity for Alliance Agreements - Bookmarked The Department granted antitrust immunity for Northwest/KLM in 1993 having determined that such approval would produce important public benefits, which it did. In 2002, the Department also granted antitrust immunity for the alliance among Delta, Air France, Alitalia, and CSA ("SkyTeam ATI Alliance"), having likewise determined that such approval would produce important public benefits, which it did. In 2004, Air France acquired KLM, and although both companies operate as separate airlines, they are managed by a common holding company and their integration efforts continue. The European Commission and the U.S. Department of Justice reviewed the Air France/KLM merger as a combination of both alliances and allowed it to proceed after concluding, among other things, that the merger would not harm competition on transatlantic routes. The Joint Applicants now seek antitrust immunity to integrate the two grants of immunity so that Northwest and KLM can become members of the SkyTeam ATI Alliance and the consumer and competitive benefits of the previously approved alliances can be expanded. Specifically, the Joint Applicants seek approval of, and antitrust immunity for, the following agreements to be made effective immediately upon the issuance of a Final Order with a duration of not less than five years:
The Alliance Agreements establish a long-term, detailed framework for cooperation in the areas of planning, revenue and pricing, yield management, marketing, and operations for foreign air transportation services via transatlantic routings offered by the Joint Applicants. The Joint Application does not seek (nor could the Department grant) antitrust immunity for Delta and Northwest to coordinate their activities with respect to interstate air transportation. Delta and Northwest understand that they will remain fully subject to the U.S. antitrust laws with respect to interstate air transportation, and intend to comply completely with their obligations under those laws. Northwest and Delta will also remain fully subject to the DOT/DOJ conditions relating to the domestic marketing agreements among Delta, Northwest, and Continental Airlines. Finally, this Joint Application does not involve Korean Air, Continental, Aeromexico or Aeroflot - other members of the SkyTeam Alliance lacking antitrust immunity, or, in the case of Korean Air, lacking antitrust immunity with Northwest. Northwest does not seek antitrust immunity for coordination of any kind with Korean Air, and Delta will not coordinate with Korean and Northwest in the same markets. The Joint Applicants do not seek antitrust immunity for coordination of any kind with Continental, Aeromexico or Aeroflot. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
July 2, 2007 Confidentiality Affidavit for American Airlines - Carl Nelson and Jeffrey Ogar Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
July 2, 2007 Confidentiality Affidavits for United Air Lines - Bruce Rabinovitz, David Heffernan, Jonathan Moss, Jonathan Sutter, Caryn Garvin, Kenneth Hines, Julie Oettinger, Conor McAuliffe Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com
July 2, 2007 It is very important that the Department of Transportation approve this application. Northwest ranks as one of the largest employers in the region and accounts for approximately 10,000 jobs in southeast Michigan. As such, Northwest Airlines contributes significantly to the overall economy and the company's activities add tremendous value to the region's large population. In addition, Detroit Metropolitan Airport is the largest hub for Northwest Airlines. Detroit's north-central location in the United States makes it a strategic and attractive gateway for passengers flowing to the largest U.S. population centers. The carrier and its affiliates operate nearly 1,000 daily flights at DTW, including five daily departures to Amsterdam. This transatlantic capacity is possible due to the antitrust immunity that exists between Northwest and KLM Royal Dutch Airlines. Without this important agreement, such level of service between Detroit and Amsterdam would not be sustainable. By: DTW, Lester Robinson, 734-942-3793
July 3, 2007 Confidentiality Affidavit for American Airlines - Bruce Wark Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
Served July 3, 2007 Notice Suspending Procedural Schedule and Providing Access to Documents In order to afford interested parties prompt access to the documents under conditions agreed to by the Joint Applicants 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. When we have determined that the record of this case is complete, we will announce an appropriate procedural schedule. By: Andrew Steinberg
July 6, 2007 Okaloosa County Airports in Support International air services and access to global markets are very important to the Southern Region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Okaloosa Regional Airport supports this By: Airports Director, Jerry Sealy
July 9, 2007 Wilkes-Barre/Scranton International Airport in Support International air services and access to global markets are very important to the Northeastern Pennsylvania Region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. The Wilkes-BarreBcranton International Airport supports this application and Northwest’s efforts to improve and expand its transatlantic network. By: Airport Director, Barry Centini
July 10, 2007 International air services and access to global markets are very important to Northwest Florida. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Pensacola Regional Airport supports this application and Northwest’s efforts to improve and expand its transatlantic network. By: Airport Director, Frank Miller
