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OST-98-3713

Statement of the Department of Transportation’s Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 | April 6, 1998

pdficon.gif (87 bytes)STATEMENT OF ENFORCEMENT POLICY REGARDING UNFAIR EXCLUSIONARY CONDUCT

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This notice sets forth a proposed Statement of the Department of Transportation’s Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry. By this notice, the Department is inviting interested persons to comment on the statement. The Department is acting on the basis of informal complaints.

Press Release | Summary Document

By: Rodney Slater


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 | April 10, 1998

pdficon.gif (87 bytes)Comments of Donald Pevsner

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This evil is rightly noted by the Department as the practice of the seven largest conventional major air carriers to stifle new, low-fare competition in their hub cities by matching fares on an often-below-cost basis; throwing capacity into such markets to drive the load-factors of new-entrants below profitable levels; using frequent-flyer plans, gate leases, commission overrides and similar advantages to consummate the gutting of the intruder. After the debacle and withdrawal, of course, comes the dramatic leap in airfares charged by the dominant major air carriers: back to their previously-unconscionable levels on all but a limited category of heavily restricted excursion fares. To have a self-styled "Airline Competition Committee", dominated by three of the most unscrupulous players in this noxious game (American, United and Delta Airlines),justify the status quo on the grounds that any regulation should be the same sort of anathema to the affected consumer as it is to these price-gouging titans is positively Orwellian, immediately bringing to mind the famous "Ministry of Truth" (which, of course, spread lies) from "1984"...though perhaps the "Ministry of Love" (which waged war) is a more appropriate metaphor.


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713


Predatory Guidelines - Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713

pdficon.gif (87 bytes)Comments of Donald D. Dodge - April 17, 1998

pdficon.gif (87 bytes)Comments of Christie A. Powers - April 17, 1998

pdficon.gif (87 bytes)Comments of William Osgood Associates - April 21, 1998

pdficon.gif (87 bytes)Comments of James Loosen - April 21, 1998


Policy Regarding Unfair Exclusionary Conduct

OST-98-3713


Policy Statement on Unfair Exclusionary Practices

OST-98-3713 | April 29, 1998

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Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 | May 8, 1998

pdficon.gif (87 bytes)Emergency Petition of The Air Transport Association of America for Extension of Time

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The Air Transport Association of America petitions the Department of Transportation, under 49 C.F.R. 5.25 (1998), on an emergency basis, to extend by 120 days the time for filing comments to the proposed Statement of the Department of Transportation's Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

Counsel:  ATA and  Dyer Ellis, Warren Dean, 202-944-3000

pdficon.gif (87 bytes)Memorandum from Office of Aviation and International Economics - May 7, 1998

Attachment:  Predatory Behavior-Dominated Hub Route-Actual Data

Remainder of  Six documents consist of "Low-Cost Airline Service Revolution" from April 1996 and all the Fare Reports by Quarter - Domestic Airline Fares Consumer Reports

pdficon.gif (87 bytes)Letter from Shirley Espeland in Support of Policy - May 7, 1998


Predatory - Policy Statement Regading Unfair Exclusionary Practices

OST-98-3713


Policy Statement Regading Unfair Exclusionary Practices

OST-98-3713

pdficon.gif (87 bytes)Comments of World Travel Agency - April 23, 1998


Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 | May 15, 1998

pdficon.gif (87 bytes)Answer of The Air Carrier Association of America in Opposition to Emergency Petition of The Air Transport Association

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It is in the public interest to leave the comment period unchanged and finalize the pro-competition guidelines. It is time to close the "hunting" season.

Counsel:  Edward Faberman

pdficon.gif (87 bytes)Answer of Delta Air Lines in Support of Emergency Petition of Air Transport Association

ATA has made a compelling case for an extension of time. As ATA points out, the Department's Notice did not specifically identify the numerous studies, reports, economic analyses and other data which the Department used to reach its tentative findings and conclusions. The Department needs to identify all of the documents on which it relied and to submit copies of those documents in the docket to all participants in order to provide interested parties a meaningful opportunity to comment on the proposed policy statement).

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-663-8060

pdficon.gif (87 bytes)Comments of Frontier Airlines, Inc. in Opposition to the Emergency Petition of the Air Transport Association for Extension of Time

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Frontier believes that the request would serve no purpose other than to delay the issuance of policies long overdue. Adding 120 days to a 60-day comment period would mean that five months will have passed for the original comment period, then another 30days for rebuttal comments, and then several months more for the Department to evaluate comments-before producing a final policy statement. Meanwhile, competition continues to be threatened, and the major airlines enter into more concentrated alliances.

