\\DC - 033583/000001 - 4105117 v13 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of ) ) A IR T AHITI N UI ) S OCIÉTÉ A IR F RANCE ) D ELTA A IR L INES , I NC . ) K ONINKLIJKE L UCHTVAART M AATSCHAPPIJ N.V. ) D OCKET DOT-OST-2013-_____ A LITALIA -C OMPAGNIA A EREA I TALIANA S. P .A. ) ) Under 49 U.S.C. §§ 41308 and 41309 ) for approval of and antitrust immunity ) for alliance agreements )

PUBLIC VERSION

JOINT APPLICATION FOR APPROVAL OF AND ANTITRUST IMMUNITY

FOR ALLIANCE AGREEMENTS

April 15 , 2013\\DC - 033583/000001 - 4105117 v13

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 12 th 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

### Table of Contents

\ \ DC

- 033583/000001

- 4561380 v1 I. INTRODUCTION

. 2 II. OVERVIEW OF ALLIANCE AGREEMENTS. 9 III. SUMMARY OF ARGUMENT. 15 IV. THE APPLICABLE LEGAL STANDARD. 21 V. APPROVAL AND GRANT O F ANTITRUST IMMUNITY 22 FOR THE ALLIANCE AGR EEMENTS WILL PRODUCE SUBSTANTIAL PUBLIC B ENEFITS AND BE IN TH E PUBLIC INTEREST.
A. The Immunized Alliance Agreements Will Enable the 27 Joint Applicants to Increase Service Over the LAX - CDG Joint Venture Route and Expand Beyond - CDG Codesharing, Resulting in Significantly Improved On - Line Service Options and Cost Savings.
B. The Immunized Alliance Agreements Will Eliminate 38 Inefficient “Multiple - Profit Markup” Pricing and Thereby Reduce Fares. C. Immunity Will Enhance Efficiencies and Thereby 41 Reduce Costs Which Will Inure to the Benefit of Consumers.
VI. THE GRANT OF ANTITRU ST IMMUNITY FOR THE ALLIANCE 43 AGREEMENTS WILL ENHA NCE , NOT SUBSTANTIALLY REDUCE, COMPETITION.
A. Global Alliance Compe tition. 45 B. U.S.

– Europe. 46 C. Country - Pairs. 50 D. City - Pairs. 53 E. There Is No Risk Of “Spillover” Between Immunized 57 and Non - Immunized Activities, Routes or Carriers.
VII. THE EXTENSIVE BENEFI TS FLOWING FROM THE 64 PROPOSED ALLIANCE CA NNOT BE ACHIEVED WITHOUT ANTITRUST IM MUNITY. Exhibits JA - 1 to JA - 6 Appendix A Appendix B Appendix C Appendix D\\DC - 033583/000001 - 4105117 v13 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of ) ) A IR T AHITI N UI ) S OCIÉTÉ A IR F RANCE ) D ELTA A IR L INES , INC . ) K ONINKLIJKE L UCHTVAART M AATSCHAPPIJ N.V. ) D OCKET DOT-OST-2013-_____ A LITALIA -C OMPAGNIA A EREA I TALIANA S. P .A. ) ) Under 49 U.S.C. §§ 41308 and 41309 ) April 15, 2013 for approval of and antitrust immunity ) for alliance agreements )
PUBLIC VERSION

JOINT APPLICATION FOR APPROVAL OF AND ANTITRUST IMMUNITY

FOR ALLIANCE AGREEMENTS

Air Tahiti Nui (“Air Tahiti Nui” or “TN”), Société Air France (“Air France” or “AF”), Delta Air Lines, Inc. (“Delta”), Koninklijke Luchtvaart Maatschappij N.V. (“KLM”), and Alitalia-Compagnia Aerea Italiana S.p.A. (“Alitalia”), and their respective majority-owned affiliates 1 (collectively, the “Joint Applicants”) hereby apply, pursuant to 49 U.S.C. §§ 41308 and 41309, for approval of and antitrust immunity for alliance agreements covering foreign air transportation via transatlantic routings as described more fully below. The Joint Application proposes to link Air Tahiti Nui to the existing antitrust immunized alliance among Air France, KLM, Delta, and Alitalia through a transatlantic Joint Venture between Air Tahiti Nui and Air

1 The Joint Applicants request that the grant of antitrust immunity (“ATI”) extend to their majorityowned corporate affiliates. See 2009 Star ATI, DOT Order 2009-7-10, Ordering Paragraph 1 at 27; and 2011 Star ATI, DOT Order 2011-11-16, at 7 & Ordering Paragraph 1 at 11 (ATI granted to the “majority-owned affiliates” of the joint applicants).Joint Application Page 2

\\DC - 033583/000001 - 4105117 v13 France (“the AF-TN Joint Venture”) and Cooperation Agreements and a Coordination Agreement with the other Joint Applicants. The AF-TN Joint Venture is the featured centerpiece of the proposed Alliance, and it provides for “metal neutrality” 2 and revenue sharing on the trunk route between Los Angeles, California (“LAX”) and Paris, France (“CDG”) and for codesharing on beyond-CDG routes. The AF-TN Joint Venture and the other Alliance Agreements, linked to the existing antitrust immunized alliance among Air France, KLM, Delta, and Alitalia, will expand Air Tahiti Nui’s very limited transatlantic network, enable the carriers to increase transatlantic service options, and enhance competition with other global alliances and unaligned transatlantic carriers. The proposed Alliance is consistent with the public interest, will produce significant public benefits, and will not substantially reduce competition. 3

I. INTRODUCTION. Air Tahiti Nui’s position in the global air transportation marketplace is unique, and Air France has a unique and longstanding relationship with Air Tahiti Nui. On the basis of that relationship, Air Tahiti Nui and Air France desire to participate in a deeply integrated, immunized alliance to preserve and enhance competition and to expand benefits to their customers.

2 ““Metal neutrality” is an industry term meaning that the partners in an alliance are indifferent as to which of them operates the “metal,” or aircraft, when they market and sell their services on a joint network. Without a metal-neutral sales environment, the partners have an economic incentive to book passengers on their own aircraft in order to retain a larger share of the revenues for themselves, which may not be in the best interest of the consumer or the alliance as a whole.” Delta/Virgin Blue/Pacific Blue, DOT Order 2011-5-8, at 2 n.4. 3 Appendices B and C contain additional information typically furnished to the Department in response to information and document requests in other proceedings involving applications for a grant of antitrust immunity.Joint Application Page 3

\\DC - 033583/000001 - 4105117 v13 Air Tahiti Nui is the flag carrier of French Polynesia. It is headquartered in Papeete and operates from Faa’a International Airport on the island of Tahiti (“PPT”). Air Tahiti Nui was founded in 1996 and commenced flight operations two years later with its inaugural flight from Tahiti to Los Angeles on November 20, 1998. The Government of French Polynesia is the airline’s major shareholder, together withTahitian private investors. Air Tahiti Nui operates a fleet of five widebody Airbus A340-300 aircraft between Tahiti and four destinations: Los Angeles, Paris (via Los Angeles), Tokyo, and Auckland. Air Tahiti Nui currently operates ten flights a week between LAX and PPT. Tourism accounts for 25% of French Polynesia’s GDP and is the primary source of hard currency earnings. Approximately 70% of all tourism to French Polynesia arrives via the Los Angeles gateway, and the CDG-LAX trunk route accounts for 70% of the traffic between Europe and Tahiti. Accordingly, the LAX– Paris trunk route is a vital lifeline for Air Tahiti Nui and French Polynesia. French Polynesia is comprised of several groups of islands, the largest and most populated of which is Tahiti. The islands of French Polynesia are located in the middle of the Pacific Ocean approximately 4,000 miles from the United States, about halfway between Australia and South America. The islands are spread out over an area the size of Western Europe but have a total land mass approximately the size of Rhode Island. As an island nation, French Polynesia is largely dependent on air service for supplying the islands with goods and services not otherwise available, such as the importation of specialty items from around the world, the delivery of international cargo and mail, and, most importantly, the transportation of tourists toJoint Application Page 4

