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American Airlines, Inc. and British Airways PLC; United Air Lines, Inc. and British Midland Airways Limited, Austrian Airlines Osterreichische Luftverkehrs AG, Deutcshe Lufthansa, A.G., and Scandinavian Airlines System;  and U.S.- U.K. Alliance Case

We find that the consolidation of the AA/BA and United/bmi cases will improve our ability to analyze and correctly decide the issues presented in each case and will not delay our decision on either alliance proposal. Our ruling on the consolidation motion is thus consistent with our authority under 49 U.S.C. § 46102 to "conduct proceedings in a way conducive to justice and the proper dispatch of business." Our procedural rules state that we may consolidate proceedings when that "will be conducive to the proper dispatch of [the Department's] business and to the ends of justice and will not unduly delay the proceedings.

The AA/BA and United/bmi applications present major common issues, since our decision on each proposal will require us to consider the current state of competition in U.S.-London markets and the impact of each alliance on competition in those markets. Those issues according to several parties will require us to consider the ability of other U.S. airlines to enter Heathrow and to expand service there. As Northwest has pointed out, moreover, AA/BA and United/bmi believe that the potential implementation of the other alliance proposal is relevant to our consideration of their own proposal. AA/BA contend that the existence of the United/bmi alliance is one factor showing that their own alliance will not reduce competition. United/bmi contend, on the other hand, that their alliance is necessary for creating a competitive counterweight to the alliance between AA and BA.

We therefore agree with Northwest, Continental, Delta, and Virgin Atlantic that the issues involved overlap to the degree that simultaneous consideration is warranted; still more important, the resolution of each pair of proceedings is likely to affect the outcome of the other. Consolidation will avoid duplication of resources both for the Department and for the parties, and will permit us to consider the merits and issues together and reach a single, comprehensive decision. Consolidation will allow parties and the Department to address the common issues involved more efficiently and avoid the need otherwise to cross-reference evidence and issues being considered on separate procedural tracks. In addition, consolidation should result in speedier disposition of the various applications than would have been possible on separate procedural tracks.

Consolidating the cases will thus cause no delay in our decision on either alliance proposal. If we were not consolidating the cases, we would still consider them simultaneously. United and its partners themselves, even as they oppose consolidation, urge us "to proceed to a consideration of both alliance applications on an expedited basis." Our decision here permits us to do just that. Their concern that "the American/BA alliance raises far more controversial competition issues than does the United/bmi application" is thus not determinative-neither case will be delayed, and both should ultimately be further expedited.

We disagree, however, that we must immediately direct American and BA to make public certain material already in the confidential portion of the record. Our foremost concern is that due process be satisfied by the parties having access to this material, and this has been done. Continental has not claimed that it will be unable to present its arguments if the information remains confidential. We do not generally rule on confidentiality motions in a piecemeal fashion, and we see no need to do so here. We will rule on the confidentiality motions by a separate order.

Finally, Continental's request to ensure the availability to European authorities of confidential material in the American/ BA proceeding has been mooted by the joint Applicants' waiver of confidentiality for that purpose. To the degree that, as Northwest argues, the Joint Applicants' waiver is limited, we leave to the European competition authorities the decision as to whether they require additional information. Those authorities have ample power and jurisdiction to seek what data they need; moreover, in contrast to Northwest's view, we have no power to bind those authorities to our confidentiality standards-the confidentiality of material submitted to them is a matter between them and the parties to their proceedings. We therefore dismiss the fourth portion of Continental's motion without reaching the merits.

By:  Read Van de Water

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