OST-2007-28845 - American, Iberia, Finnair, Malev and Royal Jordanian

Updated: Tuesday, June 17, 2008 1:32 PM

OST-2007-28845 - American, Iberia, Finnair, Malev and Royal Jordanian - Antitrust Immunity

http://www.oneworld.com/

Antitrust Immunity Applications

American Airlines, Inc., Iberia Lineas Aereas de Espana, S.A., Finnair OYJ, Malev Hungarian Airlines and Royal Jordanian Airlines

OST-2007-28845 - Antitrust Immunity

July 24, 2007

Joint Application for Antitrust Immunity - Bookmarked - 159 Pages

American Airlines, Inc. (and its affiliates American Eagle Airlines, Inc. and Executive Airlines, Inc. d/b/a American Eagle), Iberia Lineas Aereas de Espana, S.A., Finnair OY, Malev Hungarian Airlines, and Royal Jordanian Airlines hereby jointly apply, under 49 USC 41308 and 41309, for approval of and antitrust immunity for bilateral alliance agreements and for a multilateral coordination agreement.

This request encompasses all agreements between and among the applicants that implement any part of the alliance agreements or coordination agreement, or are entered into by the joint applicants pursuant to those agreements. We request that antitrust immunity be effective as of March 30, 2008, the date that U.S.-EU open skies enters into force, and remain in place for a period of at least five years, consistent with Department practice in other antitrust immunity proceedings.

The joint applicants believe that an immunized alliance is of vital strategic importance as they strive to
remain competitive with the other immunized transatlantic alliances. Iberia, Finnair, Malev, and Royal Jordanian consider that entry into a multilateral transatlantic alliance with American is essential to their long-term competitive viability under applicable open skies regimes.

Counsel: Carl Nelson, 202-496-5647, carl.nelson@aa.com for American / Steptoe & Johnson, William Karas, 202-429-3902, wkaras@steptoe.com for Iberia / Holland & Knight, Anita Mosner, 202-419-2604, anita.mosner@hklaw.com for Finnair / Condon & Forsyth, Stephen Fearon, 212-490-9100, sfearon@condonlaw.com for Malev and Royal Jordanian

July 27, 2007

Motion for Confidential Treatment Under 14 CFR 302.12

The joint applicants listed in the caption, under 14 CFR 302.12, hereby move that the Department withhold certain proprietary and commercially sensitive confidential information in this proceeding from public disclosure.

The confidential information is commercial or financial in nature, in that it relates to commercially sensitive, proprietary, and privileged financial and corporate information. This type of confidential information is proprietary and commercially sensitive, and would not otherwise be made public. It is being submitted to the Department so that the Department can expeditiously evaluate the public interest benefits that will result from granting approval of and antitrust immunity for proposed American/Iberia/Finnair/Malev/Royal Jordanian alliance.

Served August 7, 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

August 8, 2007

Affidavits - Robert Cohn, Patrick Rizzi and Jonathan Echmalian of Hogan & Hartson

August 8, 2007

Confidentiality Affidavits of Allied Pilots Association - Marie Chopra

August 9, 2007

Confidentiality Affidavits of Air France - Jean-Michel Barthelemy, Laurent Timsit, Beryl Baldous

August 14, 2007

Confidentiality Affidavits of Northwest Airlines - Alexander Van der Bellen, Andrea Fischer Newman, Peter Kenney, Glenn Fuller, Ben Labow

August 14, 2007

Confidentiality Affidavits of Northwest and Delta - Tim Murris (Northwest) and Scott McClain (Delta)

August 17, 2007

Motion of Delta, Air France, Northwest, KLM, Alitalia and Czech Airlines for Additional Information

As a critical threshold matter, the Joint Application is deficient because it fails to include the information and documents which the Department has required every other global branded alliance, e.g., Star and SkyTeam, to furnish prior to considering requests for expanded antitrust immunity. The Joint Movants set forth below a list of the additional information and documents which the Joint Applicants should be required to submit based on the submissions in the recent Star and SkyTeam ATI applications.

In particular, the current oneworld request is conspicuously silent on American's plans and efforts to include British Airways, a pivotal oneworld carrier, as part of an antitrust immunized alliance. The Department has required ATI applicants in the past to disclose all documents which discuss consideration of antitrust immunity with other airlines as part of the Department's standard evidence request.

In addition, although the Joint Application seeks global antitrust immunity, the Joint Applicants limited their submission of documents only to those relating to "competition in the U.S.-Spain, U.S.-Finland, U.S.-Hungary, and U.S.-Jordan markets." Consistent with the Department's standard practice, the Department should require the Joint Applicants to submit documents that specifically discuss or otherwise relate to the effects of the proposed immunity on competition globally, including between the U.S. and the EU, as well as the Joint Applicants' worldwide plans and operations, including their plans and operations in Asian, Central American, and other markets.

Accordingly, the Department should require the oneworld Joint Applicants to submit additional documents and information which are the same information and documents the Department has required of the Star-ATI and SkyTeam-ATI applicants.

