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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of )

)

AIR TAHITI NUI )

SOCIÉTÉ AIR FRANCE )

DELTA AIR LINES, INC. )

KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V. ) DOCKET DOT-OST-2013-0077

ALITALIA-COMPAGNIA AEREA ITALIANA S.P.A. )

)

Under 49 U.S.C. §§ 41308 and 41309 )

for approval of and antitrust immunity )

for alliance agreements )

[PUBLIC VERSION]

RESPONSE OF JOINT APPLICANTS

TO DOT ORDER 2013-7-21

REQUESTING ADDITIONAL INFORMATION

August 22, 2013
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Communications with respect to this document should be sent to:

Evelyn D. Sahr

James G. Ehrig

Eckert Seamans Cherin & Mellott, LLC

1717 Pennsylvania Avenue, NW

12th Floor

Washington, D.C. 20006

Phone: +1 202 659 6622

Fax: +1 202 659 6699

esahr@eckertseamans.com

jehrig@eckertseamans.com

Counsel for AIR TAHITI NUI

Andrea Fischer Newman,

Senior Vice President, Government Affairs

Alexander Van der Bellen,

Managing Director,

Government Affairs and Associate

General Counsel

DELTA AIR LINES, INC.

1212 New York Avenue, NW Suite 200

Washington, DC 20005

Phone: +1 202 842 4184

sascha.vanderbellen@delta.com

Rita Ciccone

General Counsel & Vice President Legal

and Corporate Affairs

ALITALIA-COMPAGNIA AEREA ITALIANA

S.p.A.

Piazza Almerico da Schio. Pal RPU

00054 Fiumicino (Roma), Italy

Phone: +39 06 65635136

ciccone.rita@alitalia.it

Richard D. Mathias

Zuckert, Scoutt & Rasenberger, L.L.P.

888 Seventeenth Street, NW, Suite 600

Washington, DC 20006-3309

Phone: +1 202 973 7917

Fax: +1 202 342 0683

rdmathias@zsrlaw.com

Counsel for ALITALIA-COMPAGNIA AEREA

ITALIANA S.p.A.

Robert E. Cohn

Patrick R. Rizzi

Hogan Lovells US LLP

555 Thirteenth Street, NW

Washington, DC 20004

Phone: +1 202 637 4999/5659

Fax: +1 202 637 5910

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for

SOCIÉTÉ AIR FRANCE and

KONINKLIJKE LUCHTVAART

MAATSCHAPPIJ N.V.

Laurent Timsit,

Vice President –

European and International Affairs

SOCIÉTÉ AIR FRANCE

45, rue de Paris

F-95747, Roissy CDG Cedex

Paris, France
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of )

)

AIR TAHITI NUI )

SOCIÉTÉ AIR FRANCE )

DELTA AIR LINES, INC. )

KONINKLIJKE LUCHTVAART MAATSCHAPPIJ N.V. ) DOCKET DOT-OST-2013-0077

ALITALIA-COMPAGNIA AEREA ITALIANA S.P.A. )

)

) AUGUST 22, 2013

Under 49 U.S.C. §§ 41308 and 41309 )

for approval of and antitrust immunity )

for alliance agreements )

[PUBLIC VERSION]

RESPONSE OF JOINT APPLICANTS

TO DOT ORDER 2013-7-21

REQUESTING ADDITIONAL INFORMATION

Air Tahiti Nui (“Air Tahiti Nui”), Société Air France (“Air France”), Delta Air

Lines, Inc. (“Delta”), Koninklijke Luchtvaart Maatschappij N.V. (“KLM”), and AlitaliaCompagnia Aerea Italiana S.p.A. (“Alitalia”) (collectively, the “Joint Applicants”)

hereby respond to DOT Order 2013-7-21, which requested supplemental

information concerning the Joint Application.

The grant of antitrust immunity is clearly in the public interest. Air Tahiti Nui

and Air France desire to deepen their existing arms’-length relationship to form a

joint venture for LAX-CDG (and beyond) service. The AF-TN Joint Venture will

create a broader network, offer increased nonstop frequencies (supported by

increased traffic flows), provide optimized routings, itineraries, and time-of-day
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coverage, and offer lower combined fares. Given the compelling public interest

benefits of the Joint Application and important principles of international comity and

regulatory harmony, the Joint Applicants urge the Department promptly to issue an

Order determining that the record is complete and establishing a procedural schedule.

The Joint Applicants respond as follows to the Department’s request for

additional information:

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.

Response: Air France and Air Tahiti Nui supplement the description of the

Joint Venture set forth in the Joint Application1as follows:

The AF-TN Joint Venture Agreement details Air France’s and Air Tahiti Nui’s

plans and objectives for future transatlantic integration between them, including the

implementation of a “common bottom line” (with its revenues being shared between

Air France and Air Tahiti Nui according to a formula) and incentives to maximize

benefits for consumers and the Joint Venture as a whole.

Air France and Air Tahiti Nui will jointly manage the Joint Venture with a

single joint management committee overseeing four joint working groups managing

their respective commercial activities. The management committee and working

groups shall each be comprised of employees from both Air France and Air Tahiti

Nui. It is anticipated that the members would include appropriate Senior Vice1

A description of the structure, scope, and procedures of the AF-TN Joint Venture is set forth

on pages 12-13, 15-16, and 21-43 of the Joint Application and in the AF-TN Joint Venture

Agreement itself (Appendix D to the Joint Application, confidential treatment requested).
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President, Vice-President and/or Director (or equivalent) level management

personnel with responsibilities for the subject matters in question.