\\DC - 033583/000001 - 4105117 v13 and from the islands. Tahiti is an 81⁄2 hour flight from Los Angeles. The geographic location of Air Tahiti Nui’s home base necessarily limits a multitude of service options, and, accordingly, air service between the United States and Tahiti is quite limited. French Polynesia is an “overseas country” of France and has been politically, culturally, and economically connected with France since the late 1800s, when the French Republic united all of the French Polynesian island groups into a French protectorate. More recently, between 1946 and 2003, French Polynesia held the status of an overseas territory of France. It became an overseas collectivity of France 4 in 2004 and is now officially referred to as an “overseas country”. French is the official language of French Polynesia and is spoken by the vast majority of its population. As a result of this long-term relationship, the two countries are politically, culturally, and commercially connected. They share a deep-rooted history, connected heritage, and common language. Air Tahiti Nui and Air France are both French carriers and serve the French public living in their respective home countries. In addition to many long-standing cultural similarities, Air France and Air Tahiti Nui also share common business interests and have had a successful reciprocal codeshare relationship since 2003 for service between Papeete and Paris via Los Angeles. The link Air France provides for Air Tahiti Nui, funneling traffic from France and European beyond points to French Polynesia, is essential to the continued

4 CIA World Factbook, French Polynesia, http://ciaworldfactbook.us/oceania/french-polynesia (last visited January 17, 2013).Joint Application Page 5

\\DC - 033583/000001 - 4105117 v13 viability of Air Tahiti Nui as a competitive international airline. In addition, Los Angeles is the prime gateway between French Polynesia and the rest of the western world, with approximately 70% of all tourism to French Polynesia arriving via the LAX gateway. Tourism from France and the United States is vital to the French Polynesian economy, and due to the travel distances involved, the only way to funnel traffic between French Polynesia and Europe is through a West Coast point such as Los Angeles. Nonstop travel between Tahiti and France is not feasible. Paris is the natural, most desired European destination and connecting gateway for French Polynesia passengers. Air France is therefore the natural partner for an alliance with Air Tahiti Nui because no other airline would provide the level of access to Paris and points beyond Paris in Europe. And, from a geographic point of view, LAX is the key pipeline for serving Paris from French Polynesia. Arms’-length codesharing with Air France on the LAX-CDG route is not an option. Based on Air France’s experience with the immunized SkyTeam Transatlantic Joint Venture (“SkyTeam TATL JV”) 5 , Air France believes that a metal-neutral joint venture is the only way to produce a win-win for Air France, Air Tahiti Nui, and their customers. The AF-TN Joint Venture will ensure that the decisions are made for the benefit of the AF-TN Joint Venture enterprise as a whole, not the self-interest of the individual carriers. Moreover, Air France is willing to give Air Tahiti Nui access to its CDG network only on the basis of an immunized joint venture which, in turn, will create value and produce incremental revenues not attainable under arms’-length codesharing.

5 SkyTeam II ATI, DOT Order 2008-5-32; DOT Order 2009-6-26.Joint Application Page 6

\\DC - 033583/000001 - 4105117 v13 As discussed in detail below, the AF-TN Joint Venture will produce substantial public benefits. The AF-TN Joint Venture will enable Air Tahiti Nui and Air France to increase nonstop service between Los Angeles and Paris, which will greatly benefit the traveling public. Antitrust immunity will also allow the carriers to optimize andharmonize their flight schedules to improve time-of-day flight coverage over the LAXParis trunk route and to offer faster, more efficient connecting service to and from points beyond Paris. Further, 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 France, making it easier for U.S. travelers to connect out of CDG to points beyond in Europe. Thus, the AF-TN Joint Venture will provide capacity enhancements, connecting efficiencies, and more choices for the U.S. traveling public. 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 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,Joint Application Page 7

\\DC - 033583/000001 - 4105117 v13 frequently choose an airline based on the frequent flyer miles and awards offered for their travel. Notably, Air Tahiti Nui’s small size and geographic location necessitate a limited, hybrid approach to its alliance with Air France. In July 2012, Air Tahiti Nui entered into a transpacific codesharing relationship with American Airlines for U.S.– French Polynesia operations. Under that codeshare agreement, American Airlines places its AA* code on Air Tahiti Nui flights between Tahiti and Los Angeles, and Air Tahiti Nui places its TN* code on American Airlines flights to 19 destinations in the United States. This relationship allows Air Tahiti Nui to feed U.S. traffic to Tahiti through the Los Angeles gateway and also gives it the ability to sell tickets in the U.S. market for travel between the United States and Tahiti. The Government of French Polynesia has indicated that it “wholeheartedly supports” this hybrid approach involving (i) arms’-length codesharing on the LAX– Tahiti route and (ii) the Joint Venture alliance with Air France on the transatlantic routes, because it “will strengthen both Air Tahiti Nui and the lifeline of tourism into French Polynesia from Europe and in particular from France” and because “this connection is invaluable to the tourism industry in French Polynesia.” 6 It requested that Air Tahiti Nui exclude Tahiti–Los Angeles from the proposed Alliance with Air France because, in contrast to the transatlantic service, Tahiti–Los Angeles “is a restricted market with little competition, as there is no connecting service to the Pacific.” [Exhibit JA-1]

6 Letter from the President of French Polynesia to the President of Air Tahiti Nui, dated January 21, 2013. [Exhibit JA-1].Joint Application Page 8

\\DC - 033583/000001 - 4105117 v13 As noted above, approximately 70% of all tourism to French Polynesia arrives via the LAX gateway, and roughly half of that traffic originates in France. Air Tahiti Nui’s ability to expand transatlantic traffic flows and service for traffic originating in France and beyond in Europe under the AF-TN Joint Venture is vital to its continued economic health and its ability to remain a viable transpacific competitor between the U.S. and Tahiti (without immunity) and in the global marketplace. Coordinating within the AF-TN Joint Venture on the transatlantic route will provide a sustainable model to capture as much tourism traffic as possible from Europe that can be transferred via Los Angeles to Tahiti. In this way, the immunized transatlantic AF-TN Joint Venture will strengthen Air Tahiti Nui and enable it to preserve and enhance its competitive position on its non-immunized transpacific routes. Thus, the combination of Air Tahiti Nui’s arms’-length transpacific codeshare arrangement with American and the proposed transatlantic AF-TN Joint Venture will ensure Air Tahiti Nui’s long-term viability and preserve healthy competition on both the transatlantic and transpacific routes. The proposed immunized Alliance will also allow Air Tahiti Nui to expand service options and synergies with multiple airline partners, thereby increasing its competitive effectiveness in the important U.S.–Europe transatlantic market. Such service will also benefit the travelling public in that consumers will have additional choices and greater scheduling options for travel between Los Angeles and Paris and points beyond Paris.Joint Application Page 9

\\DC - 033583/000001 - 4105117 v13 II. OVERVIEW OF ALLIANCE AGREEMENTS. By DOT Orders 2008-5-32 and 2009-6-26, the Department granted authority for Air France, KLM, Delta, Alitalia, and Czech Airlines to operate an antitrust-immunized alliance. Air France, Delta, KLM, and Alitalia are parties to the immunized SkyTeam TATL JV. This Joint Application seeks to link Air Tahiti Nui to the alliance among the four SkyTeam TATL JV Partners through the transatlantic AF-TN Joint Venture, a multilateral coordination agreement among all of the Joint Applicants, and bilateral cooperation agreements between Air Tahiti Nui and each of the other Joint Applicants. Air Tahiti Nui is an airline licensed by the DGAC of France, with its principal office and base of operations in Tahiti, French Polynesia. Air Tahiti Nui holds foreign air carrier permit authority from the Department authorizing it to engage in scheduled foreign air transportation of persons, property, and mail from points behind French Polynesia via French Polynesia and intermediate points to the United States and beyond. See DOT Order 2003-
9-27. The homelands of each foreign Joint Applicant have an “Open Skies” agreement with the United States, which is “a necessary predicate” for any antitrust immunity from the Department. 2010 oneworld ATI, DOT Order 2010-2-8, at 3. The EU–U.S. “Open Skies” Air Transport Agreement governs air transportation among the United States and France, the Netherlands, andJoint Application Page 10

\\DC - 033583/000001 - 4105117 v13 Italy – the homelands of Air France, KLM, and Alitalia, respectively. 7 The U.S.–France “Open Skies” Air Transport Agreement, as amended, remains in force and governs air service between the United States and French Polynesia, the homeland of Air Tahiti Nui. Air France and Air Tahiti Nui currently have an arms’-length codeshare arrangement involving flights between Paris and Los Angeles and between Los Angeles and Papeete. That codeshare arrangement was approved by the Department in August 2002. See Notice of Action Taken, dated August 30, 2002 (Docket DOT-OST-2002-13268). Air Tahiti Nui and Air France now desire to broaden and deepen their commercial relationship to achieve greater operational efficiencie s and expand their networks on a more integrated and coordinated basis. To accomplish this objective, Air France and Air Tahiti Nui have entered into a Joint Venture Agreement establishing – subject to a grant of antitrust immunity – a highly integrated, metal-neutral, revenue-sharing transatlantic joint venture covering the LAX–CDG trunk route, as well as new free-flow codesharing on the trunk route and beyond CDG. Air Tahiti Nui has also entered into a multilateral Coordination Agreement with the other Joint Applicants and bilateral Cooperation Agreements with each of them. The requested antitrust immunity must encompass the Coordination and Cooperation Agreements and include Delta,