July 10, 2007 Kent County Department of Aeronautics in Support International air services and access to global markets are very important to West Michigan and Gerald R. Ford International Airport. We rely extensively on services provided by the SkyTeam including Northwest Airlines and Delta Airlines and welcome their efforts to improve and expand their international network. We understand that Northwest Airlines and the SkyTeam have applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. By: Director, James Koslosky
July 10, 2007 Louisville International Airport in Support of Alliance Expansion On behalf of Louisville International Airport I would like express our support for the application by Northwest Airlines to expand the Northwest/KLM antitrust alliance to include additional SkyTeam transatlantic partners. Easy access to the ever expanding U.S.-Europe marketplace is important to Louisville and our many corporate partners. We welcome improved access to the global marketplace and we encourage you to grant Northwest's request to expand its ATI alliance to include additional SkyTeam partners. By: SDF, Charles Miller
July 10, 2007 Memphis-Shelby County Airport Authority International air services and access to global markets are very important to the mid-south region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional Sky Team transatlantic partners. The Memphis-Shelby County Airport Authority supports this application and Northwest's efforts to improve and expand its transatlantic network. By: President, Larry Cox
July 10, 2007 Metropolitan Knoxville Airport Authority in Support International air services and access to global markets are very important to the East Tennessee region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. McGhee Tyson Airport supports this application and Northwest's efforts to improve and expand its transatlantic network. By: President William Marrison
July 11, 2007 International air services and access to global markets are very important to The Goodyear Tire & Rubber Company. We rely extensively on services provided by Northwest Airlines, and welcome Northwest's efforts to improve and expand its international network. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. By: Barbara Hollendonner
July 11, 2007 Palm Beach International Airport in Support International air services and access to global markets are very important to the Palm Beach County, Florida region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Palm Beach International Airport supports this application and Northwest's eff orts to improve and expand its transatlantic network. By: Bruce Pelly
July 11, 2007 Motion of Air France for Confidential Treatment
Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
July 11, 2007 Confidentiality Affidavit of Continental Airlines - Bruce Keiner
July 12, 2007 Massachusetts Port Authority in Support International air services and access to global markets are very important to the New England Region We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Boston Logan International Airport supports this application and Northwest's efforts to improve and expand its transatlantic network. By: Thomas Kinton
July 12, 2007 Sarasota-Bradenton International Airport in Support International air services and access to global markets are very important to the Sarasota Bradenton area. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. The Sarasota Bradenton International Airport supports this application and Northwest’s efforts to improve and expand its transatlantic network. By: President, Frederick Piccolo
July 13, 2007 Confidentiality Affidavits of US Airways - Janet Dhillon, Howard Kass, Benjamin Slocum, Charles Rule, Andrew Forman
July 13, 2007 Textron in Support of Expanding Alliance | Word As explained in Northwest’s application, a more integrated SkyTeam alliance offers substantial advantages to consumers including improved flight schedules, reduced travel times, new service and lower fares. We believe it is very important that the Department of Transportation approve this application. By: Textron, Mark Johnson, 316-293-1081, majohnson@cessna.textron.com
July 16, 2007 Southwest Florida International Airport in Support We understand that Northwest Airlines has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Southwest Florida International Airport supports this application and Northwest Airline’s efforts to improve and expand its transatlantic network. By: Robert Ball
July 17, 2007 Columbia Metropolitan Airport in Support International air service and access to global markets are very important to the Riverbanks Region of South Carolina and to the entire state. I understand that Northwest Airlines has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Columbia Metropolitan Airport in Columbia, SC supports this application and Northwest Airlines’ efforts to improve and expand its transatlantic network. By: Mike Flask
July 17, 2007 Governor of North Dakota in Support I write today on an issue of great importance to North Dakota's continued economic prosperity. It is my understanding that Northwest Airhes has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. As Governor of the State of North Dakota, I strongly support this application. By: Governor John Hoeven
July 25, 2007 Metropolitan Airport Authority of Rock Island County, Illinois in Support International air service and access to global markets arc very important to the Quad City region. We understand that Iqorthwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. The Quad City International Airport supports this application and Northwest’s efforts to improve and expand its transatlantic network. By: Director of Aviation, Bruce Carter
