Order 2013-7-21

Served: July 31, 2013

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 31st day of July, 2013

Joint Application of

AIR TAHITI NUI.; 

SOCIÉTÉ AIR FRANCE;

DELTA AIR LINES, INC.;

KONINKLIJKE LUCHTVAART 

 MAATSCHAPPIJ N.V.; and

ALITALIA COMPAGNIA AEREA 

 ITALIANA S.P.A.

Under 49 U.S.C. §§ 41308 and 41309 for 

Approval of and Antitrust Immunity for 

Alliance Agreements

Docket DOT-OST-2013-0077

ORDER REQUESTING ADDITIONAL INFORMATION

Summary

By this Order, the Department requests additional information, as described in the Attachment, 

from Air Tahiti Nui, Société Air France, Delta Air Lines, Inc., Koninklijke Luchtvaart 

Maatschappij N.V., and Alitalia Compagnia Aerea Italiana S.p.A. (collectively, the “Joint 

Applicants”). We find that the additional information is necessary to analyze the application and 

make a decision. We believe that, with the satisfactory submission of the information requested, 

the evidence of record should be sufficient for us to establish a procedural schedule and act on 

this application. 

Background

In this proceeding, the Joint Applicants seek antitrust immunity to form a new transatlantic joint 

venture alliance. Following the initial submission of the application on April 15, 2013,1 the 

Department issued a Notice on April 19 suspending the procedural schedule and granting access 

to the confidential documents submitted along with the initial application.2 The Notice 

specifically stated that we would determine whether the record is substantially complete before 

establishing a procedural schedule.

 

1 See Joint Application.

2 See Notice (April 19, 2013).
2

Decision

We recognize and appreciate the efforts made by the Joint Applicants to identify and submit, in 

conjunction with their application, information and supporting documentation based on evidence 

requests issued by the Department in past antitrust immunity cases. As we have stated before, 

however, we retain the option of seeking additional, relevant information on a case-by-case 

basis.3 

Our review of the record indicates that additional information is required to ensure that the 

record in this case is substantially complete, pursuant to the Department’s regulations.4 We are 

therefore requiring the Joint Applicants to submit updated documents, as well as to answer a 

limited number of clarification questions about relevant issues. Without the additional 

information requested, the Department will not have sufficiently detailed evidence to make an 

informed decision on issues raised by this case.

 

Accordingly, the Department directs the Joint Applicants to provide the Department with the 

additional data and evidentiary information set forth in the Attachment. This information should 

be filed in Docket DOT-OST-2013-0077, in accordance with Department rules. We remind the 

applicants of the importance of discussing the merits of the case on the public record to the 

maximum extent possible. Unnecessarily broad redactions are contrary to the public interest and 

result in delay in reviewing the application. To the extent necessary, the applicants may seek 

confidential treatment of the information as set forth in the Department’s regulations. We 

emphasize that we do not seek duplicative filings; to the extent that the Joint Applicants affirm 

that information sought in the attachment has already been filed in the docket, they need only 

identify which documents satisfy the request.

With the satisfactory submission of the information requested in the attachment, the evidence of 

record should be sufficient for us to establish a procedural schedule for comments and other such 

responsive pleadings necessary to act on the application. 

ACCORDINGLY:

1. We direct Air Tahiti Nui, Société Air France, Delta Air Lines, Inc., Koninklijke Luchtvaart 

Maatschappij N.V., and Alitalia Compagnia Aerea Italiana S.p.A. to file the additional 

information and evidence described in the Attachment to this Order as a supplement to its 

application.

 3 See, e.g., American/ British Airways/ Iberia/ Finnair/ Royal Jordanian Case, Order 2008-12-11 at 5 (Docket 

DOT-OST-2008-0252).

4 14 C.F.R. § 303.
3

2. We will serve this order on all parties on the service list in this docket.

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov
Attachment 1 -4

ATTACHMENT

Request for Additional Information

Docket DOT-OST-2013-0077

General Instructions

1. The following definitions of terms used in this request apply:

A. “You,” “Your,” “Your Company,” “Joint Applicants,” “Partner(s),” “Party,” or “Parties” 

means Air Tahiti Nui (“TN”), Société Air France (“AF”), Delta Air Lines, Inc. (“DL”), 

Koninklijke Luchtvaart Maatschappij N.V. (“KL”), and Alitalia Compagnia Aerea 

Italiana S.p.A. (“AZ”), as well as each of their regional affiliates, individually and 

collectively. These definitions also include your domestic and foreign parents, 

predecessors, divisions, and all officers and directors who work at your corporate 

headquarters (the site where your chief executives and senior operating, marketing, and 

financial officers are located).

