### TMENT O F

Susa n Kurlan d2]i i :^c P 1 9 A Q

- r p Assistan t Secretar y fo r Aviatio n an

dInternationa

l Affairs U.S . Departmen t

o f Transportatio n 120 0 Ne w Jerse y Ave , S

E Washington , D

C 2059 0 RE : Joint Motio n o f Ai r Canada , Austrian , Britisl i Midland , Continental , Lufthansa , LOT , SAS , Swiss , TA

P an dUnited , Docket

DOT-OST-2008-023 4 - Publi c Comment Submissio n Dea r Ms . Kurland , I writ e o n behal f

o f UNIT E HER E unde r Docket DOT-OST-2008-023 4 regardin g th e inclusio n o

f Brussel s Airline s i

n th e immunize dSta

r Allianc e an dA+

+ join t venture . A lette r t o th e Departmen t

date dAugus t

31 , 2011 , submitte db y Arthu r Molin s o n behal f Deutsch e Lufthans aAG

, state d"n o part y oppose s th e motion. " I n referenc e t o UNIT E HERE' S positio n o n th e issue , th e lette r fro mLufthans asay s tha t

ou r previou s submissio n "comment s on , bu t doe s no t reques t th e Departmen t

deny , th e join t motion. " I n suggestin g tha t

w e d o no t

oppos e th e motion , Deutsch e Lufthans aA G ha s misrepresente dou r

position . UNIT

E HER E oppose s th e Joint

Motion . T

o reiterate , ou r positio n can b e summarize da s follows :

• I n orde r t o gran t antitrus t immunity t o airlines , th e law require s th e Departmen t

o f Transportatio n t o determin e tha t th e "exemptio n i s require d b y th e publi c interest." ^ W e believ e th e Brussel s Airline s cas e fall s short .

• Beyondfailing t o prov e th e consume r benefit s o

f A+ + immunity an d therefor e an expansio n o

f tha t immunity , th e Joint

Movant s fai

l t o demonstrat e tha t

immunity i s necessar

y t o provid e suppose dbenefit s with regard s t o Brussel s Airlines .

• W e believ e th e inclusio n o

f Brussel s Airline s in th e immunize dA+ + join t ventur e woul dse t

aproblemati c preceden t

fo r th e expansio n o

f antitrus t immunity grants . On

e particular

concern i s tha t

Lufthans astil l own s les s tha n amajorit

y o f Brussel s Airlines, ^ ye t

request s th e "sam e treatment " fo r Brussel s a s give n t o "majority-owne daffiliates " unde r Orde r 2009-7-10. 3 1 DO T Order 2009-7-1 0 a t

3 , citin g 4 9 U.S.C . § 41308(b) . 2 Lufthans aown s 45 % o

f Brussel s Airlines . Joint

Movant s Respons e t o Reques t fo r Mor e Information , Jul y 5 , 2011 , in Docket

DOT-OST-2008-023 4 a t

Exhibit B . 3 DO T Order 2009-7-1 0 a t

2 .I

n ou r publi c commen t

submission , w e note dcondition s tha t th e Departmen t

shoul d conside r imposin g i

f i t doe s decid e t o gran t

immunity . Thes e suggestions , whic h shoul dno t

b e misconstrue dt o represen t suppor t fo r immunity , include :

• An y gran t o f imniuhity ^hbulcl ! ho t

tak e effect

unti l Lufth,ans aoffipiall

y purchase s th e rei^i^ning^hare s o f Brussel s Airlines . •

• An y gran t o f immunity shoul dinclud e certai n carv e outs , includin g route s currentl y unde f

anti-trus t investigatio n i n Europ e an dhub-io-hu b fqutes . W e believ e expandin g th p curren t Sta r Allianc e antitrus t

immunity i s at:;omplicated on e tha t no t onl y impactsth e publi c interes t on it s ow n bu t

als o has.th e potentia l t o se t adangerou s preceden t

fo r future antitrus t

immunity grants . Whil e w e trus t

tha t th e Departmen t

wil l tak e ou r

comment s int o appiropriat e consideratio n despit e Lufthansa!smischaracterization , w e ar e als p copyin g othe r relevan t partie s o n thi s lette r

t o ensur e th e recor di s clear . Ou r ful l comments , a s submitte dformall y t o th e Departmen t durin g th e publi c commen t perio din August , ar e enclose dagai n her e fo r ybu r convenience . Thank yo u fo r you r attentio n t o thi s matter . : ,, . • .- : ^ cii t Sincerely,