July 27, 2007 Ithaca Tompkins Regional Airport in Support International air services and access to global markets are very important to Ithaca and the Tompkins County region. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. The Ithaca Tompkins supports this application and Northwest's efforts to improve and expand its transatlantic network. By: Airport Director, Robert Nicholas
August 2, 2007 Fort Smith Regional Airport in Support of Northwest International air services and access to global markets are very important to Western Arkansas/Eastern Oklahoma. We understand that Northwest has applied for expansion of the Northwest/KLM antitrust immunized alliance to include additional SkyTeam transatlantic partners. Fort Smith Regional Airport supports this application and Northwest's efforts to improve and expand its transatlantic network. By: Airport Director, Kenneth Penny
July 18, 2007 Confidentiality Affidavit for American Airlines - Gary Kennedy
July 18, 2007 Confidentiality Affidavits of Continental - Thomas Bolling, Douglas Kelley
July 19, 2007 Confidentiality Affidavits of SkyTeam - Robert Cohn, Patrick Rizzi, Jonathan Echmalian, John Varley, Scott McClain, John Nannes, Giel Schoonis
July 23, 2007 Confidentiality Affidavits of Northwest and Air France - Andrea Fischer Newman, Jean-Michel Barthelemy, Laurent Timsit, Beryl Baldous
July 24, 2007 Confidentiality Affidavits of Northwest - Glenn Fuller, Peter Kehney, Alexander Van der Bellen, Christine Wilson
July 24, 2007 Confidentiality Affidavits of Northwest - Glenn Fuller, Ben Labow
July 24, 2007 Motion of American Airlines for Confidential Treatment Under 14 CFR 302.12 Our confidential motion makes reference to confidential material submitted in this docket by the Joint Applicants. This material is protected from public disclosure by the Department's notice of July 3, 2007. Consistent with that notice, we will provide our confidential motion only to holders of valid confidentiality affidavits on file in this docket. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
July 24, 2007 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. This proceeding should not move forward until the Department and interested parties are able to review information from the European Commission's extensive and ongoing investigation of the SkyTeam alliance for anticompetitive conduct in violation of the EC Treaty. American recognizes that much of this information cannot be produced while the investigation is ongoing. However, this application for antitrust immunity by an alliance currently accused of violating European antitrust laws should not proceed until the Department and interested parties are able to review any information that will become public relating to the investigation's scope and the remedies imposed. Granting this motion will not prejudice the Joint Applicants, as they are unlikely to implement their plans until the European investigation is complete. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com July 26, 2007 Confidentiality Affidavit of Czech Airlines - Allan Mendelsohn
July 26, 2007 Answer of SkyTeam to Motion of American American's Motion is a transparent effort to delay the Department's processing of the Joint Application and thereby delay the new transatlantic services and competition that would result from the SkyTeam Joint Venture. It is not in the public interest to permit such delay. American waited almost a full month after the filing of the Joint Application to submit its Motion requesting that the scheduling Order be delayed until the EC completes an inquiry that the EC publicly announced more than a year ago. The Department should not countenance American's blatant delay tactics and its motion should be denied. American has contrived an unprecedented evidence request seeking EC documents because it is fully aware that the record is complete based on any reasonable application of Department precedent on this issue. Thus, American proposes that the Department adopt a new policy under which it would abdicate its responsibility for setting the timeline in antitrust immunity proceedings to foreign regulators that are applying different legal standards to different issues. American seeks to have the Department paralyze itself with inaction until the EC completes its inquiry, since, as American concedes, "the information [that American requested] cannot be produced while the [EU] investigation is ongoing." American's delay motive could not be more transparent. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660, rdmathias@zsrlaw.com for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508, amendelsohn@sherblackwell.com for Czech
July 26, 2007 Confidentiality Affidavit of City of Prague - Eva Lecnarova
July 27, 2007 Confidentiality Affidavit of Northwest - Timothy Muris
Airports in Support:
July 30, 2007 International air service and access to our global market is very important to General Mills. We fly extensively on Northwest Airlines and welcome their efforts to improve and expand their international network. By: General Mills, Erin Dunn
July 31, 2007 Motion for Leave to File and Reply of American Rather than debate the facts and points of law raised in American's motion, SkyTeam has decided to venture down the same path it chose in its first application for antitrust immunity - evading the legitimate questions raised while hoping the Department does not hold SkyTeamls feet to the fire by conducting a rigorous review on a full and complete record of what would become the world's largest immunized alliance. Such a record includes consideration of the ongoing European investigation of the alliance members seeking immunity in this proceeding for conduct on transatlantic routes that may well violate U.S. antitrust laws along with those in Europe. American urges the Department to reject SkyTeamls tactics just as it did in OST-2004-19214. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