[confidential]
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[end confidential]

The Joint Venture provides for coordination, metal neutrality, and revenue

sharing involving foreign air transportation on the LAX-CDG trunk route and for freeflow code-sharing beyond CDG.2 The Bilateral Coordination Agreements between

Air Tahiti Nui, on the one hand, and each of the other Joint Applicants, on the other

hand, and the Multilateral Cooperation Agreement among all of the Joint Applicants

encompass foreign air transportation via transatlantic routings. The request for

antitrust immunity does not encompass foreign air transportation between the

United States and French Polynesia (including LAX-PPT), between the United

2 The AF-TN Joint Venture also covers certain Tahiti – Europe services via LAX-CDG, but –

as explained below – that does not involve foreign air transportation and thus is not within the scope

of the Joint Application.
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States and the South Pacific, or between the United States and other international

destinations served via transpacific routings.

The proposed AF-TN Joint Venture will involve coordination in the areas of

schedules, capacity planning, pricing, inventory/yield/revenue management,

codesharing, passenger sales, marketing, and joint purchasing, among others, with

respect to their nonstop passenger flights between LAX and CDG:

 Schedules and Capacity Planning

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[end confidential]

 Pricing, Inventory, and Yield Management; Revenue Sharing

[confidential]
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[end confidential]

 Codesharing

The AF-TN Joint Venture will enable Air Tahiti Nui to significantly expand its

network through expanded free-flow codesharing on Air France’s LAX–CDG flights

and on beyond–CDG passenger flights operated by Air France. On this subject, the

AF-TN Joint Venture Agreement provides:

“Codesharing

LAX-CDG: In order to maximise passenger traffic and revenues

generated by the Joint Venture, [confidential]

[end confidential]

BEYONDS: In order to enhance service options for the traveling

public as well as Air Tahiti Nui’s competitive presence in Europe and
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Air France’s competitive presence with respect to passenger flights

to Tahiti, [confidential]

[end confidential]

 Passenger Sales and Marketing

The Alliance Agreements provide for closer cooperation among the Joint

Applicants in marketing, promotion, and distribution. This effort will entail the

coordination of their sales forces, commission/incentive programs for various

customer groups (e.g., travel agents, corporations, governments, consolidators, tour

operators, and other customer groups), joint marketing efforts and campaigns,

standardization of programs and contracts, expansion through coordination of

discount and incentive programs, enhanced coordination of frequent flyer programs,

and the integration of related systems.

[confidential]
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[end confidential]

 Joint Purchasing

The AF-TN Joint Venture Agreement also provides that the Joint Venture

Partners [confidential]

[end

confidential]

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.

Response: The Joint Applicants seek approval and antitrust immunity for

Alliance Agreements,3including a Joint Venture Agreement between Air France

and Air Tahiti Nui, a Coordination Agreement among the five Joint Applicants, and

Bilateral Cooperation Agreements between Air Tahiti Nui and each of the other

Joint Applicants. The Joint Application seeks antitrust immunity for the Alliance

Agreements to the extent that they involve “foreign air transportation over

transatlantic routings”. “Transatlantic routing” in the context of the Joint Application

3

“Alliance Agreements” is defined in the Joint Application at 11 & n.8.
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means foreign air transportation between the United States and international

destinations involving itineraries with transatlantic flights operated by the Joint

Applicants. The proposed AF-TN Joint Venture involves transatlantic routings over

the LAX-CDG segment. However, Air Tahiti Nui desires the opportunity to have

the ability to coordinate with the other Joint Applicants in the future over other

transatlantic routings.

(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).

Response: The AF-TN Joint Venture will include flights operated by Air

France and Air Tahiti Nui on the Los Angeles-Paris nonstop trunk route and on

certain flights beyond Paris operated by Air France. The AF-TN Joint Venture

includes PPT-LAX-CDG (and PPT-LAX-CDG-beyond CDG) itineraries; however,

antitrust immunity is not requested for such itineraries because they do not involve
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foreign air transportation as defined by 49 U.S.C. § 40102. This answer is the same

regardless of which direction the passenger is traveling, whether Air France or Air

Tahiti Nui is the operating carrier, or which carrier codes on the ticketed itinerary.

PPT-LAX (either direction). The Joint Venture will not include PPT-LAX in

either direction. With respect to PPT-LAX, Air France and Air Tahiti Nui will

continue to make independent scheduling, pricing, and revenue management

decisions for their own flights. This position is consistent with the view of the

Government of French Polynesia which “wholeheartedly supports” this hybrid

approach involving (i) arms’-length codesharing on the LAX–Tahiti route and (ii) the

immunized AF-TN Joint Venture alliance on the transatlantic routes.4 Air France

and Air Tahiti Nui make independent decisions regarding how much inventory is

made available to consumers at different fare levels between PPT and LAX.

However, because Air France and Air Tahiti Nui sell seats from each other’s

inventory, it is necessary for them to communicate to “map” fare buckets, but that

consists solely of identifying the class of inventory of each carrier that will be made

available by the operating carrier to the marketing carrier for codeshare sales at the

fare levels independently determined by each carrier. Class mapping is a

mechanism used throughout the industry to map the differing fare “buckets” from

one airline to the other and to enable the operating carrier to place the passengers

of the marketing carrier into the appropriate bucket of the operating carrier for

revenue management purposes. Air France and Air Tahiti Nui already use class

4

Letter from the President of French Polynesia to the President of Air Tahiti Nui, dated

January 21, 2013. Exhibit JA-1 to the Joint Application.
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mapping for their arms’-length codesharing arrangement. The JV Partners do not

share non-public information concerning seat inventories for the LAX-PPT segment,

and such class mapping communications do not require antitrust immunity.