- Kyl e Schafe r UNIT E HER E 5 5 W . Va n Bure n Chicago , I L 6066 0 kschafer@unitehere.or g CC: See attache dlis tCc :

Arthu r J . Molin s Genera l Counse l Nort h Americ a Deutsc h Lufthans aA

G . , , 164 0 Hempstea dTurnpik e ' " Eas t Meadow , N

Y 1155 4 '>:' ' Stephe n J . ^orri,ssjs y , i ) ^-i f ,•; ; Managin g Director , Regulatpi y , i . , Unite dAirline s an dContinenta l Airline s 102 5 Connecticu t

Ave . N.W. , Ste . 121 0 Washihgton , D

C 2003 6 '' • steve.mOTrissey@united.co m' • " . < > c.i ' Hershe l L Kame n Vic e President-International , Regulator y an d Polic y ' ' i Unite dAirline s an dCohtin6hta l Airline' s 1350. 1 St>NW , Ste . 125 0 Washington , D

C 2000 5 . ,.,•' : hershel.kamen(5)united.co m Danie l A . Weis s Managin g Director , Internationa l Unite dAirline s an dContinenta l Airline s 135 0 I St. , NW , Ste . 125 0 Washington , D

C 2000 5 Dan.weiss(5)united.co m Thoma s Newto n Boilin g Associat e Genera l Counsel , Regulatory , Alliance s an dInternationa l Unite dAirline s an dContinenta l Airline s 135 0 I St. , NW , Ste . 125 0 Washington , D

C 2000 5 Thomas.bollingtScoair.co m Michae l Goldma n Silverberg , Goldma n an dBikof f LL P Counse l fo r

Scandinavia n Airline s Syste m 110 1 30t h Stree t

NW , Washington , D

C 2000 7 mgoldman(5)sgbdc.co m Ma x Sandli n Lobbyis t - Ai r Canad a Mercur y LL

C 60 1 Pennsylvani aAvenu e N W Nort h Building , Suit e 100 0 Washingto n D

C 2000 4 agusttSmercurvllc.co m ?^lj'..; : i O

•:'! ; Rui Pint o Lpbbyis t - TA P Ai r Portuga l , .. , • Bristo l Grou p - vr . ' ^•gii^S^^eriilh^iv^ ^ • '• ' -'•" ' •'• ' Alexandria , V

A 2231 0

, CUri^tipe X yarne y • -, , . i . • < Assistan t Attorne y Genera l Departmen t

o f Justic e Antitrus t

Divisio n 95 0 Petmsylvahia'Avenue , I^W ' ' ' ' Washihgton , D

C 20530 ! (

i . Ray LaHoo d Departmen t

o f Jransporfciitio n U.S . Departmen t

o f Tfahspprtafip n 120 0 Ne w Jerse y Ave , SE • ; Washington , D

C 20590 " '" " ' ^ '

• • •
•'!i-,,T.-;! ' • • ' J ' • ••;'•;
. 1 •'• : ' .!.••.'. ' Elj^n^ ^ Wrigh t , . • , : - : . , Progra mManager , Docke t Operation s U.S . Departmen t

o f Transportatio n 120 b Ne w Jerse y AVenue , S E ' • Wes t Building , Groun dFloor , Roo mW12-14 0 Washington , D

C 2059 0 Sen . Patric k

Leah y Chair , U.S . Senat e Committe e o n th e Judiciar y 43 7 Russel l Senat e Bld g Unite dState s Senat e Washington , D

C 2051 0 Sen . Her b Koh l U.S . Senat e Committe e o n th e Judiciar y Chair , Subcommitte e o n Antitrust , Competitio n Polic y an dConsume r Right s 22 4 Dirkse n Senat e Offic e Buildin g Washington , D