August 1, 2007 American's motion for leave to file an unauthorized Reply should be denied. Other than an attempt to get the last word, American's "Reply" adds nothing new to the record on the issues raised by its stay motion. The Joint Applicants fully responded to American's motion and under Rule 302.11(c) "no reply to an answer, reply to a reply, or any further responsive pleadings shall be filed." 14 C.F.R. § 302.11(c). The Joint Applicants do not intend to respond further to American. American is incorrect in stating that the Joint Applicants would "not proceed with their plans until the European investigation is complete." The Joint Applicants intend to proceed with their ATI plans and implementation of the Joint Venture as soon as immunity is granted Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
August 6, 2007 Confidentiality Affidavits for Air France - Michael Goldman, Jeffrey Johnson
Order 2007-9-20 Issued and Served September 19, 2007 Order Requesting Additional Information The Department recognizes the efforts made by the Joint Applicants to identify and submit, in conjunction with their application, information and supporting documentation based on evidence requests issued by the Department in past antitrust immunity cases. However, on a case by case basis, the Department retains the prerogative to seek additional, relevant information. Our review of the record indicates that additional information is required in this case to ensure that the record is substantially complete. We are therefore requiring the Joint Applicants to submit updated documents, as well as to answer a limited number of clarification questions about relevant issues such as carve-outs and the proposed implementation of antitrust protocols. These issues have each been raised on the record but have not been addressed by the Joint Applicants in sufficient detail to permit the Department to make an informed decision. Our request is necessary because of the particular and extraordinary relief from the antitrust laws that the Joint Applicants are seeking. We have tailored the request to limit it only to what the Department requires in order to make an informed decision based on information that is currently available. In that regard, we have decided to deny American's motion to require additional information relating to the European Commission proceedings. We believe that, with the satisfactory submission of the information requested in the attachment to this order, the evidence of record should be sufficient for us to decide this matter according to applicable legal and policy standards. We recognize that the European Commission is conducting its own review of the SkyTeam alliance, but that proceeding and this one are independent of each other and necessarily will follow their own schedules and processes. At this point, in advance of a public decision by the Commission, it would be premature and even speculative to require submission of such preliminary material as that requested by American; in the future, we can review any EC actions as we deem appropriate. Meanwhile, of course, any party is free to submit any evidence for our consideration that the party believes should affect our decision. By: Andrew Steinberg
September 24, 2007 Ex-Parte Letter to Mississippi Governor Haley Barbour By: Andrew Steinberg
October 1, 2007 Re: Confidentiality Affidavits - Counsel for/of British Airways Daryl Libow and Thomas Leuba of Sullivan & Cromwell / Don Hainbach and Jason Maddux of Garofalo Goerlich / Paul Jasinski, Maria Da Chuna and Niamh McCarthy of British Airways Counsel: Garofalo Goerlich, Jason Maddux, 202-776-3970
October 3, 2007 Confidentiality Affidavit of KLM - Paul Mifsud Counsel: Hogan & Hartson, Patrick Rizzi, 202-637-5659, prizzi@hhlaw.com
October 9, 2007 Response of Joint Applicants to DOT Order 2007-9-20 (Public Version) The 4-way Joint Venture would provide substantial benefits that cannot be provided under the separate AF/DL Joint Venture and the KL/NW Joint Venture operating under separate grants of immunity. There are substantial public interest benefits that cannot be realized in the absence of the immunity requested in this proceeding. Those two distinct bilateral Joint Ventures under separate immunities do not maximize benefits because they do not permit immunized coordination between the two immunized Joint Ventures, i.e., between Northwest and Air France and between Delta and KLM. The parties are highly motivated to continue to pursue the 4-way Joint Venture because they want to realize the substantial benefits of the 4-way Joint Venture, which far surpass those possible under the separate bilateral Joint Ventures. The Joint Application discusses in detail the public benefits that will result from the more intensive coordination and integration afforded under the 4-way Joint Venture. These benefits include expanded service and pricing options, the introduction of new nonstop flights, improved elapsed times, increased flight routings, availability of lower fares, and joint fare initiatives. In addition, as explained in the Joint Application, the 4-way Joint Venture will enable the Joint Applicants to engage in more extensive reciprocal codesharing across all of their networks (and across the separate immunized 2-way Joint Ventures). These incremental public benefits resulting from the 4-way Joint Venture are not attainable under the separate bilateral Joint Ventures. The DL/AF Joint Venture does not alter the timeframe and target deadlines that have been established by the 4-way Joint Venture Agreement or the incentives of the carriers to meet those deadlines. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