7 Air France, KLM, and Alitalia each holds an “Open Skies” U.S.–EU foreign air carrier permit. See DOT Order 2008-3-16 (Air France); DOT Order 2008-5-40 (KLM); DOT Order 2010-1-15 (Alitalia). Air France, KLM, and Alitalia are members of the immunized SkyTeam Alliance and the immunized SkyTeam TATL JV. SkyTeam II ATI, DOT Order 2008-5-32.Joint Application Page 11

\\DC - 033583/000001 - 4105117 v13 KLM, and Alitalia, in order to bridge the two immunized Joint Ventures, to avoid any potential “immunity gap” between the two joint ventures, and to allow for Air Tahiti Nui to coordinate with the SkyTeam Joint Applicants. Such coordination could include codesharing on Air Tahiti Nui’s nonstop LAX–CDG flights, coordination of fares/schedules, and sharing confidential competitive information with respect to foreign air transportation via transatlantic routings. Accordingly, the Joint Applicants seek approval of, and a grant of antitrust immunity for, the following agreements to be made effective immediately upon the issuance of a Final Order, for a term of not less than five years:

 A bilateral Joint Venture Agreement between Air France and Air Tahiti Nui (“AF-TN Joint Venture Agreement”);

 A multilateral alliance coordination agreement among the Joint Applicants (“Multilateral Coordination Agreement”);

 Bilateral alliance cooperation agreements between Air Tahiti Nui, on the one hand, and Air France, KLM, Delta, and Alitalia, on the other hand (“Bilateral Cooperation Agreements”);

 An AF-TN “Free Flow” Codeshare Agreement; and

 Any existing and future implementing agreements in furtherance of the foregoing agreements and any transaction undertaken pursuant to any of the foregoing agreements. These Alliance Agreements 8 mirror the types of alliance agreements that the Department has approved and immunized in many other recent ATI cases. See,
e.g. , 2010 oneworld ATI, DOT Order 2010-7-8, at 22; SkyTeam II ATI, DOT Order 2008-5-32, at 4; U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 21.

8 The above-referenced agreements between and among the Joint Applicants are collectively referred to as the “Alliance Agreements” and are attached in Appendix A.Joint Application Page 12

\\DC - 033583/000001 - 4105117 v13 It is also important for the Department to understand what this Joint Application does not seek. The requested immunity will not encompass foreign air transportation between the United States and French Polynesia, between the United States and the South Pacific, or between the United States and other international destinations served via transpacific routings. Similarly, although previous grants of antitrust immunity by the Department have typically been global in scope, 9 the Joint Application seeks antitrust immunity only with respect to foreign air transportation via transatlantic routings. In addition, although the AF-TN Joint Venture will coordinate with members of the immunized SkyTeam TATL JV, there are no plans for Air Tahiti Nui to become a member of the immunized SkyTeam TATL JV or of SkyTeam. Finally, Korean Air Lines, Czech Airlines, Virgin Australia, V Australia, Pacific Blue Airlines (NZ/Aust.), and non-immunized SkyTeam carriers are not included in the Alliance Agreements or the requested antitrust immunity, and thus are not parties to this Joint Application. With their proposed Joint Venture, Air France and Air Tahiti Nui intend to coordinate their services, facilitate seamless air transportation between the two carriers, improve the efficiency of their operations, enhance their ability to compete in the transatlantic marketplace, and expand the benefits available to the traveling public. As more fully described below, the proposed AF-TN Joint Venture will involve coordination in the following areas with respect to their nonstop passenger flights between LAX and CDG:

9 “The immunity from United States antitrust laws granted by the Department typically extends to all global markets and services involving international air transportation.” 2007 Star ATI, DOT Order 2006-12-17, at 2-3.Joint Application Page 13

\\DC - 033583/000001 - 4105117 v13

 Schedules and Capacity Planning

 Pricing, Inventory, and Yield Management

 Revenue Sharing

 Codesharing

 Passenger Sales and Marketing

 Joint Purchasing

 Ground handling and co-locating/sharing airport facilities

 Information technology, distribution systems, and support services. The immunized coordination will enable Air Tahiti Nui and Air France to coordinate their transatlantic services on the LAX-CDG trunk route as if there had been an operational merger between them. Air France and Air Tahiti Nui will also engage in expanded codesharing on a free-flow basis. This will enable Air Tahiti Nui to expand its competitive transatlantic presence by placing its code on beyond-CDG services operated by Air France (and Air France’s affiliates) and by improving the connectivity of service between Europeand Tahiti via LAX (without immunized coordination with respect to the local LAXTahiti segment). The Bilateral Cooperation Agreements with the other Joint Applicants and the Multilateral Coordination Agreement provide the opportunity for enhanced commercial cooperation between Air Tahiti Nui and the other SkyTeam Joint Applicants through cooperative joint marketing programs and coordinated activities on transatlantic passenger air transportation services. After receipt of the requisite regulatory approvals, the other Joint ApplicantsJoint Application Page 14

\\DC - 033583/000001 - 4105117 v13 will participate in, and share confidential, competitively-sensitive information regarding, the coordination of fares, schedules, and capacity on the LAX– CDG route. For example, [ confidential ]

[ end confidential ] Air Tahiti Nui’s small size, market niche, and location make it better suited to participate in a limited joint venture with Air France, as opposed to joining the larger immunized SkyTeam Alliance or the SkyTeam TATL JV. The costs and burdens imposed on Air Tahiti Nui to join the SkyTeam TATL JV would far outweigh the benefits. Air Tahiti Nui does not have the resources or manpower required to participate in the global joint venture, particularly given that only one trunk route is involved in the proposed Alliance. Nonetheless, for the reasons discussed above, Air Tahiti Nui believes it is essential for it to be part of an immunized alliance in the transatlantic market to strengthen traffic flows over the key LAX-CDG trunk route. In summary, granting antitrust immunity to the Alliance Agreements will enable the Joint Applicants to generate substantially greater consumer and competitive benefits than they could otherwise achieve in the absence of immunity, all without a substantial reduction in competition.Joint Application Page 15

\\DC - 033583/000001 - 4105117 v13 III. SUMMARY OF ARGUMENT. The Joint Application fully satisfies the statutory criteria under 49 U.S.C. §§ 41308 and 41309 for approval of, and antitrust immunity for, the Alliance Agreements. The requested approvals and antitrust immunity are also fully consistent with Department precedents in other antitrust-immunized alliance cases. The AF-TN Joint Venture Agreement will create a common economic interest between Air France and Air Tahiti Nui on the LAX–CDG route. Implementation of the AF-TN Joint Venture and other jointly coordinated activities and programs pursuant to the other Alliance Agreements will produce important new integrative efficiencies and enable the carriers to generate substantial public benefits. These benefits, discussed in more detail below, include the expansion of Air Tahiti Nui’s transatlantic presence, increased service on the LAX-CDG route, substantial beyond-CDG codesharing, new online city-pairs and improved elapsed travel times, optimized schedules resulting in improved time-of-day coverage and expanded connectivity, and the greater availability of discount seats. The carriers also anticipate that substantial economies can also be achieved through closer coordination of their operations, marketing, planning, purchasing, and support services with respect to the LAX–CDG route. These efficiencies will, in turn, benefit air travelers because they will translate directly into more competitive fare offerings and innovative new service and product options not otherwise attainable in the absence of antitrust immunity. Indeed, the consumer benefits of the AF-TN Joint Venture are substantially greater than under arms’-length cooperation because metal neutrality eliminates the self-Joint Application Page 16

\\DC - 033583/000001 - 4105117 v13 interested incentives to channel passengers onto a carrier’s own aircraft. With their immunized metal-neutral, revenue-sharing Joint Venture, Air France and Air Tahiti Nui will be able to focus on gaining the customer’s business by providing the best available LAX–CDG itineraries and more frequencies at fares likely to be lower than would be possible without antitrust immunity due to the Joint Venture’s elimination of double marginalization 10

. Closer integration of operations, planning, and marketing will also better position Air Tahiti Nui and Air France to develop an integrated transatlantic network of seamless transportation services over the LAX–CDG trunk route and beyond–CDG services. The improved connectivity between Europe and Tahiti via LAX will expand Air Tahiti Nui’s global footprint, enhance customer convenience and satisfaction, and enable the Joint Venture Partners – particularly Air Tahiti Nui which is not a member of any global alliance – to compete more effectively over transatlantic routes. Indeed, Air Tahiti Nui believes that its proposed immunized transatlantic Joint Venture with Air France is essential to its long-term ability to compete in the global marketplace. To achieve these significant public benefits, Air France, Air Tahiti Nui, and the other Joint Applicants need to be able to agree on service and capacity, jointly plan schedules/routes, align economic incentives, work together toward common