The major airlines ask for citation to studies indicating they are engaging in predatory conduct. Such literature is abundant. They need only look to the writings of Michael Levine authored before he became Vice President of Northwest Airlines, published more than a decade ago. Levine found "predation attempts have been plentiful: a higher-cost incumbent may lower fares to a level apparently lowver than cost and, on occasion, lower than those introduced by a low-cost new entrant, and then refuse to match increases proposed by the new entrant until the new entrant is financially exhausted or withdraws from the route."

By: Paul Dempsey, VP & Dir. Frontier, 303.871.6260


Policy Statement on Unfair Competitive Practices in the Aviation Industry

OST-98-3713 | May 15, 1998

pdficon.gif (87 bytes)Comments of Various American Airlines Pilots (OST-98-3713-40)

(Editor's Note: The Following is the Full Text of the Form Letter used by American Airlines Pilots)

Dear Mr. Secretary: As an American Airlines pilot, I am writing to you to express my opposition to any effort to reregulate the airline industry.Our pilots and many other unionized airline employees were called upon to make financial sacrifices as the industry struggled to adjust to deregulation. Now the major carriers, including American Airlines, are posting strong financial results. It isn't fair to penalize major carriers for their success by giving an artificial advantage to non-union new-entrant carriers, which have not made the same substantial investments in maintenance and training facilities, quality assurance programs and employee benefits. I urge you to rethink any policy that would tilt the playing field against American Airlines and other major airlines. Otherwise, my fellow employees and I will ultimately pay the price.

pdficon.gif (87 bytes)Comments of City of Syracuse, Dept. of Aviation

We implore the U.S. DOT to continue to pursue this issue with other agencies like the Department of Justice and also the legislative branches of the federal government to resolve this most important issue. If we are able to protect and maintain a competitive market, everyone stands to benefit.


Policy Statement Regarding Unfair Exclusionary Practices - Statement of Enforcement Policy

OST-98-3713 | May 27, 1998

pdficon.gif (87 bytes)Comments of The International Association of Machinists and Aerospace Workers

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The IAM strenuously opposes the DOT's proposed policy because it singles out new entrant carriers for preferential treatment at the expense of established major carriers that employ 110,000 highly skilled IAM members and pay a living wage. The proposed policy is seriously at odds with the agency's statutorily mandated responsibilities to promote the economic stability and viability of the industry as a whole, to encourage fair wages and working conditions, and to ensure the highest standards of safety in air commerce. To the contrary, these ill-conceived proposed regulations threaten to again destabilize the industry, punish carriers that pay industry standard wages and jeopardize the margin of safety.

By:  R. Thomas Buffenbarger, 301-967-4503


Policy Statement on Unfair Exclusionary Practices

OST-98-3713


Policy Statement on Unfair Exclusionary Practices

OST-98-3713


Policy Statement on Unfair Exclusionary Practices

OST-98-3713


Policy Statement on Unfair Exclusionary Practices

OST-98-3713


Policy Statement on Unfair Competitive Practices

OST-98-3713 | Filed June 11, 1998

pdficon.gif (87 bytes)Comments of The Heritage Foundation

Attachment:  "20TH ANNIVERSARY OF AIRLINE DEREGULATION: CAUSE FOR CELEBRATION, NOT RE-REGULATION," The Heritage Foundation Backgrounder, April 22, 1998, Adam D. Thierer.

[Editor's Note: Attachment is a Publication Included in The Heritage Foundation's Public Comments in this Docket.]


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 | June 23, 1998

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By:  NBTA


Policy Statement on Unfair Competitive Practices

OST-98-3713 | (Prior Testimony Entered before Congress)

Charles Hunnicutt

Nancy McFadden

Patrick Murphy


Enforcement Policy Regarding Unfair Exclusionary Conduct

OST 98-3713 | July 1, 1998

pdficon.gif (87 bytes)Comments of Midwest Express Airlines, Inc.

While Midwest Express understands the Department's desire to be proactive in the development of a competition policy, it cannot support the proposed guidelines. This is not to say Midwest Express condones every airline practice justified in the name of deregulation. However, adopting vague guidelines aimed at protecting only one class of air carrier in connection with only one type of allegedly anticompetitive conduct is not sound transportation policy. Midwest Express also views the DOT's guidelines as inconsistent with the principles of airline deregulation.

Counsel:  Bagileo Silverberg, Robert Silverberg, 202.944.3300


Proposed Rules on Unfair Exclusionary Conduct

OST-98-3713 | July 21, 1998

pdficon.gif (87 bytes)Comments of Delta Air Lines

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The proposed policy statement and guidelines are anti-consumer and anticompetitive. They will inevitably discourage price competition and reduce the availability of low fare options for the traveling public throughout the country. The proposal is a misdirected attempt to shield from competition by regulatory fiat a limited class of airlines that should not be artificially protected from the rigors of competition. The guidelines represent bad law and bad policy and should be withdrawn.