October 9, 2007 Re: Confidential Treatment Requested In response to Department Order 2007-9-20, the Joint Applicants hereby submit in sealed containers marked "Confidential Treatment Requested Under 302.12" (i) the unredacted confidential Response of the Joint Applicants and (ii) confidential internal corporate documents. The Joint Applicants request that the Department withhold these confidential, proprietary, and commercially sensitive documents from public disclosure, and limit access to such information and documents as set forth in the Department's Notice of July 3, 2007. In further support of this request, the Joint Applicants hereby incorporate by reference its detailed Rule 12 Joint Motion filed in this Docket on June 28, 2007, with regard to these confidential submissions. The Joint Applicants are also filing a redacted version of the confidential Response in the public Docket. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
Served October 18, 2007 Notice Establishing Procedural Schedule In this proceeding, six members of the SkyTeam global alliance are seeking antitrust immunity as part of a proposed alliance. The record is now substantially complete and we establish a procedural schedule, as set forth below. On June 28, 2007, Alitalia-Linee Aeree Italiane-S.p.A., Czech Airlines, Delta Air Lines, Inc., KLM Royal Dutch Airlines, Northwest Airlines, Inc., and Société Air France, and their respective majority owned affiliates filed a joint application requesting approval of and antitrust immunity for alliance agreements covering foreign air transportation via transatlantic routings. They also filed a joint motion seeking confidential treatment for supporting documents and information, pursuant to Rule 12 of the Department’s procedural regulations. On July 3, we issued a Notice suspending the procedural schedule and providing access to documents. On September 19, following several motions in the docket, we issued an Order Requesting Additional Information. The Joint Applicants responded to this order by submitting additional documents and information on October 10. We have finished our initial review of the joint application, motions in the docket, and all supporting materials submitted by the Joint Applicants. We find that the application is now substantially complete. The procedural schedule is as follows: answers to the application must be filed no later than 21 calendar days from the issue date of this Notice, and replies must be filed no later than 7 business days after the last day for filing an answer. By: Susan McDermott
October 24, 2007 Confidentiality Affidavit of Northwest Airlines - Ben Hirst
October 25, 2007 Confidentiality Affidavit of Air Line Pilots Association - Russell Bailey
November 5, 2007 Confidentiality Affidavit of American - Roger Fones
November 6, 2007 Motion of American Airlines for Extension of Answer Date American Airlines, Inc. hereby requests a two business day extension of the answer date in this docket, from November 8 to November 13. The Department set November 8 as the answer date by Notice Establishing Procedural Schedule, October 18, 2007. American requires the requested two-day extension in order to review its position. American does not believe that such a modest extension will prejudice any party or unduly delay a decision in this proceeding. Replies should continue to be due seven business days after the answer date, as extended. We have advised counsel for SkyTeam of this motion, who state that they object. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
November 6, 2007 Confidentiality Affidavit of the Air Line Pilots Association - Jonathan Cohen
Order 2007-11-5 Issued and Served November 6, 2007 Order Modifying the Procedural Schedule By this Order, the Department modifies the procedural schedule for this matter as follows: answers are now due on November 13, 2007, and replies are due on November 27, 2007. On November 6, American Airlines filed a motion seeking to extend the answer period by two business days in order to review its position. American states that replies should continue to be due seven business days after the answer date, as extended. American notes that the Joint Applicants have indicated that they object to American’s motion. We have decided to grant American’s motion, in part. We will extend the answer period by two business days. Additionally, we will extend the reply period by two business days. By: Susan McDermott
November 7, 2007 Answer of Northwest Master Executive Council of the Air Line Pilots Association The Northwest Master Executive Council of the Air Line Pilots Association, International submits this Answer in support of the Joint Application filed by Northwest Airlines, Delta Air Lines, KLM Royal Dutch Airlines, Alitalia, Czech Airlines, and Societe Air France for antitrust immunity. The Department granted antitrust immunity to Northwest/KLM in 1993 and to Delta/Air France/Alitalia/Czech in 2002 based, in large part, on its determination that such antitrust immunity would generate important public benefits. In each case, the public benefits envisioned have become a reality. The Joint Applicants - as well as several airports and communities filing in support of the Joint Application in 2004 and again in this proceeding - have demonstrated that a number of new and additional international services, including new online services, have been the direct result of the immunized alliances. These new services, in turn, have generated additional flying for our pilots and more service choices for passengers. The requested immunity is also important to position the Joint Applicants to compete in the increasingly competitive transatlantic market against other global carriers and global alliances as the U.S.-EU Open Skies Agreement is implemented. Counsel: ALPA, Patrick Brennaman, 952-853-2355, patrick.brennaman@alpa.org