C 2051 0 Sen . Mari aCantwel l U.S . Senat e Commerce , Scienc e & Transportatio n Committe e Chair , Subcommitte e o n Aviatio n Operations , Safety , an dSecurit y 31 1 Har t Senat e Offic e Buildin g Washington , D

C 2051 0Other

studie s hav e echoe dquestion s o n th e necessity o f antitrus t immunity t o realiz e consume r

benefits . Volodyrhjn " Bilotkac h an dKa i Huscherlrath concluded , "The frequentl y postulate dlowe r price s du e t o th e remova l o f doubl e . marginalizatio n followin g antitrus t immunity ar e no t

obviou s fromth e theoretica l poin t o f view , an dca

n b e realize di n apartnershi p withou t suc h immunity." ^ Similarly ) economist s a t

th e Departmen t

'o f Justic e Economi c Analysi s Grou p note d in 2011 , "dat aals o sho w tha t antitrus t inlmunity i s no t

reasonabl y necessar y fo

r allianc e participant s t o delive r pricin g efficiencie s t o connectin g passengers . Thi s evidenc e doe s no t

suppor t broa dregulator y exemption s fromth e U.S . antitrus t law s fo r internationa l airlin e alliances." ^ Curren t Consume r Environment Meanwhile , i n 2011 , traveler s hav e alread y see n repeate dairfar e increases . Th e Lo s Angele s Time s reporte din Apri l tha t internationa l traveler s ar e likel y t o se e th e bigges t hike s partl y du e t o les s competitio n o n internationa l routes. ^ O f particula r

concern , i n Ma

y 2011 , th e Ne

w Yor k Time s ra n astor y abou t

th e clou t o f th e airhn e alliance s tha t

ar e receivin g antitrus t

immunity , noting: : But fo r al l th e tal k

o f th e benefit s tha t

alliance s offe

r travelers , ther e i s a continuin g debat e abou t

th e downside o f

thi s trend : to o muc

h marke t concentration , leadin g to highe r fares . Tha

t i s particularl y aconcer

n acros s th e Atlantic , wherefore s hav e risen disproportionatel y a s competitio n ha s shrunk . '"Something change di

n th e Nort h Atlanti c tha t

allowe dprice s to ris e thre e time s faste r

tha n they di di

n any othe r

market, " sai dHubert

Horan , an aviatio n consultan t

who ha s oppose dallianc e antitrus t immunity . 'That

wa s du e t o th e extrem e consolidatio n o f

th e industry . Ther

e i s n o othe r

facto r tha t coul d explain it' ^ I n January 2011 , US

A Toda y wrot e aforecas t

fo r busines s traveler s tha t

als o suggeste datroublin g trend : Whil e airlin e merger s ar e ofte

n limite db

y foreig n ownershi p laws , airlin e alliance s continu e t o grow . Th e alliance s no w contro l ove r 60 % o f worl dairlin e 5 Bilokatch , Volodymjo

- an dKa i Huschelrath . "Antitrus t

Immunit y for Airlin e Alliances. " Centf

e fo r European Economi c Research , Discussio n Pape r No . 10-080 , a t

33 . Articl e als o publishe di n Journal o f Economics , La

w an dOrganization . * Gillepsie , Willia

man dOlive

r Richard , "Antitrus t

Immunit y an dInternationa l Airlin e Alliances. " Economi c Analysi s Group , Antitrus t Division , U.S . Departmen t o f Justice , a t 20 . ^ Martin , Hugo . "Summe

r airfare s ma

y clim b 15 % fro mayear earlier. " Lo s Angele s Times : April 1 7 2011 . 8 Stellin , Susan . "Th

e Clou t ofAir Alliances. " Ne

w Yor k Times . Ma

y 2 2011 . 'Augus t 18 , 201 1 Susa n Kurlan d Assistan t Secretar y fo r Aviatio n an

dInternationa

l Affair s U.S . Departmen t

o f Transportatio n 120 0 Ne w Jerse y Ave , S

E Washington , D

C 2059 0 RE : Joint Motio n o f Ai r Canada , Austrian , Britis h Midland , Continental , Lufthansa , LOT , SAS , Swiss , TA