PPT-LAX-CDG; PPT-LAX-CDG-VIE; PPT-LAX-CDG-FCO. Passenger

itineraries between PPT and Europe (travelling over the LAX-CDG trunk route) and

connecting on Air France flights beyond CDG are encompassed by the AF-TN Joint

Venture Agreement. However, such itineraries are not included in the request for

antitrust immunity because they do not involve “foreign air transportation” (as

defined in 49 U.S.C. § 40102). Nonetheless, Air France and Air Tahiti Nui state that

they will not coordinate pricing on PPT-CDG itineraries (in either direction), but will

coordinate seating allocation, revenue management, and settlement on such

itineraries. The AF-TN Joint Venture envisions a financial settlement of incremental

revenues from all passengers travelling on the CDG-LAX trunk route.

LAX-CDG. Delta will make the pricing decisions ex-U.S., and Air France

will make pricing decisions ex-Europe for LAX-CDG O&D passengers. The pricing

delegations are set up to harmonize with the structure of the Air

France/KLM/Delta/Alitalia TATL JV, pursuant to which Delta makes the pricing

decisions for U.S. points-of-sale. That is a very effective and efficient delegation

given Delta’s expertise in home-market pricing from the U.S. and the lack of

presence and capability for Air France to perform that function in the U.S. Since

Delta already performs all ex-U.S. pricing for Air France, the Joint Applicants do not

want to disturb that structure. The AF-TN Joint Venture will provide for revenue
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management coordination on the LAX-CDG flights, and price and financial

settlement for local LAX-CDG itineraries.

LAX-Beyond CDG. The AF-TN Joint Venture will provide for price

coordination for LAX-beyond CDG (on Air France) itineraries. As previously stated,

Delta will make the pricing decisions ex-U.S., and Air France will make pricing

decisions ex-Europe for LAX-CDG O&D passengers as well as for LAX-beyond

CDG O&D passengers. The financial settlement under the Joint Venture will

include the LAX-CDG portion of LAX-CDG-beyond (on Air France) passengers.

LAX-beyond CDG itineraries will be subject to a prorate revenue allocation

mechanism, using the Adjusted Weighted Mileage (“AWM”) methodology to allocate

revenue to each particular segment based on distance flown, subject to

adjustments. This structure will benefit consumers substantially because it will

enable the JV Partners to price more aggressively.

For example, Air France’s current promotional published fare for Los Angeles

to Frankfurt (via CDG) is $475 USD (VLPX77US fare) plus a fuel surcharge of $258.

The current limited agreement between Air France and Air Tahiti Nui on the beyond

CDG-FRA segment does not allow Air Tahiti Nui to match it because Air Tahiti Nui’s

portion would not cover the marginal cost on the transatlantic sector. But, under the

proposed AF-TN Joint Venture, [confidential]
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[end confidential]

(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?

Response: It is not uncommon in alliances for some passengers over

certain segments to be on itineraries that are covered by a Joint Venture (or by ATI)

and others that are not. For example, before the merger of Delta and Northwest,
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domestic U.S. segments operated by Delta and Northwest contained local domestic

O&D passengers who were not covered by the immunized Delta-Northwest-Air

France-KLM Joint Venture, while other passengers on those domestic segments

with U.S.-Europe itineraries were covered by the Joint Venture. Likewise, before

the merger of United and Continental, domestic O&D passengers were not covered

by the immunized Star Atlantic Plus-Plus joint venture, while U.S.-Europe

passengers traveling on domestic U.S. segments were covered by the Joint

Venture.

There will be no coordination between Air France and Air Tahiti Nui over the

PPT-LAX segment, just like there was no coordination between Delta and

Northwest and between United and Continental on domestic U.S. segments. Each

carrier will set its own prices and make its own revenue management

determinations on that segment. Revenue/seat management will be established

through a normal industry class mapping mechanism, pursuant to which the

carriers will identify the class of inventory of each carrier that will be made available

by the operating carrier to the marketing carrier for codeshare sales at the fare

levels independently determined by each carrier.

(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.

Response: PPT is a destination covered under the SkyTeam TATL Joint

Venture. The only member of the SkyTeam Alliance that serves PPT with its own
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metal is Air France. Delta lists its code on Air France’s flights between LAX and

PPT. Air France’s flights on the LAX-PPT segment are included in the Air

France/KLM/Delta/Alitalia TATL Joint Venture financial settlement. However, the

proposed AF-TN Joint Venture does not include PPT-LAX itineraries and LAX-PPT

flights.

With respect to PPT-Europe itineraries, as previously noted, antitrust

immunity is not requested for such itineraries because they do not involve foreign

air transportation. In any event, Air France and Air Tahiti Nui will not coordinate

pricing with respect to PPT-Europe itineraries.

With respect to LAX-CDG and beyond-CDG routes, since these are routes

covered by the Air France/KLM/Delta/Alitalia TATL Joint Venture, Delta will retain

governance rights with respect to Air France’s operations on such routes and Air

France’s share of the revenue generated by the AF-TN Joint Venture will be

contributed by Air France to the Air France/KLM/Delta/Alitalia TATL Joint Venture

revenue pool for financial settlement purposes.

For the reasons discussed in the Joint Application and supplemented below,

the AF-TN Joint Venture will establish a metal neutral partnership that will create

economic incentives for Air France and Air Tahiti Nui to act for the good of the Joint

Venture enterprise, rather than each carrier’s self-interest. Since Air France’s

share of the AF-TN Joint Venture will be contributed to the Air

France/KLM/Delta/Alitalia TATL Joint Venture, the grant of antitrust immunity for

the other Alliance Agreements among the Joint Applicants will create economic
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incentives for all of the Joint Applicants to promote the success of the AF-TN Joint

Venture.

(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.

Response: Air France will be responsible for Europe point-of-sale pricing

for the LAX-CDG (and beyond) flights, as it currently does under the Air

France/KLM/Delta/Alitalia TATL Joint Venture. Delta will continue to be

responsible for U.S. point-of-sale pricing for the LAX–CDG (and beyondCDG) flights, as it currently does under the Air France/KLM/Delta/Alitalia TATL

Joint Venture.