Counsel: Northwest, Alexander Van der Bellen, 202-842-3193 for Northwest / Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com for Delta, Air France and KLM / Zuckert Scoutt, Richad Mathias, 202-298-8660, rdmathias@zsrlaw.com for Alitalia / Sher & Blackwell, Allan Mendelsohn, 202-463-2508, amendelsohn@sherblackwell.com for Czech

August 27, 2007

Answer of Joint Applicants to SkyTeam's Motion for Additional Information - Bookmarked

SkyTeam - which has consistently resisted motions seeking additional information and documents in novel applications of a far larger scope - now seeks additional information regarding a facially non-controversial alliance between five carriers with exactly -one overlapping transatlantic route between them. There is no reasoned basis for SkyTeam's request given the nature of this proceeding, and the Department should deny its motion.

SkyTeam - obviously upset by American's motions seeking additional information in its two most recent applications for antitrust immunity - has filed a motion lacking any factual or legal support. SkyTeam seeks information regarding (1) global competition between carriers that do not compete outside transatlantic markets; (2) future plans for American and British Airways without showing why such information is at all relevant to this proceeding (in contrast to American's showing in OST-2004-19214); and (3) other issues without showing why their consideration is warranted by the "specific facts and issues presented" by this application (Order 2005-4-25). SkyTeam's motion should be denied given the lack of any factual or legal support for its arguments.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com for American / Steptoe & Johnson, William Karas, 202-429-3902, wkaras@steptoe.com for Iberia / Holland & Knight, Anita Mosner, 202-419-2604, anita.mosner@hklaw.com for Finnair / Condon & Forsyth, Stephen Fearon, 212-490-9100, sfearon@condonlaw.com for Malev / Condon & Forsyth, Michael Holland, 212-490-9100, mholland@condonlaw.com for Royal Jordanian

August 28, 2007

Confidentiality Affidavits of US Airways - Janet Dhillon, Howard Kass, Benjamin Slocum, Charles Rule, Andrwe Forman

September 5, 2007

Motion for Leave to File and Reply of Delta Air Lines, Air France, Northwest Airlines, KLM, Alitalia and Czech Airlines in Support of Motion for Additional Information - Bookmarked

The Joint Movants have asked the Department to require the oneworld ATI Applicants to submit relevant additional information and documents before the Department deems the oneworld ATI Application complete and establishes a procedural schedule. The Joint Movants' evidence request was virtually identical to the Department's evidence requests in similar proceedings involving global ATI requests. The oneworld ATI Applicants have requested global immunity, and there is no basis for applying a different and more lax standard to the five-way oneworld global ATI application than the Department has previously applied to Star and SkyTeam. Moreover, American and oneworld's attempt to shield consideration of future ATI plans involving other oneworld members, including British Airways, from Department scrutiny is at odds with the Department's standard evidence request, and with nearly 10 years of precedent.

The oneworld ATI Applicants' Answer is more significant for what it does not say than for what it does say. The oneworld ATI Applicants do not contend, nor could they, that the information and documents requested were not required by the Department in other global alliance ATI proceedings, or that the evidence sought is not material or relevant to the public interest and competition issues raised by the global scope of the oneworld ATI application. Nor do they contend that expanded ATI with British Airways has not been or is not under consideration.

The relevance of information relating to consideration of ATI with other carriers (such as plans involving British Airways), and to the global impacts and global plans pertaining to the Joint Applicants' request for global ATI, is self-evident. The oneworld ATI Applicants' effort to short-circuit the Department's standard evidence request should be rejected, and the Joint Applicants should be required to submit the additional information and documents identified in the Joint Motion before the application is deemed complete.

September 14, 2007

Motion for Leave to File and Response to SkyTeam's Motion and Reply - Bookmarked

SkyTeam's 10 page reply - more than triple the length of its original motion - is a belated and ineffective attempt to meet the Department's standard for requiring production of additional evidence in antitrust immunity proceedings. SkyTeam seeks information about competition to which the U.S. antitrust laws do not apply and speculation about a potential alliance application with another carrier that is irrelevant to this proceeding. The Department should promptly deny SkyTeam's original motion of August 17, 2007.

Order 2007-11-12
OST-2007-28845 - Antitrust Immunity

Issued and Served November 16, 2007

Order Requesting Additional Information

By this Order, the Department requests additional information, as set forth in the Attachment, from American, Iberia, Finnair, Malev, and Royal Jordanian. We believe that the additional information is necessary to analyze the application and decide this case. Subject to review of the information requested and determination that the record is substantially complete, we intend to establish a procedural schedule to act on this application.

In the pleadings, the parties also debate whether submitting additional information would irreparably harm the Joint Applicants due to the fact that certain confidential information would be made available to affiants under Rule 12 of the Department’s procedural regulations. The Joint Applicants argue in their answer, and again in their reply, that the disclosure of commercially sensitive information that is irrelevant to this proceeding would cause irreparable harm because certain affiants hold high-level commercial positions with the Joint Applicants’ competitors. The SkyTeam parties respond, first, that the commercial sensitivity of documents has nothing to do with whether those documents are relevant to the proceeding, and second, that Rule 12 procedures, which apply equally to all parties, are sufficient to protect the Joint Applicants’ interests.