10 “Double marginalization, also called multiple mark-ups, occurs when two airlines have basic interline or code share arrangements to handle multiple segments but are unwilling to cooperatively price the combined itinerary for the consumer. Thus, for example, Airline A is not willing to accept a cooperative price for the segment it operates because it risks losing revenue to Airline B, which might operate the longer, more profitable segment in the itinerary. The consumer is ultimately not offered the most competitive fare or optimal routing.” Delta/Virgin Australia/Pacific Blue, DOT Order 2011-6- 9, at 4 & n.15.Joint Application Page 17

\\DC - 033583/000001 - 4105117 v13 economic interests, jointly establish prices and fares, jointly determine inventory allocations, agree on products, and share revenues, among other activities. These important, consumer-benefiting joint activities and this deeper level of integration, however, are only possible “following a grant of immunity,” particularly in light of antitrust exposure risks with respect to the AF–TN Joint Venture Agreement and the planned collaborative activities between Air Tahiti Nui and the other Joint Applicants. 2007 Star ATI, DOT Order 2006-12-17, at 18. Arms’-length codesharing or other forms of non-immunized collaboration will not generate comparable public benefits, as the Department has recognized: “We also tentatively find that a grant of antitrust immunity is necessary to achieve many of these [public] benefits. In the current environment, the two sets of [carriers] are unable to cooperate on fares, route coordination, and other business plans on a network-wide basis because of the risk of a legal challenge. As such, the carriers are currently unable to implement many of the provisions that would deliver the most significant consumer benefits: joint pricing, joint scheduling, and network coordination. . . . Absent the ability to share revenues and establish a truly metal-neutral network, the alliances would also lack the commercial incentive to fully integrate their networks.” 2010 U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 14. In addition to the need for antitrust immunity to implement the AF-TN Joint Venture, 11 antitrust immunity between Air Tahiti Nui and the other Joint Applicants is necessary for three principal reasons:

11 “These second-stage commercial agreements, such as the [AF-TN 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.” 2007 Star ATI, DOT Order 2006- 12-17, at 17.Joint Application Page 18

\\DC - 033583/000001 - 4105117 v13 First, under the SkyTeam TATL JV, [confidential]

[end confidential] Given this structure, it will be necessary for Air Tahiti Nui, Delta, and Air France to discuss competitively sensitive topics such as pricing, yield management, and inventory control on foreign air transportation via transatlantic routings. Second, it is necessary for Air Tahiti Nui to have antitrust immunity for itsAlliance Agreements with the other SkyTeam Joint Applicants in order to permit freeflowing discussions and the exchange of competitively sensitive and confidential information on subjects like schedule coordination, capacity levels, optimization of cooperative activities, marketing initiatives, frequent flyer programs, joint procurement, and harmonization of standards.Third, Air France will contribute its share of revenues under the revenuesharing provisions of the AF-TN Joint Venture to the SkyTeam TATL JV as part of the SkyTeam TATL JV financial settlement. As a result, the other SkyTeam TATL JV Partners will effectively be participating in the pooling of revenues with Air Tahiti Nui under the AF-TN Joint Venture. Failure to grant antitrust immunity for the Alliance Agreements among and between Air Tahiti Nui and the other Joint Applicants would subject the carriers to unacceptable antitrust liability risk. A carve-out of the LAX–CDG route from the SkyTeam TATL JV is neither necessary nor required, and would not be acceptable to Air France or the other SkyTeam Joint Applicants. As a result of the SkyTeam TATL JV, pursuant to whichJoint Application Page 19

\\DC - 033583/000001 - 4105117 v13 [confidential]

[end confidential] A carve-out would be unduly burdensome and inefficient, and Air France is not prepared to accept a carve-out of the LAX-CDG route and sacrifice the benefits it achieves from coordinating with Delta and the other SkyTeam TATL JV Partners on that route. Moreover, the Department has repeatedly recognized that carve-outs in the context of joint ventures would be counterproductive and anti-consumer because it would undermine the benefit-producing efficiencies of the joint venture. “When the SkyTeam and Star applicants presented the Department with integrated joint ventures of substantial scope, the Department ultimately decided that the carve-outs would undermine the efficiencies of the joint venture , and thus we removed the carve-outs on affected routes. (Certain carve-outs remain on routes that are not subject to joint venture cooperation.) The key point is that carve-outs affecting only certain passengers . . . introduce inefficiencies for joint venture partners whose alliance is otherwise pro-competitive

. The costs of managing the carve-out for select fare classes or select travelers disrupt the efficient functioning of the joint venture and impair metal-neutrality, which limits the benefits for both nonstop and connecting passengers. In short, we have concluded that the disadvantages of carve-outs outweigh the advantages in markets where there is joint venture cooperation . We find that this conclusion applies to the facts of this case as well.” 2010 oneworld ATI, DOT Order 2010-7-8, at 21 (emphasis added).Joint Application Page 20

\\DC - 033583/000001 - 4105117 v13 Granting this Joint Application would be consistent with Department policy, which has encouraged small, unaligned airlines to participate in antitrust immunized alliances. And, applications to add smaller foreign airlines to an existing immunized alliance have typically been noncontroversial and promptly approved by the Department. 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); 2007 Star ATI, DOT Order 2007-9-12 (bmi joins Star Alliance as a full member); 2010 oneworld ATI, DOT Orders 2010-2-8 & 2010-7-8 (Finnair and Royal Jordanian obtain immunity as part of oneworld). Here, Air Tahiti Nui is a small carrier with a very limited presence in the U.S.–Paris, U.S.–France, and U.S.–Europe markets, and it is not a member of an airline alliance. [Exhibits JA-2, JA-3, JA-4] As previously discussed, it needs to participate in an antitrust-immunized alliance in order to be an effective transatlantic competitor and enhance its long-term position in the global marketplace. Like the smaller carriers added to the immunized Star and oneworld alliances (discussed above), Air Tahiti Nui desires to participate in an antitrust-immunized alliance to realize the economies of scope and density that arise from participating in a larger, more integrated network. Linking Air Tahiti Nui to the existing immunized alliance among Air France, KLM, Delta, and Alitalia is consistent with those precedents. Importantly, a grant of immunity for the Alliance Agreements will produce public interest and consumer benefits without any substantial reduction inJoint Application Page 21

\\DC - 033583/000001 - 4105117 v13 competition. Given Air Tahiti Nui’s very small share of the U.S.–Europe, U.S.– France, and U.S.–Paris markets, the Alliance Agreements will not appreciably affect – much less alter – the competitive balance in any of these markets. The Department has granted antitrust immunity to alliances and carriers (i) having far more overlapping nonstop routes where the number of competitors would decrease to one, and (ii) where the resulting market shares of the alliance carriers were higher than here. Moreover, there are many competitive one-stop and connecting alternatives between LAX and CDG which will continue to provide service and fare discipline. Indeed, one-stop and connecting traffic accounts for about 45% of the LAX–Paris market. [Exhibit JA-5] And, this is an “Open Skies” route that any EU or U.S. carrier can serve at any time.

IV. THE APPLICABLE LEGAL STANDARD. In considering applications for antitrust immunity, the Department engages in a two-part analysis: a “competitive analysis” and a “public benefits” analysis. See 2011 Star ATI, DOT Order 2011-11-16, at 5; 2010 oneworld ATI, DOT Order 2010-7- 8, at 7-8. The Department is required under 49 U.S.C. § 41309(b) to “approve an agreement . . . when the Secretary finds it is not adverse to the public interest and is not in violation of this Part.” If the Department approves an agreement under 49 U.S.C. § 41309, the Department has the discretion to grant the transaction antitrust immunity under 49 U.S.C. § 41308 “provided that [the Department determines that] the exemption is required by the public interest.” 2011 Star ATI, DOT Order 2011- 11-16, at 5; see also 49 U.S.C. § 41308. “While the public interest determination under both §§ 41309(b) and 41308(b) entails a comparison of anti-competitiveJoint Application Page 22

\\DC - 033583/000001 - 4105117 v13 effects and public benefits, the standard in section § 41308(b) . . . is higher.” 2011 Star ATI, DOT Order 2011-11-16, at 5; 2010 oneworld ATI, DOT Order 2010-7-8, at
8. The Department’s established policy is to approve and grant immunity for inter-carrier agreements if: (1) the agreements do not eliminate or substantially reduce competition and are not adverse to the public interest; and (2) a grant of immunity is required by the public interest and for the parties to proceed with the transaction. 2010 oneworld ATI, DOT Order 2010-7-8, at 8. As discussed in detail below, the Joint Application clearly satisfies each of these criteria. Accordingly, the Department should approve and grant antitrust immunity for the Alliance Agreements.