November 13, 2007 Answer of American Airlines - Bookmarked
While SkyTeam has promised the Department evidence of changed circumstances, a closer review shows that the Joint Applicants have delivered nothing new of material substance. The proposed remedy for the domestic spillover issues would do nothing to prevent route planning decisions from being altered by the elimination of competition for DPIJ traffic. SkyTeam has again failed to provide any fare data to suggest that it has used its current grants of antitrust immunity for anything more than leveraging market power against consumers. The public benefits associated with the proposed four-way joint venture are largely the same ones cited in the 2004 application - and in any event could be obtained through the two existing bilateral joint ventures within SkyTeam. The one true public benefit cited - expanded networks - is insufficient to justify the domestic spillover and merger of SkyTeam's two existing joint ventures. Since SkyTeam has presented nothing new, the Department's decision should remain the same - the Joint Application should be denied. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
November 13, 2007 United takes no position on whether the Joint Applicants' renewed request for antitrust immunity should be granted. However, if the Department is persuaded to grant the Joint Application, United agrees with the Joint Applicants that new carve-outs should not be imposed on the immunity, and that the carve-outs previously imposed on the immunity granted to Delta and Air Prance by Order 2002-1-6 should be removed. Those carve outs apply in only two city pairs - the hub-to-hub routes of Atlanta-Paris and Cincinnati-Paris. Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com
November 13, 2007 US Airways takes no position on the specific merits of Skyteam's Joint Application, nor does it endorse the application in any way. However, US Airways recognizes the importance of this proceeding to the industry going forward. DOT already has an analytic approach to antitrust immunity applications and can rely on established tools to address concerns about effects on domestic competition. If DOT approves the Skyteam application, US Airways also urges DOT to ensure similarly situated applicants are treated equally, and all carriers are afforded the same opportunity to obtain the flexibility that Skyteam seeks. Finally, the Department should use this proceeding as an opportunity to both streamline the evaluative process, and to provide guidance for subsequent antitrust immunity applicants regarding the key elements for consideration of such cases. Counsel: US Airways, Howard Kass, 202-326-5153, howard_kass@usairways.com
Answers in Support of SkyTeam Alliance Antitrust Immunity:
November 27, 2007 Consolidated Reply of The Joint Applicants - Bookmarked The Joint Applicants seek immunity for Alliance Agreements that do not substantially lessen competition, and will produce substantial public benefits not otherwise attainable. The Joint Application has received broad support from numerous parties including affected communities and labor groups. The only opponent‑American‑has merely repeated arguments it previously made, and that have already been rejected by the Department. American's claims do not withstand scrutiny, have been thoroughly refuted, and provide no basis for disapproval or further delay. The Department should promptly approve and grant the antitrust immunity for the Alliance Agreements pursuant to 49 U.S.C. § 41308 and 41309. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
November 27, 2007 Reply of the TWU Local 543 in Support The Transport Workers Union represents the 175 flight dispatchers and operations specialists at Northwest Airlines. To deny Northwest and its employees immunized membership in SkyTeam would deny it the comparable immunized flexibility which the Department has already seen fit to grant to 9 members of the Star Alliance. There is no legitimate reason to restrict the number of U.S. carriers participating in a single immunized alliance while permitting numerous foreign airlines to have immunized membership in a single alliance. Such a policy would greatly disadvantage U.S. carriers (and their employees) compared to foreign competitors. It would be contrary to the public interest and quite detrimental to the interests of U.S. carriers and their hardworking employees. By: TWU Local 543, Perry Sprague, 952-854-5838
December 6, 2007 Public Motion for Leave to File and Response of American Airlines - Bookmarked SkyTeam's reply to American's answer is long on name-calling but short on substance. American provided facts demonstrating that the Joint Application does little more than rehash public benefits rejected by the Department in Order 2005-12-12, and SkyTeam failed to rebut them. American challenged SkyTeam to point to specific public benefits that would not exist unless the proposed four-way joint venture were immunized, but SkyTeam dodged the question. SkyTeam continues to hide behind the facade of a four-way Joint Venture because it has nothing new to offer. Accordingly, the Department should reject the Joint Application. In 2005, SkyTeam wrongly believed that the Department would grant it expanded antitrust immunity based on "a minimal showing of public benefits, regardless of the particular facts and circumstances" (Order 2005-12-12). SkyTeam has provided no new public benefits for the Department to consider; rather, the Joint Applicants now assume that a joint venture agreement and U.S.-EU Open Skies require the Department to reverse its precedent. There is no reason or basis for the Department to do so, and the Joint Application should be denied. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