Counsel: Shaw Pittman, Robert Cohn, 202.663.8060


Enforcement Policy Regarding Unfair Exclusionary Conduct

OST-98-3713

pdficon.gif (87 bytes)Comments of The Economic Strategy Institute

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Twenty years of deregulation have produced a vibrant, highly competitive industry that has provided consumers with greater choice at price levels -that continue to decline. The fact that some carriers fail or that some routes have few competitors does not provide a basis for a proposal that effectively represents re-regulation of the industry.

Appendix A:  Hub Pricing Analysis

By:  Scott Gibson, Visiting FEllow, 202-289-1288


Policy Statement on Unfair Competitive Practices

OST-98-3713 | July 23, 1998

Editor and Paralegal NoteBecause filings received in this Docket are "Comments" - The Docket Section is not required to post a "Board" copy to the Public.  When filing comments, replies, answers, objections etc.,  please provide extra copies for everyone who anxiously wait for all documents - especially Counsel that does send a paralegal on a daily basis.

If you would like to file any document with Daily Airlines Filings -   send the file as an attachment in your e-mail.  Any format is accepted.   Send to info@airlineinfo.com  Please do Not send a filing by fax because - though equally appreciated - a fax copy does not scan well and renders the OCR process for HTML useless.

Filings that are sent in electronic submission cuts down the time your Editor has to hunt down all those darn footnotes when converting to HTML!!!!!!!  It also allows for Zero mistakes.  Besides, wouldn't it be great to see all the charts in color and with a searchable content?

pdficon.gif (87 bytes)Comments of United Retired Government Employees Local Number One (U.R.G.E.)

By: Donald Phillips, U.R.G.E.


Proposed Statement of Enforcement Policy on Unfair Exclusionary Conduct

OST-98-3713

pdficon.gif (87 bytes)Comments of the Air Transport Association of America - July 23, 1998 (In FAST PDF - Will download and print quickly!)

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By:  ATA and Cleary Gottlieb

pdficon.gif (87 bytes)Comments of Alaska Airlines, Inc. - July 24, 1998

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By: Keith Loveless, Assoc. Gen'l Counsel, Alaska Airlines, 206.431.5102

pdficon.gif (87 bytes)Comments of Allied Pilots Association - July 23, 1998

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By: Captain Richard LaVoy, Pres. APA

pdficon.gif (87 bytes)Comments of American Airlines, Inc. in Opposition to Proposed Statement - July 23, 1998

By: George Nicoud III, Sr. Attorney, American, 817.967.3812

pdficon.gif (87 bytes)Comments of America West Airlines

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Counsel:  America West and Baker Hostetler, Joanne Young, 202-861-1532

pdficon.gif (87 bytes)The American Antitrust Institute's Comments - July 24, 1998

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By: Albert Foer, AAI, 202.362.8704

pdficon.gif (87 bytes)Comments of American Express Travel Related Services Company, Inc. - July 21, 1998

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By: Edward Gilligan, Pres. Corporate Services, AETRSC, 212.640.5395

pdficon.gif (87 bytes)Comments of the American Society of Travel Agents - July 24, 1998

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By: Paul Ruden, Sr. VP Legal and Industry Affairs, ASTA

pdficon.gif (87 bytes)Comments of the Attorneys General of the States of Arkansas, Connecticut, Florida, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New York, North Carolina, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming

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By: Thomas Miller, Iowa Atty. General, 515.281.8414

pdficon.gif (87 bytes)Comments of Continental Airlines - July 24, 1998

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Counsel:  Continental and Crowell Moring, Bruce Keiner, 202-624-2615

pdficon.gif (87 bytes)Comments of Northwest Airlines - July 22, 1998

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By: Elliott Seiden, VP Law and Gov't Affairs, Northwest, 202.842.3193

pdficon.gif (87 bytes)Comments of Norman Mineta - July 24, 1998

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pdficon.gif (87 bytes)Comments of Pro Air

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By: Kevin Stamper and Bradley Toney, Pro Air, 206.623.2000

pdficon.gif (87 bytes)Comments of Spirit Airlines - July 24, 1998

By:  Mark Kahan, 810-779-2700

pdficon.gif (87 bytes)Comments of Sun Country Airlines - July 23, 1998

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By: James Olson, VP Strategic Planning, Sun Country, 612.681.3900

pdficon.gif (87 bytes)Comments of Sun Pacific International

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Counsel:  Sher Blackwell, Mark Atwood

pdficon.gif (87 bytes)Letter Seeking Support from Gerald Greenwald, Chariman and CEO United Airlines, Inc. to James Sabol - July 14, 1998