B. “Application for Antitrust Immunity” means the Joint Applicants’ application for 

Approval of and Antitrust Immunity for Alliance Agreement submitted to DOT on April 

15, 2013. “ATI” refers to antitrust immunity.

C. “Alliance Agreement(s)” has the same meaning as defined by the Joint Applicants on 

page 1 of their Application for Antitrust Immunity.

D. “Document(s)” means (1) all written, recorded, transcribed, electronic, or graphic 

material, including letters, electronic mail, memoranda, reports, studies, forecasts, lists, 

and directives, as well as minutes and records of meetings, conferences, telephone or 

other conversations or communications; and (2) all information contained in data 

processing equipment. Except where otherwise specified, a request for Documents is 

limited to documents created or revised since September 15, 2012. Copies of Documents 

requested herein shall be full, complete and unredacted. For each Document, if not 

contained in the Document itself, include the date of preparation and the name and title of 

each individual who prepared the Document.

E. “Discuss” means analyze, constitute, summarize, report on, consider, recommend, set 

forth, or describe a subject, regardless of the length of the discussion. Documents that 

merely mention or refer to a subject without further elaboration do not discuss that 

subject. Documents that discuss a particular subject include all Documents that contain 

reports, studies, forecasts, analyses, plans, proposals, evaluations, recommendations, 

directives, procedures, policies, guidelines, or any other comments that address or 

concern the subject, or that constitute a discussion of the subject.

F. “And” and “or” shall be construed disjunctively and conjunctively as necessary in order 

to bring within the scope of each information directive all responses that might otherwise 

be construed to be outside its scope.
Attachment 1 -5

G. “Plans” means tentative and preliminary proposals, recommendations, analyses, 

forecasts, or considerations, whether or not finalized or authorized, as well as those that 

have been adopted.

2. All responses to these information directives shall reflect the cumulative knowledge of the 

responding Parties and shall be accompanied by a sworn statement or statement under 

penalty of perjury, executed by a responsible officer of the responding Party, that the 

responses are full, complete, and accurate. All responses shall identify clearly the 

information directives to which they respond, as well as the person(s) who is (are) the 

source(s) of the information. Supplemental responses shall be submitted in the event that 

information is discovered after submission of the initial responses. 

3. To the extent that any responsive documents are written in a foreign language, provide a 

copy of the original document, as well as an English translation of the document.

4. Documents produced in response to any request shall be consecutively numbered, and shall 

be marked with the number of the request to which they respond. Responding carriers shall 

prepare an index of the documents produced, setting forth the document number, date, 

preparer, addressee, and subject of each document, and the information directive to which it 

responds. 

5. These information directives are requesting only material and documents now or previously 

located at corporate headquarters of any of the Parties (the site where the Parties’ chief 

executives and senior operating, marketing, and financial officers are located) and only those 

documents, material, and messages prepared by or for the Board of Directors, senior 

management, or middle management responsible for strategic planning, marketing, alliance 

relations, pricing, revenue management, or schedule and route planning.

6. Please provide a privilege log identifying and describing all withheld documents, as required 

by 14 C.F.R. § 303.04(h). 

7. Please provide an original and two copies of all Documents. The original filing should be on 

8.5" x 11" paper using dark ink and be unbound without tabs, which will expedite use of our 

docket imaging system. To the extent that the carriers deem it necessary, they may seek 

confidential treatment of the information as set forth in the Department’s regulations.

Clarification Questions & Accompanying Documents

Please provide responses to the following questions and all Documents that discuss the issues 

addressed in each of the following questions. Do not resubmit Documents that were already 

submitted to DOT in response to the information request drafted by the Joint Applicants and 

presented with your Application for Antitrust Immunity in Docket DOT-OST-2013-0077. 

Whether previously or newly submitted, you should identify the reference number(s) of the 

Documents responsive to the requests below:
Attachment 1 -6

1. To supplement the application, provide a more detailed description of the structure, scope, 

and procedures of the proposed joint venture and clarify its relationship to the existing, 

broader SkyTeam joint venture. In particular, please:

(a) Provide the definition and meaning of “transatlantic routing” as used in the Joint 

Application, the AF-TN Joint Venture Agreement, and Antitrust Compliance Protocols.