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).

Response: Air France is Air Tahiti Nui’s natural partner for a Joint Venture,

based on the deep political, cultural, and economic relationships between French

Polynesia and France, the fact that Air France and Air Tahiti Nui are both French

carriers sharing unique cultural and business interests, the fact that France is the
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primary destination for travelers between PPT and Europe, and the fact that Air

France is the only airline that has a hub at Paris—Air Tahiti Nui’s principal European

gateway.

Air France’s most important strategic assets supporting the LAX-CDG route

are its large beyond-CDG network, large frequent flyer base, and corporate accounts.

In the absence of antitrust immunity, Air France will use these strategic assets to

benefit its own flights. Without an immunized Joint Venture, Air France has no

incentive to allow Air Tahiti Nui to access its beyond-CDG network, since those

passengers would otherwise fly on Air France’s metal between LAX and CDG. Nor would Air

France otherwise be willing to give Air Tahiti Nui access to its frequent flyer base or corporate

accounts for transatlantic travel on Air Tahiti Nui, when those passengers would otherwise fly on

Air France.

The immunized Joint Venture, however, will eliminate the self-interest

incentives and allow the carriers to create a broader network, offer new flights,

increase frequencies (supported by increased traffic flows), provide their customers

with optimized routings, itineraries, and time-of-day coverage, and offer lower

combined fares (since each AF-TN Joint Venture Partner shares in the revenue

generated by the other – rather than just its own metal services). A joint venture

arrangement represents the deepest, most integrated form of alliance cooperation,

with the potential to create the greatest degree of public benefits for consumers

and communities. The AF-TN Joint Venture Agreement will enable Air Tahiti Nui

and Air France to create a metal-neutral common economic interest by sharing
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revenues from coordinated foreign air transportation on the LAX–CDG trunk route.

This arrangement will ensure that each carrier is fairly compensated for the value

of its respective contribution to the AF-TN Joint Venture as a whole and will

maximize each carrier’s incentive to pursue services, sales, and marketing

initiatives for the benefit of the Joint Venture. Having a common economic interest

will also empower the Joint Venture to benefit consumers significantly through the

introduction of new flights, optimized schedules, expanded availability of discount

seats, lower fares resulting from the elimination of incentives for each carrier to

build in separate profit markups on codeshare flights, reduced costs, improved

elapsed times, increased flight routings, and joint fare initiatives. Indeed, the

Department and others have recognized that these consumer benefits typically

result from immunized alliances and joint ventures, such as the one proposed

here.5

The AF-TN Joint Venture will foster frequency and capacity increases on the

LAX–CDG trunk route. Under the AF-TN Joint Venture, Air Tahiti Nui [confidential]

5

2010 oneworld ATI, DOT Order 2010-2-8 at 30; Delta/Virgin Blue/Pacific Blue, DOT Order

2011-5-8 at 13; U.S.-Japan Alliance Case, DOT Order 2010-10-4 at 13; SkyTeam II ATI, DOT Order

2008-4-17 at 15.
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[end confidential] As a result of the

immunized AF-TN Joint Venture, Air France will also be able to offer

[confidential]

[end confidential]

Under the immunized Joint Venture, Air France and Air Tahiti Nui will

enhance time-of-day coverage. As the Joint Application noted, the summer

2013 schedule for Air Tahiti Nui’s LAX–CDG flight has an early afternoon LAX

departure and a late morning CDG departure.

July 2013 Schedule (LAX–CDG) – Daily Flights

Departure Time – LAX Departure Time – CDG

TN 13:10 11:30

AF 15:45 10:30

AF 18:30 13:35

Air Tahiti Nui and Air France offer almost wingtip-to-wingtip morning

departures from CDG (only about an hour apart). Morning CDG departures are

considered prime-time departures. Neither carrier would unilaterally remove

itself from that time period. However, under the metal-neutral AF-TN Joint

Venture, the carriers will have the incentive to optimize schedules for the good

of the Joint Venture and the travelling public. [confidential]
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[end confidential]

The AF-TN Joint Venture will also enable Air Tahiti Nui to significantly

expand its network through expanded free-flow codesharing on Air France’s LAXCDG and beyond–CDG flights. With respect to new on-line service benefits, Air

Tahiti Nui’s European network will initially expand by up to [confidential]
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[end confidential].

These are important and valuable benefits for consumers. Passengers

value frequent and convenient service because the availability of travel options

increases the likelihood that they will be able to find seats, discount fares, and

timely service. Furthermore, on connecting flights, passengers must be able to

obtain seats on each of the legs necessary to link the point-of-origin to the point-ofdestination and in both directions. By combining the Air France and Air Tahiti Nui

networks, passengers will be afforded more service options for mixing and

matching outbound and return paths between the United States and Europe and

between Europe and Tahiti. These synergies will yield time savings, enhanced

convenience, increased travel options, and lower average fares.

Flight connections between the AF-TN Joint Venture Partners would also

be greatly enhanced as a result of co-locating and sharing their facilities at CDG

by moving Air Tahiti Nui from Terminal 2A to Terminal 2E/F. Air Tahiti Nui is

currently located in Terminal 2A of CDG, which is a lengthy walk to Air France’s

main section of the airport located in Terminal 2E/2F. Due to Air Tahiti Nui’s

remote location, currently U.S. travelers from Los Angeles to Paris on Air Tahiti Nui

flights have a difficult time making connections out of CDG on Air France. With the

AF-TN Joint Venture, Air Tahiti Nui will move to the 2E/2F Terminal next to Air
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France, making it easier for U.S. travelers to connect out of CDG to points beyond

in Europe. The co-location and sharing of facilities at this large gateway airport

will generate substantial cost savings, facilitate seamless metal-neutral

operations, and greatly enhance the passenger experience and connectivity. In

the absence of immunity and the resulting increased traffic flows and enhanced

connectivity from the metal-neutral Joint Venture, there is no incentive to

expend the requisite resources and make the necessary investments to colocate and share facilities.