By: Gerald Greenwald, Chariman and CEO United

pdficon.gif (881 bytes)Comments of United Air Lines - July 24, 1998

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Counsel:  United and Ginsburg Feldman, Joel Burton, 202-637-9130


Policy Statement on Unfair Competitive Practices

OST-98-3713 | July 28, 1998

pdficon.gif (881 bytes)Comments of the Air Line Pilots Association

Counsel:  ALPA, Russell Bailey

pdficon.gif (87 bytes)Comments of the International Air Transport Association

By:  IATA, David O'Connor

pdficon.gif (881 bytes)Comments of Southwest Airlines

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Editor's Note:  Thank you counsel for providing an electronic copy

Counsel:  Southwest, Robert Kneisley

pdficon.gif (87 bytes)Comments of Woodside Travel Trust

It is high time for debate and reflection to end and for the Government to undertake its duty to protect the travelers of this country. The Department of Transportation should immediately finalize the Enforcement Policy and take swift and major action against those carriers engaging in anticompetitive behavior in order to ensure the future of airline competition and reasonably priced airfares for all travelers.

Counsel: Ungaretti Harris, Edward Faberman, 202.778.4460


Policy Statement on Unfair Competitive Practices

OST-98-3713 | July 24, 1998

pdficon.gif (87 bytes)Comments of the Regional Airline Association

By: Walter Coleman, Pres., 202.857.1170

pdficon.gif (87 bytes)Comments of Those in Suppport of "the Olson Family" (Air Carrier Association of America)

Through the pen of Brian's sister, "Susie," we've taken the liberty to tell the real story. If the Air Transport Association really wants to help "Brian" get to Florida, perhaps it, or any of its members or the "independent" groups they fund could take Brian to the next "lobbying" retreat held in Florida.

Counsel: ACA and Friends of "the Olson Family", Michelle Faust, 202.778.4442


Policy Statement on Unfair Exclusionary Practices

OST-98-3713 | July 31, 1998

pdficon.gif (87 bytes)Comments of The Air Carrier Association of America

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Counsel: Edward Faberman, 202.778.4462


Policy Statement on Unfair Exclusionary Practices

OST-98-3713 | August 5, 1998

pdficon.gif (87 bytes)Comments of Baylen Linnekin


Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 | September 2, 1998

pdficon.gif (87 bytes)Re:  Comments of Congressmen William Lipinski and James Oberstar


Proposed Rules Regarding Unfair Exclusionary Conduct

OST-98-3713 | September 8, 1998

pdficon.gif (87 bytes)Notice Extending Comment Period - Posted at 3:20 p.m.

The Department has now decided, on its own initiative, to extend the period for reply comments from September 8, 1998 to September 25, 1998. In an effort to encourage a meaningful dialogue on the issues involved in the policy statement, the Department has conducted meetings with various air carrier parties and several additional meetings are scheduled for the near future. Since our regulations require that a written summary of the meetings be placed in the docket, we have decided to extend the due date for reply comments to more easily accommodate the submission of the written summaries and to give commenters an opportunity to file comments after reviewing the documents.

By:  Charles Hunnicutt

pdficon1.gif (224 bytes)Reply Comments of The Air Transport Association of America

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The comments submitted to DOT both in opposition to and in support of the Rules confirm that the Rules are bad law and bad policy. They are bad policy because the Rules will have profound anticompetitive and anti-consumer effects, and because the Rules are so vague and confusing that attempts to comply will likely lead to less, not more, competition. They are bad law because the scope of the Rules would exceed DOT's authority and because DOT has committed fatal procedural errors in promulgating the Rules.

All Appendices in FastPDF

Counsel:  ATA and Cleary Gottlieb, Mark Leddy, 202-974-1500

pdficon.gif (87 bytes)Reply Comments of American Airlines in Opposition to Proposed Statement

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American reads the proposed Statement as calling for comments only on the proposed Statement. Accordingly, American will not burden this already-burgeoning docket with replies to complaints about other matters. Instead, American limits these reply comments to the issue at hand - should the Department adopt the proposed Statement? For the reasons discussed in American's opening comments and the opening and reply comments of the Air Transport Association (in which American joins), and the reasons that follow, even if the Department had the authority to adopt the proposed pricing and capacity rules, it should not do so.