V. APPROVAL AND GRANT OF ANTITRUST IMMUNITY FOR THE ALLIANCE AGREEMENTS WILL PRODUCE SUBSTANTIAL PUBLIC BENEFITS AND BE IN THE PUBLIC INTEREST. Air France and Air Tahiti Nui have entered into a bilateral Joint Venture in order to expand and deepen their coordination, strengthen their transatlantic services, expand and more fully develop their international networks, and exploit synergies resulting from more complete integration. An immunized AF-TN Joint Venture will also enhance Air Tahiti Nui’s ability to compete in the global marketplace. This is a particularly important objective for Air Tahiti Nui given that it is a relatively small carrier and not a member of any global alliance. The other Alliance Agreements establish a solid framework for enhanced cooperation and coordination between Air Tahiti Nui and each of the other Joint Applicants, which inJoint Application Page 23

\\DC - 033583/000001 - 4105117 v13 turn will result in additional consumer and competitive benefits. Antitrust immunity is essential, however, if the Joint Applicants are to implement the Alliance Agreements and deliver the resulting public benefits to travelers. The AF-TN Joint Venture Agreement in particular establishes the structure for highly integrated commercial cooperation between Air Tahiti Nui and Air France:

 The AF-TN Joint Venture Agreement details Air France’s and Air Tahiti Nui’s plans and objectives for future transatlantic integration between them.

 The AF-TN Joint Venture Agreement provides for a “common bottom line” (with its revenues being shared between Air France and Air Tahiti Nui according to a formula) and creates incentives to maximize benefits for consumers and the Joint Venture as a whole. (Article 9)

 The business objectives of the Joint Venture are: [confidential]

[end confidential]

 Air France and Air Tahiti Nui will jointly manage the Joint Venture, [confidential]Joint Application Page 24

\\DC - 033583/000001 - 4105117 v13 [end confidential] 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. These public benefits cannot be achieved through standard codesharing or other arms’-length arrangements, and the Department has concluded that implementing joint venture integration requires the umbrella of antitrust immunity. The AF-TN Joint Venture Agreement will enable Air Tahiti Nui and Air France to implement a common metal-neutral economic interest by sharing revenues from coordinated foreign air transportation on the LAX–CDG trunk route. ThisJoint Application Page 25

\\DC - 033583/000001 - 4105117 v13 arrangement will ensure that each carrier is fairly compensated for the value of its respective service and 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 greater service options, the introduction of new flights, 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 – benefits the Department has recognized in the past. “Northwest-KLM, the first transatlantic alliance with an integrated joint venture, and the only for which long-term data are available, has been associated with lower fares, increased capacity, and greater service options for passengers. The data on subsequent immunized alliances also suggest pro-consumer results, even before those alliances moved towards deeper integration.” 2010 oneworld ATI, DOT Order 2010-2-8, at 22.A common bottom line for revenues prioritizes benefits to the proposed AFTN Joint Venture as a whole with each partner sharing in the fruits of that cooperative effort. This is in contrast to non-immunized relationships where each carrier strives to maximize its own economic self-interest and is unwilling to disadvantage itself for the benefit of the other alliance or joint venture participants. The closer cooperation made possible through the immunized AF-TN Joint Venture removes the incentives for Air France and Air Tahiti Nui to act opportunistically in ways which inure to the short-term financial benefit of one carrier but which reduce the efficiency and consumer benefits of the bilateral transatlantic alliance as a whole.Joint Application Page 26

\\DC - 033583/000001 - 4105117 v13 The AF-TN Joint Venture is the deepest level of integration possible, and the Joint Venture Partners have concrete plans to utilize the requested immunized authority. Although the proposed Joint Venture Agreement is a relatively new development, Air France and Air Tahiti Nui have substantial prior experience as partners. As detailed elsewhere in this Joint Application, the Joint Venture Partners have had a codesharing relationship for more than a decade; they are culturally and commercially linked; they provide vital services to the people of France and French Polynesia; and their respective information technology and reservations systems are currently readily compatible with each other without any need for changing technology platforms in order to make these benefits a reality for consumers. With this background, the Department has substantial certainty that the substantial consumer benefits and efficiencies of the AF-TN Joint Venture highlighted in this Joint Application will be realized soon after the requested antitrust immunity is granted. Antitrust immunity for the Alliance Agreements and the linkage to the existing antitrust immunized SkyTeam TATL JV will produce the following substantial public benefits:

 A broader and more fully optimized joint network;

 Substantial expansion of Air Tahiti Nui’s transatlantic and European presence;

 Additional and expanded services on the LAX–CDG route;

 Substantial beyond-CDG codesharing resulting in new on-line citypairs, new paths, and improved elapsed travel times;Joint Application Page 27

\\DC - 033583/000001 - 4105117 v13  Improved connectivity and enhanced on-line service options between Europe and Tahiti via LAX;

 Lower fares through the elimination of “double marginalization” pricing;

 A greater availability of discount seats through improved access to expanded inventory;

 Enhanced fare and service competition against other alliances and large carriers operating U.S.–Europe and U.S.–France services; and

 Cost savings from efficiencies realized as a result of the immunized cooperation and coordination. Antitrust immunity for the Alliance Agreements will offer expanded, more convenient schedule options, improved, seamless service throughout a broader international route network, expanded scope for each participant carrier’s frequent flyer program, and broader “one-stop shopping” opportunities. See 2010 U.S.-Japan Alliance Case, DOT Order 201010-4, at 14 (“We [DOT] have observed that product quality improvements, expanded frequent flyer coordination, and other benefits arise from immunized alliances in the transatlantic market . . . .”). In addition, the cost benefits and efficiencies that can be achieved by the AF-TN Joint Venture will flow to customers in the form of cost savings, harmonized superior service, increased availability of lower fares, and augmented discount/incentive programs. These consumer benefits closely mirror the benefits produced by other immunized joint ventures and acknowledged by the Department. A. The Immunized Alliance Agreements Will Enable the Joint Applicants to Increase Service Over the LAX-CDG Joint Venture Route and Expand Beyond-CDG Codesharing, Resulting in Significantly Improved On-Line Service Options and Cost Savings.Joint Application Page 28

\\DC - 033583/000001 - 4105117 v13 Under the AF-TN Joint Venture Agreement, Air Tahiti Nui and Air France will improve their service offerings. The AF-TN Joint Venture Agreement specifically provides for joint coordination of scheduling, planning, and capacity on the LAX– CDG route and of connectivity on beyond–CDG services: [confidential]Joint Application Page 29

\\DC - 033583/000001 - 4105117 v13 [end confidential] The Alliance Agreements will enable the Joint Applicants to optimize schedules and provide new travel options for consumers and communities, including additional nonstop frequencies, improved time-of-day coverage on the LAX–CDG route, and expanded beyond–CDG on-line services. The substantial benefits of this expanded coordination and integration among the Joint Applicants are otherwise unattainable in the absence of antitrust immunity. The AF-TN Joint Venture allows for “metal neutrality,” which maximizes incentives for the Joint Venture Partners to (i) efficiently codeshare without restrictions, (ii) agree on schedules that increase passenger convenience by adding new flights or shifting flights to provide broader time-of-day coverage, and (iii) route customers on city-pairs via the most efficient routing regardless of which carrier operates the flight(s). In addition, economies of density will arise as a result of the immunized coordination and cooperation. Demand will increase due to the higher quality product created by the antitrust-immunized AF-TN Joint Venture and the lower prices made possible through lower costs. The increased traffic will enable the Joint Venture Partners to (i) increase their load factors, (ii) increase frequencies (more weekly flights), (iii) improve connectivity, and (iv) use fixed ground facilities and personnel more efficiently.Joint Application Page 30