The expanded codesharing and schedule coordination within the framework

of the AF-TN Joint Venture Agreement will enable the carriers to increase traffic

flows over their combined network, increase aircraft utilization, and more efficiently

utilize airport/ground personnel and facilities, and thereby reduce unit operating

costs and achieve economies of density superior to those achieved by carriers that

codeshare on a non-immunized basis. The higher load factors generated by “metalneutral” sales, increased connecting traffic flows, joint pricing, and

inventory/revenue management will also translate into a reduction in the Joint

Venture Partners’ marginal operating costs; and the integration of transatlantic

pricing, sales and marketing functions should result in a reduction in the Joint

Applicants’ administrative costs. This, in turn, will result in lower costs for

passengers.

In addition to the above benefits, the AF-TN Joint Venture will provide Air

Tahiti Nui with the opportunity to participate in multiple frequent flyer mile/award
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programs. Because Air Tahiti Nui currently is not in an alliance, it does not have

access to an interchangeable frequent flyer program. Travel between Los Angeles

and Paris involves a large quantity of potential frequent flyer miles, and Air Tahiti

Nui’s inability to tap into an alliance’s frequent flyer programs limits its competitive

effectiveness as some passengers, especially those traveling for business,

frequently choose an airline based on the frequent flyer miles and awards offered

for their travel. Air France is not prepared to give Air Tahiti Nui access to its

frequent flyer program in the absence of an immunized joint venture.

The grant of antitrust immunity is essential to mitigate the potential risk of

proceeding with full implementation of the Alliance Agreements. The centerpiece

of the alliance is the “metal neutral” AF-TN Joint Venture Agreement, involving the

sharing of revenue, risk, and benefits. Simply put, due to the unacceptable risk of

antitrust litigation, the Joint Applicants cannot and will not proceed in the absence

of immunity. The Department has consistently found that there is a clear and

legitimate need for antitrust immunity, particularly to allay antitrust exposure risks

with respect to second-stage joint venture agreements:

“These second-stage commercial agreements, such as

the [Air France-Air Tahiti Nui Joint Venture Agreement],

involve revenue and benefit-sharing arrangements that

create a greater risk of antitrust litigation and potential

antitrust liability, even though we have tentatively found

that the alliance expansion will not substantially reduce

competition.”

DOT Order 2006-12-17, at 17.
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The Department made a similar determination in granting ATI to the Star

Alliance (which included a number of small European airlines): “The specific terms

of [the Star Alliance Agreement], with its emphasis on metal neutrality, create a risk

of antitrust litigation.” DOT Order 2009-4-5 at 18.

Because Air Tahiti Nui is a very small player in a highly competitive

transatlantic market, the benefits of this alliance can be achieved without any potential

harmful competitive effects. As discussed in detail in Section VI of the Joint

Application, the grant of antitrust immunity will not result in a substantial reduction in

competition. As pointed out in the Joint Application, the conclusion that there would

be no competitive harm in the Los Angeles-Paris market is consistent with the

Department's tentative findings with respect to nonstop overlap routes in the U.S.-

Japan Alliance case. In that case, there were six nonstop overlap routes involving a

reduction in the number of nonstop competitors, compared to only one here. There,

the Department found that the reduction in nonstop competitors “would not

significantly affect competition on the city-pair level, including nonstop overlap

markets.” DOT Order 2010-10-4 at 12. One of the overlaps in the U.S.-Japan case

involved a reduction of nonstop competitors from 2 to 1 (Washington-Tokyo) and

another involved a reduction from 4 to 2 (Chicago-Tokyo). Id. at 9. The Department

found no competitive harm on the Washington-Tokyo and Chicago-Tokyo routes,

noting that “because these markets serve as trunk routes for connecting traffic for

one or both ATI Applicants, the carriers face strong disincentives to cut capacity and

raise prices.” Id. at 12. This finding is equally applicable here, because each
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carrier’s Los Angeles-Paris flights will serve as the key trunk routes, facilitating

connecting traffic between the Joint Venture carriers’ networks, and because there

are substantial alternative competitive services over other gateways to discipline the

carriers’ behavior.

Air Tahiti Nui is a small unaligned air carrier based in a geographically

remote location, with a very limited presence in the U.S.–Paris, U.S.–France,

and U.S.–Europe markets. It needs to join an antitrust-immunized alliance

with a global network carrier in order to be an effective transatlantic

competitor and enhance its long-term position in the global marketplace. The

Department has granted antitrust immunity to relatively small alliances involving

similar relatively modest network expansions. French Polynesia is a distant country

located in the middle of the South Pacific, and so, by virtue of geography, there are

not large numbers of third-country beyond points that can be served by the alliance.

The primary network expansion will be garnered by Air Tahiti Nui, a small

transatlantic operator, which will gain access to Air France’s vast network beyond

Paris.

The Department granted antitrust immunity to an alliance between American

and Lan Chile despite very limited beyond connectivity. There was a small

domestic market in Chile beyond Santiago, and American already directly served

most major destinations in South America. Nonetheless, the Department found that

approval of the alliance would promote additional network traffic flows and was

consistent with the public interest and the new open skies agreement with Chile.
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See DOT Order 99-4-17. Similarly, the Department granted antitrust approval to an

alliance between United and Air Canada. At that time, the limited transborder U.S.-

Canada open skies agreement did not cover beyond service to third countries. Even

though the scope of the United-Air Canada alliance involved only bilateral service

between the two countries, the Department found that “the procompetitive effects of

global alliances can be particularly evident in the case of behind- and beyondgateway markets where many passengers now lack convenient online service . . . the

proposed alliance will significantly increase competition in the behind- and beyondgateway U.S.-Canada markets.” DOT Order 97-6-30 at 27.