(b) Describe the specific routes that are covered by the proposed AF/TN joint venture. For 

additional clarity, please also indicate whether, and to what extent, the sample list of 

itineraries below would be covered. To the extent that more than one of the applicants 

operates a flight on a segment shown below, please explain whether the coverage under 

the proposed AF/TN joint venture changes. If the answer differs based upon which 

direction the passenger is traveling, the identities of the operating carriers, or the carrier 

codes on the ticketed itinerary, please explain. Also, for each of these itinerary types, 

describe who will make scheduling, pricing, and revenue management (availability) 

decisions and how they will be made (e.g., on the basis of what prorate agreements). In 

each case, describe how metal neutrality will be achieved across all itinerary types and 

paths, despite the exclusion of some SkyTeam carriers from the AF-TN joint venture 

agreement.

PPT-LAX (either direction),

PPT-LAX-CDG (either direction),

PPT-LAX-CDG-VIE (either direction, including all AF/KL destinations 

behind CDG), and

PPT-LAX-CDG-FCO (either direction, including all AZ destinations 

behind FCO).

(c) Explain how cooperation would be handled when the applicants are operating flights that 

contain some passengers that are covered by the joint venture and others that are not. For 

example, since both AF and TN fly all segments on the PPT-LAX-CDG route, but are 

only seeking antitrust immunity for their cooperation on “transatlantic routings,” there 

may be some passengers on the companies’ aircraft that are covered by the joint venture 

and others that are covered by other marketing, sales, and prorate arrangements. How 

will the pricing, capacity management, and importantly, revenue management, be 

handled separately for those distinct categories of passengers? Under these 

circumstances, would the operating carrier have the incentive to prioritize seat inventory 

for LAX-PPT passengers, on which it would not share revenue, over the seat inventory 

for Europe-PPT or LAX-Europe passengers, on which it would share revenue?

(d) Describe the extent to which services to PPT will remain covered by the existing, broader 

SkyTeam joint venture and how any overlap will be reconciled for purposes of the JVs 

and to what extent the economic incentives for the member carriers promote metal 

neutrality.
Attachment 1 -7

(e) Describe how pricing will work in the proposed joint venture and whether it will be 

handled by one party or another depending upon direction or the specific origin and 

destination for the ticketed itinerary.

2. Consumer benefits achieved through alliances derive from both the scope of the combined 

network and the alignment of economic incentives. Moreover, the Department has routinely 

stated that grants of antitrust immunity should be reserved for cases where substantial 

consumer benefits will be realized, such as through the linking of networks, and where those 

consumer benefits could not be readily achieved through other less anticompetitive means

(see, e.g., Order 2010-9-4, at 1). Please explain how the Joint Applicants’ limited 

arrangement is compatible with the aforementioned policy and describe how substantial 

benefits will derive from the proposed alliance given the limited scope of the proposed 

alliance, even within its geographic scope (e.g., AZ and TN do not have the same underlying 

commercial arrangements as AF/TN, limiting the network cooperation even among SkyTeam 

members).

3. Please describe how the applicants intend to achieve the reduction of double marginalization, 

as described in the Joint Application at 39, and estimate the potential value to consumers

overall and U.S. consumers in particular. 

4. Will both the TN and AF flights carry the DL code on the LAX-CDG and LAX-PPT 

segments and will Delta SkyMiles members based in the United States earn miles, including 

elite qualifying miles, on TN-operated flights to/from both CDG and PPT? 

5. Typically, airline partners engage in bilateral or multi-lateral cooperation at “arms-length” as 

a first step in building a mutually beneficial partnership. What efforts have been made to 

optimize arms-length cooperation prior to this application and why is immunity and a joint 

venture necessary to link the parties networks on a single “trunk route” (LAX-CDG)? Please 

address the question generally and then with respect to each of the following areas: 

(a) Code sharing and marketing support – How will the new codeshare operate differently 

from the existing AF-TN code share? How many additional points will be added and 

why is a grant of antitrust immunity necessary to add them? Why is a joint venture 

necessary for a full reciprocal code share? Are there any steps that could yet be taken 

with respect to marketing support and frequent flyer cooperation?

(b) Breadth of network – Why is the joint venture agreement limited to cooperation between 

AF and TN, thus excluding other members of the SkyTeam immunized alliance (and joint 

applicants in this proceeding) such as Alitalia?

(c) Co-location – To what extent will AF, TN, and the other immunized SkyTeam partners 

co-locate at CDG and LAX, and why is a grant of immunity necessary to achieve this 

objective?

