BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Joint Application of 

Delta Air Lines 

and the Virgin Blue Group 

for antitrust immunity 

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Docket DOT-OST-2009-0155 

ANSWER OF THE DELTA MASTER EXECUTIVE COUNCIL 

OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL 

Communications with respect to this document should be addressed to: 

 

Donald L. Moak 

Chairman 

Delta Master Executive Council 

Air Line Pilots Association, International 

100 Hartsfield Centre Parkway, Suite 800 

Atlanta, Georgia 30354 

lee.moak@alpa.org 

 

October 22, 2010 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Joint Application of 

Delta Air Lines 

and the Virgin Blue Group 

for antitrust immunity 

) 

) 

) 

) 

) 

) 

) 

Docket DOT-OST-2009-0155 

ANSWER OF THE DELTA MASTER EXECUTIVE COUNCIL 

OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL 

The Delta Master Executive Council of the Air Line Pilots Association, 

International (ALPA), submits this Answer in support of Delta’s proposed alliance with 

the Virgin Blue Group. On July 1, 2009, Delta became the first U.S. flag carrier to serve 

all six continents. Delta entered the Los Angeles-Sydney route, which, for nearly two 

decades before, had been the exclusive purview of Qantas and United. 

Delta has a strong track record of developing international routes which produce 

important benefits to U.S. aviation interests, including labor. However, without an 

Australian partner, Delta is operating at a serious disadvantage to Qantas/American and 

United/Air New Zealand, both of which use their distribution and network strengths on 

both ends of the North America-South Pacific route to capture more traffic. Approval of 

the Delta/Virgin Blue joint venture will level the playing field and ensure lasting benefits 

for consumers and U.S. airline employees who fly these important long-haul transpacific 

routes. 
The Department has consistently approved ATI alliances as a way to enable U.S. 

carriers to expand their networks, access additional traffic, and offer new services. This 

promotes more flying and more jobs for U.S. airline workers. . Here, for the first time, 

the Department has tentatively denied immunity between a U.S. carrier and an open skies 

partner. The stated concerns relate primarily to the alliance benefits and the scope of 

joint venture cooperation. The Applicants’ October 13, 2010 Response contains new 

clarifying information, including an extensive economic benefits study, a commitment to 

include beyond/behind points in the joint venture, and an amendment to the settlement 

mechanism. With this, the Department’s concerns have been fully addressed. The case 

should be resolved favorably, consistent with other recent grants of antitrust immunity to 

United/Continental/ANA, American/Japan Air Lines and American/British Airways. 

The Delta Pilots are very concerned about equality of competitive opportunity. 

United already has very extensive service across the Pacific, aided by the historic 

advantage of well-established hubs at Los Angeles and San Francisco. It has the 

advantage of longstanding incumbency on both North- and South-Pacific routes. 

United’s strength in the Pacific will be even greater now that is has joined forces with 

Continental to become the world’s largest airline --- and is entering into an antitrust 

immunized relationship with All Nippon Airways in addition to the ATI United already 

holds with Air New Zealand and Asiana. For its part, American has a close, decadeslong alliance with oneworld partner Qantas -- which alone operates more than 50% of 

U.S.-Australia capacity. Like United, American is now being allowed to form an 

immunized alliance with JAL, which will further strengthen oneworld in the Pacific. 

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By entering into an alliance with V Australia and the Virgin Blue Group, Delta 

becomes a more credible challenger for North America-South Pacific passengers. It 

would be unfair to hobble Delta as a competitor and deprive it of the network coverage, 

frequency, and choice that are necessary to attract corporate accounts and time-sensitive 

business travelers, which will otherwise continue to favor Qantas/American and 

United/Air New Zealand. 

When DOT approved the large and significantly overlapping AA/BA alliance, it 

found that “the alliance would enhance competition by creating a viable third immunized 

alliance that is comparable to and competitive with the product and service offerings of 

oneworld’s competitors, Star Alliance and SkyTeam, which have already received grants 

of antitrust immunity and are proceeding with their own alliance plans and integrated 

joint ventures." AA/BA Final Order 2010-7-8 at 3. Similar benefits will result here with 

less potential harmful competitive effects. Delta and V Australia are smaller players in 

the U.S.-Australia market than AA/BA are to London. Importantly, Sydney is open, 

while Heathrow is severely slot constrained. Furthermore, in the Japan ATI proceeding, 

the Department found that no harm would result on six overlapping U.S.-Tokyo routes, 

even though many of those overlaps were more serious than the 4:3 combination 

proposed here between the two smallest players. See, Order 2010-10-4 at 12. In its 

Final Order, the Department should approve the Delta/Virgin Blue alliance, consistent 

with its other recent precedents. 

 It would be seriously unfair to strengthen oneworld and Star in Tokyo (at Delta’s 

expense) but deny Delta the ability to form a beneficial and pro-competitive alliance with 

Virgin Blue in Australia. While the Department may have initially perceived this alliance 

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differently, the new information provided by the Applicants makes clear that it is exactly 

the same as other end-to-end joint ventures which have been approved. 

As noted above, the Department approves ATI alliances as a way to enable U.S. 

carriers to expand their networks, access additional traffic, and offer new services. 

Delta’s Los Angeles-Sydney flight directly supports 200 high quality U.S. aviation jobs 

including pilots, mechanics, flight attendants, dispatchers and reservationists, and 

indirectly supports hundreds of additional jobs in the local economy. The grant of 

antitrust immunity for the proposed alliance between Delta and V Australia will promote 

and sustain U.S. flag presence in the Australia and South Pacific markets. 

For the reasons above, the Delta MEC urges the Department to revise its tentative 

findings in a Final Order and to grant antitrust immunity to Delta and the Virgin Blue 

Group. 

Respectfully submitted 

Donald L. Moak 

Chairman 

Delta Master Executive Council 

Air Line Pilots Association, International 
CERTIFICATE OF SERVICE 

A copy of the foregoing document has been served this 22nd day of October, 2010, upon 

the following persons via email: 

robert.rivkin@dot.gov 

susan.kurland@dot.gov 

susan.mcdermott@dot.gov 

christa.fornarotto@dot.gov 

bob.goldner@dot.gov 

todd.homan@dot.gov 

peter.irvine@dot.gov 

christopher.mandel@dot.gov 

UrsKR@state.gov 

Jeremy.Parkinson@infrastructure.gov.au 

sascha.vanderbellen@delta.com 

anita.mosner@hklaw.com 

carl.nelson@aa.com 

howard_kass@usairways.com 

benjamin.slocum@usairways.com 

hkamen@coair.com 

dan.weiss@coair.com 

jeffrey.manley@united.com 

steve.morrissey@united.com 

jhill@dlalaw.com 

info@airlineinfo.com