December 7, 2007 Re: SkyTeam Letter Requesting a Show Cause Order The Joint Applicants submit this letter in opposition to the Motion for Leave to File an unauthorized "Response" of American Airlines, Inc. American's motion should be denied and its continuing delay tactics should be rejected by the Department. The Department established a firm procedural schedule providing for Answers and Replies and no further pleadings. American's unauthorized Response adds nothing new to the record and merely restates American's previously articulated position on the issues. The Joint Applicants will not submit a further substantive response. The record in this proceeding is complete, and the Joint Applicants respectfully urge the Department to issue promptly a Show Cause Order Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
February 6, 2008 Re: Notice of Ex-Parte Communication On January 29, 2008, I met for the first time with Leo van Wijk, Vice Chairman of Air France-KLM, and we discussed generally the status of his air carrier and the state of the international airline industry. During the meeting, he brought up the application of Delta Air Lines, Northwest Airlines, Air France, KLM, Alitalia, and Czech Airlines for antitrust immunity (Docket OST-2007-28644) for foreign air transportation. Mr. van Wijk indicated the importance of application to his carrier and its alliance. I noted to Mr. van Wijk, as did Under Secretary Jeff Shane and General Counsel D.J. Gribbin, that the Department's rules prohibited me from discussing the merits of the case. By: Mary Peters
February 6, 2008 Ex-Parte Letter with Sen. Norm Coleman On January 11, 2008, I spoke to Senator Norm Coleman regarding the application of Delta Air Lines, Northwest Airlines, Air France, KLM, Alitalia, and Czech Airlines for antitrust immunity (Docket OST-2007-28644) for foreign air transportation. Senator Coleman expressed his support for the application and asked that there be no delay in its processing. I informed him that the matter will continue to be handled appropriately and with due attention. By: Michael Reynolds
Issued and Served April 9, 2008 Order to Show Cause - Bookmarked By this Order, the Department proposes to grant Air France, Alitalia, Czech, Delta, KLM, and Northwest authority to operate an immunized alliance in transatlantic markets. The proposed alliance features, at its core, an integrated joint venture that seeks to align the economic incentives of the joint venture participants to increase output and service options, as well as provide fare benefits. We tentatively find that the proposed alliance is consistent with the public interest, will produce public benefits, and will not substantially reduce competition. Accordingly, we tentatively approve the proposed alliance and grant it antitrust immunity. We also tentatively find that the grant of antitrust immunity should be subject to conditions. In addition to standard conditions, such as the obligation to submit origin and destination survey data, we are proposing several special conditions designed to preserve competition and ensure the realization of public benefits. First, we clarify that the Joint Applicants will at all times remain subject to the antitrust laws for purely domestic air transportation and international air transportation that is beyond the scope of the Alliance Agreements. Second, pending full implementation of the joint venture, we propose to preserve limited “carve outs” of the Atlanta-Paris CDG and Cincinnati-Paris CDG markets to prohibit the coordination of fares for timesensitive travelers. Third, we propose to require the Joint Applicants to fully implement the joint venture within 18 months, as planned, in order for the antitrust immunity to remain effective. By: Michael Reynolds
April 15, 2008 Confidentiality Affidavits of Interactive Travel Services Association Representatives - James V. Dick | Edward W. Sauer | Constance O'Keefe | Marshall Sinick
April 23, 2008 Comments of Joint Applicants to Show Cause Order 2008-4-17 - Bookmarked The Joint Applicants strongly urge the Department to finalize the Order without delay. The statute requires the Department to issue a "final decision" by no later than six months after the application is submitted. 49 U.S.C. 41710. And, it is vital that the Department issue the Final Order prior to the opening of second stage negotiations next month, and thereby fulfill the U.S. Government's commitment to the EU to "provide fair and expeditious consideration" of applications for antitrust immunity of commercial cooperation agreements "including revised agreements" such as the Alliance Agreements at issue here. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
April 23, 2008 Re: Objections of the American Society of Travel Agents - Bookmarked ASTA submits that the prudent approach is to defer any consideration of immunity in this proceeding pending the results of the joint U.S.-EC study of competitive conditions in transatlantic markets and the outcome of proposed Delta/Northwest merger, both of which will permit the Department to proceed on a reasoned basis instead of an unsupported assumption that is little more than a guess. At a minimum, the Department should not extend the grant of immunity to “programs designed to coordinate and reach agreements in the areas of … travel agent programs” and “travel agent …compensation” or to the collective “presentation and sale of the alliance members’ own airline services in the CRSs,” as it now proposes to do. Such an extension is not justified by any evidence in the record of this proceeding, by the applicable statutes, or by the Department’s prior immunity decisions. Counsel: ASTA, Paul Ruden