6. If the JV is implemented, what specifically do you expect to happen to prices and capacity? 

Absent the JV, what would happen? Address all segments, but pay special attention to 
Attachment 1 -8

whether either or both carriers would decrease, increase, or maintain capacity between LAX 

and PPT. In light of AF’s current restructuring efforts, which include evaluating route 

profitability, what are AF’s plans for continuing to serve PPT?

7. Describe in detail AF and TN’s annual financial performance on the PPT-LAX-CDG route, 

breaking out the performance by segment and describing the relative revenue and traffic 

contributions of the Europe-originating, France-originating, U.S.-originating, Tahiti –

originating, and other-country-originating segments for the past three years. (Remember to 

include documentation as directed above.) 

8. Please explain how the protocols the Joint Applicants intend to implement will preclude 

coordination of pricing on LAX-PPT itineraries despite the Joint Applicants’ coordination of 

pricing on CDG-PPT itineraries.

Data

9. Prior to and after the filing of this application, DOT staff consulted with the Joint Applicants’

representatives concerning the scope of data that the Department would likely require in 

analyzing this application. The Department further requested that the data provided in 

support of the immunity request conform to certain specifications. A copy of the data request 

by the Department is attached. Although the applicants have made a number of efforts to 

submit the data requested using the required specifications, we have determined that there are 

still some deficiencies in the submissions that require correction or clarification:

 

(a) Air France must resubmit its response to the attached Origin and Destination data request 

with fare data converted to U.S. Dollars.

 

(b) Air Tahiti Nui should clarify whether the four data files submitted with the same content 

but with descriptions stating that the files represent four different geographical areas are

indeed correct, are consistent with what the carrier intended to submit, and are fully and 

accurately responsive to the Department’s request for Origin and Destination data as 

specified in the attachment to this order.

10. With regard to the applicants’ MIDT submission, do the Joint Applicants object to a limited 

public disclosure by the Department of aggregated market share (including nonstop and 

connecting share) from the data set? 
Attachment 1 -9

MIDT Traffic Data

Using MIDT data for the most recent 12-month period available, provide directional net passenger 

bookings for all Tahitian origin and destination airport pair markets for all airlines and all US to Europe 

origin and destination airport pair markets that Air Tahiti Nui served during the period. Include the 

following data elements:

Field 1: Trip Originating Airport

Field 2: Booked Point of Sale Country Code

Field 3: Airport Path and Marketing Carrier Designator String by Leg

Example: A Paris – Los Angeles – Papeete directional trip with segments marketed by TN, AF

respectively would be reported as “CDG TN LAX AF PPT”. Use a “//” to represent the marketing carrier 

on any ARNK (Arrival Not Known) segments.

Field 4: Volume of Net Bookings

Include an explanation of the trip break methodology used to create directional trips from itinerary data.

Origin Destination Fare Data

1. For all itineraries that Air Tahiti Nui participates in, all itineraries involving Tahiti that touch a 

US or European point should be provided. The Department prefers the O&D data represent an 

internal 100% census of itineraries meeting the above criteria; however suitable alternatives may

be considered, if proposed. Data should be submitted on a quarterly basis for the most recent 

year ended period for which data is available. Provide all information for any itinerary that was 

begun during the periods described above irrespective of when the full itinerary was completed. 

Provide the itinerary in an origin-destination (by direction of travel) format, referred to as 

“market directional.” Provide the number of (1) passengers, (2) market fare, (3) purchase class, 

(4) period, (5) airport sequence, (6) operating carrier code sequence, (7) change in operating 

carrier flag, (8) ticketing/marketing carrier code sequence, (9) change in ticketing/marketing 

carrier flag, (10) origin, (11) destination, (12) number of market coupons, (13) sequence number 

of each market directional that makes a full itinerary, (14) total distance flown (all kilometers 

converted to miles), (15) distance between the origin and destination (all kilometers converted to 

miles), (16) unique itinerary identifier, (17) one-way/round-trip itinerary identifier, (18) reporting 

carrier, and a (19) full itinerary online identifier. Fares must include all taxes, fees, and 

applicable surcharges (particularly any fuel surcharges paid). Provide the passenger counts 

summarized by the unique combination of period, flight sequence, ticketing/marketing carrier 

sequence, operating carrier sequence, reporting carrier, directional market fare, one-way/roundtrip itinerary identifier, full itinerary online identifier, and purchase class value.

For itineraries that include a segment provided by ground transportation, note the ground segment 

as ‘—‘ in the tkcarriergroup and opcarriergroup variables.