Counsel:  American, George Nicoud, 817-967-3812

pdficon.gif (87 bytes)Reply Comments of America West Airlines

In its initial comments, America West expressed the view that Departmental action to eliminate system constraints creating direct preferences for the prederegulation major carriers would have a substantial impact on competitive opportunities and provide, greater consumer benefits than a policy designed to provide special pricing protection to a small and select group of "new entrant" carriers. America West also expressed its concern with the pace of change and urged the Department to use its power under Section 41712 as well as its legislative program to increase access to slot constrained airports; to support legislation permitting exemptions from the perimeter rules at both Reagan Washington National Airport and New York's LaGuardia Airport to enable post-deregulation carriers based in the West to have competitive access to these airports from their primary hubs; to enable post-deregulation carriers to have a first right on new common use facilities at airport rates reflecting average airport costs and to obtain better access to existing gates and overnight parking facilities; and to immediately separate CRS booking fee issues from other more complicated CRS issues and move forward quickly with a proposed rule to prevent CRS abuses that benefit CRS owner airlines.

Counsel:  America West and Baker Hostetler, Joanne Young, 202-861-1532

pdficon.gif (87 bytes)Reply Comments of Continental Airlines

The initial comments demonstrate that the proposed enforcement policy is bad for all segments of the aviation industry. First and foremost, the Department's proposal is bad for consumers, who would face higher fares and reduced capacity while losing the economic benefits of hub efficiency. The proposal is bad for competition, which would be artificially constrained; bad for hub airports, which would receive less frequent service than they now receive; bad for small and medium-sized communities, which may lose present or future service; and bad for major airlines, which would lose the opportunity to meet consumer demand. As an airline which has overcome rigors of competition with the Big Three airlines through its managerial know-how, financial investment and customer service to become the fifth largest U.S. carrier, Continental agrees with the Air Transport Association that it would be a "tragic mistake" for the Department to commemorate the 20th anniversary of aviation deregulation by adopting a policy that would undermine the very benefits deregulation has produced.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202-624-2500

pdficon.gif (87 bytes)Reply Comments of Delta Air Lines

The comments also demonstrate that the adverse impacts on low fare competition will go well beyond local city-pairs and will adversely undermine existing competition among network carriers. While preventing major carriers from matching new entrant low fares, traffic and revenue will be diverted from the major carriers, resulting in heavy losses of local traffic necessary to support service from smaller spoke cities. By preventing major carriers from filling seats, the proposed rules will affect the efficiency of network flying and result in a shift of aircraft to markets not served by the new entrant. Such a result may well be beneficial to the new entrant by protecting it from competition, but consumers will be deprived of network service and low-fare options.

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-663-8060

pdficon.gif (87 bytes)Reply Comments of Midwest Express Airlines

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Nothing contained in the voluminous record compiled in this Docket has caused Midwest Express to swerve from its fundamental position that the Department currently has all the legal tools needed to prohibit airline conduct that is adjudged to be either anticompetitive or an unfair practice. The guidelines are totally unnecessary to achieve this purpose. However, recognizing the Department's interest in taking a more active posture in combating unfair or anticompetitive conduct, Midwest Express once again urges the Department to coordinate its efforts with those of the Department of Justice to insure the industry remains healthy by challenging and eliminating conduct that is appropriately determined to be illegal.

Counsel:  Bagileo Silverberg, Robert Silverberg, 202-944-3300

pdficon.gif (87 bytes)Reply Comments of Norman Mineta

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Section 411 gives DOT the authority to act by regulation and/or enforcement against unfair and deceptive practices and unfair methods of competition. That authority includes instances in which the action is taken against a practice which violates anti-trust law; it includes instances in which the action is taken against practices which are simply outside the ambit of anti-trust law (for example, proper notice to passengers of terms and conditions of carriage); and it includes actions taken which are consistent with anti-trust principles, whether or not an anti-trust violation is alleged or has occurred (for example, the CRS rules promulgated by the Department). What Section 411 does not give the Department the authority to do is to take action against a practice which anti-trust law expressly holds to be legal.

pdficon.gif (87 bytes)Reply Comments of Northwest Airlines

The proposed rule would produce adverse consequences much worse than any imaginable disease. Dozens of expert analysts and economists have advised the Department that the proposal would be harmful to competition and to consumers. Even supporters of the Department's proposal admit that there are serious problems with it. The comments, including those of the author and floor leader of the key Civil Aeronautics Board Sunset Act, also demonstrate that the Department does not have the authority to propound an anti-predation policy, such as this one, which conflicts with the antitrust laws.