P an dUnited , Docket

DOT-OST-2008-023 4 - Publi c Comment Submissio n Dea r Ms . Kurland , I writ e on behal f

o f UNIT E HER E t o submi t

apubli c commen t

i n th e schedule d proceedin g unde r

Docket DOT-OST-2008-023 4 regardin g th e inclusio n o f Brussel s Airline s in th e immunize dSta r Allianc e an dA+

+ join t venture . W e ar e concerne dabou t

th e Joint Motion an dwill detai l ou r issue s belo w in th e followin g areas :

• Demonstratio n o

f publi c benefi t • Preceden t

fo r expansio n o

f immunize dgrou p • Existin g regulator y concern s • Lac k o f informatio n i n th e publi c domai n 

### Demonstratio n o f

Publi c Benefi t I n orde r t o gran t antitrus t immunity t o airlines , th e la w require s th e Departmen t o f Transportatio n t o determin e tha t th e "exemptio n i s require db y th e publi c interest." ^ W e believ e th e Brussel s Airline s cas e fall s short . Regulator y Backgroun d Th e Departmen t

o f Justic e ha s voice dconcern ove r th e leve l o

f proo f airline s hav e provide dtha t

th e benefit s the y clai mrequir e immunity . I n th e DOJ' s publi c commen t o n th e 2009 Sta

r Allianc e immunity case , include din thi s Docket , th e DO J wrot e " agran t

o f antitrus t immunity doe s no t

tur n on 'th e subjectiv e desir e o f th e partie s t o avoi dantitrus t

litigation.'" ^ Th e DO

J note dtha t

airlin e alliance s ha d realize dconsume r

benefit s withou t

immunity, 3 an dconclude dtha t th e applicant s i n tha t cas e ha d"no t

justifie dthei r

extraordinar y immunity request."' ^ 1 DO T Order 2009-7-1 0 a t

3 , citin g 4 9 U.S.C. § 41308(b} . 2 DO J Comment s on Show Caus e Order in Docke t DOT-OST-2008-023 4 a t

33 . 3 DO J Comment s o n Sho w Caus e Order in Docke t DOT-OST-2008-023 4 a t

33-36 . * DO J Comment s on Sho w Caus e Order in Docke t DOT-OST-2008-023 4 a t

43 .capacity wit h more tha n 6 0 curren t

an dpendin g member s includin g 2 5 o f th e world' s 3 0 larges t

airlines , Fe

w place s remairijwher

e alliance s don' t

reac h an d now the y ar e eve

n recruitin g LCCs

, Whil e alMdnces help traveler s maximiz e thei r mile s wit h asingl e carrie r

an dsimplif

y airfar e discoun t

negotiation s fo r corporat e trave l managers , theallianc e oligopoly wiUMkel y lea dt o fewe r

fligh t option s an dhighe r

airfare s on man y globa l routes. ^ : - . ; . • ' I n November2010 , th e Ne w York.Time s ha dijpukmimbe^t&t o th e tren din relatio n t o U.S . t o Europ e travel , acentra l segmen t o f th e airlin e immunization : Fare s betwee n th e Unite dState s an dEurop e als o ros e sharply , especiall y fo r economy-clas s seats . Th

e averag e one-wa

y far e i n Augus t wa s $455 , aris e o f

2 0 percen t fro mayea r

earlier , whil e th e averag e premium-clas s far e wa s $2,087 , an increas e o f

1 1 percent.^' ^ : . :: : I n all o f thes e accounts , competitiv e issue s ar e raise da s apossibl e caus e o f . increasin g fares . t - ' Brussel s Airline s Join t

Motion Th e Joint Movant s clai mtha t

inclusio n o

f Brussel s Airline s i n th e immunize dA+ + join t ventur e woul dbenefi t

consumer s in avariet y o

f ways , includin g "efficiency

enhancin g integration, " "reductio n o f doubl e marginalization, " "economie s o f densit y .. . permittin g aticke t pric e reduction, " improve d"capacit y allocatio n (availability ) a t

awide r range r o f fares, " "reduce dwaitin g tim e fo r preferre dflights" andmore.i i Th e Join t Movant s bas e thes e conclusion s o n state dbenefit s o f th e initia l A+