Provide a description of the methodologies used to determine market directional trip breaks 

within itineraries and the prorate for assigning the market directional fare from the full itinerary 

fare. DOT proposes using the industry standard “four hour rule” for intra-North American travel 

and the “24-hour rule” for all other travel to determine market directional trip breaks. DOT 

prefers the use of the square root of the miles methodology for market directional fare proration. 

Square root of the miles methodology distributes the itinerary revenue by dividing the itinerary 
Attachment 1 -10

fare by the square root of the number of miles distance between airports in the itinerary. To the 

extent the applicants prefer to use alternative methodologies for determining market directional 

trip breaks or prorates, they are required to provide appropriate methodological descriptions and 

validation.

The purchase class values should provide detail that allows for the evaluation of a given 

itinerary’s level of service purchased. The classes should be broken down by both Restricted and 

Unrestricted fares sold in First Class, Business Class, Premium Economy, and Economy cabins. 

DOT is open to alternative mappings and levels of detail that the applicants may suggest. If 

multiple purchase classes are assigned to different segments in a market directional provide the 

most premium class assigned from any of the segments in the market directional.

Figure 1 provides a detailed listing of the variables required (meta data) and Figure 2 provides a 

sample of the final format. The minimum combination of variables that make each row unique 

(composite primary key for the dataset) is highlighted in yellow.

Provide the data electronically as a comma separated value (CSV) or other delimited text file 

format. If a format other than CSV is selected, provide the meta-data detail necessary to allow 

for the loading of the data into a relational database environment.
Attachment 1 -11

Figure 1 - Technical description of the dataset to provide

Market (Directional)

1 AirportGroup Sequential order of airport routing in the market directional, “:” separated, 3 di 

designator

2 Dest Market of travel destination for the passenger(s), 3 digit IATA airport code designato

3 Itin_Online Indicates if for entire itinerary the passengers stayed on the same carrier for all 

operated

4 Itin_RoundTrip Indicates if passengers flew one way or round trip for the itinerary, 0=One-way, 1=R 

5 ItinID Identifies all market directionals for a single itinerary with the same value

6 MktCoupons Total number of segments traveled for the directional market

7 MktFare Fare paid by passengers for the market directional

8 MktMilesFlown Total track miles for each segment of the market directional minus ground miles

9 MktSeq Identifies the order the market directionals are traveled

10 NonStopMiles Market origin to destination distance, excludes ground segments (radian miles, point 

11 OpCarrierChange Identifies if there is a change to the operating carrier in the segments within the direc 

12 OpCarrierGroup Sequentially identifies the operating carriers for each segment of the directional, “:” 

13 Origin Market of travel origination for the passenger(s), 3 digit IATA airport code designato

14 Passengers Number of passengers flying for the market directional record

15 Period Period first segment of the itinerary was flown, four digit year plus single digit quart 

16 PurchaseClass Restricted and Unrestricted sales of First Class, Business Class, Premium Economy, 

17 RpCarrier Code for the carrier that reports the data to DOT

18 TkCarrierChange Identifies if there is a change to the ticketing/marketing carrier in the segments 

1=Yes, 0=No

19 TkCarrierGroup Sequentially identifies the ticketing/marketing carriers for each segment of the m 

separated
Attachment 1 -12

Figure 2 – Sample of the final format of the dataset to provide

ItinIDMktSeqMktCouponsPeriodOriginDestAirportGroupTkCarrierChangeTkCarrierGroupOpCarrierChangeOpCarrierGroupRPCarrierPassengersMktFare

1 1 2 20121 PPT CDG PPT:LAX:CDG 0 TN:TN 1 TN:AF TN 5 900

1 2 2 20121 CDG PPT CDG:LAX:PPT 0 TN:TN 0 AF:AF TN 5 900

2 1 3 20123 PPT CDG PPT:LAX:SFO:LAX:CDG 1 TN:DL:DL:TN 1 TN:OO:OO:TN TN 20 1247

3 1 4 20122 GOA PPT GOA:CDG:SFO:LAX:PPT 1 AF:AF:DL:TN 1 DB:AF:OO:TN TN 3 1139

3 2 3 20122 PPT GOA PPT:LAX:CDG:GOA 1 TN:AF:AF 1 TN:AF:DB TN 3 1126

4 1 5 20123 MAD PPT MAD:CDG:SFO:LAS:LAX:PPT 1 AF:AF:--:DL:TN 1 AF:AF:--:OO:TN TN 2 1314

4 1 1 20073 PPT MAD PPT:LAX:CDG:MAD 1 TN:AF:AF 1 TN:AF:AF TN 2 1304

* Indicates primary key