By: Susan McDermott

February 20, 2008

Response of Joint Applicants to Order 2007-11-12

Motion for Confidential Treatment

The Joint Applicants are seeking multilateral antitrust immunity in an effort to compete with the Star and SkyTeam alliances, which each already enjoy far broader transatlantic antitrust immunity than members of the oneworld alliance are seeking in this proceeding. As the Department has noted, "any consumer benefits created by a large multilateral immunized alliance are likely to be greater in the face of the enhanced competition made possible by a more open air services agreement between the U.S. and Europe" (Star ATI Expansion Case, Order 2006-12-17). The proposed alliance will provide enhanced competition against the Star/SkyTeam immunized alliances - competition that is sorely needed.

The Joint Application is now complete, and the Department should promptly establish a procedural schedule. Given the lack of material network overlap in this case, the Department should move expeditiously toward a final decision approving the Joint Application for multilateral antitrust immunity among American, Iberia, Finnair, Malev and Royal Jordanian.

February 21, 2008

Re: Certification of Malev - Nemesne Kane Aniko

Counsel: Condon & Forsyth, John Maggio, 212-894-6792, jmaggio@condonlaw.com

February 25, 2008

Re: Certification of Royal Jordanian - Guido Ruther

Counsel: Condon & Forsyth, John Maggio, 212-894-6792, jmaggio@condonlaw.com

February 25, 2008

Re: Confidential Documents and Index of Iberia

The enclosed confidential document supplements Iberia's February 21, 2008 submission of confidential documents in response to Order 2007-11-12. It is being filed under seal pursuant to the joint motion of the applicants for confidential treatment under 14 C.F.R. 302.12, which was filed with the Department on February 21, 2008. Electronic versions of this letter and the revised Iberia Index of Confidential Documents are today being filed in the public record and served on those persons shown on the Certificate of Service attached to the Joint Motion.

Counsel: Steptoe & Johnson, Carol Gosain, 202-429-6461, cgosain@steptoe.com

Served May 12, 2008

Notice

In this proceeding, American, Iberia, Finnair, Malev, and Royal Jordanian are seeking a grant of antitrust immunity to operate a global immunized alliance under the umbrella of the oneworld alliance. Before we can act on this request, we must determine whether the record is substantially complete and establish a procedural schedule. As explained below, we have determined that the record is not yet substantially complete, and direct the Joint Applicants to provide further evidence.

On November 16, 2007, by Order 2007-11-12, we issued an evidence request that required the Joint Applicants to produce additional documents, data, and written answers to clarification questions. At that time, we stated that “more information is required concerning the Joint Applicants’ worldwide plans to cooperate and why they are seeking extraordinary relief from the antitrust laws to do so.” On February 21, 2008, the Joint Applicants responded to the evidence request.3 We have reviewed the response and accompanying documents carefully, and find that, in order to satisfy the Department’s evidence request, further clarification of the record is needed. In its current state, the record does not contain sufficient information for the Department to assess the competitive effects and public benefits of the proposed alliance.

To ensure a substantially complete record, the Joint Applicants should supplement their February 21st response as follows:

Clarify the answer to Question 8.
Clarify the answer to Question 10.
Clarify the answer to Question 11 and submit a joint venture agreement(s).
Correct the submission of MIDT data.

By: Michael Reynolds

June 9, 2008

Joint Motion of the Applicants to Dismiss

American Airlines, Iberia Lineas Aereas de Espana, Finnair, Malev Hungarian and Royal Jordanian Airlines hereby jointly move to dismiss their application in this docket.

Counsel: Carl Nelson, 202-496-5647 for American / Steptoe & Johnson, William Karas, 202-429-3902 for Iberia / Holland & Knight, Anita Mosner, 202-419-2604 for Finnair / Condon & Forsyth, Stephen Fearon, 212-490-9100 for Malev / Condon & Forsyth, Michael Holland, 212-490-9100 for Royal Jordanian

Order 2008-6-18
OST-2007-28845 - Antitrust Immunity

Issued and Served June 16, 2008

Order Granting Motion to Dismiss

In this proceeding, American, Iberia, Finnair, Malev, and Royal Jordanian sought a grant of antitrust immunity to operate a global immunized alliance under the umbrella of the oneworld alliance. On May 12, 2008, the Department issued a notice determining that the record was not yet complete. We stated that additional specific information was necessary in order to make a reasoned decision in the case. No applicants or parties responded to the notice. On June 9, 2008, the Joint Applicants moved to dismiss their application for antitrust immunity, without citing a reason.

We grant the motion and dismiss the application. Because there are no remaining issues for consideration, we also terminate the proceeding and close the docket.

By: Michael Reynolds