Finally, Air Tahiti Nui points out that the Department has long encouraged

small, unaligned airlines to participate in antitrust immunized alliances. Applications

to add smaller foreign airlines to an existing immunized alliance have been

consistently approved by the Department, even though the smaller carrier did not

materially expand the alliance networks. See, e.g., 2007 Star ATI, DOT Orders

2006-12- 17 & 2007-2-16 (LOT and TAP join Star Alliance); 2001 Star ATI, DOT

Order 2001-1-19 (Austrian joins Star Alliance); 2011 Star ATI, DOT Order 2011-11-

16 (Brussels Airlines joins Star Alliance when Brussels Airlines served the United

States only on a codeshare basis); 2007 Star ATI, DOT Order 2007-9-12 (bmi joins

Star Alliance as a full member); 2010 oneworld ATI, DOT Orders 2010-2-8 and

2010-7-8 (Finnair and Royal Jordanian obtain immunity as part of oneworld). Like

the smaller carriers that were added to the immunized Star and oneworld alliances,

Air Tahiti Nui needs to participate in an antitrust-immunized alliance to realize the
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economies of scope and density that arise from participating in a larger, more

integrated network. Linking Air Tahiti Nui to the existing immunized alliance through

the Air France-Air Tahiti Nui Joint Venture, the Multilateral Cooperation Agreement,

and the Bilateral Coordination Agreements between Air Tahiti Nui and each of the

other Joint Applicants is fully consistent with those precedents. Air Tahiti Nui should

be treated no differently than the other small, unaligned carriers.

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.

Response: Carriers operating under arms’-length codeshare agreements

typically each include a profit mark-up on their respective segments, so that

passengers traveling on such interline connections pay a “double markup”.

Antitrust immunity, particularly with a joint venture, eliminates the incentives for the

carriers to include separate profit margins on connecting routes. The common

economic interest created by antitrust immunity provides carriers with the incentive

to eliminate the double mark-up and reduce their interline fares.

Examples of the reduced fares that result from the elimination of double

marginalization by the “common economic incentive” of an immunized Joint

Venture are shown below.
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Origin Destination Lowest AF-TN

Interline Fare ($)*

Lowest

SkyTeam JV ATI Fare ($)

(without double mark-up)

$ Lower % Lower

LAX FRA 1467 991 476 32%

LAX ROM 1324 977 347 26%

LAX ZRH 1150 872 278 24%

LAX MAD 1308 814 494 38%

LAX NCE 1182 954 228 19%

* The AF-TN Interline Fares were constructed by combining Air Tahiti Nui’s lowest promotional LAX-CDG fare

with the SPA rates Air France offers Air Tahiti Nui from CDG on the beyond-CDG segment. Fares are

inclusive of fuel surcharge.

Previous economic studies have shown that the elimination of double

marginalization results in fare decreases of approximately 15 percent.6 The

elimination of the double mark-up benefits consumers through lower interline

fares, as well as the carriers through increased demand.

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?

Response: Air France will carry the Delta code on its LAX-CDG flights. Air

Tahiti Nui desires to carry the Delta code on its LAX-CDG flights in the future, but

an agreement with Delta has not yet been reached. Air Tahiti Nui currently has a

frequent flyer agreement with Delta which provides for a reciprocal redeem-only

relationship on sectors across the Pacific, which was originally entered into with

Northwest Airlines and retained after the Delta-Northwest merger. Should Air

6 See e.g., J.K. Brueckner, International Airfares in the Age of Alliances: The Effects of CodeSharing and Antitrust Immunity, REVIEW OF ECONOMICS AND STATISTICS 85: 105-118 (2003).
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Tahiti Nui carry the Delta code on its LAX-CDG flights, Delta SkyMiles members

based in the U.S. would be able to earn miles, including elite miles, on Air Tahiti

Nui-operated flights from both CDG and PPT.

5. Typically, airline partners engage in bilateral or multi-lateral cooperation at “armslength” 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?

Response: Air France and Air Tahiti Nui have engaged in reciprocal arms’-

length codesharing since 2003, for service between PPT and LAX and between

LAX and Paris. Thus, for the past 10 years, the carriers already have taken the

“first step” in the development of a mutually beneficial partnership. The two carriers

now desire to broaden and deepen their relationship through a mutually beneficial

joint venture which will expand consumer benefits beyond those achievable through

arms’-length agreements on the core LAX-CDG trunk route. The new AF-TN

codeshare agreement will be “free flow”, a notable difference from the current block

space codeshare agreement between Air France and Air Tahiti Nui.

In arms’-length relationships, carriers enter into codesharing opportunistically

and seek to avoid the cost of traffic diversion on routes where they have a
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competitive advantage. As a result, arms’-length codeshare agreements are often

negotiated on an individual city-pair basis and tend to be narrow in scope. That

situation has characterized the past relationship between Air France and Air Tahiti

Nui. They have limited codesharing on only one of Air France’s LAX-CDG flights

and no codesharing beyond CDG. Antitrust immunity increases carriers’ economic

incentives to codeshare on a broader basis.

As discussed in the Response to Information Request No. 2, Air France’s

“crown jewels” are its extensive beyond-CDG network, its large frequent flyer base,

and its corporate accounts. Without the common economic interest created by

the immunized Joint Venture, there is no economic incentive for Air France to allow

Air Tahiti Nui to gain access to these important strategic assets, when those passengers

would otherwise use Air France. The immunized Joint Venture, however, eliminates

the self-interest incentives, and will allow the carriers to create a broader network,

offer new flights, increase frequencies (supported by increased traffic flows),

provide their customers with optimized routings, itineraries, and time-of-day

coverage, and offer lower combined fares (since each AF-TN Joint Venture Partner

shares in the revenue generated by the other – rather than just its own metal

services).