Counsel:  Northwest, Megan Rae Poldy, 202-842-3193


Proposed Policy Statement Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 | September 8, 1998

pdficon.gif (87 bytes)Reply Comments Submitted by the Attorneys General of Arkansas, Connecticut, Florida, Idaho, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nevada, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming

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These attorneys general support the Department of Transportation's effort to address unfair marketing strategies in the airline industry, including the active enforcement of 41712 with the goal of generating more choice and more competition for the benefit of all air travelers.

pdficon.gif (87 bytes)Comments of The George Washington University

Without using the term monopoly, the guidelines assume a monopoly. There can be neither predatory behavior nor exclusionary behavior outside the realm of a monopoly. First it must be shown that markets can be monopolized. This falls under the concept of the "relevant market." This goes to one of the arguments that needs to be in this debate and that is what is the relevant market and how is it decided.

By: Darryl Jenkins

pdficon.gif (87 bytes)Comments of Pro Air

The Statement will not have an adverse effect on service to small and medium-sized communities. Some dominant carriers claim that the Statement threatens the air service that is provided to small and medium-sized communities. This disingenuous argument ignores the fact that there is such a lack of meaningful competition in the vast majority of these communities that consumers there are paying some of the highest air fares in the country for substandard service. The solution to this problem is to encourage competition by new entrants rather than to further entrench the dominant carriers who have been unwilling in the past to provide reasonable service at a fair price. When a low-fare carrier enters a new small or medium-sized market, the dominant carrier often diverts traffic from the new entrant by temporarily lowering fares and increasing capacity. This almost always results in the route losing its economic viability for the new entrant, and the new service is either reduced or terminated. In the absence of the adoption of the Statement, low-fare carriers will continue to be driven out of these small markets, thereby further entrenching the monopolies of the dominant carriers.

By:  Bradley Toney


Proposed Rule of Unfair Exclusionary Practices

OST-98-3713 August 14, 1998 Senator Charles Robb - Letter to Director of Congressional Relations    

By:  Charles Robb

OST-98-3713 September 10, 1998 Response of AirTran Airways    

By:  Leslie Head


Proposed Rule on Unfair Exclusionary Practices

OST-98-3713 September 14, 1998 pdficon.gif (87 bytes)Comments of The American Antitrust Institute

Today's world of scheduled air carriers, working out of a hub-and-spoke network, is fundamentally different from the world in which Areeda and Turner and others debated about cost-based tests of predation. In this world, the very concept of "a" cost for a particular spoke is a chimera. And when the airlines argue that we already have antitrust laws that deal sufficiently with price predation, on the basis of a cost-based test, they are wrongly implying that the antitrust laws offer a more certain method for coping with air hub predation.

By:  Albert Foer, 202-362-8704


Proposed Rule on Unfair Exclusionary Practices

OST-97-3713 September 14, 1998 pdficon.gif (87 bytes)Re: July 29, 1998 DOT Meeting with American Airlines, Inc.
    Attachment: DOT Proposed Pricing and Capacity Rules
    pdficon.gif (87 bytes)Re: July 17, 1998 DOT Meeting with Business Travel Contractors Corporation
    pdficon.gif (87 bytes)Re: July 28, 1998 DOT Meeting with Continental Airlines, Inc.
    pdficon.gif (87 bytes)Re: July 21, 1998 DOT Meeting with Delta Air Lines, Inc.
    pdficon.gif (87 bytes)Re: July 23, 1998 DOT Meeting with Northwest Airlines, Inc.
    Attachment: Competitor Analysis of Vanguard Airlines

By: [Unsigned DOT Publication]


Policy Statement on Unfair Competitive Practices

OST-98-3713 September 15, 1998 Comments of Ascent Aviation Products
    Comments of New York Department of Transportation

Policy Statement Regarding Unfair Exclusionary Conduct

OST-98-3713 September 24, 1998 Comments of Transportation Trades Department AFL-CIO  
  September 25, 1998 Comments of The Air Transport Association of America  
  September 23, 1998 Comments of Northern Airlines Corporation  
  September 25, 1998 Reply Comments of United Air Lines, Inc.  
  September 25, 1998 Comments of Melvin A. Brenner Associates  
  September 25, 1998

Attachment A: Executive Summary
Attachment B: Debunking the DOT Myths About Domestic Airline Competition
Supporting Exhibits

 
  September 25, 1998 Additional Reply Comments of American Airlines, Inc. in Opposition to Proposed Statement  
  September 25, 1998 Reply of Spirit Airlines, Inc.  
   