\\DC - 033583/000001 - 4105117 v13 Indeed, the Department has repeatedly recognized that integrated multinational airline alliances, such as the AF-TN Joint Venture, can produce extensive consumer benefits 12 : “Antitrust immunity is well suited to enable carriers to achieve merger-like efficiencies and deliver benefits that would not otherwise be possible.” SkyTeam II ATI, DOT Order 2008-4-17 at 15. For example, the Department has noted the beneficial impact of immunized alliances on service levels, fares, and costs: “Alliance-based networks are the principal driving force behind transatlantic price reductions and traffic gains.” DOT Second Report , at 5-6. “[W]e tentatively find that the following public benefits are likely [from an immunized oneworld alliance]: (1) more options for travelers in numerous transatlantic city pairs, based on the applicants’ ability . . . to achieve fare combinability; (2) lower fares resulting from the reduction in double marginalization on multi-segment itineraries; (3) volume discounting . . .; (4) expanded access to discounted fares resulting from coordinated inventory; (5) reduced costs through shared sales, marketing, distribution, procurement, . . .” 2010 oneworld ATI, DOT Order 2010-2-8, at 30. “Generally speaking, a grant of antitrust immunity may enable airlines to achieve merger-like synergies, boost capacity, and deliver lower prices for some itineraries.” Delta/Virgin Blue/Pacific Blue, DOT Order 2011-5-8, at 13. “The likelihood that these proposed benefits [ e.g. , fare reductions, more access to lower fares, and cost savings, etc.] will be realized is

12 See International Aviation Developments: Transatlantic Deregulation, The Alliance Network Effect , U.S. Department of Transportation, Office of the Secretary (Oct. 2000), at 5 (“DOT Second Report”), at 2-3, 5-6, 10 (emphasis in original); see also, e.g., DOT Orders 2008-5-32 (SkyTeam II ATI); 2010-10-4 (ANA/CO/UA; AA/JAL); 2009-4-5 (CO/Star Alliance); 2010-2-8 (oneworld ATI); 2011- 6-9 (DL/Virgin Australia/Pacific Blue); 2006-12-17 (Star Alliance ATI); 2005-10-8 (American/Lan Airlines/Lan Peru); 2005-1-23 (America West/Royal Jordanian); 2004-4-10 (American/SN Brussels); 2003-5-18 (United/Asiana); 2002-11-12 (American/SWISS); 2002-7-39 (American/Finnair); 2002-6-18 (Delta/Korean); 2002-4-4 (United/bmi); 2002-1-6 (Delta/Air France/Alitalia/Czech); 2001-5-1 (Continental/COPA); 2001-1-19 (United/Austrian); 1999-9-9 (American/Lan Chile).Joint Application Page 31

\\DC - 033583/000001 - 4105117 v13 supported by both our [DOT’s] historical experience reviewing antitrust immunity cases and several third-party studies of immunized alliances. In a review of international airline cooperation between 1990 and 2000, Whalen found that immunized alliances are associated with 50 percent higher passenger volumes and 16 to 21 percent lower fares that [sic] non-immunized alliances. Other studies have pointed to fare reductions and welfare gains that occur when cooperating alliances eliminate or reduce two separate mark-ups, or double marginalization, on interline routes.” U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 13. The Department has also acknowledged that antitrust immunity increases carriers’ economic incentives to codeshare on a broader basis and to reduce their interline fares. And, the Department has recognized these benefits are also produced in the context of granting antitrust immunity to an alliance between two foreign carriers: “The proposed alliance will allow the partners to broaden and deepen their existing code-share arrangement to achieve greater operational efficiencies and to continue the expansion of their route networks on a more integrated and coordinated basis.” See SAS/Icelandair, DOT Order 2000-10-13, at 15. Moreover, unlike SAS/Icelandair, the Air France–Air Tahiti Nui cooperation involves a joint venture which will allow for deeper, more integrated coordination that will enable the carriers to optimize service and fare enhancements. The immunized AF-TN Joint Venture will enable Air Tahiti Nui and Air France to produce significant benefits, efficiencies, and cost savings by incentivizing both partners to act in the collective interest of the Joint Venture, instead of the individual interest of each carrier. 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 with global market demands. Air Tahiti Nui is currently aJoint Application Page 32

\\DC - 033583/000001 - 4105117 v13 very small carrier on the LAX-CDG route with no frequent flyer base and no significant network behind LAX or in Europe. In the absence of antitrust immunity, Air France will use its assets to benefit its own flights. The immunized Joint Venture, however, eliminates the self-interest incentive, 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). The immunized AF-TN Joint Venture will increase frequencies and capacity on the LAX–CDG trunk route. Under the Joint Venture, Air Tahiti Nui expects [confidential]

[end confidential] In addition, the immunized Joint Venture will provide enhanced time-of-day coverage. For example, the current schedule for Air Tahiti Nui’s LAX–CDG flight in July 2013 has an early afternoon LAX departure and a late morning CDG departure.Joint Application Page 33

\\DC - 033583/000001 - 4105117 v13 Current 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

As can be seen, Air Tahiti Nui and Air France offer almost wingtip-towingtip morning departures from CDG (about an hour apart). Morning CDG departures are considered prime-time departures. Neither carrier would unilaterally remove itself from that time period based on its own self-interest. However, as part of the immunized, metal-neutral AF-TN Joint Venture, the carriers have the incentive to optimize schedules for the good of the Joint Venture, which, in turn, benefits the traveling public, and thus [confidential]Joint Application Page 34

\\DC - 033583/000001 - 4105117 v13 [end confidential] 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. [Exhibit JA-6.] 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 co-locate and share facilities. As a result of the immunized AF-TN Joint Venture, Air France will also be able to offer [confidential]

[end confidential] And, Air Tahiti Nui’s ability to offer seamless, immunized codesharing on beyond-CDG routes will result in substantial efficiencies and savings when compared to operating such tag routes with its own aircraft and

crews. 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 efficientlyJoint Application Page 35

\\DC - 033583/000001 - 4105117 v13 utilize airport/ground personnel and facilities, thereby reducing unit operating costs and achieving economies of density superior to those achieved by carriers thatcodeshare 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 functions should result in a reduction in the Joint Applicants’ administrative costs. This, in turn, will result in lower costs for passengers. In addition, the AF-TN Joint Venture will enable Air Tahiti Nui to significantly expand its network through expanded free-flow codesharing on LAX–CDG and beyond–CDG 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 [confidential]Joint Application Page 36

\\DC - 033583/000001 - 4105117 v13 [end confidential] With respect to new on-line service benefits, Air Tahiti Nui’s European network will initially expand by up to confidential ]

[end confidential]

. In sum, the closer coordination made possible through the AF-TN Joint Venture Agreement and the other Alliance Agreements will enable the Joint Applicants ( e.g., Air Tahiti Nui, Air France, Delta, KLM, Alitalia) to eliminate current arms’-length negotiated restrictions on codesharing and expand reciprocal codesharing on the LAX–CDG route. This expansion is particularly important for Air Tahiti Nui because Air Tahiti Nui has a small presence across the Atlantic Ocean and in Europe, and Paris is the only point in Europe that Air Tahiti Nui serves with its own aircraft.Joint Application Page 37

\\DC - 033583/000001 - 4105117 v13 Codesharing without antitrust immunity produces significantly fewer network expansion and consumer benefits than an immunized, integrated alliance becausethe incentives are carrier-centric rather than alliance-centric. In arms’-length, nonimmunized codeshare relationships, carriers limit codeshares on the basis of tit-fortat exchanges of benefits. However, the AF-TN Joint Venture Agreement establishes incentives for each carrier to focus on maximizing benefits for the AF-TN Joint Venture as a whole, not just for the individual carrier. In such a relationship, winning the passenger’s booking for a trip on the LAX–CDG route is the priority, regardless which carrier, in fact, transports the passenger on its transatlantic itinerary. To this end, the AF-TN Joint Venture Agreement provides detailed provisions, including formulas, for handling the Joint Venture’s financial settlements. (Article 9) Approval of the Joint Venture and other Alliance Agreements will also enable the Joint Applicants to coordinate schedules and connections in ways that will result in improved on-line service options and benefits, improved ( i.e., reduced) elapsed travel times, additional flexible routings and travel paths for passengers, and the more efficient use of their networks. 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-of-destination 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 pathsJoint Application Page 38

\\DC - 033583/000001 - 4105117 v13 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. Indeed, the Department has acknowledged such benefits in prior grants of antitrust immunity: “This proposed expansion will increase international service options, particularly for traffic to or from cities beyond and behind major gateways. The alliance will enable the [Star Alliance] partners, for example, to provide on-line service between points behind their gateways in the United States and points beyond Warsaw, Lisbon, and Zurich, among others.” 2007 Star ATI, DOT Order 2006-12-17, at 18.