Allowing Air Tahiti Nui to place its code on Air France’s beyond-CDG flights

will enable Air Tahiti Nui to increase traffic flows over the critical LAX-CDG trunk

route, which will expand its transatlantic competitive presence and improve

connectivity of service between Europe and Tahiti via Los Angeles (with no
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coordination with respect to local LAX-PPT passengers). As noted in the Joint

Application and above (in response to Information Request No. 2), with antitrust

immunity, Air Tahiti Nui’s European network will initially expand by up to

[confidential] [end confidential]

By increasing Air Tahiti Nui’s traffic flows over the critical LAX-CDG trunk

route, Air Tahiti Nui will become a stronger competitor in all of its markets, not only

across the Atlantic, but over its non-immunized transpacific routes as well.

In addition, antitrust immunity eliminates the incentive for the carriers to build

in separate profit margins on connecting routes and provides the carriers with the

incentive to reduce their interline fares. Carriers operating under arms’-length

codeshare agreements typically charge a profit mark-up on their respective

segments, resulting in a double markup from the combination of each carrier’s

segments under normal interlining arrangements. With antitrust immunity and a

metal-neutral Joint Venture, the carriers have the incentive to eliminate the double

mark-up. As noted in the Response to Information Request No. 3, the elimination of

double marginalization between Air France and Air Tahiti Nui will result in

substantial decreases in the interline fares between Air France and Air Tahiti Nui.

Antitrust immunity coupled with a joint venture produces consumer benefits

that exceed those generated by antitrust immunity alone. By establishing a “metal

neutral” common bottom line, a joint venture maximizes incentives for the partners

to (i) efficiently code-share without restrictions, (ii) agree on schedules that increase

passenger convenience by adding new flights or shifting flights to provide broader
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time-of-day coverage, and (iii) route customers between city-pairs via the most

efficient routing regardless of which carrier operates the flight(s). These incentives

are not present under non-immunized codesharing, or even with antitrust immunity

in the absence of a joint venture.

In addition, economies of density arise because the increased traffic will

enable the carriers to (i) increase frequencies, (ii) use larger and more efficient

aircraft, (iii) increase their load factors, (iii) increase aircraft use (more flight hours

per day), and (iv) use fixed ground facilities and personnel more intensively. Thus,

not only is there an increase in demand due to the higher quality product created by

the antitrust immunized joint venture, but there is also an increase in demand due to

lower prices resulting from lower costs.

(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?

Response: The reason the Joint Venture does not include other SkyTeam

members is because only Air France operates nonstop flights between Los Angeles

and Paris, and only Air France operates a hub beyond CDG. Air France is the

natural partner for an alliance with Air Tahiti Nui given (i) the longstanding political,

cultural, and economic relationships between French Polynesia and France,

discussed in the Joint Application (at p.4), (ii) that France is the primary destination

for travelers between PPT and Europe, (iii) that Air France and Air Tahiti Nui are

both French carriers sharing unique cultural and business interests, and (iv) that Air
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France is the only airline that has a hub at Paris, Air Tahiti Nui’s most important

European gateway.

Air Tahiti Nui has also determined that it would be too burdensome and

costly to become a member of SkyTeam. Its size, tiny market niche, and the distant

geographic location of its home base in PPT make it better suited to participate in a

limited joint venture with its natural European partner, Air France. Air Tahiti Nui

believes that the costs and burdens imposed on Air Tahiti Nui joining SkyTeam and

a complex, multi-party joint venture, merely to obtain a Joint Venture covering a

single trunk route, would far outweigh the benefits. Air Tahiti Nui does not have the

resources or manpower required to participate in the global joint venture enterprise,

particularly given that only one trunk route is involved in the proposed Alliance.

It is not necessary for every alliance partner to be part of every Joint

Venture, particularly where, as here, there is no overlap with other SkyTeam

members on the trunk LAX-CDG route, and no benefit to the inclusion of

additional partners to the AF-TN Joint Venture. There is no conflict between the

proposed Joint Venture and the existing TATL Joint Venture. We note that other

joint ventures approved by the Department did not include all of the other

alliance members serving the region. For example, Star partners Asiana and Air

Canada (both of which serve Japan) did not join the United/Continental/ANA

joint venture. The fact that the Joint Applicants each have other alliance

partners is not unusual, and in no way affects the potential public benefits that will

be produced by the grant of this Joint Application. The Joint Applicants request
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antitrust immunity in order to allow for potential future coordination with the other

existing TATL Joint Venture partners, in other markets which are unrelated to the

primary purpose of the proposed Joint Venture covering the LAX-CDG route.

(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?

Response: If the Joint Application is approved, the Joint Venture Partners

will co-locate and share their facilities at CDG. Air Tahiti Nui will move from CDG

Terminal 2A to Terminal 2E/F where Air France is located. See Joint Application

Exhibit JA-6. For the same reasons that Air France does not have the incentive

to give Air Tahiti Nui access to its beyond-CDG network in the absence of the

immunized Joint Venture, so too Air France has no incentive to give Air Tahiti

Nui access to its CDG facilities. In the absence of immunity and the resulting

increased traffic flows and enhanced connectivity from the metal-neutral Joint

Venture, there is no incentive to expend the requisite resources and make the

necessary investments to co-locate and share facilities.

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 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?