Appendix A:  Public Policy to Deter Exclusionary Practices in the Airline Industry
Fig A-1:  NW Airlines Average Fare - Detroit/Boston
Fig A-2:  NW Airlines & Spirit Airlines Total Seats Offered - Detroit/Boston
Fig B-1:  NW Airlines & US Airways Average Fare - Detroit/Boston
Fig B-2:  NW, US & Spirit Airlines Total Seats - Detroit/Boston
Fig B-3:  NW, US & Spirit Airlines O&D Passengers - Detroit/Boston
Fig C-1:  United Airlines Average Fare - Denver/Tucson
Fig C-2:  UA & Frontier Airlines Total Seats - Denver/Tucson
Appendix  A Simple Model of Competitive Response
Resume:  Jeffrey H. Rohlfs
Resume:  John Haring
Appendix B:  Load Factor Selected Startup Carriers 1996

 
  September 25, 1998 Reply of Sun Pacific  

Unfair Exclusionary Practices

OST-98-3713 September 30, 1998 pdficon.gif (87 bytes)Errata Statement of Spirit Airlines, Inc.  

Spirit Airlines, Inc. hereby submits this errata statement to correct clerical errors contained in its September 25, 1998 Reply and in the report attached as Appendix A to the Reply.

Counsel:  Mark Kahan, 810.779.2700

OST-98-3713 September 21, 1998 pdficon.gif (87 bytes)Business Travel Coalition  
    Service List  

In our view, it seems appropriate to direct the Policy toward the most extreme responses to new entry where, for example, an incumbent airline loses millions of dollars by offering tens of thousands of seats at or below the ennui entrant's fare level.


Unfair Exclusionary Practices

OST-98-3713 September 29, 1998 pdficon.gif (87 bytes)Reply Comments in Support by Air Carrier Association of America Unfair Exclusionary Conduct document.gif (123 bytes)HTML

The complaints raised by the ATA parties are without merit. The problem the ATA parties have with the guidelines is neither its purported vagueness nor "re-regulating" effect. The ATA parties are not concerned with whether the guidelines are more general or more specific; their sole concern is warding off any threat to their market dominance. Thus, they continue to make inflammatory and incongruous arguments, hoping that one may stick whether or not it is for the good of the American public.

Counsel:  Edward Farberman, 202.778.4462


Unfair Exclusionary Practices

OST-98-3713 September 28. 1998 pdficon.gif (87 bytes)Comments of Alfred Khan

Computer Reservation Systems / Unfair Exclusionary Conduct

OST-97-2881
OST-98-3713
October 19, 1998 pdficon.gif (87 bytes)Minutes between Department Officials and Staff
Members and the Air Carrier Association et al

Charles Hunnicutt, the Department's Assistant Secretary for Aviation and International Affairs, and Patrick Murphy, the Deputy Assistant Secretary, told the group that the Department is working on significantly improving its system for collecting and publishing fare and traffic data and hopes to finish this project within two years. The transition will enable the Department to publish real-time data from computer reservations systems rather than the ten-percent sample that it currently publishes a year after the fact. As in all other meetings with interested parties, Mr. Hunnicutt invited those present to file reply comments stating their views and providing supporting evidence and analysis. He acknowledged that major carriers' pricing and capacity strategies are not the only challenge faced by new-entrant carriers and characterized the proposed policy as the Department's first step in addressing problems with competition.

By:  Charles Hunnicutt


Unfair Exclusionary Practices

OST-98-3713 November 9, 1998 pdficon.gif (87 bytes)Comments of The Savannah Airport Commision Policy Statement on Unfair Exclusionary Practices

By:  Patrick Graham, Executive Director, 912-964-0514, savaptcomm@aol.com


Unfair Exclusionary Practices

OST-98-3713 November 18, 1998 pdficon.gif (881 bytes)David M. Patterson - Comment
    pdficon.gif (881 bytes)George A. Compton - Comment
    pdficon.gif (881 bytes)Wilcox Travel Cruise & Company - Comment
    pdficon.gif (881 bytes)Various Parties (3) - Comment(s)
    pdficon.gif (881 bytes)R. A. Politte - Comment
    pdficon.gif (881 bytes)Various Parties (10) - Comment(s)
    pdficon.gif (881 bytes)Various Parties (14) - Comment(s)
    pdficon.gif (881 bytes)Various Parties (3) - Comment(s)
    pdficon.gif (881 bytes)Various Parties (3) - Comment(s)

Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 November 23, 1998 pdficon.gif (881 bytes)US Airways - Meeting Summary re Proposed Airline Competition Policy Statement

Enforcement Policy Regarding Unfair Exclusionary Conduct in the Air Transportation Industry

OST-98-3713 December 11, 1998 pdficon1.gif (224 bytes)Motion for Leave to File an Otherwise Unauthorized Document and Surreply of The Air Transport Association of America Enforcement Policy Regarding Unfair Exclusionary Conduct
    pdficon1.gif (224 bytes)Appendix A:   Surreply of Janusz Ordover and Robert Willig  
    pdficon1.gif (224 bytes)Appendix B:   Surreply Comments of Daniel Kasper  

Counsel:  ATA and Cleary Gottlieb, Mark Leddy, 202-974-1500

OST-98-3713 December 11, 1998 pdficon.gif (87 bytes)Motion of Northwest Airlines for Leave to File Surreply Comments and Surreply Comments of Northwest Airlines Enforcement Policy Regarding Unfair Exclusionary Conduct
    Appendix A:  Resolving the Debate: Comments of the Responses to DOT's Proposed Enforcement Policy by Dr. Laura D'Andrea Tyson  

Several commenters, including the Department, failed to submit their comments within the prescribed time limits. Dr. Kahn submitted his comments in an untimely manner. In those comments, he made a number of new arguments, some of which were directed at Northwest specifically. Northwest addresses Dr. Kahn's new arguments in its surreply.

The Department also filed documents after the close of the comment period, supplying its summary of its meeting with the Air Carrier Association on October 19, almost a month after the reply comment period closed, over a month after it supplied the, summaries of all the other meetings it had with airlines, and almost two months after the meeting itself. Several arguments were raised in that meeting for the first time. A more timely submission by the Department would have allowed Northwest to reply to those arguments during the reply period; because it was filed after the reply period was closed, Northwest is forced to submit this surreply out-oftime.

Counsel:  Northwest, Megan Rae Poldy, 202-842-3193


Policy Statement Regarding Unfair Exclusionary Practices - Statement of Enforcement Policy
Regarding Unfair Exclusionary Conduct

OST-98-3713 September 17, 1998 pdficon.gif (87 bytes)Southwest Airlines - Department Meeting with Southwest Airlines on September 17, 1998  

Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 January 7, 1999 pdficon1.gif (224 bytes)Additional Reply Comments of The Air Carrier Association of America Unfair Exclusionary Conduct
    Attachment:   Wall St. Journal Cartoon  

The ATA would have the Department of Transportation believe that if the Proposed Policy is issued, it will undermine the free market and Congressional intent. This position is flawed. First, it assumes that the current state of the industry reflects a free market. When an oligopoly dominates the domestic market and resorts to predatory practices to further augment that control, the idea that a "free market" exists is but wishful thinking. Moreover, a free market cannot exist when major airports are closed to new competition. Second, Congress gave both the Department of Justice and the Department of Transportation authority to address anti-competitive behavior. Although the ATA may wish it were not so, Congress did not make the Department of Justice the sole enforcement body of competitive issues affecting the aviation industry. This is another plain fact -- codified as 49 USC 41712 -- which the ATA continues to ignore. The ATA concludes its document with, "DOT should leave well enough alone." Predators and monopolists like to be left alone. Except, however, when it comes to international competition. Then, these same carriers quickly become proponents of government intervention. The attached cartoon from the January 5, 1999 Wall Street Journal best summarizes the position of the ATA and its members on airline competition.

Counsel:  ACA, Edward Faberman


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 January 29, 1999
Docketed February 2, 1999
pdficon.gif (87 bytes)The Reason Foundation - Policy Study on Airline Policy Issues

"Airline Deregulation - The Unfinished Revolution"

Ufair Exclusionary Practices

By:  Reason Foundation, Robert Poole, President, Los Angeles, CA


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 September 7, 1998
Docekted February 17, 1999
pdficon.gif (87 bytes)Meeting Summary of September 7, 1998 with United Airlines Policy Statement Regarding Unfair Exclusionary Practices - Statement of Enforcement Policy Regarding Unfair
Exclusionary Conduct

United believes that the Department and the industry have two different versions of the future. The Department’s public statements indicate a belief that the industry is moving toward being dominated by a few big airlines. The industry, on the other hand, sees the large airlines as struggling for success and having a shrinking market share, unlike airlines like Southwest. Southwest has had a much higher growth rate than the overall industry. Southwest is the largest monopolist today - it has more monopoly markets than the big six airlines combined.  The dialogue has not worked because the Department and the industry interpret existing facts so differently. United thinks there have been a number of industry efforts to achieve a dialogue that have not been successful.

By:  DOT


Policy Statement Regarding Unfair Exclusionary Practices

OST-98-3713 January 30, 2001
*Originally Released on 1/16/01 as Part of Competition Policy Documents
Administration's Report on the Findings and Conclusions of their Investigation of Unfair Exclusionary Conduct in the Air Transportation Industry Policy Statement Regarding Unfair Exclusionary Practices - Statement of Enforcement Policy Regarding Unfair Exclusionary Conduct

By:  Randall Bennett


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