Served: April 13, 2011

1 UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Joint Application of

AIR CANADA
THE AUSTRIAN GROUP
BRITISH MIDLAND AIRWAYS LTD

CONTINENTAL AIRLINES, INC.

DEUTSCHE LUFTHANSA AG
POLSKIE LINIE LOTNIECZE LOT S.A.

SCANDINAVIAN AIRLINES SYSTEM
SWISS INTERNATIONAL AIR LINES LTD.
TAP AIR PORTUGAL UNITED AIR LINES, INC.

for approval of, and a grant of antitrust immunity for, alliance agreements under 49 U.S.C. §§ 41308 and 41309

Docket DOT-OST-2008-0234

NOTICE

This notice concerns the withdrawal of three “carve outs” imposed upon the above-captioned carriers (the “Joint Applicants”) by Order 2009-7-10.

The Joint Applicants are members of an alliance that was approved and granted antitrust immunity in July 2009. The final order in the case, Order 2009-7-10, imposed carve outs in a number of city-pair markets in which competitive concerns were identified. 1 In those carve-out markets, immunity is limited to the coordination of fares and capacity for connecting traffic only, which protects the passengers in the local nonstop market who could, under certain circumstances, be subject to higher prices or reduced quality of service if the airlines were to gain market power through the alliance. Order 2009-7-10 provided that the carve outs would cease to apply if competing airlines introduced and sustained new services in the subject

1 See Order 2009-7-10 at 18-21, Ordering Paragraphs 5, 6, and 7, and Appendix A. The order and the appendix provide for carve outs in the following ma rkets: New York-Copenhagen, New York-Geneva, New York-Lisbon, New York-Stockholm, Cleveland-To ronto, Houston-Calgary, Houston-Toronto, New York-Ottawa, and U.S.-Beijing markets, Chicago-Tor onto, San Francisco-Toronto, Washington-Frankfurt (already withdrawn) and Chicago- Frankfurt (already withdrawn).2 markets, thereby addressing the underlying competitive concerns. 2 The Department required that any new services operate at least five times per week for more than nine months.

On February 28, 2011, the Joint Applicants notified the Department that competing airlines had introduced and sustained the requisite amount of services in three of the subject markets: New York-Copenhagen, New York-Stockholm, and U.S.-Beijing. 3 Accordingly, they ask the Department to confirm that the carve outs in those markets will be withdrawn.

The Department concurs that the carve outs in the three subject markets should be withdrawn as

set forth in the order. 4 In the New York-Copenhagen and New York-Stockholm markets, Delta Air Lines has operated service, at a frequency of at least five times per week, since May 27,

2010. 5 In the U.S.-Beijing market, Delta has operated service, at a frequency of at least five times per week, since June 4, 2010. 6

The affected carve outs will cease to apply as of April 28, 2011 in the case of the New YorkCopenhagen and New York-Stockholm markets, and May 5, 2011 in the case of the U.S.-Beijing market. We reserve the right to re-impose the carve outs if warranted.

This notice does not affect any other carve outs. We note that the Joint Applicants have also petitioned to remove the carve outs in the New York-Geneva market. 7 We will respond to that petition separately.

We will serve this notice on interested parties.

2 See Order 2009-7-10 at Ordering Para graph 5(b), 5(c), and 5(d). See also Ordering Paragraphs 6 and 7.

3 See Letter from Joint Applicants’ Counsel to Todd M. Homan, Director of the DOT Office of Aviation Analysis (February 28, 2011).

4 See Order 2009-7-10 at Ordering Para graphs 5-7 (providing that car ve outs may be withdrawn upon 60 days’ written notice to the Department if appropriate conditions are met).

5 See OAG Scheduling Data for May 2010-February 2011. See also Press Release, Delta Air Lines, Delta Adding Flights Between New York and Key Business Markets (May 11, 2010) (noting that service begins in New York-Copenhagen/Stockholm on May 27, 2010).

6 See OAG Scheduling Data for June 2010-March 2011. See also Press Release, Delta Air Lines, Delta Expanding Asian Gateway at Seattle (June 4, 2010) (noting that service begins in the Seattle-Beijing market on June 4, 2010). While American Airlines has also introduced new ser vices to China – in the Chicago-Beijing market – it did not begin serving the market at least five times per week until July 3,
2010. See Press Release, American Airlines, Inc., American Airlines to Begin Four Times a Week Flights Between Chicago and Beijing on May 25/ Daily Service Begins July 3, 2010 (May 10, 2010).

7 See Joint Petition (Feb. 3, 2011).3 By:

SUSAN L. KURLAND Assistant Secretary
for Aviation and International Affairs

Date:

(SEAL)

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