B. The Immunized Alliance Agreements Will Eliminate Inefficient “Multiple-Profit Markup” Pricing and Thereby Reduce Fares. A grant of antitrust immunity will eliminate inherent inefficiencies to pricing and enable the Joint Applicants to offer more attractive fares to consumers. Under the AF-TN Joint Venture Agreement, the Joint Venture Partners will coordinate, to the maximum practicable extent, pricing, fares, and inventory/yield management for foreign air transportation involving transatlantic routings. [confidential ]Joint Application Page 39

\\DC - 033583/000001 - 4105117 v13 [end confidential] Under a typical, non-immunized codeshare between two carriers with each operating separate legs, each carrier prices independently and charges its own profit “markup” for its leg, i.e., double marginalization. But, with antitrust immunity and especially with a common revenue bottom line under the AF-TN Joint Venture Agreement, the carriers jointly price a fare without the separate profit markups and thus offer lower fares. This deeper level of coordination and cooperation will involve discussions among personnel from each carrier about transatlantic fares, pricing, yield management, seat inventory allocation, discount programs for certain travelers, promotional fare offerings, joint bids for large volume travelers, prorate agreements,Joint Application Page 40

\\DC - 033583/000001 - 4105117 v13 wholesale net fares, uniformity for miscellaneous service charges, and the integration of the corresponding revenue/inventory management systems. With this enhanced cooperation, consumers, corporate travel departments, and travel agents will enjoy an expanded availability of discount fares and incentive programs. Such a result should not be surprising given the findings of the Department and others that “[a]lliance-based networks are the principal driving force behind transatlantic price reductions and traffic gains” ( DOT Second Report , at 5) and “Whalen found that immunized alliances are associated with . . . 16 to 21 percent lower fares that [sic] non-immunized alliances” (2010 U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 13). Although Air France and Air Tahiti Nui are the only carriers providing nonstop service between LAX and Paris, there is little risk of any adverse pricing impact on that route. First, as discussed later, there is a vast array of one-stop and connecting flights serving that route, which are used by almost one-half of all passengers travelling between Los Angeles and Paris. Second, Air Tahiti Nui operates only three times per week between LAX and CDG in the winter, and thus for almost 60% of the time there is only one nonstop operator. In fact, Air Tahiti Nui currently operates daily service on this trunk route for only two months of the year. (IATA 2012 Schedules, OAG.) Third, Air Tahiti Nui has never had an influence on the pricing behavior on the LAX-CDG route because it is too small (0.1% U.S.-Europe, 0.9% U.S.-France), has no beyond-CDG connectivity, and has only a limited frequent flyer program. [Exhibits JA-2, JA-3] Simply put, Air Tahiti Nui’s pricing behavior on this route does not result in competitive responses from other carriers.Joint Application Page 41

\\DC - 033583/000001 - 4105117 v13 The Joint Venture, however, will allow the carriers to maximize service and efficiencies, which will increase the availability of discount fares and incentive programs for the travelling public. C. Immunity Will Enhance Efficiencies and Thereby Reduce Costs Which Will Inure to the Benefit of Consumers. 1. Joint Marketing, Promotion, and Distribution. 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. For example, the AF-TN Joint Venture Agreement states: [confidential]Joint Application Page 42

\\DC - 033583/000001 - 4105117 v13 [end confidential] Consumers will gain substantial benefits from this marketing, promotion, and distribution coordination.

2. Joint Procurement. The Joint Applicants will coordinate and cooperate on joint procurement activities, which will result in reduced costs. These activities may include (i) volume/bulk purchasing, common specifications for goods/services, joint bidding, joint negotiations with suppliers, the use of standardized contracts for goods/services, and even the establishment of a joint procurement group, and (ii) diverse areas of supply-and-demand such as general goods/services, maintenance services, field station support, catering services, ground equipment acquisition and sales, fuel, information technology, and courier services.Joint Application Page 43

\\DC - 033583/000001 - 4105117 v13 In particular, the AF-TN Joint Venture Agreement provides that the Joint Venture Partners [confidential]

[end confidential] The Multilateral Coordination Agreement also provides that any two of the Joint Applicants may engage in cooperative programs including joint purchasing. Joint procurement activities under the AF-TN Joint Venture Agreement and the Bilateral Coordination Agreements will enable the carriers to negotiate for better, lower-priced contracts with suppliers, and cost reductions generally lead to price reductions for passengers.

3. Joint Development and Coordination of Accounting & Information Systems and Data. The Joint Venture Partners will coordinate efforts to implement compatible information systems and accounting data. (Section 6.1.4 and Article 9) Coordination in these areas will likewise assist in generating synergies and cost efficiencies, which, in turn, will benefit the AF-TN Joint Venture, the other Joint Applicants, and their travelers. To this point, the information technology and reservations systems used by Air France and Air Tahiti Nui are currently readily compatible with each other without any need for changing technology platforms in order to make these benefits a reality for consumers.

VI. THE GRANT OF ANTITRUST IMMUNITY FOR THE ALLIANCE AGREEMENTS WILL ENHANCE, NOT SUBSTANTIALLY REDUCE, COMPETITION.A grant of antitrust immunity for the Alliance Agreements will enhance interalliance and transatlantic competition in a number of ways. First, it will enable AirJoint Application Page 44

\\DC - 033583/000001 - 4105117 v13 Tahiti Nui to gain a stronger presence in the transatlantic market and in Europe generally, a critically important development for Air Tahiti Nui given its small presence in this region. Second, it will enhance Air Tahiti Nui’s economic viability and enable it to sustain and strengthen its presence in the transatlantic market and funnel greater traffic flows over its non-immunized transpacific routes to sustain and strengthen its competitive presence across the Pacific Ocean. Third, the AF-TN Joint Venture Agreement and other Alliance Agreements will enable the Joint Applicants to (i) implement additional nonstop flights between the U.S. and France, and (ii) expand their respective networks by offering broader codesharing on the LAX–CDG and beyond-CDG routes. At the same time, the grant of antitrust immunity for the Alliance Agreements will not substantially reduce competition. When the Department evaluates applications for antitrust immunity, the Department applies “the Clayton Act test, which is used to predict the competitive effects of a proposed merger,” and primarily considers: “whether a grant of antitrust immunity is likely to substantially reduce competition and facilitate the exercise of market power – that is, to allow the applicants to profitably charge supra-competitive prices or reduce service or quality below competitive levels in any relevant market. . . . [and] whether the alliance would significantly increase market concentration in relevant markets, whether the alliance causes potential competitive harm, and whether new entry into the market would be timely, likely, and sufficient either to deter or to counteract the potential competitive harm.” Delta/Virgin Blue/Pacific Blue, DOT Order 2011-5-8, at 6-7 (footnote omitted). 13

13 See also 2011 Star ATI, DOT Order 2011-11-16, at 5; 2010 oneworld ATI, DOT Order 2010- 2-8, at 11.Joint Application Page 45

\\DC - 033583/000001 - 4105117 v13 The Department examines whether a proposed alliance would substantially reduce competition in relevant markets, including the global, inter-alliance, U.S.-regional, U.S. country-pair, and city-pair markets. As a general principle, the addition of a small airline to an existing alliance does not substantially reduce or eliminate competition. As the Department observed in approving the addition of LOT and TAP (each far larger than Air Tahiti Nui) to the immunized Star Alliance, “there is only a small risk of competitive harm where the transaction involves small networks with limited nonstop service to the United States.” 2007 Star ATI, DOT Order 2006-12-17, at 19. Here, Air Tahiti Nui has a substantially smaller network and less U.S.–Europe service than LOT or TAP had. Air Tahiti Nui’s immunized Joint Venture with Air France and immunized coordination with the other SkyTeam Joint Applicants will enhance competition among both alliances and airlines, not substantially reduce it. A. Global Alliance Competition. There are only three branded, global alliances: Star, oneworld, and SkyTeam (of which Joint Applicants Air France, Delta, KLM, and Alitalia are immunized members). Competition among them is intense, and the immunized cooperation of Air Tahiti Nui with certain members of SkyTeam will only enhance this inter-alliance competition. In 2011, the Department granted antitrust immunity to a group of eleven Star Alliance members. 2011 Star ATI, DOT Order 2011-11-16. The Star Alliance now has more immunized airlines than any alliance in the world, and the nine-member immunized Star Alliance encompasses seven European carriers (Lufthansa,Joint Application Page 46

\\DC - 033583/000001 - 4105117 v13 Austrian, SAS, LOT, SWISS, TAP, Brussels Airlines) and two North American carriers (United, Air Canada). 14 The Star Alliance operates approximately 21,900 daily departures, serving 1,329 airports in 194 countries. 15 The five-member immunized oneworld Alliance has three European carriers (British Airways, Iberia Airlines, Finnair), and the entire oneworld alliance operates approximately 8,672 daily departures, serving 823 destinations in 154 countries. 16 Air Tahiti Nui is a small, unaligned airline that is not a member of an airline alliance. It does not have antitrust immunity enabling it to coordinate and cooperate with other airlines. In order to strengthen its competitive position, expand its market presence across the Atlantic Ocean and in Europe, offer its passengers more service options, and enhance passenger convenience, Air Tahiti Nui seeks to participate in an immunized alliance. To that end, it has entered into the Joint Venture with Air France concerning the LAX–CDG route and beyond-CDG codesharing, the Multilateral Coordination Agreement, and Bilateral Cooperation Agreements with the other Joint Applicants. A grant of antitrust immunity will enable Air Tahiti Nui to compete more effectively in the global marketplace against the other major alliances and larger, unaligned transatlantic carriers. B. U.S.–Europe.The U.S.–Europe air services market is intensely competitive under the EUU.S. “Open Skies” Agreement. Approximately 39 U.S. and foreign scheduled