+ immunizatio n in 2009 . Yet, despit e growin g scholarl y an dpopular skepticis mabou t th e benefi t

o r necessit y o

f antitrus t exemptions , th e Joint

Movant s d o no t

provid e an y proo f tha t consumer s hav e actuall y realize dthes e claime dbenefit s unde r A+ + sinc e th e initial gran t

o f immunity tw o year s ago . I f th e state dbenefit s wer e atru e resul t o f th e immunity grant , th e Joint Movant s ough t t o b e abl e t o demonstrat e theman dpredic t concretel y thei r

expansio n t o Brussel s Airlines . Beyondfailing t o prov e th e consume r benefit s o

f A+ + immunity an dtherefor e an expansio n o

f tha t immunity , th e Joint

Movant s fai

l t o demonstrat e tha t

immunity i s necessar y t o provid e suppose dbenefit s with regard s t o Brussel s Airlines .

^ Grossman , Ben . "201 1 busines s trave l forecastrHighe r price s an dmor e hassles. " US A Today . Januar y 4 , 2011 . •.•..• • 1 " Clark, Nicola . "Sticke

r Shoc k fo r Traveler s a s Airfare s Climb. " Ne w Yor k Times . November

8 2008 . 1 1 Docke t DOT-OST-2008-0234-031 3 a t 7-8 .Th e Join t Movant s note , "i

f immunity wer e no t

granted , i t

woul db e highl y inefficient fo r Lufthansa " an dclai mtha t withoii t immunity the y woul dfac e "intolerabl y hig h ris k o f antitrus t litigation' ' ari d''legal complianc e complexities/'^ ^ W e d o no t believ e tha t thes e ar e vaH

dreason s t o claiman entitlemen t t o exemptio n fromou r

antitriis t laws . I n fact , th e reasonin g i s entirel y circular : tha t antitrus t immunity i s necessar y becaus e protectio n fromantitrus t complianc e i s necessary .

• • ' " • • _\' . ;>'••.:-.. , r : -.i U ,:.••'. ' • •• ; ; - •. " - ;;- : . . ; - • Furthermore , though'Brussel s Airline s woul doffe r onl y connectin g servic e fo r U.S . passengers , th e Joint

Movant s t o doinothin g t o dismis s th e previousl y note dfinding b y th e economist s a t

th e Departmen t

o f Justic e Economi c Analysi s Group tha t "dat a als o sho w tha t

antitrus t immunity i s no t

reasonabl y necessar y fo

r allianc e participant s t o delive r

pricin g efficiencie s t o connectin g passengers."! ^ 

### Preceden t fo r Expansio n of

Immunize dGrou

p W e believ e th e inclusio n o

f Brussel s Airline s i n th e immunize dA+ + join t ventur e set s problemati c precedent s fo r th e expansio n o

f antitrus t immunity grants . Expansio n ofHub^to^Hu

b Servic e Sinc e Order-2009-7-1 0 wa s issue dgrantin g immunity t o th e A+ + join t venture , th e European scop e o

f th e ventur e ha s significantl y expanded . Initially , Frankfur t wa s th e onl y European hu b with servic e dominate db y on e o f th e A+ + partners . Wit

h th e addition s o

f SWIS S an dAustrian Airlines , Zurich (ZRH ) an dVienn a[VIE

) respectivel y joi n tha t

immunize dhu b list . Brussel s Airline s woul dmake Brussel s (BRU ) th e fourt h additio n in jus t

tw o years . Volodymyr

Bilotkac h an dKa

i Huscherlrath' s recen t

studie s fo

r th e Centr e fo

r European Economi c Researc h sho w tha t immunizatio n ha s notabl e effect s o n ai r trave l networks . For

example , the y findtha t

antitrus t immunity lead s t o decrease s in th e passenge r

volume s an dfrequenc y o f servic e fo r non-allianc e carrier s t o newl y immunize dhubs.i' * I n it s 2009 comments , th e Departmen t o f Justic e als o i-aisedconcern th e possibl e anti-competitiv e effect s o

f immuniziri g airlin e partner s with hub s a t both end s o

f certai n city-pairs . ^

^

! 2 Joint Movant s Respons e t o Reques t fo r Mor e Information , Jul

y 5 , 2011 , i n in Docke t

DOT-OST

2008-023 4 a t

7 . 1 3 Gillepsie , Willia

man dOlive

r Richard , "Antitrus t

Immunit y an dInternationa l Airlin e Alliances. " Economi c Analysi s Group , Antitrus t Division , U.S . Departmen t o f Justice , a t 20 . 1 4 Bilokatch , Volodymy

r an dKa i Huschelrath . "Airline Alliances , Antitrus t Immunit y an dMarket Foreclosure. " Centre fo

r European Economi c Research , Discussio n Pape r No . 10-083 , a t

23,24 . 1 5 DO J Comment s on Sho w Caus e Order i n Docke t DOT-OST-2008-023 4 a t

17-18 , 25-26 .Th e Brussel s applicatio n alon e seek s immunizatio n tha t woul dad dthre e .such hub

to-hu b pairs : Washington/Dulle s to-Brussels , Chicag o t o Brussel s an dNewar k t o Brussels . Th e immunize dpartner s woul dfac e n o non-sto p competitor s o n th e . Dulle s - Brussel s route , an donl y on e non-sto p competito r o n th e Chicag o - Brussel s route , whil e holdin g th e dominan t hu b presenc e a t

bot h ends . 1

^ , i

. ..• ' ' , > ' -' i ";•':: • -X: ' '•:•• . --i. ",': s '• ' ..."• • • •:••'-. . '•: > - ] / • • • W e believ e th e Departmen t

o f Transportatio n mus t

analyz e th e collectiv e competitiv e impac t

o f th e expansio n o

f hub s witiii n th e At<+jnfetwor k (Zurich , Vi«nn a an dBrussels ) i n considerin g thi s applicatio n an dpotentia l carve-outs . Ownershi p .

< . v Becaus e Lufthans astil l own s les s tha n amajorit y o f Brussel s Airlines,! ^ ye t

request s th e "same treatment " fo

r Brussel s a s giventp"3|?ajdrity-pwned,affiliat^s': , unde r , Order 2009-7-10,1 ^ anotabl e preceden t woul db e se t

i n thi s cas e fo

r th e expansio n o f immunize djoin t

venture s unde r

clause s regardin g controlle do r jaffiliati e entities . I f th e Departmen t

determine s tha t

som e gran t

o f immunity i s necessary , w e sugges t tha t i t no t tak e effect

unti l Lufthans aofficiall

y purchase s th e remainin g sl^are s o f Brussel s Airlines . Inter-Allianc e Qynqmic s Additionally , par t

o f th e justificatio n th e Join t

Movant s giv e fo

r thei r immunity reques t suggest s anothe r

dangerou s preceden t

fo r antitrus t exemptions . I

n thei r respons e t o th e Departmen t o f Transportation' s Reques t for Mor e Information , the , Joint Movant s not e tha t

immunit y woul dmak e themmor e competitiv e wit h othe r alliances , particularl y SkyTeam.i ^ However , the y d o no t

sugges t tha t an y ne w servic e woul db e launched ; the y onl y sugges t tha t existin g servic e woul dbecom e par t o f th e immunize djoin t

venture . It shoul dno t

b e th e Departmen t

o f Transportation' s prerogativ e t o us e antitrus t immunity t o improv e th e marke t positio n o

f an y on e allianc e in relatio n t o others . Indeed , w e believ e th e Departmen t ough t t o b e wear y o

f encouragin g acycl e o

f continue dconsolidatio n base do n repeatin g thi s logic .
1 6 Source : BR

U airpor t timetables . Ther e ar e direc t flights fro mBR U t o ORD , ATL , IAD, PHL

