Order 2010

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Served: November 19 , 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 19 th Day of November , 2010

Docket DOT

- OST

- 2009

- 0155

INTERIM ORDER

In this proceeding, Delta Air Lines and its partners in the Virgin Blue Group (the Applicants) are seeking a grant of antitrust immunity for a new alliance. On September 8, 2010, the Department

issued an Order to Show C ause which tentatively found that the ir application should be denied for

several reasons that were discussed in detail in that Orde r. 1 We will address the comments submitted in response to th at Order

, and render our decision

, in a future order.

In their October 13, 2010 pleading, t he A pplicants generally did not dispute the rationale for the Department’s tentative decision to deny their application. Rather, they chose to introduce new information and propose d changes to their alliance agreements, including modifications to the

structure and scope of the a lliance

, in an effort to address the concerns that had been raised by the Department

. 2 The Applicants also proposed commitments to maintain capacity in the market for two years following the gr ant of antitrust immunity

. 3 In addition, they provide d a rene wed commitment and a revised timetable to make the necessary changes to their business processes to more capably flow traffic across their respective networks to r ealize public benefits. 4

1 Show Cause Order 2010

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- 4, pp. 5

- 13. Finally, they

represent ed that some of these commitments will be im plemented in February 2011, at the earliest,

2 Joint Applicants’ Response to Show Cause Order 2010

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3 Joint Applicants’ Response to Show Cause Order 2010

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4 Joint Applicants’ Response to Show Cause Order 2010

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- 33. Joint Application of:

DELTA AIR LINES, INC.

VIRGIN BLUE AIRLINES PTY LTD

VIRGIN BLUE INTERNATIONAL AIRLINES

PTY LTD D/B/A V AUSTRALIA PACIFIC BLUE AIRLINES (NZ) LTD PACIFIC BLUE AIRLINES (AUST) PTY LTD

Under 49 U.S.C. §§ 41308

- 41309 for approval of

and antitrust immunity for alliance agreements2 and offer ed to demonstrate , prior to any antitrust immunity, that the changes describ e d a b o v e have

been made. 5

Having thoroughly reviewed the A pplicants’ filing, we find that additional action by the Applicants, which must be documented, is necessary to enable us to fully and fa i rly evaluate their proposed changes to the alliance. We are , therefore, direct ing the A pplicants to provide the following information :

1. Updated and finalized written alliance agreements incorporati ng the proposed commercial changes and capacity commitments ;

2. A report on the Navitaire programming and testing process and the date on which the upgrade

w as completed;

3. A d etailed status report on any third

- country regulatory or other approvals required to implement the revised alliance agreements or an explanation of why approvals are not required ; and

4. At such time as the Applicants submit the above information, they should also provide the latest available passenger and fare data, with addi tional explanation, to substantiate their assessment

that market conditions have stabilized

.

A CCORDINGLY :

We direct Delta Air Lines, Virgin Blue Airlines, Virgin Blue International Airlines, Pacific Blue Airlines (NZ), and Pacific Blue Airlines (Austral ia) to file the additional information described

above in the docket.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document is available at: http://www.regulations.gov

5 Joint Applicants’ Response to Show Cause Order 2010

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