14 Since that 2011 Star ATI Order, bmi was sold and ceased participating in the Star Alliance, s ee DOT Order 2012-6-21, and Continental has merged with United. 15 See Star Alliance Website, Star Alliance Facts and Figures (November 2012), available at http://www.staralliance.com/assets/doc/en/about/member-airlines/pdf/ Star%20Alliance%20Facts%20and%20Figures%20Nov%202012.pdf. 16 See oneworld Alliance Website, oneworld at a glance (January 2013 data), available at http://www.oneworld.com/news-information/oneworld-fact-sheets/oneworld-at-a-glance/.Joint Application Page 47

\\DC - 033583/000001 - 4105117 v13 passenger carriers provide scheduled passenger nonstop service between 29 airports in the United States and 51 airports in Europe. For the year ended February 2013, there were 32.7 million air passengers between the United States and Europe. 17 Air Tahiti Nui has a very small presence in the U.S.–Europe market. It provides service on just a single transatlantic route (LAX–CDG) and accounts for just 0.1% (one-tenth of one percent) of the U.S.–Europe traffic. [Exhibit JA-2] In fact, approximately 33 U.S. and foreign air carriers (not including Air France, Delta, KLM, and Alitalia) have a larger share of the U.S.–Europe market. 18 In granting antitrust immunity to the oneworld Alliance in 2010, the Department reported that the immunized U.S. and European members of the Star Alliance (plus Air New Zealand) would have a 31.7% nonstop on-board market share in the U.S.-EU market 19 post-transaction, followed by the immunized SkyTeam at 28.9%, oneworld at 22.3%, Virgin Atlantic at 7.1%, US Airways at 4.6%, and other carriers accounting for the remaining 5.5%. See 2010 oneworld ATI, DOT Order 2010-2-8, at 14. The Department noted that there were then approximately 39 airlines in the nonstop scheduled U.S.–EU market and that “[n]o single airline has a dominant share of nonstop passengers, indicating a generally competitive market.” 2010 oneworld ATI, DOT Order 2010-2-8, at 13. More recent data indicate that the Star Alliance accounts for approximately 40.7% of the U.S.–Europe market, with the SkyTeam Alliance and oneworld accounting for about 26.0% and 20.5%, respectively, and unaffiliated carriers

17 MIDT Data, YE February 2013. 18 MIDT Data, YE February 2013. 19 The Department included Norway and Switzerland traffic in this “EU” data. See 2010 oneworld ATI, DOT Order 2010-2-8, at 14 n.42.Joint Application Page 48

\\DC - 033583/000001 - 4105117 v13 representing the remaining 12.8%. 20 Air Tahiti Nui’s immunized Joint Venture with Air France and immunized coordination/cooperation with Delta, KLM, and Alitalia would not materially alter U.S.-Europe market shares or the competitive balance among alliances and unaligned carriers. The Star Alliance would still be substantially larger than SkyTeam and oneworld, and oneworld would retain basically the same market share as before. Focusing solely on the AF-TN Joint Venture, the Joint Venture Partners would together account for only about 5.1% of the U.S.–Europe market, less than non-immunized Star Alliance member US Airways at 5.7%. 21 Moreover, the intense competition in the transatlantic marketplace will continue as airlines and alliances (i) compete for passengers on fares, service, schedules, and routings, and (ii) take advantage of the EU-U.S. “Open Skies” Agreement whereby U.S. and EU carriers are able to fly from any EU country to the United States, regardless of which specific EU country is the foreign carrier’s homeland ( e.g., Open Skies – a member of oneworld and a U.K. carrier – flies nonstop from Paris to the United States; and Lufthansa, a member of the Star Alliance, could fly nonstop from Paris to New York as well if it desired). In addition, many of the carriers serving the U.S.–Europe market operate from hubs in their homelands or from hubs of their immunized alliance partners, and support their nonstop services by offering codeshare connections behind and beyond their gateways to even more destinations. For example, the Star Alliance transports transatlantic passengers over United’s hubs in Chicago, Washington, Denver, San Francisco, and New York, Air Canada’s hubs in Toronto and Montreal,

20 MIDT Data, YE February 2013. 21 MIDT Data, YE February 2013.Joint Application Page 49

\\DC - 033583/000001 - 4105117 v13 Lufthansa’s hubs at Frankfurt and Munich, SWISS’ hub at Zurich, SAS’ hub at Copenhagen, TAP’s hub at Lisbon, LOT’s hub at Warsaw, and Brussels Airlines’ hub at Brussels, among others. Oneworld carries transatlantic passengers over American’s hubs in Chicago, Dallas/Ft. Worth, Miami, and New York, British Airways’ hub at London, Finnair’s hub at Helsinki, and Iberia’s hub at Madrid, among others. In short, passengers flying on these alliances have options to travel to, from, and via a large number of gateways on each side of the Atlantic Ocean. Air Tahiti Nui, however, has no hub in the U.S. or Europe, nor does it currently offer behind/beyond-Paris codesharing connections. It is a very small transatlantic carrier (with a single transatlantic route and a 0.1% U.S.–Europe market share), [Exhibits JA-2, JA-4], and it does not participate in any alliance, much less an immunized one. Accordingly, a grant of immunity here will not materially change the U.S.–Europe competitive landscape. The AF-TN Joint Venture seeks to address Air Tahiti Nui’s situation. It will enable Air Tahiti Nui to expand its LAX–CDG and beyond-CDG services, and improve connectivity for traffic between Europe and Tahiti via LAX. This will strengthen the ability of Air Tahiti Nui to compete more vigorously in the transatlanticmarket and expand its presence in behind- and beyond-gateway U.S.-Europe citypairs. Thus, the Joint Venture will provide more consumers access to the competitive benefits generated by vigorous transatlantic competition among alliances and network carriers and will substantially bolster Air Tahiti Nui’s vital role in connecting France with French Polynesia via Los Angeles and supporting French Polynesia’s critically important tourism industry.Joint Application Page 50

\\DC - 033583/000001 - 4105117 v13 C. Country-Pairs. The United States currently has “Open Skies” agreements with each homeland of the European Joint Applicants: (i) EU-U.S. “Open Skies” Agreement covering France (Air France), the Netherlands (KLM), and Italy (Alitalia); and (ii) U.S.-France “Open Skies” Agreement, as amended, covering French Polynesia (Air Tahiti Nui). The AF-TN Joint Venture and immunized coordination/cooperation with the other Joint Applicants will not materially reduce or eliminate competition in any relevant transatlantic country-pairs. (i) U.S.-France. There are about 46 daily nonstop flights offered by 9 carriers between the United States and France. In addition to the nonstop services offered by Air Tahiti Nui, Air France, and Delta, the following carriers operate competitive nonstop flights between the United States and France: oneworld members American and Open Skies (8 daily nonstop flights), Star Alliance members United and US Airways (7 daily nonstop flights), and XL Airways France. 22 European and U.S. carriers from the Star and oneworld Alliances also offer substantial competitive one-stop connecting service over their European and U.S. gateways (e.g., Frankfurt, Zurich, London, Madrid, Munich, New York, Chicago, Dallas/Ft. Worth, Houston) to various destinations in France. And, immunized Star Alliance carrier, Air Canada, offers substantial one-stop options from the United States to France via its Toronto and Montreal gateways. In the 2007 Star ATI proceeding, the Department recognized the competitive discipline resulting from

22 If the American–US Airways merger is completed, AA and US together would operate eight daily departures to France from seven cities in the United States. See http://newamericanarriving.com/customers/more-flights/ ; see also http://newamericanarriving.com/customers/international-benefits/ (last reviewed February 14, 2013).Joint Application Page 51

\\DC - 033583/000001 - 4105117 v13 connecting services operated by other alliances and carriers across the Atlantic Ocean to continental Europe: “For the large majority of travelers, the carriers offering U.S.-Switzerland connecting services, such as the European members of SkyTeam and oneworld, should discipline the fares and service offered by the nonstop [Star Alliance] carriers.” 2007 Star ATI, DOT Order 2006-12-17, at 12. Furthermore, as noted above, the EU-U.S. “Open Skies” