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OST-2001-11029


American Airlines, Inc. and British Airways PLC; U.S.- U.K. Alliance Case

OST-2001-10387
OST-2001-10388
OST-2001-11029

Served November 20, 2001 Notice Shortening Answer Period Approval of and Antitrust Immunity for Agreement

On November 19, 2001, Delta Air Lines, Northwest Airlines, and Continental Airlines filed a joint Motion for an Oral Evidentiary Hearing Before an Administrative Law Judge. Under the Department's regulations, answers to the Motion would normally be due within seven days. By this Notice, we are calling for answers to this Motion to be filed by Monday, November 26, 2001, to expedite consideration of the motion.

By:  Read Van de Water



Order 01-11-10
OST-01-10387
OST-01-10388
OST-01-10575

OST-01-10576

OST-01-11029

Issued November 20, 2001
Served November 20, 2001
Order Consolidating Proceedings and Requiring Data Submissions Approval of and Antitrust Immunity for Agreement

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



OST-01-11029 November 21, 2001 Joint Submission of American Airlines and British Airways in Response to Order 01-11-10 and Joint Motion for Extension of Time U.S.- U.K. Alliance
    Attachment:  AA U.S.- Europe Flight Schedules 11/01  
    Service List  

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com and Boros Garofalo, Don Hainbach, 202.822.9070, dhainbach@bgairlaw.com 



OST-01-10575
OST-01-11029
November 21, 2001 Re:  Additional Information of Applicants U.S.- U.K. Alliance

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com , and Silverberg Goldman, Michael Goldman, 202.944.3305, and Squire Sanders, Marshall Sinick, 202.626.6651 

OST-01-10575
OST-01-11029
November 21, 2001 Motion of United Air Lines for Confidential Treatment U.S.- U.K. Alliance
    Attachment:  Index of Confidential Documents  
    Service List  

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com



OST-01-11029 November 23, 2001 Motion of British Airways for Confidential Treatment U.S.- U.K. Alliance Case
    Attachment:  Documents to Be Held Confidential  
    Service List  

Counsel:  British Airways, Paul Jasinski, 713.397.4250



OST-01-11029 November 26, 2001 Answer of Virgin Atlantic Airways Limited in Support of Joint Motion for an Oral Evidentiary Hearing Before an Administrative Law Judge U.S.- U.K. Alliance Case
       Service List     

Counsel:  Virgin Atlantic Airways, Hugh Ford, 44.1293.747.622, hugh.m.ford@fly.virgin.com 


OST-01-10387
OST-01-10388
OST-01-11029
November 26, 2001 Joint Answer of United Air Lines, British Midland, Lauda, Lufthansa and SAS to Joint Motion for an Oral Evidentiary Hearing U.S.- U.K. Alliance Case
       Service List     

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com



OST-01-11029 November 27, 2001 Re:  Letters from 23 U.S. Senators Raising Concerns about Alliance U.S.- U.K. Alliance
    Attachment:  Letters form Senators   
    Service List  

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193


OST-01-10575
OST-01-10576

OST-01-11029
November 27, 2001 Re:  Affidavits for United Air Lines U.S.- U.K. Alliance
    Service List  

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6000, jmanley@wilmer.com



OST-01-11029 November 28, 2001 Further Joint Submission of American Airlines and British Airways  U.S.- U.K. Alliance
    Attachment:  U.S.- U.K. Frequencies for  9/01, 11/01, 7/02  
    Service List  

Attachment A summarizes U.S.-U.K. frequency changes for American, British Airways, and other carriers since September 11, 2001. Attachment A also shows which canceled or suspended frequencies appear to have been restored in schedules for summer 2002 based on current OAG information, as well as information in Annex 2 submissions.

Order 2001-11-10, p. 13 n. 36, also requires the joint applicants to provide "the most recent documents regard-ing... any planned (or current draft) transatlantic schedules to be implemented for each of two years after implementation of the proposed alliance." As the joint applicants stated in their application submitted on August 10, 2001 (OST-2001-10387), and again in a confidential joint response to Order 2001-9-15 on September 28, 2001 (OST-2001-10387 and 10388), the joint applicants have not yet finalized any schedule changes to be made after implementation of the proposed alliance.

However, the joint applicants used best efforts to comply with Order 2001-9-15 by providing preliminary draft schedules for winter 2002 (November 2002 - March 2003) and for summer 2003 (April 2003 - October 2003). See joint response of September 28, 2001, item 5. The joint applicants generally anticipate that transatlantic schedules will be restored to pre-September 11 levels by the time they are able to implement an immunized joint alliance schedule. Accordingly, the joint applicants confirm that they currently do not intend to revise the foregoing preliminary schedules based on the effects of September 11.

Finally, American and British Airways are separately submitting confidential documents responsive to Order 2001-11-10 under a joint motion for confidential treatment pursuant to 14 CFR 302.12.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 November 28, 2001 Joint Motion of American Airlines and British Airways for Confidential Treatment U.S.- U.K. Alliance
    Attachment:  Items to Be Held Confidential  
    Service List  

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 November 28, 2001 Re:  Continental Airlines Served United Air Lines With Confidential Pleadings:  United Withdraws Footnote #1 of Consolidated Reply U.S.- U.K. Alliance

Continental served United's counsel today with the confidential versions of its pleadings submitted on November 2 and 8, 2001, in Dockets OST-01-10387 and OST-01-10388. United withdraws footnote 1, except for the first sentence, of its November 9, 2001 consolidated reply to answers to the American/British Airways application in Docket OST-01-10387.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com and Crowell Moring, Bruce Keiner, 202.624.2500

OST-01-11029 November 28, 2001 Answer of Continental Airlines to Northwest Airlines Motion U.S.- U.K. Alliance

Continental' strongly supports Northwest's November 16 motion to strike the American/British Airways appendices to their November 9 reply since acceptance by the Department would severely prejudice Continental and other interested parties which have been denied any meaningful opportunity to analyze them and respond to the summary and fallacious conclusions in them. The Department's original procedural schedule did not even allow Continental and other interested parties the opportunity to respond to the American/British Airways appendices submitted on November 9, which is apparently the reason American and British Airways have withheld this material since August 10, to the detriment of due process and fairness in this proceeding. As American and British Airways are aware, these appendices include thirty separate analyses and studies raising complex issues and assumptions. The Department must not reward the wanton tactics of American and British Airways to circumvent the requirements of due process by failing to include these appendices in the American/British Airways application submitted to the Department thirteen' weeks earlier. If, despite Northwest's compelling arguments, these appendices are not stricken, minimum due process requires that Continental and other interested parties be given the opportunity, as part of an oral evidentiary hearing, to submit rebuttal exhibits by other experts, cross-examine the authors of the appendices and submit briefs to an Administrative Law Judge who can evaluate the conflicting expert testimony objectively.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500

OST-01-11029 November 28, 2001 Joint Answer of Continental Airlines, Delta Air Lines and Northwest Airlines to Motion of American Airlines and British Airways U.S.- U.K. Alliance

Continental, Delta and Northwest do not object to the joint motion for extension of time submitted by American and British Airways on November 21 so long as the due dates established by Order 2001-11-10 for answers and replies are deferred for at least the same periods as the extension of time requested by American and British Airways and the Applicants submit complete updates in accordance with the Department's regulations in 14 C.F.R. 303.04 on November 28. Thus, answers would be due no sooner than December 17 and replies would be due no sooner than December 24. Extending the due date for the applicants without providing a commensurate extension for other parties would be manifestly unfair.


OST-01-10575
OST-01-11029
November 28, 2001 Re:  Revised Exhibit of United Air Lines U.S.- U.K. Alliance

As stated in the letter dated November 21, 2001 filed in the above referenced proceedings, United Air Lines, Inc. on behalf of United, British Midland Airways Limited, Austrian Airlines, Osterreichische Luftverkehrs AG and Lauda Air Luftfahrt AG, Deutsche Lufthansa AG, and Scandinavian Airlines System  hereby submits revised Exhibits JA-7, -8 and -9, which were submitted in conjunction with their September 5, 2001 joint application for approval of and antitrust immunity for an Alliance Expansion Agreement and an Amended Coordination Agreement. These exhibits provide U.S.-Europe and U.S.-U.K. seat and traffic shares based on OAG and CRS booking data. The updated information contained in these revised exhibits does not materially alter the analysis and conclusions set forth in the joint application.

Counsel:  Wilmer Cutler, Briabinovtiz, 202.663.6960, brabinovitz@wilmer.com 



OST-01-11029 November 30, 2001 Consolidated Joint Reply of Continental, Delta, and Northwest to Answers for an Oral Evidentiary Hearing before an Administrative Law Judge U.S.- U.K. Alliance

For the reasons explained in the Joint Motion, an oral evidentiary hearing is essential to develop, evaluate and resolve the substantial issues of disputed material fact entailed by this extraordinarily complex case. The answers submitted in response to the Joint Motion fail to refute this inevitable conclusion. Neither American/British Airways nor United/bmi dispute that numerous factual issues are highly controverted and that significant discrepancies exist in the documentary evidence. Nor have the alliance applicants offered an explanation of why the Department's reasons for previously determining to hold an oral hearing to consider London Heathrow alliance issues do not also apply to this case. Instead, the alliance proponents have thrown up a few hollow procedural arguments and urged the Department to side-step the vital hearing process in the interest of expedience. Given the extraordinarily high public interest stakes involved, the Department should give this case the full and careful consideration it deserves.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, Delta, Shaw Pittman, Robert Cohn, 202.663.8060, and, Continental, Crowell Moring, Bruce Keiner, 202.624.2500

OST-01-11029 November 30, 2001 Affidavit of Timothy Bye, on Behalf of British Midland U.S.- U.K. Alliance
    Service List  

Counsel:  Squire Sanders, Elizabeth Collins, 202.626.6600, ecollins@ssd.com



OST-01-10575
OST-01-11029
December 3, 2001 Joint Motion of United Air Lines and British Midland Airways for Confidential Treatment U.S.- U.K. Alliance
    Attachment:  Items to Be Held Confidential  
    Service List  

INDEX OF CONFIDENTIAL DOCUMENTS OF UNITED AND bmi

Date

Description

Responds to:

No. of Pages

11/30/2001

Tentative, nonpublic transatlantic schedules of United and bmi for Summer 2002

Order 01-11-10

2

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com, and Squire Sanders, Marshall Sinick, 202.626.6651, msinick@ssd.com 



Order 01-12-5
OST-01-11029
Issued December 4, 2001
Served December 4, 2001
Order on Motions U.S.- U.K. Alliance

We begin by noting that neither the statute nor our rules require oral evidentiary hearings in alliance cases. Moreover, opponents of the motion correctly note that the motion has been filed long after the deadline for such requests under our rules. Nevertheless, because of the complicated procedural history of the case, including the institution of this new, consolidated proceeding, we will address the motion on its merits.

Our rules explicitly provide that we may choose between an oral evidentiary hearing and show-cause procedures when we consider whether to approve and immunize agreements affecting international air transportation. Given the lack of any statutory requirement for a formal hearing, we have the discretion to determine whether oral evidentiary hearing procedures are necessary or appropriate. We have never used formal hearing procedures in such cases. We have concluded that holding an oral evidentiary hearing in this proceeding is unnecessary and that we can properly decide the factual issues without such procedures.

The Joint Movants have accurately noted that oral evidentiary proceedings are appropriate to develop facts in certain circumstances, and have enumerated several significant issues alleged to belong in this category. We disagree, however, that an oral evidentiary hearing is therefore needed in this case. Assuming arguendo the relevance and intricacy of the issues discussed, we note that the importance and even complexity of issues, including factual issues, do not automatically imply that oral evidentiary procedures are necessary. Rather, the question is whether there are material issues of fact whose resolution requires such procedures. We have not been convinced that such issues exist here. We have routinely decided factual issues involving economic and policy questions in other cases of similar complexity without a formal hearing; we believe that similar issues can be resolved here without ALJ hearing procedures. In addition, holding a formal hearing would require a significant amount of time and thereby delay our final decision. We have not made any decision in this case, but we do not wish to see our options limited by external events that would forestall any particular result. As all the parties recognize, and as we have stated earlier in this case, we would like to be able to issue our decision in this case by early next year. A timely decision would enable us to take advantage of this potential opportunity to achieve an open skies agreement with the United Kingdom, if the outcome of our negotiations and our decision on the merits lead to that result.

We are well aware, of course, that our statute and precedent require us to determine whether the alliance satisfies the antitrust test (or, if not, the public benefits and transportation needs test in the statute). We intend to carefully examine these issues, which we believe can be accomplished by using show-cause procedures, and to give every party a fair opportunity to present its evidence and arguments on the issues.

We find it unnecessary to strike the material in question from the record. Northwest may well be correct in arguing that much, if not all, of the material should have been filed as part of the application submitted by American and British Airways. All parties now have, however, additional time to consider these materials and to respond to them, including the question of their substantiation or lack of it. We see no prejudice to opponents in allowing them an opportunity to refute or rebut evidence and arguments, rather than ignoring them. Therefore, in the interests of a complete record and in the absence of prejudice to interested parties, we deny both Northwest motions.

By:  Read Van de Water

OST-01-11029 December 4, 2001 Re:  Northwest Airlines Filing of Statements of Concern of U.S. Officials U.S.- U.K. Alliance
    Attachment:  Statements of Officials Raising Concerns  
    Service List  

We are enclosing statements by the Chairman and Ranking Member of the U.S. Senate Judiciary Subcommittee on Antitrust, Business Rights and Competition, the ranking Democratic Member of the U_ S. House of Representatives Committee on Transportation and Infrastructure, the Governors of Alaska and South Dakota, and the President of the International Brotherhood of Teamsters raising serious concerns about the proposed alliance between American Airlines and British Airways. We request that the enclosed statements be placed in the record.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 4, 2001 Joint Motion for Leave to File an Otherwise Unauthorized Document and Joint Reply of American Airlines and British Airways U.S.- U.K. Alliance
    Service List  

The opponents' request for six additional calendar days to prepare their second round of answers reflects a comprehensive coordinated campaign to defeat the American/British Airways alliance by stalling any decision on the merits until after the U.S. and U.K. lose their ability to negotiate an open skies agreement. The request is without merit and should be denied.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com, British Airways, Paul Jasinski, 718.397.4250



OST-01-10575
OST-01-10576

OST-01-11029
December 10, 2001 Re:  Affidavits for United Air Lines U.S.- U.K. Alliance
    Service List  

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6000, jmanley@wilmer.com



OST-01-11029 December 11, 2001 Re:  Nancy Van Duyne Filing Newspaper Articles about U.S.- U.K. Alliance U.S.- U.K. Alliance

I know that you swear that all input is being considered and I realize this article never directly quotes the DOT but it is stuff like this that confirms for us that you all have signaled your approval. NVD, your neighborly clipping service.

From London's "Mail on Sunday." - BA clinches its American tie-up - Graeme Beaton, Mail on Sunday 9 December 2001

By:  Nancy Van Duyne, nvandu@coair.com 



OST-01-11029 December 14, 2001 Emergency Joint Motion of Continental/Delta/Northwest for The Production of Documents

Microsoft Word File

U.S.- U.K. Alliance

If it is true that British Airways may withdraw all of its short-haul services (including those at Heathrow), that completely undermines the Joint Applicants' purported justification for establishing a transatlantic alliance. It confirms what the Petitioners have been saying all along - that the alliance's real strategic purpose is not to provide network connectivity for U.S.-Europe transfer passengers, but rather to focus almost exclusively on capturing long-haul U.S.-London Heathrow gateway passengers. A decision by British Airways to withdraw all of its short-haul intra-European services would effectively eliminate the alleged network benefits of the American/British Airways alliance since there would be few, if any, connections to European cities beyond London.

Counsel:  Northwest, Megan Rae Rosia, 202-8422-3193 / Continental and Crowell Moring, Bruce Keiner, 202-624-2500 / Delta and Shaw Pittman, Robert Cohn, 202-663-8060

OST-01-11029 December 14, 2001 Answer of US Airways U.S.- U.K. Alliance
    Service List  

If and when the U.S. Government reaches a new, liberalized bilateral agreement with the British, and before it grants antitrust immunity to the AA-BA and/or UA-BD alliances, it is incumbent upon the U.S. Government to ensure that US Airways has competitive access from each of its domestic network gateways to Heathrow. Such access necessarily entails commercially viable slots and competitive groundside and vital support facilities, including gates, club rooms, and ticket counters. Since US Airways has no alliance partner with which to trade slots and share airport facilities, it is in the unique position of having to rely solely on the U.S. Government to obtain from the U.K. competitive access to Heathrow. And, split operations between Heathrow and Gatwick are not a commercially viable option for US Airways, a small, new entrant carrier.

Counsel:  O'Melveny Myers, Joel Burton, 202.383.5300 



OST-01-11029 December 17, 2001 Joint Answer of American Airlines and British Airways U.S.- U.K. Alliance Case
    Attachments JA 1-7Market Share  
    Attachments JA 8-12:  Cities Served   
    Service List  
OST-01-11029 December 17, 2001 Joint Motion of American Airlines and British Airways for Confidential Treatment U.S.- U.K. Alliance Case
    Service List  

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com, British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 December 17, 2001 Answer of British Airways to Emergency Joint Motion for the Production of Documents U.S.- U.K. Alliance Case
    Service List  

Counsel:  British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 December 17, 2001 Answer and Supplemental Comments of Continental Airlines

Microsoft Word File

U.S.- U.K. Alliance Case
OST-01-11029 December 17, 2001 Motion of Continental Airlines for Confidential Treatment U.S.- U.K. Alliance Case

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500

OST-01-11029 December 17, 2001 Statement of Daniel Kasper U.S.- U.K. Alliance Case
    Service List  

By:  Daniel Kasper, 617.252.9994

OST-01-10387
OST-01-10575
OST-01-11029
December 17, 2001 Answer of Dallas/Fort Worth International Airport U.S.- U.K. Alliance Case
    Service List  

Dallas/Fort Worth has already strongly expressed in previous pleadings its position that the American/BA alliance should be approved with antitrust immunity because coordinated and immunized American/BA services will enable DFW to receive nonstop service to Heathrow Airport in London for the first time. Dallas/Fort Worth also stated that no useful purpose would be served by "carving out" the DFW-London route from antitrust immunity. Finally, DFW insisted that if the Department decides to condition its approval of the American/BA Alliance on a "slot surrender" remedy, the DFW-London route should be treated the same as other U.S.-London "overlap" routes losing a nonstop competitor as a result of the American/BA alliance. Dallas/Fort Worth takes no position as to whether the United/bmi alliance should be approved because these alliance carriers have not indicated any intention to provide nonstop service between DFW and London. We, nevertheless, believe that approval of the United/bmi alliance will enhance overall competition between the U.S. and U.K. and provide increased competition for the American/BA Alliance specifically.

Counsel:  Silverberg Goldman, Michael Goldman, 202.944.3305 

OST-01-11029 December 17, 2001 Answer of Delta Air Lines

Microsoft Word File

U.S.- U.K. Alliance Case
    Exhibits:  Oneworld and Star Alliance  

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

OST-01-11029 December 17, 2001 Answer of The Department of Justice

Scanned Copy

U.S.- U.K. Alliance Case
    Exhibits in Native PDF Format  
    Appendix A (Scanned Copy)  
    Appendix B (Scanned Copy)  
    Exhibits 1-5 (Scanned Copy)  
    Exhibits 6-8 (Scanned Copy)  
    Service List  
OST-01-11029 December 17, 2001 Motion of The Department of Justice for Confidential Treatment U.S.- U.K. Alliance Case

By:  Department of Justice, Robert Young

OST-01-11029 December 17, 2001 Answer of The City of Houston and Greater Houston Partnership U.S.- U.K. Alliance Case
    Service List  

Counsel:  Leftwich Douglas, Rebecca Taylor, 202.434.9100

OST-01-11029 December 17, 2001 Supplemental Answer of Northwest Airlines U.S.- U.K. Alliance Case
    AttachmentStatement of Robert Reynolds  
    Attachment ACV of Robert Reynolds  
    Attachment B w/ Tables: Fare Increase Calculations  
    Attachment CEvidence on Switching  
    Service List  
OST-01-11029 December 17, 2001 Motion of Northwest Airlines for Confidential Treatment U.S.- U.K. Alliance Case
    Service List  

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 17, 2001 Answer of Virgin Atlantic Airways U.S.- U.K. Alliance Case
    Appendix:  Reply to Statement of Alfred Kahn  
    Service List  

By:  Virgin Atlantic, Hugh Ford, 44.1293.747.622, hugh.m.ford@fly.virgin.com



OST-01-11029 December 18, 2001 Answer of Virgin Atlantic Airways in Support of Emergency Joint Motion for Production of Documents U.S.- U.K. Alliance Case
    Service List  

The Joint Motion accurately describes recent press reports indicating that British Airways has under consideration a major restructuring of its business, including the possibility that all short haul flying presently maintained at London's Heathrow Airport will be discontinued. These press reports also portend the possibility of the total elimination of all British Airways' operations at Gatwick Airport. Virgin Atlantic agrees with the movants that these developments, if true, call into question two of the justifications the Joint Applicants have proffered in support of approval of their application, namely that an American/BA alliance would create new interline connecting opportunities of value to US-Europe passengers, and that Gatwick is a good substitute for Heathrow. For the reasons stated in the Joint Motion, any new studies calling for significant restructuring in these areas must be supplied to insure that the evidentiary record is complete and accurate.

By:  Virgin Atlantic, Hugh Ford, 44.1293.747.622, hugh.m.ford@fly.virgin.com



OST-01-11029 December 18, 2001 Affidavit of Richard Anderson, CEO of Northwest Airlines U.S.- U.K. Alliance Case
    Service List  

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 19, 2001 Joint Statement of Charles Hunicutt and Bradley Mims U.S.- U.K. Alliance Case
    Service List  

We believe that while there are some factual differences between the American/British Airways immunity application in 1997-1999, and the present applications, the underlying situation of infrastructure constraints and potential market power concentration remain unchanged. In fact, the fact pattern presented today presents even more concern with regard to market power concentration in the relevant market(s) Immunized alliances require market conditions that protect consumers and competition. It is our position that this protection can only be provided where there are no significant restrictions on the ability of other airlines to enter the markets served by the alliance partners and to respond freely to their initiatives. We certainly have made many statements regarding the recognition of the potential benefits in the international context of such alliances, particularly end-to-end combinations. However, we have equally expressed concern regarding potential issues of competition policy relative to the alliances.

In particular, as was the case in 1997-99, we are concerned that the proposed alliances here are likely to harm competition and lead to higher fares for consumers in numerous U.S.-London and U.S.-Heathrow city-pair markets. Heathrow is a distinct market, separate from service to Gatwick Airport. Heathrow is strongly preferred by business travelers. The fact that service from U.S. points to Heathrow commands a substantial revenue premium over service from U.S. points to Gatwick is confirmation that service to Heathrow must be considered a distinct market.

The proposed American/ British Airways alliance is unlike any alliance the Department of Transportation has ever approved. That was also the case with the original American/British Airways proposal. First, of course, no other alliance has ever involved the two principal competitors in the largest U. S. international aviation market. Second, the alliance is not structured to provide primarily new end-to-end network service benefits of the sort that have justified the approval of other alliances As is discussed in pleadings filed by other parties, the proposed alliance appears designed to consolidate the positions of American and British Airways in the overlap markets in which they are the principal competitors and to facilitate the reduction of capacity, at least by British Airways, in the overlap Heathrow markets.

Counsel:  Robins Kaplan, Charles Hunnucutt, 202.775.0725 and Ferguson Group, Bradley Mims, 202.331.8500



OST-01-11029 December 20, 2001 Notice of Communication U.S.- U.K. Alliance Case

Notice of Michael Jackson, Deputy Secretary of the Department of Transportation, reporting the oral communication on November 15, 2001, providing the latest procedural schedule for the American Airlines/British Airways' application for antitrust immunity, to Richard Anderson, CEO of Northwest Airlines.

By:  Michael Jackson

OST-01-11029 December 20, 2001 Notice of Communication U.S.- U.K. Alliance Case

Notice of Read Van de Water, Assistant Secretary for Aviation and International Affairs, reporting the oral communication on November 30, 2001, providing the latest procedural schedule for the American Airlines/British Airways' application for antitrust immunity, to Clint Highfill of Senator Tom Daschle's office.

By:  Read Van de Water 

OST-01-11029 December 20, 2001 Confidentiality Affidavits of Elliott Seiden, Virgin Atlantic Airways U.S.- U.K. Alliance Case
    Service List  

Counsel:  Garfinkle Wang, Elliott Seiden, 703.533.0900

OST-01-11029 December 20, 2001 Emergency Joint Motion of American Airlines and British Airways to Limit Access to Confidential Material U.S.- U.K. Alliance Case
    Service List  

American Airlines, Inc. and British Airways Plc hereby jointly move for immediate issuance of an order denying Richard H. Anderson, CEO of Northwest Airlines, Inc. access to all confidential materials filed by American and British Airways in Dockets 10387 and 11029 pursuant to 14 CFR 302.12. As chief executive officer, Mr. Anderson is the foremost commercial decision maker at Northwest, and cannot realistically function as "counsel" on behalf of his company (or himself) in this proceeding. While American and British Airways have been tolerant of the 26 affidavits filed thus far by Northwest representatives, including its president, to now add the chief executive officer at this late date would make a mockery of the affidavit process.

The confidential materials submitted by American and British Airways include each company's most competitively sensitive strategic planning documents. No matter how well intentioned, Mr. Anderson will not be able to ignore the confidential knowledge he obtains when making strategic decisions for Northwest, which competes directly with both American and British Airways.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com, and British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 December 20, 2001 Reply of Delta Air Lines

Microsoft Word File

U.S.- U.K. Alliance Case

There is serious question as to whether any remedies could be imposed sufficient to overcome the adverse competitive impacts of the alliance. However, if the Department is able to obtain such remedies and grant approval to the alliance in connection with an open skies agreement, the DOJ correctly identified timing as a critical issue, and urged the Department to "limit immunity ... until other carriers are able to actually begin operating at LHR to offset that harm." DOJ at 6. Delta agrees with the DOJ that timing is critical, and that Delta and other new entrants should have full competitive access to Heathrow on Day One the alliance is allowed to conduct any code-sharing or joint immunized activities at Heathrow. Otherwise, the alliance will be able to advance its already enormous lead in locking up key frequent business travelers and corporate customers. Even without immunity, the alliance has been able to capture increased traffic by pooling frequent flyer programs and through other cooperative efforts.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

OST-01-11029 December 20, 2001 Letter to Secretary Mineta from Houston's Congressional Delegation U.S.- U.K. Alliance Case

Counsel:  Crowell Moring, Lorraine Halloway, 202.624.2500



OST-01-11029 December 21, 2001 Joint Reply of American Airlines and British Airways U.S.- U.K. Alliance
    Exhibit JA-R1:  Total BA Destinations and Passengers at Heathrow  
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DOJ's aggressive analysis, if nothing else, totally undermines the extravagant regulatory demands of competitors. DOJ embarked on a decidedly one-sided piece of advocacy designed to draw only negative inferences from the facts, and to present only arguments that portray negatively the proposed alliance. DOJ also chose simply to ignore many of the arguments and much of the factual record put forward by American and BA in support of their alliance. The stridency of I)OJ's arguments is apparent, as is the lack of justification in this record for DOD's proposed nine slot remedy. The nine slot remedy proposed by DOJ is based on unsupportable evaluations of the London routes to New York and Boston.

Counsel:  American Carl Nelson, 202.496.5647, carl.nelson@aa.com 

OST-01-11029 December 21, 2001 Joint Motion of American Airlines and British Airways for Confidential Treatment U.S.- U.K. Alliance
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Counsel:  American Carl Nelson, 202.496.5647, carl.nelson@aa.com 

OST-01-11029 December 21, 2001 Re:  Letters of U.S. Senators and Representatives in Support of Application filed by American Airlines and British Airways U.S.- U.K. Alliance
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Counsel:  American Carl Nelson, 202.496.5647, carl.nelson@aa.com 

OST-01-11029 December 21, 2001 Reply of the Cleveland Parties U.S.- U.K. Alliance
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Simply put, combining the only two U.S. carriers currently holding slots at London Heathrow with the two largest U.K. slot holders at Heathrow is a "dangerous combination", massively increasing concentration at London Heathrow and preventing new entrants from obtaining the slots and facilities necessary to institute new, competitive U.S.-London service. Even taken alone, without United/bmi, a combined American/British Airways would control over 60% of the U.S.-Heathrow market in terms of frequency shares yet, taken together, American/British Airways and United/bmi would trul dominate London Heathrow with 84% of U.S.-London Heathrow frequencies and a frequency share of over 80% in 9 of 11 nonstop London Heathrow markets. Together, the proposed American/British Airways and United/bmi duopoly would create a level of concentration at London airports greater than a merger between the four largest U.S. carriers or combining the top 11 European airlines. The Cleveland Parties and other parties know from experience, however, that London airports are not open for new service, and it is astounding that the U.S. could consider pursuing a U.S.-U.K. "open skies" agreement while real access at London Heathrow and London Gatwick is not possible. As Continental has noted, since U.S. airlines can already provide unlimited service to every other point in the U.K, the only benefit of "open skies" between the U.S. and U.K.