Response: See Response to Information Request No. 2. The AF-TN Joint

Venture will promote frequency and capacity increases on the LAX–CDG trunk

route. Air Tahiti Nui [confidential]
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[end confidential] As a result of the immunized AF-TN Joint Venture, Air

France will also be able to offer [confidential]

[end

confidential]

Under the immunized Joint Venture, Air France and Air Tahiti Nui will

enhance time-of-day coverage. As the Joint Application noted, the summer

2013 schedule for Air Tahiti Nui’s LAX–CDG flight has an early afternoon LAX

departure and a late morning CDG departure. Air Tahiti Nui and Air France offer

almost wingtip-to-wingtip morning departures from CDG (only about an hour

apart). Morning CDG departures are considered prime-time departures.

Neither carrier would unilaterally remove itself from that time period. However,

under the metal-neutral AF-TN Joint Venture, the carriers will have the incentive

to optimize schedules for the good of the Joint Venture. [confidential]
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[end

confidential]

The Joint Applicants are unable to predict what will happen to fares in the

future, other than to reiterate the previous discussion that interline fares between

Air France and Air Tahiti Nui will be lower as a result of the Joint Venture and the

elimination of double marginalization. As the Joint Application explains, Los

Angeles is a highly competitive market with many competitors offering service to

Paris and Europe over many other U.S. gateways. The Joint Applicants expect

that fares will be fully competitive. With service provided to Europe and between

LAX and CDG by the three major antitrust immunized alliances, the Department

can be assured that the benefits and efficiencies of the proposed Alliance will be

passed on to consumers. The open entry provisions of the U.S.-EU open skies

agreement will ensure that no carrier could charge supra-competitive prices. This

has been a cornerstone of U.S. aviation policy. As the Department has stated:

“even if a transaction creates a partnership with a preponderant market share, the

transaction would not substantially reduce competition if competitors have free and

open access to the marketplace.” DOT Order 2001-3-4 at 12.

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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.)

Response: Air France and Air Tahiti Nui are separately providing their

respective confidential data and response to the Department for this Information

Request No. 7. See Exhibits JA-R-AF-1, JA-R-AF-2.

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.

Response: The JV Partners reiterate that, contrary to what is stated in the

question, Air France and Air Tahiti Nui will not coordinate pricing on CDG-PPT

itineraries.

Air France and Air Tahiti Nui also note that the Antitrust Compliance

Protocols were adopted as an additional assurance to eliminate any hypothetical

concerns the Department may have had about spillover between immunized and

non-immunized activities. But, the Department has granted antitrust immunity in

other cases without such protocols and where the risk of spillover was greater than

here. For example, the Department has granted antitrust immunity to alliances

subject to carve-outs from the immunity for certain nonstop routes and fare

categories without imposing special conditions to address any hypothetical spillover

between the immunized and non-immunized segments. See, e.g., SkyTeam I ATI,
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DOT Order 2002-1-6, at 6 & Appx. A; American/LanChile, DOT Order 1999-9-9, at

21 and Appx. A; United/Air Canada, DOT Order 1997-9-21, at 18 & Appx. A.

Air France and Air Tahiti Nui will be able to manage the immunized and nonimmunized segments without running afoul of the antitrust laws, just as these other

carriers did (even without protocols in place). Indeed, in this case, the demarcation

line (between what is and is not immunized) is even clearer than in the cited

immunity carve-out situations, in which the same route had immunized and nonimmunized elements.

Air France and Air Tahiti Nui will engage in immunized coordination only with

respect to LAX-CDG-Europe services. Air France and Air Tahiti Nui will not

coordinate or exchange any competitively sensitive information related to any U.STahiti routings, nor will Air Tahiti Nui share any competitively sensitive information

with American Airlines. The Antitrust Compliance Protocols will help ensure that

this is the case. They prohibit the exchange of data and information related to

transpacific routings, thereby preventing spillover from immunized transatlantic

activities to non-immunized activities. In effect, the Antitrust Compliance Protocols

permit the exchange of competitively sensitive information and coordination

relating only to foreign air transportation via transatlantic routings but prohibit

such activities with respect to transpacific and other air transportation.

[confidential]
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[end confidential] The Antitrust Compliance Protocols provide clear

direction to the employees of both carriers concerning the scope of permissible

coordination, limit the kinds of information that can be exchanged, and ensure

that such direction and limitations will be properly communicated to employees.

The Antitrust Compliance Protocols also govern the kinds of data and

information that will be exchanged between the Joint Venture Partners. By

prohibiting the exchange of data and information related to non-transatlantic

routings, the Antitrust Compliance Protocols will prevent spillover from transatlantic

to transpacific markets (such as LAX – PPT). The Antitrust Compliance Protocols

permit the exchange of only certain kinds of non-public, competitively sensitive data

and information relating only to transatlantic operations between the Joint Venture

Partners. Conversely, the Antitrust Compliance Protocols prohibit the exchange of

data and information relating to transpacific routings.
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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.

Response: Air France submits its O&D data set with fare data converted in

to U.S. Dollars on the enclosed CD. See Exhibit JA-R-AF-3. Air France used the

below IATA average quarterly conversion rate:

(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.
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Response: Air Tahiti Nui confirms that the data files it submitted were

correct, consistent with what it intended to submit, and are responsive to the

Department’s request for Origin and Destination data.

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?

Response: The Joint Applicants do not object to the limited public

disclosure by the Department of aggregated market share data, including nonstop

and connecting shares, from the data submitted by the Joint Applicants to support

the Department’s decision in this proceeding.



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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Response of Joint Applicants has been

served this 22nd day of August 2013, upon the following addresses:

francis.heil@aa.com

robert.wirick@aa.com

howard.kass@usairways.com

benjamin.slocum@usairways.com

thomas.bolling@united.com

dan.weiss@united.com

todd.homan@dot.gov

peter.irvine@dot.gov

reese.davidson@dot.gov

bob.goldner@dot.gov

paul.gretch@dot.gov

esta.rosenberg@dot.gov

urskr@state.gov

gmlindsey@lawa.org

info@airlineinfo.com

Jonathan Echmalian