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American Airlines, Inc. et al., ALM Antillean Airlines N.V., and
BWIA International Airways Limited Reciprocal Code-Share Services Proceeding
Order 97-2-29 / OST-97-2159 / 50311 / 50312 / 96-1940 / 96-1941 / 96-1942
/ 96-1939 / Undocketed / Issued and Served February 27, 1997
Order
Instituting Proceeding
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Attachment
- Evidence Request
We consolidate into this proceeding the captioned applications of American,
ALM, and BWIA for certain exemption authorities; and the American, ALM,
and BWIA applications for statements of authorization for reciprocal code-sharing
services. We are also requiring additional information to facilitate our
review of the applications, since they raise significant competitive issues,
and are deferring consideration of these applications pending further notice.
Finally, when we have determined that the record of this case is complete,
we will announce an appropriate procedural schedule for reaching a decision
expeditiously.
American Airlines, Inc. et al., ALM Antillean Airlines N.V., and BWIA
International Airways Limited Reciprocal Code-Sharing Services Proceeding
OST-97-2159 / 50311 / 50312 / 96-1940 / 96-1941 / 96-1942 / 96-1939 / Undocketed
/ Filed March 10, 1997
Petition
of ALM Antillean Airlines for Reconsideration of Order 97-2-29
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ALM strongly objects to the DOT Order on two grounds. First, there is no
need for additional evidence to resolve the public interest benefits of
the proposed code share arrangement with American. There is no bar to entry
by any U.S. carrier in this market. The Netherlands Antilles has a de facto
open skies policy. No one disputes this. TWA's unsupported charge
that ALM's code share agreement will "exclude potential competition"
is totally without basis. Neither TWA, United nor the Department have offered
even factual allegations or creative scenarios as to how this possibly
could occur.
Counsel: Condon Forsyth, Thomas Whalen, 202.289.0500
Petition
of American Airlines for Partial Reconsideration of Order 97-2-29
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American will comply with the Department's evidence request as expeditiously
as possible. American will demon-strate that its proposed arrangements
with ALM and with BWIA are pro-competitive; will benefit consumers with
expanded price, service, and quality options; and are in the public interest.
The two proposals, however, should be considered and decided in separate
proceedings, consistent with the Depart-ment's longstanding practice with
other code-sharing applica-tions even in common geographic regions.
Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com
American Airlines, Inc. et al., ALM Antillean Airlines N.V., and BWIA
International Airways Limited Reciprocal Code-Sharing Services Proceeding
OST-97-2159 / Filed March 20, 1997
Answer
of Trans World Airlines
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American and ALM argue that the BWIA and ALM code shares should not be
considered in the same proceeding because the agreements are separate and
independent and because there are different countries involved. ALM seems
to be particularly annoyed at being consolidated with a Category II airline,
as identified by the FAA. However, the Department's consolidation is entirely
reasonable. The Caribbean is a single competitive region, where islands
compete with each other for U.S. tourist dollars. American's strategic
documents may well consider the region as a whole, and documents that may
be relevant to the BWIA agreement may also shed light on American's motivation
with respect to ALM. The issues with respect to both the BWIA and ALM agreements
are essentially identical in that both are relatively small Caribbean carriers
combining with the industry giant. The Department should adhere to its
decision to conduct a consolidated proceeding.
Counsel: TWA and Richard Fahy, 202.457.4764
Consolidated
Answer of United Air Lines
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ALM for its part seeks to distinguish itself from BWIA on the basis of
the differing FAA safety categorizations of the Netherlands Antilles and
Trinidad, BWIA's homeland. Those considerations affect only the timing
of the implementation of the code shares, however, and not their ultimate
competitive impact. ALM's concerns provide no basis for the Department
to bifurcate its investigation. Indeed, such bifurcation would have the
effect of enabling the applicants to understate American's dominance in
the Caribbean by engaging in "divide and rule" tactics to gerrymander
evidence relating to Caribbean market traffic.
Counsel: United and Ginsburg Feldman, Joel Burton, 202.637.9130
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