By:  Mayor Michael White, and Greater Cleveland Growth Associates, Dennis Eckert

OST-01-11029 December 21, 2001 Reply of Continental Airlines U.S.- U.K. Alliance

Continental continues to believe that the anticompetitive impact of an American/British Airways alliance coupled with a Unitedlbmi alliance at London Heathrow would be so harmful that the applicants' requests for immunity from the antitrust laws ;should be denied. Justice has correctly identified many of the harms which would flow from approval of an American/British Airways alliance and developed remedies which could ameliorate, but not eliminate, those harms. Nonetheless, even if the remedies proposed by Justice and additional remedies proposed by Continental and others were imposed, the American/British Airways alliance would continue to harm competition, as Justice itself has recognized. Under these circumstances, Continental believes that outright disapproval is the only sure means of maintaining competition on U.S.-London routes and requiring the applicant carriers to find less -anticompetitive alternatives to meet their legitimate objectives.

Counsel:  Crowell Morning, Bruce Keiner, 202.264.2500

Delta Reply - December 20th

OST-01-11029 December 21, 2001 Reply of Federal Express U.S.- U.K. Alliance
    Exhibit:  Statement of Frederick Smith CEO of FedEx before Senate Judiciary Committee  
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FedEx is particularly concerned that none of the parties, including the Department of Justice, have fully addressed the immensely valuable benefits of open skies to U.S. shippers and exporters. An open skies agreement will reduce costs and increase flexibility for U.S. shippers by removing regulatory impediments to efficient air express/cargo routings. As previously discussed, all-cargo operators require open fifth-freedom rights, broad route flexibility, and Continental's answer for example is misleading, in that it states that "[t]he only benefit" will be opening access to Heathrow and Gatwick.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-01-11029 December 21, 2001 Reply of the New Jersey Parties U.S.- U.K. Alliance
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The proposed merger of United and bmi, both major slotholders at London Heathrow airport, would compound these anticompetitive effects. The Connecticut/New Jersey/New York region served by Newark International Airport is the largest travel market in the U.S. for domestic and international travel, and the current restrictions on slots and facilities at London's Heathrow and Gatwick airports make it impossible for other airlines serving Newark International Airport to compete effectively ,with an immunized American/British Airways alliance. The proposed alliances should be rejected because they will decrease service options and increase prices for U.S.U.K. air transportation for New Jersey travelers and businesses unless Newark International Airport's hub carrier, Continental, is able to secure sufficient competitive slots and acilities at London Heathrow to offer meaningful competition for the combined American/British Airways and United/bmi operations.

By:  Regional Business Partnership, Chip Hallock

OST-01-11029 December 21, 2001 Supplemental Reply of Northwest Airlines

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U.S.- U.K. Alliance

In Northwest's view, the estimates of new competitive service and associated slots that U.S. carriers participating in this proceeding have indicated they need are the benchmark for satisfying this requirement. Without repeating the detailed analysis supporting those estimates, suffice to say that at least 448 slots (reduced to account for those to be used by non-Heathrow U.S. carriers proposing service at Boston or New York) are required by U.S. carriers to accommodate competitive service.. Anything short of this would ignore good faith explanations of new service requirements and would fail to meet the public interest standard governing this proceeding.

It is fair to say that the U.S. airline industry is at a turning point. Only by opening markets and preserving competitive opportunities will the chances of returning to pre-September 11 conditions be optimized. Without the remedies proposed by Northwest and the Department of Justice, those opportunities will be lost, millions of consumers will suffer the consequences of irrevocably lost competition, and Open Skies will be no more than a tombstone for the resting place of competitive air service between the U.S. and London.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 21, 2001 Answer of Northwest to AA/BA Motion to Restrict Access to John Anderson

Microsoft Word File

U.S.- U.K. Alliance

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 21, 2001 Re:  Letter in Opposition Filed by Northwest Airlines U.S.- U.K. Alliance
    Attachments:  Letters  
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Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com 

OST-01-11029 December 21, 2001 Answer of United Air Lines U.S.- U.K. Alliance

United strongly endorses American's and BA's joint motion. Allowing key executives such as Mr. Anderson to review sensitive and confidential commercial information competitors are required to produce in Department proceedings is clearly highly anti-competitive. Over the years, the Department has developed its affidavit procedures for the handling of documents filed in Department proceedings on a confidential basis to balance the due process interests of parties participating in those proceedings with the public interest in maintaining the confidentiality of commercially and competitively sensitive information applicants are required to produce. The balance the Department has struck is to allow counsel and outside experts to have access to documents filed on a confidential basis, subject only to the filing of an affidavit agreeing not to disclose information contained in the documents. As American and BA point out in their Motion, those procedures do not contemplate affording access to those documents to key corporate executives responsible for a company's commercial decisionmaking solely due to the fact that the executive fortuitously happens to be a lawyer. As American and BA also point out, the issue here is not Mr. Anderson's (or any other executives') good faith, but the clear potential for anti-competitive effects arising from the fact that a business executive directly responsible for Northwest's most fundamental strategic decisions is gaining access to its competitors' most sensitive planning documents.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6670, brabinovitz@wilmer.com

OST-01-11029 December 21, 2001 Consolidated Joint Reply of United Air Lines, British Midland, Austrian, Lufthansa and SAS U.S.- U.K. Alliance

No party argues, as indeed it cannot, that the United/bmi alliance would reduce competition in any city-pair market. There are simply no markets in which United and bmi compete. The DOJ, the only impartial party filing comments on the alliances, has concluded: We do not oppose including immunity for the UA/bmi transaction as part of an otherwise beneficial trade. Approval of the UA/bmi alliance presents no appreciable harm relative to the status quo because bmi is currently not an actual or potential competitor in U.S.-London markets -it is prohibited by Bermuda II from operating to the U.S. from its LHR base.

Certainly, the DOT must give greater weight to the disinterested position of DOJ than to the self-serving positions of the other parties that have commented on these alliances. The problem before the Department is how to condition the American/BA alliance so as to preserve competition without jeopardizing the ability to conclude an open skies agreement with the U.K. DOJ's comments offer helpful guidelines for such conditions. It is clear that once the necessary conditions have been settled upon, there is no impediment to approval of the expanded United/bmi alliance and implementation of an open skies agreement.

Some parties have suggested that certain of the conditions imposed on the American/BA alliance should also be imposed on the expanded United/bmi alliance. These suggestions relate primarily to the ever-vexing issue of slot divestitures at Heathrow. Because United/bmi are not part of the competitive problem at Heathrow, however, there is absolutely no basis for the Department to impose any slot divestiture conditions on United/bmi. Indeed, since United/bmi are committed to becoming a significant competitor to an immunized American/BA alliance, it would be counterproductive to require United/bmi to contribute any of their limited slot holdings to the solution of the competitive problems caused by the American/BA alliance. United/ bmi have what one party calculates as less than 17% of the commercially viable slots at Heathrow compared to the American/BA Share of nearly 42%. United/ bmi have made clear that they require additional slots in order to grow at Heathrow to compete more effectively with an immunized American/BA alliance. To require United or bmi to divest slots from their much smaller holdings would be fundamentally unfair and completely inconsistent with any rational competition policy.

Finally, at least one party has suggested that antitrust immunity for American/BA be phased into effect so that it does not become fully effective until the carriers receiving divested slots are ready to begin service. DOJ Comments at 54. United and bmi take no position on that phasing proposal except to note that it should have no applicability to the effectiveness of immunity for the expanded United/bmi alliance. bmi is no less a new entrant to U.S.-Heathrow routes than the non-incumbents that are demanding LHR slots through divestitures. bmi and its partners need the same head start as any other new entrant to build an alliance at Heathrow that can compete with a combined American/BA. In these circumstances, United and bmi should be allowed to implement their expanded alliance as soon as that is possible under a U.S./U.K. open skies agreement and without regard to any phasing that may be required for full effectiveness of immunity for American/BA.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com and Silverberg Goldman, Michael Goldman, 202.944.3305, mgoldman@sgbdc.com 

OST-01-11029

December 21, 2001 Reply of US Airways U.S.- U.K. Alliance
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Inasmuch as both alliances now before the Department have vast slot holdings at Heathrow, the Department must require divestitures not only from AABA, but from UA-BD as well. In granting antitrust immunity to AA-BA and UA-BD, the Department would be sponsoring the creation of a duopoly at slot and facilityconstrained Heathrow with each alliance having the ability to coordinate prices and schedules. It would be inexplicable to require only half of the duopoly to divest the slots and facilities necessary to create a competitive market structure under open skies. Rather, UA-BD's large slot holdings must be part of the competitive solution that provides new entrant access to Heathrow.

As a new, liberalized aviation agreement with the U.K. appears inevitable, the Department is now faced with the prospect of having to allocate slots and ensure the provision of facilities for new entrant U.S. carriers to serve Heathrow. To this end, US Airways has clearly demonstrated that it is uniquely positioned to provide effective competition in the U.S.-Heathrow market from its three network gateway hubs at Philadelphia, Pittsburgh, and Charlotte. With four daily roundtrips to Heathrow from its three gateway hubs, US Airways will provide unsurpassed competition and maximize the public benefits of free and open competition in the U.S.-Heathrow market.

Counsel:  O'Melveny Myers, Joel Stephan Burton, 202.383.5300



OST-01-10575
OST-01-10576

OST-01-11029
December 21, 2001 Re:  Affidavits for US Airways U.S.- U.K. Alliance
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Counsel:  O'Melveny Myers, Benjamin Bradshaw, 202.383.5300, bbradshaw@omm.com



OST-01-11029 December 21, 2001 Re:  Supplement Letter of 14 Members of the House of Representatives from the State of Michigan Filed by Northwest Airlines U.S.- U.K. Alliance
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Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com



OST-01-11029 January 15, 2002 Joint Motion of Continental Airlines, Delta Air Lines and Northwest Airlines for Immediate Action U.S.- U.K. Alliance

British Airways' recent public comments underscore the importance of its strategic study and the relevance of the related documents to this proceeding. In a BBC interview on January 9, British Airways Chief Executive Officer Rod Eddington discussed the wide-ranging "Size and Shape Review," which the BBC reported as a "restructuring plan" that would involve cutting as many as 15 European short-haul routes and an increased focus on "the more lucrative transatlantic business travel market." See Attachment 1. Although British Airways has claimed it "is far from reaching any final decision" and "reducing short-haul operations" is only "one of the numerous options" under review, those claims are belied by more recent reports that now indicate a decision is imminent because the British Airways "chief executive wants to cut back radically on short-haul and regional routes, axing scores of aircraft and up to 10,000 jobs in the process" in an announcement on the "Future Size and Shape Project" expected next month.

As the Petitioners asserted in their Joint Motion, the impending reduction of short-haul service by British Airways is central to the issues in this case. The Department cannot approve the American/British Airways application unless it determines that substantial network benefits will flow from the alliance and outweigh its overwhelmingly anticompetitive impact. A reduction of short-haul service by British Airways would directly affect the extent of any network benefits that the American/British Airways alliance might offer in U.S.-beyond London markets. The General Accounting Office's recent report on the American-British Airways alliance questioned the alleged network benefits of the proposed alliance, concluding that "the potential benefits from the AA/BA alliance may be limited" due to, among other things, "BA's corporate strategy of reducing its overall capacity." The GAO's conclusions are consistent with those of the Department of Justice. See, DOJ Comments at 5 and 48. British Airways' current strategic planning documents relating to the reduction of beyond-London service are unquestionably relevant to the issues in this proceeding and must, therefore, be made available to the parties with an opportunity to submit comments to the Department on them.

Counsel:  Northwest, Megan Rae Rosia, 202.8422.3193, megan.rosia@nwa.com, and Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkiener@crowell.com, and Delta and Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com



OST-01-11029 January 16, 2002 Re:  Support of Sam Skinner of USFreightways for U.S.- U.K. Open Skies Agreement U.S.- U.K. Alliance
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As you know, liberalizing and expanding air service between the U.S. and the United Kingdom has been a long-standing policy goal that predates even our respective tenures at DOT. Each of us experienced both frustration and success in this endeavor, and while we were able to achieve some incremental changes, those steps pale in comparison to the opportunity that exists for you to finally achieve an open skies agreement with the United Kingdom.

A decade of results has supported the proposition that liberalized international aviation agreements benefit consumers through more service and lower prices, promote international commerce and enhance growth opportunities for the travel and tourism industry. Furthermore, the Department's decision to link antitrust immunity with open skies agreements has proven to be an invaluable carrel to encourage foreign governments to open up markets over which they had been long protective. Our predecessors at DOT would likely have never envisioned a day when the U.S. had open skies agreements with Germany, France, Italy and Switzerland, among many others.

Reaching an open skies aviation pact with the United Kingdom would be the crowning achievement of this bipartisan, multi-administration policy initiative. Open skies would finally address the complaints by the U.S. airlines that lack operating rights to serve London Heathrow, and would also give more by U.S. cities direct access to London Heathrow. The related piece of this initiative, the proposed alliances between United Airlines-British Midland and American Airlines-British Airways could also provide public benefits.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com



OST-01-11029 January 23, 2002 Re:  Washington Times Article Submitted by Northwest Airlines U.S.- U.K. Alliance

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.rosia@nwa.com



Order 02-1-12
OST-01-11029
Issued January 25, 2002
Served January 25, 2002
Order to Show Cause U.S.- U.K. Alliance

The Department of Transportation today tentatively approved antitrust immunity covering the alliances of air carriers American Airlines and British Airways, and United Airlines and bmi, a decision that will significantly benefit consumers by expanding service to a host of U.S. cities; encouraging additional price competition; and increasing passenger choice. Final approval of antitrust immunity, which depends on several conditions yet to be met, will greatly enhance competition in the nation's largest overseas market by allowing four new U.S. carriers to enter the London Heathrow market, and providing passengers with 17 new roundtrip services between the U.S. and Heathrow Airport for a total of more than 6,200 new flights per year.

The Department's analysis and tentative conclusions for approving anti- trust immunity are largely in line with the recommendations of the Department of Justice. Tentative approval of antitrust immunity is based on several conditions yet to be met, including the divestiture by American and British Airways of 224 take-off and landing slots for flights by new competitors between U.S. cities and Heathrow airport.

    The Department's order tentatively allocates those slots as follows:
    *  5 daily roundtrips to Continental (3 of which must be served from
       Newark)
    *  6 daily roundtrips to Delta (3 of which must be served from New York's
       JFK
    *  Airport, and 1 from Boston)
    *  3 daily roundtrips to Northwest
    *  2 daily roundtrips to US Airways
    *  bmi would be required to provide slots to United for a daily round trip
       from Boston.

Final approval also hinges on the finalization of an open skies agreement between the U.S. and U.K. The nation's existing aviation agreement with the U.K., one of its most restrictive, limits where U.S. carriers can fly, how many flights they can operate, and what prices they may charge, providing minimal consumer choice for the almost 18 million passengers traveling the route every year. The latest round of open skies talks are expected to begin in Washington on Monday, January 28.