, EW Ran d JFK . Unite di s th e onl y carrie r flying nonsto p fro

mIA D t o Brussels , an dth e ORD-BR U rout e ha s only Unite dan dAmerican . BR

U i s ahu b fo

r Brussel s Airlines , whic h control s over 30 % o f th e flights ther e (See "Brussel s Airline s Put s Sta r Allianc e in the-Drivin g Sea t in Belgium. " Airline s an dDestinations . 1 1 Januar y 2010.) . OR

D an dIA D ar e hub s fo

r United , EW

Ri s ahu b fo

r Continenta l " Lufthans aown s 45 % o

f Brussel s Airlines . Joint

Movant s Respons e t o Reques t fo r Mor e Information , Jul

y 5,2011 , in Docket

DOT-OST-2OO8'-0234 a t

Exhibit B . 1 8 DO T Order 2009-7-1 0 a t

2 , se e tex t

an dals o Footnote 4 . . 1 9 Joint Movant s Respons e t o Reques t fo r Mor e Information , Jul

y 5,2011 , in Docke

t DOT-OST-2008

- 023 4 a t 3 , 6 . >

### Existin g Regulator y Concern s >

I n Jun e 2011 , Bloomberg reporte dthat , "Deutsch e Lufthans aA G[LHA)' s competitor s mad e n o attemp t t o tak e ove r

route s th e carrie r

cede di n retur n fo

r European Unio n antitrus t

approva l t o bu y part'o f

Brussel s AiHine s NV

, E U regulator s said. " Whileth e E U i s no t t&kift g furthe r actio n a t thi s time , Bloomberg reporte dth e E

U Competitio n CdihiffiissidnerYiote dtha t trave l agent s o r

other s coul d file acomplaint"i f

ther e ar e Seridu s contfern s abou t abreac h o

f competitio n law."2

o Th e Unite dState s Shoul dwithhol dinclusio n o f th e fou r route s cede db y Lufthans ai n an y gran t of antitrus t immunity fb

r Brussel s Airlineis . Additionally , thre e o

f th e airline s involve din thi s reques t fo r antitrus t immunity expansio n areeurrentl y subjects,o f antitrtts t probe s th e European Commissio n launche di n Februar y 201 1 relate dt o specifi c routesi^ i On e o f th e route s unde r scrutin y oversea s - Brussel s t o Lisbon - i s include di n th e Brussel s apphcation . 2 2 Thi s rout e shoul dno t

b e include din an y U.S.-immunizedgrou p unti l th e European Commissio n make s adeterminatio n in tha t case . 

### Lac k o f Informatio n i n Publi c Domai n DO T Orde r 2009-7-10 , include di n thi s docket , directe dth e Join t Movant s t o submi t annua l report s t o th e Departmen t o f Transportatio n Offic

e o f ANriatio n Analysis.2 3 Th e report s wer e describe din th e Order : V . ANNUA L REPORTIN

G I n th e tentativ e decision , w e tentativel y foun dtha t additiona l reportin g i s necessar y to monito r

commercial development s an densur e tha t publi c benefit s ar e bein g realized . N

o part y ha s objecte dto thes e reportin g requirements . ITSA/AST A ha s suggeste dtha t

we augmen t

th e requirement s to addres s sale s an ddistributio n issues , a s well a s complianc e wit h antitrus t

protocols . W

e agre e wit h thi s suggestion . Th

e Departmen t

intend s tha t

additiona l reportin g shoul dcover

al l core airlin e activitie s undertake n to achiev e th e ful l rang e o f publi c benefits , which include s cooperatio n i n sale s an ddistributio n an djoin t negotiation s wit

h trave l agents , a s Wel

l aseffort s to preserv e competition , whic h includ e antitrus t

compliance . Al

l intereste dpartie s ha dth e opportunity

2 0 White , Aoife . "Lufthans aCompetitor s Mad e N o Bid s fo r Brussel s Slots , E U Says. " Bloomberg . 2 0 Jun e 2011 . 2 1 "Antitrust : Commissio n probe s certai n co-operatio n agreement s betwee n Lufthans aan dTurkis h Airline s an dbetwee n Brussel s Airline s an dTA P Ai r Portugal. " European Commissio n Pres s Releas e IP/11/147 . 1 1 February 2011 . 2 2 DOT-OST-2008-0234-031 3 a t 281 . 2 3 DO T Orde r

2009-7-1 0 a t

29 , poin t 10 .t o repl y t o ITSA/ASTA' s suggestions , an dthftreyver e h o furthe r

comment s o n thi s issue . Therefore , we make fina l oif r tentativ e findin g tha t

th ^ airline s shoul dsubmi t y. annua l reports . Tlj e report s sf}ould-fojcu s o n th e progres s mad e byth ^ i applicant s tqward^^qchieving tkeirstatfii dgoal s fo r operatin g a n allianc e wit

h . antitrus t immunit y the , specifi c action ^ th^yMvetqken.toimplementeac h o f • , thei r allianc e agreement s (includin g ^speciall y join t ventur e agreements) , th e presen t o r futur e planne d^ooperatic m,aman g th e allianc e partnersi n all.core airlin e functions , an dadiscussio n o f th e pabli(benejit s tha t

ar e bein g realize d b y th e immunize dalliance.^ ^ Relate dt o pu r

opncer n abou t th e demonst f

^tio n o f publi c benefi t

i n th e Brussel s Airline s application , w e ar e concerne dtha t informationfromthe;201 0 submissio n o f thi s repor t

i s no t include di n th e publi c docket . I n Ma y 2011 , UNIT

E HER E submitte dareques t

unde r th e Freedo mo

f Informatio n Ac t t o th e Departmen t

o f Transportatio n t o releas e th e 201 0 repor t tha t shoul dhav e bee n submitte db y th e immunize dgroup . ? 5 Th e Departmen t

denie dth e reques t

i n full2 6 an dan appea l i s pending.27 I n orde r fo r pubjf c entitie s t o mak e mor e informe danalysi s o f th e inipac t

o f antitrus t immunity grante dt o th e Joint Movants , includin g an understandin g o f an y publi c benefit s actuall y realized , w e believ e thes e report s mus t b e mad e pubUcl

y availabl e in th e future an dtha t an y Fina l Orde r in thi s matte r

shoul dreflec t

thi s change . W

e als o as k tha t th e 201 0 repor t

b e release dimmediatel y an dtha t th e schedul e o n thi s Joint

Motio n b e extende daccordingl y t o allo w fo r analysi s prio r

t o an y expansio n o

f antitrus t immunity t o Brussel s Airlines . W e believ e tha t

th e presen t publi c commen t

proces s i s fatally flawedbecaus e ke y informatio n abou t th e effect s o f immunity ha s been withhel dfromth e public . 

### Conclusio n W e ar e concerne dtha t

th e Joint Movant s hav e no t

prove n th e publi c benefit s tha t woul dcome fro

man expansio n o

f th e A++immunization , no r hav e the y justifie dth e necessity o

f an immunity grant . Meanwhile , th e propose dgrowth o f th e immunize d join t ventur e set s apotentiall y problemati c preceden t fo r future requests ^

2 4 DO T Order 2009-7-1 0 a t

26 . 2 5 DO T FOI A Fil e Numbe r

FY-2011-13 8 2 6 Determinatio n fro mDO T FOI A Office r Kath y Ra y i n lette r

fro mth e Offic e o f

th e Secretar y o f Transportatio n date d3 1 Ma y 2011 . 2 7 Appea l submitte db y UNIT

E HER E t o Rosalin dA . Knapp i n alette r date d2 7 Jun e 2011 .I

f immunity i s grante dnonetheless , w e reques t th e Departmen t

o f Transportatio n conside r certai n rout e carv e outs . W e als o reques t

th e releas e o

f annua l report s submitte db y th e Joint

Movants , retroactivel y an din th e future . W e hop e tha t

th e Departmen t

wil l addres s ou r

concern s whe n makin g afinal orde r o n thi s matter . Sincerely , Kyl e Schafe r UNIT E HER E 5 5 W . Va n Bure n Chicago , I L 6066 0