April 25, 2008 Re: Notice of Cessation of Continuing Interest of Interactive Travel Services Association This is to advise the Department and other interested persons that neither Interactive Travel Services Association nor Squire Sanders & Dempsey, L.L.P. has any continuing interest in the above-referenced proceeding. We also acknowledge and accept our obligations not to disclose any information we obtained which may be deemed to be confidential. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
May 2, 2008 Reply of Joint Applicants to Objections of ASTA ASTA's request that the Department delay finalizing the Order pending the results of the EU-DOT alliance study and the Department of Justice's review of the proposed Delta‑Northwest merger is a meritless delay tactic. The Department's decision was based on a specific and careful review of the proposed Alliance Agreements and a record containing thousands of pages of the Joint Applicants' confidential business documents relating to this alliance and its impact on transatlantic competition. The U.S.‑EU study is a generalized study of all alliances, and is unnecessary to complete the record in this case. In addition, the Department has a statutory obligation to issue a timely final order. The proposed Delta‑Northwest merger has no bearing on the merits of this transatlantic immunity case and provides no basis for deferral. The U.S. ‑EU open skies agreement is now in effect. Air France‑KLM and their U.S. partners have an immediate need and bilateral expectation to begin to implement the benefits of their immunized alliance. Contrary to ASTA's unfounded claim, finalizing the Order could not in any way "prejudge", "complicate" or "distort" the Justice Department's analysis of the merger. The Department of Justice did not file comments in this proceeding and had previously concluded that the grant of immunity to the Joint Applicants would not significantly reduce transatlantic competition. ASTA's pretexts concerning the proposed merger do not present legitimate reasons to delay the issuance of a Final Order Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France, KLM and Northwest / Zuckert Scoutt, Richard Mathias, 202-298-8660 for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508 for Czech Airlines
May 2, 2008 The basis for this request is that counsel for ASTA attempted to file the Objections on the due date, April 23, 2008, through the filing system at www.regulations.gov and believed that the filing had been accomplished. In fact, because counsel’s computer screen did not display a “Send a Comment or Submission” button in conjunction with the listing of the Show Cause Order, the attempt to file was made twice, the second time after consultation with a DOT staff person who explained that the filing would be accepted as long as it was attached to any document already filed in the docket that showed the “Send a Comment or Submission” button. In each of the two cases the message was received that the upload of the document was successful and counsel believed at that point that two successful filings of the paper had been achieved. In reality, there was another page in the regulations.gov website on which a further submit step was required to actually accomplish the filing. The document was served on parties to the docket by e-mail the next day, arriving faster than it would have if first-class mail service had been used. Counsel learned from another attorney on April 30 that the filing did not appear on www.regulations.gov. Since documents are often “posted” after they are filed, counsel first thought the filing was simply “in process,” but phone inquiries to the Help section at Regulations.gov indicated otherwise. Counsel immediately filed the document with the aid of the Help person and it now appears in Docket OST-2007-28644 as filed on April 30 and posted on May 1. We emphasize three things. First, good faith attempts were made to timely file the document. Second, counsel reasonably believed the filing had been accomplished. And, third, and most important, no prejudice to any party can have arisen from the late filing, because the document was delivered electronically to the parties at 10:10 am the day after the filing attempt. Counsel: ASTA, Paul Ruden
Order 2008-5-32 Issued and Served May 22, 2008 In the Show Cause Order, we conducted competitive and public interest analyses from which we drew several tentative findings and conclusions. Pursuant to 49 U.S.C. § 41309, we conducted a competitive analysis to assess the effects of granting immunity at the U.S.-Europe, U.S.-country pair, city-pair, and U.S. domestic market level. We noted that the four-way joint venture between Delta, Northwest, Air France, and KLM – submitted for the record – provided the details necessary for us to assess the competitive implications of integration and any resulting public benefits. We further noted that the alliance would operate under the U.S.-EU Air Transport Agreement, which is a regional agreement that enhances competition in new ways by facilitating entry by duly authorized carriers on any routes between the U.S. and the EU (with open intermediate and beyond rights). Having analyzed the effect of the alliance in multiple markets, and having considered the regulatory environment, we Having reviewed all pleadings, we have determined that no party submitted any evidence persuasively showing that the findings and conclusions in our competitive and public interest analyses were flawed. Nor did any party challenge the proposed conditions which were designed to ensure the realization of public benefits. We therefore adopt all findings, conclusions, and conditions as stated in the Show Cause Order. By: Michael Reynolds
June 27, 2008 Re: Ex-Parte Letter to Boston City Councilman Mark Ciommo By: Michael Reynolds |
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