By: Read Van De Water

OST-01-11029 January 25, 2002 Notice of Communication in Case U.S.- U.K. Alliance

By:  Norm Mineta



OST-01-11029 January 29, 2002 Comments of Michael Levine to Order 02-1-12 U.S.- U.K. Alliance
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By:  Michael Levine



OST-01-11029 January 31, 2002 Motion of Continental Airlines, Delta Air Lines, and Northwest Airlines to Dismiss U.S.- U.K. Alliance
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Continental, Delta and Northwest urge the Department to dismiss the U.S.- U.K. Alliance Case immediately because the fundamental predicate of immediate prospects for an Open Skies agreement with the U.K. no longer exists and to require answers to this motion by February 5, 2002.

The Department and the applicants (American, British Airways, United, bmi and the other Star Alliance carriers) have recognized that consideration of the alliances at issue in this proceeding is dependent upon negotiation of an Open Skies agreement between the U.S. and the U.K. and that the U.K. has insisted that satisfactory approval of, and antitrust immunity for, an American/British Airways alliance is a prerequisite to the U.K.’s agreement to Open Skies.  American and British Airways have stated they will not continue pursuing antitrust immunity in this proceeding because of conditions proposed by the Department, which were substantially less than those sought by Continental, Delta and Northwest.  As a result, U.S.- U.K. open skies negotiations scheduled for this week have been cancelled.  Moreover, United and bmi have recognized that approval of their request for antitrust immunity depends on approval of the American/British Airways application and negotiation of an Open Skies agreement between the U.S. and the U.K.  Since the “existence of an open skies agreement is one necessary precondition for considering the approval and grant of antitrust immunity”  (Order 2001-9-12 at 5) and action on approving the alliances is “conditioned on reaching an agreement with the United Kingdom on an Open Skies aviation agreement.” (Order 2002-1-12 at 1), there is no longer any justification for continuing this proceeding.  Under these circumstances, the Department should take immediately the same action it took in Order 99-7-22, terminating this proceeding because the “fundamental predicate” of reaching an “Open Skies agreement meeting U.S. objectives” is not  now attainable.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, Delta, Shaw Pittman, Robert Cohn, 202.663.8060, and, Continental, Crowell Moring, Bruce Keiner, 202.624.2500

OST-01-11029 Served February 1, 2002 Notice Shortening Answer Period U.S.- U.K. Alliance

On January 31, 2002, Continental Airlines, Delta Air Lines, and Northwest Airlines filed a joint Motion to Dismiss in this proceeding. Under the Department’s regulations, answers to the motion would normally be due February 11, 2002. The joint Motion requested that the answer period be shortened to February 5. By this Notice, we grant that request, and call for answers to the Motion to be filed on Tuesday, February 5, 2002, to expedite consideration of the motion. The Answers of the Joint Applicants should specifically address the status of the proposed alliances.

By:  Read Van de Water

OST-01-11029 February 1, 2002 Letter of Donald Carty, President and CEO of American Airlines U.S.- U.K. Alliance
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Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com



OST-01-11029 February 5, 2002 Joint Answer of American Airlines and British Airways U.S.- U.K. Alliance
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American Airlines, Inc. and British Airways Plc hereby jointly answer in opposition to the motion to dismiss filed on January 31, 2002 by Continental Airlines, Inc., Delta Air Lines, Inc., and Northwest Airlines, Inc. On February 1, 2002, the Department issued a notice requiring that answers be submitted by February 5, 2002, and stating that the joint applicants "should specifically address the status of the proposed alliances" (p. 1). The motion to dismiss should be denied. On January 25, 2002, the Department issued show-cause Order 2002-1-12, providing the opportunity to submit objections on February 15, 2002 and answers on February 25, 2002. American and British Airways intend to respond in accordance with the Department's procedural schedule. The proposed alliance agreement between American and British Airways remains in place.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com British Airways, Paul Jasinski, 718.397.4250

OST-01-11029 February 5, 2002 Answer of Federal Express in Opposition to Motion to Dismiss U.S.- U.K. Alliance
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More importantly, FedEx believes that the US and UK governments should not abandon their open skies negotiations. It is important to travelers and shippers in the transatlantic markets that this critical market be opened up immediately. Granting the Motion to Dismiss will send a message that the United States has given up, and that is the wrong message, especially at this critical juncture.

The Opinion of the Advocate General of the European Court of Justice, delivered January 31, 2002, confirms that the Member States of the European Union have the right to negotiate their own bilateral agreements, except for three specifically identified clauses. Therefore, there is no legal impediment to the United Kingdom continuing to negotiate, absent any contrary opinion by the Court itself or any political grant of a mandate to the European Commission to negotiate air services agreements. Still, this window of opportunity will not stay open indefinitely. Failure to grasp the open skies opportunity now will leave this market regulatorily frozen in the restrictive 1977 treaty provisions if the EU acts to preempt national authority to negotiate such agreements. That is totally unacceptable. Neither the United States nor the United Kingdom should give up now, as liberalization is in the best interests of air transportation services consumers on both sides of the Atlantic.

FedEx believes that the Order itself is legally flawed, in a fatal sense, and will put that position forward in its response to the Show-Cause Order. FedEx does not believe that the Department should deprive the participants in this docket of the opportunity to address those flaws in accordance with the established principles of due process. For the foregoing reasons, the Department should deny the Motion to Dismiss filed by Continental, Delta, and Northwest.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-01-11029 February 5, 2002 Joint Answer of United, Austrian, bmi, Lauda, Lufthansa, SAS to Motion to Dismiss U.S.- U.K. Alliance
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Although American and British Airways have jointly issued a statement opposing the conditions the Department tentatively proposed in Order 2002-1-12, not sought leave to withdraw their joint application for immunity. Nor has either indicated that it does not intend to file timely objections to the Order. For their part, Joint Applicants remain fully committed to their alliance and to the efforts by the Department to secure a liberalized air services agreement with the United Kingdom. In that regard, the statement Secretary Mineta issued on January 25, 2002, following the announcement by American and British Airways of their objections to the conditions tentatively proposed in Order 2002-1-12, confirms the Department's intention to "continue working with the United Kingdom to achieve our long held mutual objective of open skies." Joint Applicants intend to respond more fully to Order 2002-1-12 according to the schedule established by the Department in the order.

Joint Applicants strongly endorse the Department's intentions. The pursuit of a more liberal air service agreement with the United Kingdom cannot be held hostage to the willingness of American and British Airways to implement their alliance agreement on terms necessary to protect consumer interests and competition. For that reason, the public interest, as opposed to the private commercial interests of Continental, Delta and Northwest, would not be served by the Department's preemptive termination of this proceeding. On the contrary, Joint Applicants are firmly convinced that the Department's long-held desire to secure a liberalized air services agreement with the United Kingdom will be better served by continuing this proceeding than by the peremptory termination sought by Continental, Delta and Northwest.

In any event, Joint Applicants have a due process right to a final decision from the Department on their joint application for immunity for their alliance agreements, and United and bmi have a similar right to a final decision on their joint application for authority to code share on Heathrow services. A decision to terminate this proceeding would be a direct denial of those rights. To avoid such a denial and to facilitate the conclusion of a liberalized air services agreement with the United Kingdom, the Motion To Dismiss must be denied.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202.663.6670, jmanley@wilmer.com



OST-01-11029 February 6, 2002 Motion of Virgin Atlantic Airways for Leave to File Late Answer

Microsoft Word File

U.S.- U.K. Alliance Case
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Virgin Atlantic's London based senior staff responsible for directing Virgin Atlantic's participation in this proceeding did not become aware of the Motion to Dismiss, or the Notice shortening the response date, until after the close of business London time on February 1, 2002. Moreover, these same senior staff officers were out of the office on foreign travel during the first part of this week and thus were unable to review and participate in the submission of a response to the Motion to Dismiss in a timely fashion.

Counsel:  Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com  

OST-01-11029 February 6, 2002 Answer of Virgin Atlantic Airways in Support of Motion to Dismiss

Microsoft Word File

U.S.- U.K. Alliance Case
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There is an additional significant basis to doubt the feasibility of the successful negotiation of an Open Skies Agreement between the U.S. and the UK. On January 31, 2002, the Advocate General for the Commission of the European Communities (EC) issued its much-anticipated Opinion on the challenge by the EC to alleged breaches of Community law by seven Member States of the European Union arising from their having signed Open Skies Agreements with the United States in violation of Community common rules. The AG concluded that in three critical areas -- pricing, CRS and nationality - the Member States have breached European Community law by reaching Open Skies Agreements with the United States. The DOT is very much aware of these legal proceedings, of course. Indeed, the expedited procedural schedule in this proceeding has been grounded in the DOT's hope that the United States and the United Kingdom could conclude an Open Skies Agreement before a ruling in the EC litigation that might preclude the UK from signing such an agreement.

If adopted by the ECJ, the AG Opinion would preclude the UK from signing an Open Skies Agreement with the United States. Since a U.S.-UK Open Skies Agree­ment is a necessary precondition to the grant of antitrust immunity to carriers in the U.S.-UK trade, it follows that this proceeding should be terminated forthwith. Moreover, the AG Opinion contains analysis, and makes findings, that have present effect on the ability of the United Kingdom to continue in Open Skies discussions with the United States.

Perhaps the most confounding of the three areas covered by the AG Opinion is the nationality issue. From the EC perspective, discrimination in the treatment of airlines or citizens of non-contracting parties undermines the purpose of the Community at its core: The right of citizens of any Member State to establish and conduct business in any other Member State. If the right of establishment within the Community is undermined, the glue that binds the Member States into a functioning economic unit will fissure, and Community cohesiveness will unravel. From the U.S. perspective, acceding to the request of EC contracting parties to permit the designation of any EC Member State under a particular bilateral Open Skies Agreement would allow EC countries who have thus far refused to sign Open Skies Agreements with the United States (in addition to the UK, Greece, Ireland and Spain) to obtain the benefits of Open Skies (by establishing an airline in the territory of an Open Skies contracting party) without reciprocally opening its markets to U.S. airlines. Logic informs that the United States could not agree to such an unbalanced outcome.

All sides agree that there cannot be antitrust immunity alliances in the U.S.-UK trade unless and until the United Kingdom and the United States conclude an Open Skies Agreement. In the light of the opinion of the Advocate General, it is now clear that Community law precludes the United Kingdom from negotiating or signing such an agreement. That being the case, the DOT should dismiss this proceeding.

Counsel:  Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com



OST-01-11029 February 7, 2002 Notice of Communication in Case Between Michael Jackson, Deputy Secretary and Dick Armey, Majority Leaders U.S.- U.K. Alliance Case

By:  Michael Jackson



Order 02-2-04
OST-01-11029
Issued February 7, 2002
Served February 7, 2002
5:30 pm
Order Denying Motion U.S.- U.K. Alliance Case

In their Motion to Dismiss, Joint Movants incorrectly assert that U.S. - U.K. Open Skies negotiations have been cancelled. The British Government (HMG) has not "cancelled" the negotiations. In light of the show cause order, HMG has deferred the talks pending its further consideration. We therefore find that a critical element of the joint movants' request has not been satisfied and does not constitute a basis for granting their motion.

Furthermore, as pointed out by the Joint Applicants, as well as by Federal Express, the parties have not yet had the opportunity to comment on the show cause order. The parties should have an opportunity to file a response to the show cause order, so that they may voice their concerns and opinions. It would therefore not be in the public interest to grant the joint movants' motion.

By:  Read C. Van de Water



OST-01-11029 February 13, 2002 Joint Motion of American Airlines and British Airways to Dismiss Application U.S.-U.K. Alliance Case
    Service List  

The Department has correctly linked the approval of antitrust immunity to the signing of an open skies agreement with the United Kingdom. Regrettably, we have come to the conclusion that the prospects of reaching both acceptable remedies and open skies now seem too remote to justify the continued time, effort, and expense of all parties involved.

First, we intend to maintain and strengthen the relationships between and among our oneworld partners. We will continue to look for every possible way to offer a more vigorous and competitive worldwide alliance.

Second, in the transatlantic market we intend to offer as much competition as possible to the three major immunized alliances, even though we will be at a distinct disadvantage without an immunized agreement.

Third, we intend to join forces to encourage both the United States and the European Commission to begin the process of establishing a truly open market between the U.S. and Europe. In light of the rapidly changing commercial environment in the airline industry, the public cannot and should not have to wait several years to win this result. While we expect that some parties to this case who enjoy considerable competitive advantages under the current regime will resist change, the governments should not wait. All issues should be on the table, from operating freedoms to ownership and control. Our governments should move quickly and decisively to establish a transatlantic common aviation market.

Counsel:  American, Carl Nelson / British Airways and Boros Garofalo, Don Hainbach

OST-01-11029 February 13, 2002 Joint Motion of Continental/Delta/Northwest to Dimsiss United/bmi Application and Answer to AA/BA Motion to Dismiss

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This morning, American and British Airways moved to dismiss their own application, acknowledging that “acceptable remedies and open skies now seem too remote to justify the continued time, effort, and expense of all parties involved.”  The Petitioners concur in that assessment.

The Department should also act to dismiss the pending application of United and bmi.  Without the impetus of the AA/BA alliance, it is clear that the Department’s “fundamental predicate” of U.S.-U.K. open skies will not be satisfied, and, accordingly, there will be no basis to move forward with the United/bmi application.  The Department recognized this commonality when it correctly decided to consolidate the two cases.  See, Order 2001-11-10.  United itself acknowledged that, as a practical matter, “approval of and antitrust immunity for the proposed addition of bmi to United’s integrated European alliance will be accomplished by the Department’s approval of the application of American and BA . . .” Answer of United, Docket OST-01-1037 (Nov. 2, 2001).

United and bmi opposed the Petitioners’ prior motion to dismiss because “[American and British Airways] have not sought leave to withdraw their joint application for immunity.  Nor has either indicated that it does not intend to file timely objections to the [Show Cause] Order.” United/bmi Answer (Feb. 5, 2002).   However, today’s development leaves no doubt that American and British Airways have abandoned their intent to seek an antitrust immunized alliance and with it any prospect for the requisite open skies regime.

Counsel:  Continental and Crowell Moring, Delta and Shaw Pittman, Northwest Airlines

OST-01-11029 Served February 13, 2002 Notice Requiring Answers to Portion of Joint Motion U.S.- U.K. Alliance Case

American Airlines, Inc. and British Airways PLC filed a joint motion to dismiss the antitrust application in this proceeding. As part of the joint motion, the movants request that "the Department immediately issue a notice suspending all further procedural dates in the above-captioned proceeding, includiing objections on February 15 and answers to objections on February 25, pending action on the joint motion to dismiss." Under our procedural regulations, answers to this motion, including the request to suspend the procedural dates, would be due on February 25. In order to afford all parties an opportunity to comment and the Department to act on this aspect of the joint motion before the due date for objections to the Department's Show Cause order in this proceeding, we require that answers to that portion of the American/British Airways motion calling for suspension of the procedural dates be filed no later than 10:00 a.m. February 14, 2002.

By:  Read Van de Water

OST-01-11029 February 12, 2002 Objection of Joshua Chessman U.S.- U.K. Alliance Case

By:  Joshua Chessman



OST-01-11029 Served February 14, 2002 Notice Suspending Procedural Dates and Requesting Comment U.S.-U.K. Alliance Case

We believe that there is good cause to suspend until further notice the deadlines of February 15 for Objections and Comments and of February 25 for Answers regarding our order to show cause, except to the extent indicated below.

We have a request by American and British Airways to dismiss their application and to suspend the procedural dates of this proceeding, and a request by United and bmi to proceed towards a final decision on their application. We would like the parties to comment on the implications for proceeding to a final decision on the application of United/bmi in light of the relief requested by American/British Airways. In this context, we also ask the parties to address our tentative findings on the United/bmi application.

We request that these comments be filed by February 22, 2002, and replies by March l, 2002.

We would like comments and replies to the Continental, Delta and Northwest joint motion to be filed on the same time dates as indicated above.

By:  Read Van de Water

OST-01-11029 February 14, 2002 Answer of Federal Express Corporation to Motion to Suspend Procedural Dates U.S.-U.K. Alliance Case
    Service List  

Indeed, it is ironic that these two countries-which share a similar vision on so many things at this time-cannot make progress on a matter that would significantly benefit consumers and shippers on both sides of the Atlantic. Events since September 11 have highlighted the very special relationship that binds these two countries. FedEx In this respect, the Order exceeds the Department's authority. The only lawful condition the Department can impose is one that restores the competitive status quo ante by, for example, requiring the parties to divest slots so that one other carrier can replace American in the overlapping markets. Instead, the Order attempts to address by regulatory fiat the effects of Bermuda 2's restriction on entry at Heathrow. This is not an IATCA proceeding. Addressing this restriction is the government's responsibility and it must be addressed at the negotiating table.

To seize this opportunity, the United States should show leadership on this issue and revive the talks. It should urge Her Majesty's Government to work promptly and firmly toward a new liberal arrangement, which will serve the broader national interests of both countries much better than if they do nothing. Narrow commercial interests have been allowed to define the landscape of this debate for too long. Now is the time for governments to lead and decide.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-01-11029 February 14, 2002 Joint Answer of United Air Lines, Austrian, bmi, Lauda, Lufthansa and SAS to Motion of American and British Airways to Dismiss Application U.S.-U.K. Alliance Case
    Service List  

Regardless of the Department's ultimate ruling on American/BA's motion to withdraw, the Department should remain steadfast in its stated position that the Joint Applicants and other parties have a due process right to respond to the show-cause order and, insofar as it would apply to the Joint Applicants' applications, reject American/BA's belated request to suspend the established and ongoing procedural schedule on which the Joint Applicants have relied in good faith.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com, and Squire Sanders, Marshall Sinick, 202.626.6651, msinick@ssd.com

OST-01-11029 February 14, 2002 Motion of Virgin Atlantic Airways for Leave to File Late-Filed Answer and Answer in Support of Motion to Dismiss

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U.S.-U.K. Alliance Case
    Service List  

Virgin Atlantic supports the Motion to Dismiss. In their Motion, American and British Airways state that developments in the European Court of Justice have left little doubt that the EU is moving toward a multilateral negotiating regime on aviation agreements. This view coincides broadly with the arguments and evidence presented in Virgin Atlantic's Answer submitted in support of the previous Motion to Dismiss filed by Continental, Delta and Northwest. Answer of Virgin Atlantic Airways Limited in Support of Motion of Continental, Delta and Northwest to Dismiss, filed February 6, 2001. Virgin Atlantic reiterates that argument here. The Advocate General to the ECJ has found that EU Member States may not conclude agreements with outside States in the areas of intra-EU pricing, CRS or citizenship. These findings are likely to be upheld by the Court. Moreover, the AG's findings impose present obligations on the UK that preclude agreement to the ownership and control (citizenship) clause. That being the case, the UK is not in a position to sign an Open Skies Agreement with the United States, and that, in turn, precludes the United States from conferring antitrust immunity on any airline alliance in the US-UK trade.

Counsel:  Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com



OST-01-11029 February 22, 2002 Comments of Continental Airlines U.S.- U.K. Alliance

The time has come for the Department to dismiss the applications of American' and British Airways for antitrust immunity and codeshare authority, dismiss or deny the applications of United, bmi and their Star Alliance partners for antitrust immunity and codeshare authority and terminate the U.S.-U.K. Alliance Case. Any other action would be unwise, arbitrary and capricious. Continental has opposed the proposed de facto merger between British Airways and American on U.S.-U.K. routes because of that alliance's extraordinary anticompetitive impact on London Heathrow-U.S. routes. Continental also opposed the proposed de facto merger between Star Alliance partners bmi and United because of the combined anticompetitive effect of that alliance with the British Airways/American alliance. Continental continues to oppose both antitrust immunity and transatlantic codesharing between United and bmi at London Heathrow because that airport is not open to Continental and other airlines since competitive slots and facilities are not, and will not be, available at London Heathrow. Unless and until London Heathrow is truly open to new entry, no further codesharing among London Heathrow incumbents, be it American/British Airways or United bmi, could be justified.

Counsel:  Continental and Crowell Moring, Bruce Keiner

OST-01-11029 February 22, 2002 Comments of Delta Air Lines

Microsoft Word
U.S.- U.K. Alliance

The Department's well-settled policy is not to grant antitrust immunity to alliances without the existence of an open skies agreement. This policy is reaffirmed in the Show Cause Order. Thus, the tentative approvals in the Show Cause Order were expressly "conditioned on reaching an agreement with the United Kingdom on an Open Skies Agreement." Moreover, the Department made clear that "the proposed action will not be made final without that agreement." This essential predicate cannot and will not be met here. In these circumstances, there is no basis to move forward with the grant of immunity to United/bmi. United's and bmi's request to press the matter to "obtain a final ruling on the merits of their application" is an exercise in futility. The Department should either dismiss that application, as urged by Delta and the other Petitioners in their February 15 Motion, or grant the Joint Applicants wish for a "final ruling" by denying it.

Similarly, there is no basis for approval of any of the proposed codesharing activities between United/bmi or AA/BA, that were contemplated in the Department's tentative decision and premised on the existence of an open skies agreement. The status quo restrictive Bermuda II environment is so radically different from the open skies regime upon which interested parties based their evaluation and comments and upon which the Department based its tentative findings, that the Show Cause Order must be vacated in its entirety. To do otherwise would constitute a violation of Delta's and other parties' due process rights.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com 

OST-01-11029 February 22, 2002 Comments of Federal Express U.S.- U.K. Alliance
    Service List  

The Department's Show Cause Order' is inconsistent with both U.S. law and economic interests, and endangered U.S. hopes for eliminating the restrictions of Bermuda 2. It should never have been issued. Predictably, its effect was to force American Airlines and British Airways to withdraw their joint application and the U.K. government to defer further discussions. Federal Express Corporation takes no position on the merits of the remaining United/bmi application, other than to note that its continued viability presents the U.S. and U.K. governments with a live, market-driven transaction that requires their resolution. In light of United and bmi's apparent desire to go forward, the Department should take the initiative to restart the open skies talks.

The Show-Cause Order did unnecessary and serious damage to the ability of the United States to conclude an open skies agreement with the United Kingdom - to FedEx's great disappointment. However, since the U.K. government has held out the possibility of continuing the talks, the Department should take all steps necessary to rehabilitate the U.S. position and press for open skies. Time is not the ally of U.S. commercial interests, because the passage of time could require the United States to negotiate with the E.U. members as a bloc with uncertain outcome. The Show-Cause Order proposed conditions so onerous and unfair that American and British Airways abandoned their proposed alliance within hours after it issued.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-01-11029 February 22, 2002 Comments of Northwest Airlines U.S.- U.K. Alliance
    Service List  

In light of the request by American/BA to dismiss their antitrust immunity application, there is no prospect for an open skies agreement between the United States and the United Kingdom. Thus, a fundamental predicate for favorable action on the United/bmi application - a U.S.-U.K. open skies agreement - cannot be satisfied. Under these circumstances, there is no basis for the Department to proceed with consideration of the United bmi application.

It is the Department's long-standing policy that antitrust immunity will not be granted in the absence of an open skies agreement with the foreign country in question. That has been the policy since the first immunized alliance between Northwest and KLM in 1993, it is the policy that applied to United's own immunized alliances with Lufthansa, SAS, Austrian Airlines and Lauda and it is the policy today.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193

OST-01-11029 February 22, 2002 Joint Comments of United Air Lines, British Midland, Austrian, Lauda, Lufthansa and SAS U.S.- U.K. Alliance

As the Joint Applicants demonstrate below, that decision by American and British Airways should not deter the Department from making final its tentative decision in Order 2002-1-12 to approve the joint applications of United and bmi pending in this docket, and the Joint Applicants' request to add bmi to the existing immunized alliance among United, the Austrian Group, Lufthansa, and SAS. In Order 2002-1-12, the Department tentatively found that approving these applications and granting the Joint Applicants antitrust immunity for their proposed alliance agreements poses no risk to competition -- tentative findings that were not dependent upon the conclusion of a new liberalized air services agreement with the United Kingdom. That finding, and the significant benefits to consumers that the alliance will generate, clearly establish that proceeding to finalize the Show Cause Order as applied to the Joint Applicants would be fully consistent with the public interest, notwithstanding the decision by American and British Airways to abandon their own alliance rather than relinquish slots at Heathrow Airport. Moreover, by facilitating the Joint Applicants' ability to coordinate their networks at Heathrow, approval of their applications for immunity and code-share authorizations will enhance significantly United's ability to compete with British Airways and the other Heathrow incumbents on U.S.-Heathrow services. Further, from a competitive as well as a strategic standpoint, a step of even greater significance would be for the Department to indicate its willingness to authorize bmi to operate a limited number of flights between Heathrow and points in the United States on an extra-bilateral basis. Faced with such increased competition from an immunized United/bmi alliance, British Airways and American would be obliged to seriously rethink their opposition to proceeding with their own immunity application, opening the way for the U.S. and the U.K. to conclude a liberalized air services agreement.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com and Silverberg Goldman, Michael Goldman, 202.944.3305, mgoldman@sgbdc.com 

OST-01-11029 February 22, 2002 Comments of US Airways U.S.- U.K. Alliance
    Service List  

Now that AA-BA have abandoned their pursuit of an immunized alliance, and an Open Skies agreement is no longer in reach, an underlying predicate for approval of the United/bmi application for antitrust immunity is gone. It would be unacceptable for the Department to give serious consideration to an immunized alliance anchored at slot and capacity restricted Heathrow airport in the absence of meaningful access to Heathrow for non-incumbent U.S. carriers such as US Airways. Clearly, permitting a price-fixing cartel between the second largest carrier in the world and a major slot holder at Heathrow, where competitive, new entry for non-incumbent U.S. tamers is effectively denied, cannot be in the public interest. The only choice for the Department under these circumstances is to dismiss the United/bmi application. Nonetheless, given the enormous benefits of increased, competitive access to Heathrow for U.S. consumers, we believe it is incumbent for the U.S. government to pursue unrelenting diplomatic efforts to achieve this objective.

Counsel:  O'Melveny Myers, Joel Stephan Burton, 202.383.5300

OST-01-11029 February 22, 2002 Comments of Virgin Atlantic Limited U.S.- U.K. Alliance
    Service List  

It is beyond challenge that expanding Virgin Atlantic's transatlantic position materially would promote a competitive market structure, particularly since Virgin Atlantic is widely and correctly perceived as a "disruptive rival." Thus, the DOT's decision to freeze Virgin Atlantic out of its slot allocations not only unfairly promotes U.S. trade and commercial interests; it does so at the expense of fundamental market structure and competition considerations that should have been the DOT's exclusive focus. The Department clearly could have achieved better competitive outcomes in a number of markets by directing LHR slots to Virgin Atlantic, rather than to the U S airlines named in the Show Cause Order. Virgin Atlantic urges the DOT, in such further orders as it may issue herein, to reconsider the marketplace impact of a policy that confines slot and asset divestitures exclusively to U.S. flag carriers. Competition in the marketplace is flag-blind; competition policy should be flag-blind as well.

Virgin Atlantic hopes that the developments before the ECJ and in this Docket that preclude approving these alliances and signing a bilateral "Open Skies" Agreement will liberate both sides of the Atlantic to re-evaluate their approaches to aviation liberalization and pursue true "Open Skies." True Open Skies does not reserve government travel to the carriers of any particular flag. True Open Skies does not close domestic markets to foreign ownership, investment and competition. And, True Open Skies does not countenance anticompetitive mergers and alliances that create monopolies and harm consumers. For the first time in a decade, both governments have a unique opportunity to shed the shackles of outmoded policy templates. The United States and the United Kingdom have been delivered the opportunity to turn the page on stale 20'h Century policies and to open a new page focused on the promise and needs of 21St Century aviation. We earnestly urge both governments to seize the moment. The sooner, the better.

Counsel:  Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com



OST-01-11029 February 25, 2002 Notice of Communication in Case U.S.- U.K. Alliance

By:  Read Van de Water

OST-01-11029 January 24, 2002
Docketed February 25, 2002
Re:  Acord Corporation in Opposition to Alliance U.S.- U.K. Alliance

By:  Acord Corporation, Linda Cutrupi

OST-01-11029 February 25, 2002 Comment of Sonia Kidian U.S.- U.K. Alliance

By:  Sonia Kidian



OST-01-11029 March 1, 2002 Reply of Continental Airlines U.S.- U.K. Alliance Case

Like playground opportunists who say, "Let's change the game and the rules, so we can win now that the bullies are gone," United, bmi, Austrian, Lauda, Lufthansa and SAS ask the Department to abandon its fundamental principles to approve a proposal incorporating new bmi London Heathrow-U.S. flights which was not even before the Department or the Department of Justice when they reviewed the United/bmi/Star Alliance applications. But this is not a playground, and the Department could not lawfully grant the relief now sought by United, bmi and their Star Alliance partners based on the record in this proceeding, which is predicated on a very different proposal from the applicants in a very different context.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@crowell.com

OST-01-11029 March 1, 2002 Reply of the Delta Air Lines

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U.S.- U.K. Alliance Case

The Department should also not approve any further codesharing activities between United/bmi or American/British Airways involving services to, from or via London. Given the continued restrictions on access to London Heathrow for Delta and other U.S. carriers, the Department cannot make the requisite public interest findings to support the authorization of codeshare services between major Heathrow operators.

Finally, Delta disagrees with the positions of Federal Express and Virgin Atlantic concerning the proposed divestiture remedies. However, in light of the withdrawal of the AA/BA immunity application, and the absence of legal or public interest bases to proceed with further consideration of either the U.K. alliances, it is unnecessary for Delta to submit a detailed rebuttal on the remedies issues. Suffice it to say that Delta believes the Department's general approach to require the alliances to divest London Heathrow slots and facilities for service by Delta at New York, Boston and its hubs, was soundly supported on the basis of the record, public policy and law. In conclusion, Delta urges the Department promptly to dismiss all pending applications in this proceeding.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com 

OST-01-11029 March 1, 2002 Reply of the Federal Express Corporation U.S.- U.K. Alliance Case
    Service List  

Federal Express Corporation urges the Department to pursue its open skies initiative vigorously, and in all markets. U.S. policy firmly commits the United States to eliminating all competitive barriers erected by foreign governments. In erecting and preserving those barriers, those governments are, in the Department's words, enhancing "their airlines' positions both by restricting the development of new, competitive services and by trying to overcome, through government fiat, their carriers' cost disadvantages that make it difficult for them to compete against U.S. airlines."' Neither the recent opinion of the European Court of Justice's Advocate General, nor the termination of the proposed American Airlines/British Airways alliance presents a sufficient reason for the Department to abandon well-established U.S. international air transportation policy.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-01-11029 March 1, 2002 Reply of the City of Houston and the Greater Houston Partnership U.S.- U.K. Alliance Case
    Service List  

Counsel:  Leftwich Douglas, Rebbecca Taylor, 202.434.9100, rltaylor@ldpllc.com 

OST-01-11029 March 1, 2002 Reply of US Airways U.S.- U.K. Alliance Case
    Service List  

US Airways remains fully supportive of the U.S. government's attempts to liberalize the restrictive and anachronistic U.S.-U.K. aviation agreement. To that end, US Airways urges the Department to continue pursuing diplomatic initiatives to obtain competitive access at Heathrow airport for non-incumbent U.S. carriers. Under the current circumstances, however, it is readily apparent that such access remains foreclosed. Given the lack of any meaningful possibility at the present time to liberalize the U.S.-U.K. aviation relationship and create a competitive market structure in which non-incumbent U.S. carriers have opportunities at Heathrow, the Department should dismiss the pending United/bmi application for antitrust immunity.

Counsel:  O'Melveny Myers, Joel Stephan Burton, 202.383.5300

OST-01-11029 March 1, 2002 Reply Comments of United Air Lines, bmi, Austrian, Lauda, Lufthansa and SAS U.S.- U.K. Alliance Case
    Service List  

The likely eclipse of open skies, however, does not render void the Department's positive tentative findings with regard to the Joint Applicants' applications, particularly its finding that those applications pose no risk to competition under current market conditions. Even if open skies may have slipped from its grasp, the Department should not respond by forfeiting the good that approval of the Joint Applicants' applications would generate. Rather, given the Department's finding that their alliance will not reduce competition and the alliance's manifold benefits to consumers, the public interest would best be served by approving the Joint Applicants' applications. In addition to the "good" of benefiting the public, such approval will further the more "perfect" objective of open skies by increasing competition on Heathrow-U.S. routes, thereby intensifying the pressure for liberalization at a time when all other available outcomes are likely to reduce or eliminate such pressure. In sum, the Department should promptly finalize its approval of and grant of antitrust immunity to the Joint Applicants' alliance, approve United/bmi's application for additional code-share authority, and allow bmi to operate a limited number of Heathrow-U.S. flights.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com and Silverberg Goldman, Michael Goldman, 202.944.3305, mgoldman@sgbdc.com

OST-01-11029 March 1, 2002 Reply Comments of Virgin Atlantic Airways Limited U.S.- U.K. Alliance Case
    Service List  

The Open Skies table is gone. As AA and BA have acknowledged in their Motion to Dismiss their application, Europe is moving to a multilateral EU-centered process that renders moot the various stratagems spun out by UA/bmi (and FedEx) for jump-starting Open Skies bilateral talks. The time has arrived for the DOT to terminate this proceeding. Nothing in the Comments submitted by UA/bmi or FedEx undermines the central fact that now dominates these proceedings: a bilateral U.S.-U.K. Open Skies is beyond reach. Since Open Skies are the sine qua non for antitrust immunity, these applications should be dismissed.

Counsel:  Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com



OST-01-11029 March 4, 2002 Correction to Reply of Federal Express U.S.- U.K. Alliance Case

The word "no" was inadvertently omitted from the second full sentence on page 3 of our reply dated March 1, 2002. As corrected, the sentence should read as follows:

The United States is thus entitled to rely on the U.K.'s representations of its negotiating authority, and it has no legal right or obligation to look behind those representations.

FedEx regrets any confusion this typographical error may have caused. We have served, by first-class mail, a copy of this letter on all parties listed on the service list to our March 1 reply.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com



OST-01-11029 January 29, 2002
Docketed March 22, 2002
Re: Letter of SFS intec in Opposition to Alliance U.S.- U.K. Alliance Case

Correspondence of SFS intec, Inc. in opposition to the proposed American Airlines/British Airway antitrust immunized alliance and code share application

By:  SFS intec, Jodi Jeffeson



OST-01-11029 January 8, 2002
Docketed March 26, 2002
Re:  Troon Golf Corporation in Strong Opposition U.S.- U.K. Alliance Case

By:  Troon Golf Corportation, Steven Velastegui

OST-01-11029 January 21, 2002
Docketed March 26, 2002
Re:  Gail DeFranco in Strong Opposition U.S.- U.K. Alliance Case

By:  Gail DeFranco

OST-01-11029 February 4, 2002
Docketed March 26, 2002
Re:  Flexsys America in Opposition U.S.- U.K. Alliance Case

By:  Flexsys America, William Woodyard

OST-01-11029 January 25, 2002
Docketed March 26, 2002
Re:  Gambro in Strong Opposition U.S.- U.K. Alliance Case

By:  Gambro, Don Waters

OST-01-11029 January 25, 2002
Docketed March 26, 2002
Re:  Bowne Corporation in Strong Opposition U.S.- U.K. Alliance Case

By:  Bowne Corporation, Donald Woodworth



Order 02-4-04
OST-01-11029
OST-99-6507
Issued April 4, 2002
Served April 4, 2002
Final Order U.S.- U.K. Alliance Case/Application of American Airlines and British Airways for Statements of Authorization and Related Exemption Authority

We disagree with the argument that the decision of AA/BA to seek dismissal of their application eliminates the possibility of a U.S.-U.K. Open Skies agreement. United/bmi remain committed to the implementation of their proposed alliance, and we believe that their commitment could provide the opportunity to achieve an Open Skies agreement. In this regard, we note that the U.K.'s Transport Minister has recently stated that the United Kingdom retains the right to negotiate and conclude an Open Skies agreement with the United States subject to meeting its obligations under Community Law.

We have decided to approve and grant antitrust immunity to the proposed United/bmi Alliance Agreements and to approve United/bmi's request for blanket code-share and related exemption authority subject to the terms and conditions proposed in our show­cause order, and the requirement that, within six months from the date of the issuance of this Order, the United States achieves an Open Skies agreement with the United Kingdom that meets U.S. aviation policy objectives. Our approvals and grant of immunity will not become effective until 30 days after that agreement is achieved.

By:  Read Van de Water



OST-99-6507
OST-01-11029
April 24, 2002 Petition of Continental Airlines for Reconsideration U.S.- U.K. Alliance Case; American Airlines and British Airways - Statements of Authorization

Despite the inability of the United States to negotiate an "open skies" agreement with the United Kingdom for decades and years of disagreements among interested stakeholders about what an open skies agreement with the U.K. must accomplish, particularly at London Heathrow, the Department has taken the unprecedented step of granting "final approval and antitrust immunity for alliance agreements" between United, bmi , Austrian, Lauda, Lufthansa and SAS without any "open skies" agreement before it. Granting final approval and antitrust immunity without even giving interested parties the opportunity to consider the proposed alliance and its impact in light of whatever "open skies" agreement is accomplished would be arbitrary and capricious and violate the due process rights of parties to comment on the alliance in light of relevant provisions in any such "open skies" agreement and whether London's Heathrow airport will be open to effective new competition by U.S.-flag carriers as a result of the agreement.

Continental urges the Department to reconsider its approval of the proposed alliance agreement and either deny approval or defer final action until a true open skies agreement is reached with the U.K. and open access at London Heathrow is ensured for U.S.-flag carriers.2 At the very least, the Department must defer final action on the proposed alliance at London Heathrow until a new U.S.-U.K. "open skies" agreement has been negotiated and interested parties are given an adequate opportunity to address issues raised by the alliance in light of the "open skies" agreement and commitments for new access at London Heathrow.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500



OST-01-11029 April 29, 2002 Joint Motion of United Air Lines, British Midland, Austrian, Lauda, Lufthansa and SAS to Postpone Answer Date US-UK Alliance Case

By petition dated April 24, 2002, Continental requested reconsideration of Order 02-4-4 in the above-captioned proceeding. That order made final the Department's tentative decision in Order 02-1-12 to grant antitrust immunity to the alliance expansion agreements of United, bmi, Austrian, Lauda, Lufthansa and SAS, subject to conditions. Under normal procedures, the answer to Continental's petition would be due on May 6, 2002. United, bmi, Austrian, Lauda, Lufthansa and SAS ("Joint Applicants") hereby respectfully request an extension of the answer date to May 17, 2002. This extension is needed to enable the Joint Applicants to prepare and coordinate among themselves a joint answer to Continental's petition. Continental is the only party that petitioned for reconsideration of Order 02-4-4 and has stated it does not object to an extension of the answer date as requested herein.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202.663.6670, jmanley@wilmer.com, Squire Sanders, Marshall Sinick, 202.626.6651, msinick@ssd.com for British Midland, and Silverberg Goldman, Michael Goldman, 202.944.3305, mgoldman@sgbdc.com for SAS



OST-01-11029 Served May 2, 2002 Notice Extending Proceeding Procedural Dates U.S.- U.K. Alliance Case/Application of American Airlines and British Airways for Statements of Authorization and Related Exemption Authority

On April 24, 2002, Continental Airlines, Inc., filed a petition for reconsideration of the Department’s action granting, subject to conditions, final approval and antitrust immunity for alliance agreements among United Air Lines, Inc., British Midland Airways Limited; Austrian Airlines Osterreichische Luftverkehrs AG, Lauda Air Luftfahrt AG,. Deutsche Lufthansa AG, and Scandinavian Airlines System ("United/bmi"). Order 2002-4-4 in the U.S.-U. K. Alliance Case, Docket OST-200 l-l1029.

Answers to the petition would normally have been due on May 6,2002.

On April 29, 2002, United/bmi filed a joint motion to postpone the answer date to Continental’s petition for reconsideration until May 17, 2002. In support of their request, United/bmi state that an extension is needed to enable the joint applicants to prepare and coordinate among themselves a joint answer to Continental’s petition. United/bmi report that Continental has stated that it has no objection to the request for an extension here.

We have decided to extend the answer period through May 8, 2002. While we recognize the desire of United/bmi for additional time to respond to Continental’s petition, we nevertheless have an interest in promptly resolving this matter. Given the particular circumstances of this case, we have decided that the more limited extension of the answer period we are allowing here is in the public interest. 

By:  Read Van de Water



OST-01-11029 May 8, 2002 Answer of Delta Air Lines

Microsoft Word File

U.S.- U.K. Alliance Case

The Department has repeatedly said that the achievement of U.S.-U.K. open skies must ensure de facto access to London Heathrow Airport, in light of the critical importance and severe access constraints at that facility. The Department's approval of the United/bmi alliance is a departure from the Department's longstanding policy of requiring open skies as a "fundamental predicate" to the grant of antitrust immunity, rather than, in this case, having open skies as a conditional antecedent. Notwithstanding this extraordinary change in procedure, the Department must remain committed to all of its aviation policy objectives with the U.K. -- including meaningful competitive access for Delta and other U.S. non-incumbent carriers at Heathrow. Delta recognizes that granting pre-approval to the United/bmi alliance was designed to serve as a catalyst for such liberalization. However, the Department must ensure that using pre-approval as a negotiating carrot does not compromise in any way the need to achieve full-scale, not piecemeal, U.S.-U.K. liberalization.

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202.663.8060

OST-01-11029 May 8, 2002 Answer of Federal Express U.S.- U.K. Alliance Case
    Service List  

The petition of Continental Airlines, Inc. for reconsideration of Order 2002-4-4, conditionally approving the United-bmi alliance agreement, provides a road map for going nowhere in one of the most important bilateral aviation markets in the world. Continental opposes an open skies agreement with the United Kingdom, citing potential action by the European Court of Justice. Continental also wants the right to review and impose its own conditions on any new air services agreement with the United Kingdom before the Department takes any other action.

This proceeding provided an outstanding opportunity for the Department to break the unfortunate impasse that has allowed Bermuda 2 to continue in effect. Because of misplaced deference to parochial concerns like Continental's, it lost the opportunity the British Airways-American alliance presented. It should not repeat that mistake. The Department should instead focus its energy on obtaining an open skies agreement with the United Kingdom. As FedEx has stated previously, the benefits to the U.S. economy through the liberalization of all-cargo services alone would dwarf the costs of the uncertainties Continental cites. The time has come for action so that the United States need not be saddled with this restrictive agreement for another 25 years.

Counsel:  FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com 

OST-99-6507
OST-01-11029
May 8, 2002 Answer of the City of Houston and the Greater Houston Partnership U.S.- U.K. Alliance Case
    Service List  

Houston urges the Department to make meaningful Heathrow access a cornerstone of any efforts to liberalize Bermuda II, and to shape its decisions in this and other proceedings in a manner consistent with this goal. In particular, the Department should structure its decisions to maximize the possibility of Heathrow entry for the cities, carriers and communities that currently are denied the benefits of such access. The Houston Parties appreciate the Department's efforts to negotiate a new U.S.-U.K. agreement, and welcome renewed efforts to find creative approaches to address the roadblocks that have hindered liberalization for so long.

Counsel:  Leftwich Douglas, Tanikia Roberts, 202.434.9100, troberts@ldpllc.com  

OST-01-11029 May 8, 2002 Joint Answer of United, bmi Limited, Austrian, Lauda, Lufthansa,  and SAS  U.S.- U.K. Alliance Case
    Service List  

Continental's claim that the Department's alleged failure to provide interested parties an opportunity to comment on the proposed alliance in light of the precise terms of the agreement ultimately concluded between the U.S. and U.K. governments is somehow arbitrary and capricious and a denial of due process is both factually wrong and totally misplaced. The argument is wrong because Continental and other interested parties have had ample opportunity to comment on the alliance and the conditions under which it should be approved. As noted in the text, Continental's real objection is not that the Department failed to provide Continental an opportunity to comment, but that the Department found Continental's objections to the Joint Applicants' request for immunity wholly unpersuasive. Continental's due process claim also is meritless because the precise terms of a new agreement to be concluded with the United Kingdom lifting the Bermuda 2 Heathrow access restrictions formed no part of the Department's calculus in finding that the grant of immunity to the Joint Applicants' alliance arrangements would not reduce competition in any relevant market. On the contrary, as also noted in text, the Department was persuaded to grant such immunity because, even under the restrictive terms of the current Bermuda 2 agreement, the proposed alliance is entirely pro-consumer and pro-competitive.

Continental's petition essentially does no more than reiterate its own parochial concerns about the terms on which it may gain increased access to Heathrow under a future air services agreement with the United Kingdom. A petition for reconsideration is, however, the wrong forum for raising such concerns because the Department's grant of immunity to the Joint Applicants is not related to or conditioned on Heathrow access.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com, Squire Sanders, Marshall Sinick, 202.626.6651, msinick@ssd.com, and Silverberg Goldman, Michael Goldman, 202.944.3305, mgoldman@sgbdc.com



Order 02-6-02
OST-99-6507
OST-01-11029
Issued June 4, 2002
Served June 4, 2002
Order Dismissing Petition for Reconsideration U.S.- U.K. Alliance Case; American Airlines and British Airways Statements of Authorization 

We have decided to dismiss Continental's petition for reconsideration of Order 2002-4-4. Although tiled within the timeframe specified in our rule, we find that Continental's petition is premature. In asserting that an Open Skies agreement must already be in place before we approve and immunize an alliance, Continental is focusing on form rather than substance. As we expressly stated in our final order, "Our grant of approval and antitrust immunity ... will become effective only after the United States has achieved an Open Skies agreement with the United Kingdom that meets our aviation policy objectives. 

Further, in ordering paragraph 16 we provided that the grant of immunity would "become effective 30 days after a U.S.-U.K. Open Skies Agreement that meets U.S. aviation policy objectives is achieved." We are currently awaiting notification from the U.K. government of its interest concerning negotiations. If negotiations resume and an Open Skies Agreement is reached within the timeframe provided in ordering paragraph 4 of Order 2002-4-4. there will be a more informed basis for the Department and interested parties to consider any petitions for reconsideration that a party might wish to tile. The provision of ordering paragraph 16 will permit that to happen in a timely way. In view of the above, we find that Continental's petition is premature and should be dismissed without prejudice.

By:  Read Van de Water



OST-01-11029 July 24, 2002 Affidavit for American Airlines U.S.-U.K. Alliance Case

American has caused to be destroyed the set of confidential documents we received from United, and any copies we made from such set.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com



OST-01-11029 July 31, 2002 Affidavit on Behalf of Delta Air Lines U.S.- U.K. Alliance Case

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060



OST-01-11029 August 2, 2002 Affidavit on Behalf of Continental Airlines U.S.- U.K. Alliance Case

Counsel:  GCW Consulting, Morris Garfinkle

OST-01-11029 August 2, 2002 Affidavit on Behalf of Continental Airlines U.S.- U.K. Alliance Case

Counsel:  Continental, Thomas Newton Bolling



OST-01-11029 August 5, 2002 Affidavit on Behalf of British Airways U.S.- U.K. Alliance Case

Counsel:  Boros Garofalo, Don Hainbach, 202.822.9070

OST-01-11029 August 5, 2002 Affidavit on Behalf of the City of Houston and Greater Houston Partnership U.S.- U.K. Alliance Case

Counsel:  City of Houston, Jol Silversmith and Rachel Trinder, 202.973.7927



OST-01-11029 August 7, 2002 Affidavit on Behalf of City of Houston and the Greater Houston Partnership U.S.- U.K. Alliance Case

Counsel:  Leftwich Douglas, Tanikia Roberts, 202.434.9100

OST-01-11029 August 7, 2002 Affidavit on Behalf of Counsel for United Airlines - Jeffrey Manley U.S.- U.K. Alliance Case

Counsel:  Wilmer Cutler, Jeffrey Manley, 202-663-6670, jmanley@wilmer.com 



OST-01-11029 August 7, 2002 Affidavit of Jeffrey Manley for United Air Lines U.S.- U.K. Alliance Case

Counsel:  Wilmer Cutler, Jeffrey Manley, 202.663.6670, jmanley@wilmer.com



OST-01-11029 August 19, 2002 Affidavits on Behalf of Northwest Airlines U.S.- U.K. Alliance Case

By:  Scott Grant, Robert DeHaan, Megan Rae Rosia, and Elliot Seiden



OST-01-11029 August 27, 2002 Affidavits on Behalf of the  Allied Pilots Association U.S.- U.K. Alliance Case

By:  Edgar James, David Dean, Marie Chopra, and Robert Mann



OST-01-11029 August 30, 2002 Affidavits on Behalf of Federal Express U.S.- U.K. Alliance Case

By:  Nancy Sparks, Warren Dean, Patricia Synder, Matthew Swartz, Mary Riordan



OST-01-11029 September 13, 2002 Motion of United Air Lines, British Midland, Austrian, Lauda, Lufthansa and SAS to Amend Order 2002-4-4 U.S.-U.K. Alliance Case
    Service List  

In the few months since Order 2002-4-4 was issued, nothing has happened to call into question the correctness of any of these findings: bmi continues to be blocked from introducing nonstop service to the United States from its hub at London's Heathrow Airport by the terms of the Bermuda 2 agreement. As a result, it is as true today as it was five months ago that the alliance proposed between United and bmi will not eliminate or substantially reduce competition between the carriers in any relevant market. Similarly, it is as true today as it was in April that implementation of the United/bmi alliance would immediately enhance the service options available to passengers in numerous U.S.­Heathrow city pairs and increase competition in a large number of U.S.-transatlantic air service markets. It also continues to be true that the United States is continuing to pursue fundamental liberalization of its air services agreement with the United Kingdom, and that approval of the United/bmi alliance, including the grant of antitrust immunity conditioned upon the conclusion of an open skies agreement, can be helpful to that on­going effort, as the Department so found in Order 2002-4-4.

It is equally true, moreover, that under the conditions imposed by the Department, United/bmi will not be able to implement their alliance until 30 days after an acceptable agreement is concluded. This condition, which United/bmi have previously shown is unnecessary to achieve the Department's public interest objectives, serves to defer the benefits the public would gain from the implementation of the alliance until after other U.S. carriers gain access to Heathrow. Nonetheless, because of this condition, extending the immunity granted to United/bmi for an additional six months will not lead to any change in the competitive status quo ante at Heathrow until after an acceptable open skies agreement is concluded.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202-663,6960 for United / Squire Sanders, Marshall Sinick, 202-626-6651 for British Midland / Silverberg Goldman, Michael Goldman, 202-944-3305 for SAS



OST-01-11029 September 24, 2002 Answer of Continental Airlines U.S.-U.K. Alliance Case

The Department's order in this proceeding was clear and unequivocal: unless an open skies agreement meeting U.S. objectives was negotiated by October 4, 2002, the approval and antitrust immunity for the second largest U.S. carrier and the second largest U.K. carrier at London Heathrow would terminate. The U.S. was "awaiting notification from the U.K. government of its interest concerning negotiations" (Order 2002-6-2 at 4) and had high hopes that approving the United/bmi alliance at London Heathrow would "help the United States achieve an Open Skies agreement with the United Kingdom" providing "important public benefits" (Order 2002-6-2 at 2) when it deferred petitions for reconsideration of its decision taking the extraordinary step of approving an antitrust-immunized alliance prior to negotiation of an Open Skies agreement. The Department now knows what the U.K. government's "interest concerning negotiations was," however, and it is clear that the prospect of an immunized alliance between United, bmi and the other Star Alliance carriers has created no meaningful incentive to achieve anything like true Open Skies meeting U.S. policy objectives at London Heathrow. After the firm U.S. rejection of the U.K.'s "take it or leave it" proposal falling far short of Open Skies, the Department must confirm the U.S. determination to insist on Open Skies by denying the Star Alliance carriers' motion.

The Star Alliance carriers premise their request that the Department waive enforcement of the condition it imposed because "the United States is continuing to pursue an open skies agreement with the United Kingdom" and the Star Alliance carriers would be forced to re-apply when and if an Open Skies agreement between the U.S. and the U.K. is achieved. If the Department were to grant an extension based on these arguments, the Star Alliance requests for extensions could well prove endless. In the rapidly changing aviation world of today, the record on which the Department's conditional approval was based is already growing very stale. In another six months, even more dramatic changes in the aviation industry may well occur. Thus, even those premises for the Department's decision which have not already evaporated are likely to change significantly over the next six months. Any further consideration of an antitrust ­immunized alliance between United, bmi and their Star Alliance partners at London Heathrow must await a new application submitted when and if an Open Skies agreement meeting U.S. objectives at London Heathrow has been concluded.

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

OST-01-11029 September 24, 2002 Answer of Delta Air Lines to Motion of United/bmi U.S.-U.K. Alliance Case

Delta strongly concurs with the U.S. Government's determination that the U.K. proposal failed to provide the type of significant benefits to U.S. airline interests and U.S. communities that the U.S. Government is committed to achieving. Since the U.K. has once again made it abundantly clear that it does not intend to offer a meaningful open skies proposal, the United States needs to send an equally clear response that antitrust immunity for U.S.-U.K. carrier alliances is unavailable in these circumstances.  Delta opposes the United/bmi motion, and urges the Department to allow the conditional grant of antitrust immunity to expire according to the automatic expiration terms established by Order 2002-4-4.

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



OST-01-11029 September 26, 2002 Joint Reply of United Air Lines, British Midland, Austrian, Lauda, Lufthansa, and SAS U.S.-U.K. Alliance Case
    Service List  

Neither Continental nor Delta make any attempt to refute either the conclusions on which the Department relied in granting United/bmi antitrust immunity or the continuing validity of those conclusions. Although Continental asserts that the record on which the Department made these findings "is already growing very stale" and that the "premises for the Department's decision which have not already evaporated are likely to change over the next six months," it offers no specific support for these ipse dixit assertions. The fact that neither Continental nor Delta can offer any rebuttal to the central basis for extending the antitrust immunity granted conditionally by Order 02-4-4 speaks far louder in support of the United/bmi joint motion than the empty rhetoric of these answers speaks in opposition.

Absent a breakthrough such as open skies with the U.K., there is little chance that the competitive landscape will change in the next 6 months. Accordingly, there is no basis for DOT to review ab initio competitive issues relating to the alliance. It is precisely the existence of Bermuda II that stalls any change in the competitive landscape and a comparison of the DOJ's analysis of competition in 1998 with DOT's analysis in its show cause order this year illustrates how Bermuda II preserves the status quo. The only significant change since the DOT show cause order earlier this year is a movement by BA of yet more of its operations from Gatwick to Heathrow and the acquisition by BA of additional slots (through purchase from Eastern European airlines and swaps with SN Brussels) that further underlines the need for counterbalancing competition at LHR. The United/bmi alliance is the most important immediate source of such counterbalancing and should not be delayed by the need for another proceeding to review competition issues once open skies has been agreed.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202-663-6960 for United, Austrian, Lauda, and Lufthansa / Squire Sanders, Marshall Sinick, 202-626-6651 for British Midland / Silverberg goldman, Michael Goldman, 202-944-3305 for SAS



Order 02-10-6
OST-01-11029
Issued and Served October 3, 2002 Order Amending Condition

Word Document

U.S.-U.K. Alliance Case

We have decided to grant, in part, United/bmi's Motion, and to extend through December 31, 2002, the date on which the authority we granted United/bmi in Order 2002-4-4 will terminate unless the United States achieves an Open Skies agreement with the United Kingdom that meets U.S. aviation policy interests. We will deny the request of United/bmi for an extension of the deadline beyond that date.

We originally imposed the six-month condition, on our own initiative, in the interest of furthering our goal of reaching an Open Skies agreement with the United Kingdom that meets U.S. aviation policy objectives. While we have not yet achieved that result, the process remains ongoing. Indeed, the United States recently expressly communicated to the Government of the United Kingdom the U.S. Government's continued interest in reaching Open Skies.

By:  Read C. Van de Water



OST-01-11029 September 9, 2002
Docketed October 8, 2002
Re:  Letter from Department of State to Tony Baker of the UK U.S.-U.K. Alliance Case

We have carefully considered the proposal you presented at our August 15 meeting for a "limited agreement." After consultation with our airlines, airports, interested communities, and labor, we have concluded that the UK proposal, which you characterized as "take it or leave it in the main elements," cannot serve as a basis for initiating-bilateral negotiations. We continue to believe that Open Skies provides the best environment for' developing the U.S.-UK aviation market in the interest of 'consumers, shippers, and the broader economies of both countries. We would welcome an opportunity to-hold Open Skies negotiations with the UK or to discuss an all-cargo open Skies agreement. What we seek is a truly transformative agreement that would consign Bermuda II, once and for all, to the history books.

By:  John Byerly



OST-01-11029 December 10, 2002 Motion of United Air Lines, British Midland Airways, Austrian Airlines, Lauda, Lufthansa and SAS to Further Amend Order 02-4-4 U.S.-U.K. Alliance Case
    Service List  

United/bmi request the Department to further amend ordering paragraph 4 of Order 2002-4-4 to the extent necessary to extend the date by which the United States must achieve a suitable air services agreement with the United Kingdom until June 30, 2003, or that the Department grant them such other or further relief as the Department determines to be consistent with this Motion and the public interest.

Counsel:  Wilmer Cutler, Bruce Rabinovitz, 202-663-6960 for United, Austrian, Lauda, and Lufthansa / Squire Sanders, Marshall Sinick, 202-626-6651 for British Midland / Silverberg Goldman, Michael Goldman, 202-944-3305 for SAS



OST-01-11029 December 19, 2002 Answer of Continental Airlines US-UK Alliance Case

Serious doubts about the U.K.'s ability to enter into a new agreement with the U.S. which does not provide London Heathrow-U.S. rights for all carriers based in the European Union have been raised by a European Court of Justice decision, and sorting out the prospects for meaningful U.S.-U.K. Open Skies negotiations could take months if not years. In the rapidly changing aviation world of today, the record on which the Department's conditional approval was based is already stale. In another six months, even more dramatic changes in the aviation industry may well occur. Any further consideration of an antitrust-immunized alliance between United, bmi and their Star Alliance partners at London Heathrow must await a new application submitted when and if an Open Skies agreement meeting U.S. objectives at London Heathrow has been concluded and a new analysis of competition at London Heathrow has been completed. For the foregoing reasons, Continental urges the Department to deny the Star Alliance carriers motion.

Counsel:  Continental and Crowell Moring, Bruce Keiner

OST-01-11029 December 19, 2002 Answer of Delta Air Lines to Motion of United/bmi US-UK Alliance Case

A further extension of time has failed to motivate the United Kingdom to engage in meaningful open skies discussions, and the Department should not continue to entertain an additional concessionary extension in the hope that the U.K. might, one day, change its mind. If and when the United Kingdom does enter into a true open skies agreement, the Department can readily process a new antitrust immunity application that might be presented by the parties.

Delta submits that there have been no recent developments with respect to the U.S.-U.K. aviation relationship that would warrant approval of these renewed requests. The U.K. government continues to rebuff U.S. efforts to liberalize the restrictive Bermuda II agreement in a manner that would provide Delta and other U.S. carriers with critical access to the restricted London Heathrow Airport, the most important gateway in Europe. So long as Delta and other U.S. carriers are barred from serving London Heathrow and from effectively competing for the crucial U.S.-U.K. component of U.S.-Europe traffic, the Department should not extend antitrust im u ty for United/bmi or allow American and British Airways to codeshare.

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



Order 2002-12-22
OST-01-11029
Issued and Served December 31, 2002 Order U.S.-U.K. Alliance Case

In this Order, we are amending a condition we attached, in Order 2002-4-4, to our grant of approval and antitrust immunity for alliance agreements between and among United Air Lines, Inc., British Midland Airways Limited d/b/a bmi British Midland, and various affiliates of these carriers. Our action in that order, as amended by Order 2002-10-6, currently makes our approval and antitrust immunity subject to the condition (among others) that the United States achieve by December 31, 2002, an Open-Skies agreement with the United Kingdom that meets U.S. aviation policy objectives. Our action in this order extends that December 31, 2002 deadline through June 30, 2003. In taking this action, we are granting a Motion filed on December 10, 2002, by the conditionally immunized carriers, requesting that we extend this deadline.

By: Read Van de Water



June 11, 2003

Motion of United Air Lines, British Midland Airways, Austrian Airlines, Lauda Air, Lufthansa, and SAS to Amend Order

The submitters move that the Department delete the condition that the United Sates conclude an acceptable open skies air services agreement with the United Kingdom, thereby enabling United/bmi to implement the Alliance Agreements and provide a more effective competitive counterbalance to the code share services of American and BA, particularly at Heathrow Airport.

On June 5, 2003, the European Commission was granted a mandate to negotiate an open skies agreement with the U.S. on behalf of all EU member states, including the U.K. EC Press Release #IP/03/806. Whether these negotiations are conducted between the U.S. and either the U.K. or the BC under its recent mandate doesn't matter. The end result being negotiated is the same --an open skies regime that includes the U.K.

United/bmi move that the Department delete the above-referenced condition, thereby enabling Unitedlbmi to implement the Alliance Agreements and provide a more effective competitive counterbalance to the code-share services of American and BA, particularly at Heathrow Airport. The Department has already found that grant of immunity to the United/bmi alliance is both pro-consumer and pro-competitive, a finding that is based on a detailed competition and public interest analysis. In the alternative, if the Department is unwilling to remove the condition, Unitedlbmi request that the Department further amend Order 02-4-4 to the extent necessary to extend the June 30, 2003 deadline for an additional period to coincide with the comparable relief granted by European competition authorities -- i.e., until December 31, 2010.

Counsel: Wilmer Cutler, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmer.com for United, Austrian, Lauda, and Lufthansa / Squire Sanders, Marhsall Sinick, 202-626-6651, msinick@ssd.com for British Midland / Silverberg Goldman, Michael Goldman, 202-944-3305, mgoldman@sgbdc.com for SAS



Served June 12, 2003

Notice Shortening Answer Period

Notice shortening answer period pursuant to 14 CFR Section 302.11 answers to United/bmi's Motion would be due on June 20, 2003, in view of the short time remaining until the June 30 deadline, the department will shorten the answer period and will require that answers to the Motion be filed no later than 5:00 p.m. June 17, 2003.

By: Paul Gretch



June 17, 2003

Answer of Continental Airlines

Rather than equivocating further, the Department should deny the motions and focus instead on negotiation of the transformative agreement covering London Heathrow access which must be the sine qua non for reaching any comprehensive aviation agreement with the European Union. Even the Star Alliance carriers must recognize that their chances of getting antitrust immunity because American and British Airways can now do the same codesharing the Star Alliance partners have done for years are slim to nonexistent. In fact, the request for immediate antitrust immunity may be nothing more than a ruse to make their equally-outrageous request for automatic approval of their antitrust immunity if an agreement meeting U.S. requirements at London Heathrow is reached at any time during the eight years and nine months following the Department's original contingent action on the Star Alliance exemption application seem less unreasonable.

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


June 17, 2003

Answer of Delta Air Lines

There is no longer any legitimate basis for yet another extension of the automatic expiration condition, last modified by Order 2002-12-22. The entire point of extending conditional antitrust immunity to United/bmi was to foster entry into a new liberalized agreement "while negotiation efforts with the United Kingdom continue." Those negotiation efforts ended in disappointment. The further extension of time granted by Order 2002-12-22 failed to motivate the United Kingdom to engage in meaningful open skies discussions, and the Department should not continue to entertain additional concessionary extensions in the hope that the U.K. might, one day, change its mind. United/bmi's proposal for a seven year extension of their conditional authority is counter-productive to the Department's original intent of providing a negotiating catalyst. Furthermore, since the United Kingdom elected to pass on the United States' last bilateral overtures, negotiations over open skies will inevitably be a long process now that the United Kingdom must share negotiating authority with the EU.

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


June 17, 2003

Answer of Northwest Airlines

In this latest attempt to secure antitrust immunity without open skies, United/bmi predict that the Department's recent approval of the codeshare arrangement involving AA/BA "assures that there will be no achievement" of the goal of an open skies agreement with the U.K. (UA/bmi Motion at 7). United/bmi, therefore, urge the Department to essentially declare defeat, abandon its long standing policy and precedent of conditioning antitrust immunity upon the existence of an open skies agreement, and approve the United/bmi application without requiring open entry for all U.S. carriers. As a carrier that continues to be foreclosed from competing in the critical U.S-London Heathrow market, unlike United, Northwest strongly urges the Department to stay the course on pursuit of liberalization of the U.S-U.K. aviation market by denying the United/bmi request for immediate effectiveness of antitrust immunity.

The Department also should deny United's Motion to extend the effectiveness of Order 2002-2-4 through December 31, 2010. In the rapidly changing aviation world of today, the record on which the Department's conditional approval was based already is stale.

Counsel: Northwest, Megan Rae Rosia, 202-842-3193, megan.rosia@nwa.com



June 18, 2003

Joint Reply of United Air Lines and British Midland Airways and Motion for Leave to File

The Delta Group raise the same arguments against the relief requested by Unitedlbmi and their alliance partners that they directed against the approval of code sharing by American and BA. Because the Delta Group are not able to gain entry to United/bmi request leave to file this reply in order to put into proper context the self-serving answers filed by the Delta Group. Acceptance of this pleading will provide the Department with a more balanced record on which to decide the motion at issue.

Counsel: United and Wilmer Cutler, Jeffrey Manley, 202-663-6670 / British Midland and Squire Sanders, Marshall Sinick, 202-626-6651



Order 2003-6-39
OST-2001-11029
- US-UK Alliance Case

Issued and Served June 30, 2003

Order

Order 2003-6-39 grant, in part, the June 11, 2003, Motion of United Air Lines, Inc., British Midland Airways Limited, d/b/a dmi British Midland, Austrian Airlines Osterreichische Luftverehrs AG, Lauda Air Lufftfahrrt AG, Deutsche Lufthansa AG, and Scandinavian Airlines System and their wholly-owned affiliates (United/bmi), to amend Order 2002-4-4, as amended by Orders 2002-10-6 and 2002-12-22

As we stated in Order 2002-12-22, we originally imposed the six-month condition, on our own initiative, in the interest of furthering our goal of reaching an Open Skies agreement with the United Kingdom that meets U.S. aviation policy objectives. With regard to the Unitedlbmi request that, in light of the Department's recent decision to approve certain code-share services between American and British Airways, the Department should remove the Open Skies condition to enable United/bmi to implement their Alliance Agreements, we note that American and British Airways were not granted antitrust immunity for their proposed code-share services. As we already stated in Order 2003-5-33, 12 "it has been our long-standing policy not to grant antitrust immunity in cases where an Open Skies aviation agreement does not exist between the United States and the foreign country involved." No such agreement now exists between the United States and the United Kingdom, and United/bmi have not presented evidence to convince us that it is in the public interest to depart from our normal policy in this matter.

Most recently, on June 5, 2003, the EC was granted a mandate to negotiate a U.S.-EU aviation agreement. The United States and the EU have agreed to begin negotiations of a comprehensive new agreement to maximize benefits for aviation services. Talks with the EU are expected to begin in early autumn. In these talks, the United States looks forward to building on and extending the Open-Skies framework that already exists with 11 of the current 15 member states.

By: Michael Reynolds



April 2, 2007

Joint Motion of United Air Lines and British Midland Airways

By this motion, United Air Lines, Inc. and British Midland Airways Limited, doing business as bmi, and their respective affiliates, are requesting the Department to modify Order 2002-4-4, as amended by Order 2003-6-39, as indicated below.

In Order 2002-4-4, issued in this docket on April 4, 2002, the Department approved and granted antitrust immunity for alliance agreements between and among United, bmi, and four other members of the Star alliance pursuant to 49 U.S.C. § 41308 and 41309. Pursuant to ordering paragraph 4 of that Order, as amended by Order 2003-6-39, the immunity is contingent upon the U.S. entering into an Open Skies agreement with the U.K. and further review by the Department at that time. In light of the Open Skies Agreement reached between the United States and the member states of the European Union on March 2, 2007, the Joint Movants hereby request that the Department modify ordering paragraph 4, as amended, to remove these two conditions, effective as of March 30, 2008, the date the Open Skies Agreement is to take effect).

The Department's decision to grant the Carrier Group immunity from U.S. antitrust laws was based upon its findings that a grant of immunity was in, and required by, the public interest, and that implementation of the proposed alliance between the carriers would not eliminate or substantially reduce competition in any relevant market. Those findings were supported by a record demonstrating, inter alia, the substantial benefits to the traveling public that would result from combining the complementary networks of United and bmi, the lack of any nonstop transatlantic overlap routes between bmi, on the one hand, and United and the other members of the Carrier Group, on the other, the very limited service bmi operated between the U.S. and the U.K. (only two daily services from Manchester), and the competition that an immunized United/bmi alliance would be able to provide to the leading carriers in the U.S.-U.K., U.S.-London and U.S. London (Heathrow) markets -- British Airways and American, key members of the competing oneworld alliance. However, because the U.S. and U.K. did not yet have in place an open skies-type air service agreement, the Department made the effectiveness of its grant of immunity with respect to bmi contingent on "the United States achiev[ing] an Open Skies agreement applying to the United Kingdom that meets U.S. aviation.

The Open Skies Agreement that will enter into force on March 30, 2008, clearly satisfies that condition. Of particular relevance here, the Agreement applies to the United Kingdom. And, there can be no doubt that the Agreement "meets U.S. aviation policy objectives" -- the Agreement grants the full panoply of rights that are the hallmark of the model U.S. Open Skies agreement to all U.S. and EU carriers. Among other things, the Agreement removes all bilateral limits on the number of carriers that can serve London-area airports, including Heathrow and Gatwick, the number of U.S. cities that can serve as gateways for nonstop service to points in the U.K., the number of weekly frequencies carriers can operate, the prices carriers can charge, and the markets that can be served beyond the United Kingdom.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com



Order 2007-9-12
OST-2001-11029

Issued and Served September 12, 2007

Order

The Department grants prospective authority to certain Star Alliance carriers for a global immunized alliance that is now authorized to include bmi as a full partner and operate in the U.S.-U.K. market. Upon the effective date of this authority, the immunized group will include United, Air Canada, Austrian, bmi, Lufthansa, LOT, SAS, Swiss, and TAP. The authority granted here, which is subject to standard conditions, will become effective on March 30, 2008, when the U.S.-EU Air Transport Agreement is implemented provisionally.

We note that no interested party has submitted a comment, much less an objection, to United’s and bmi’s motion.

We find that the applicable conditions precedent in Order 2002-4-4, as amended, will be met, and it is in the public interest to grant the motion.

By: Andrew Steinberg


 

Order 2012-6-21
OST-2001-11029 - US-UK Alliance Case
OST-2005-22922 - Star Alliance Antitrust Immunity
OST-2008-0234 - Star Alliance Antitrust Immunity

Issued and Served June 25, 2012

Order Terminating Antitrust Immunity

We terminate the antitrust immunity held by British Midland Airways Limited:

By striking Ordering Paragraph 1 of Order 2009-7-10, as amended by Order 2011-11-16, and replacing it with the following text, including the footnote (new text is shown in bold underline; deleted text is shown as stricken):

We approve and grant antitrust immunity to the Alliance Agreements between and among Air Canada, The Austrian Group, British Midland Airways, Ltd., Brussels Airlines NV/SA, Continental Airlines, Inc., Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., Scandinavian Airlines System, Swiss International Air Lines Ltd., TAP Air Portugal, and United Air Lines, Inc., and the majority-owned affiliates of the aforementioned carriers, in so far as such agreements relate to foreign air transportation

By striking Ordering Paragraph 11 of Order 2009-7-10, as amended by Order 2011-11-16, and replacing it with the following text (deleted text is shown as stricken):

We direct Air Canada, The Austrian Group, British Midland Airways, Ltd., Brussels Airlines NV/SA, Continental Airlines, Inc., Deutsche Lufthansa AG, Polskie Linie Lotnicze LOT S.A., Scandinavian Airlines System, Swiss International Air Lines Ltd., TAP Air Portugal, and United Air Lines, Inc. to withdraw, or to remain withdrawn, from participation in any International Air Transport Association tariff coordination activities that discuss any proposed through fares, rates, or charges applicable between the United States and any countries whose airlines have been or are subsequently granted antitrust immunity, or renewal thereof, to participate in similar alliance activities with a US airline(s);

By striking Ordering Paragraph 13 of Order 2009-7-10, as amended by Order 2011-11-16, and replacing it with the following text, including the footnote (deleted text is shown as stricken):

We direct Air Canada, Austrian, British Midland Airways, Ltd., Brussels Airlines NV/SA, Deutsche Lufthansa, Polskie Linie Lotnicze LOT, Scandinavian Airlines System, Swiss, and TAP Air Portugal to continue to report full-itinerary Origin-Destination Survey of Airline Passenger Traffic for all passenger itineraries that include a US point.

By: Susan Kurland


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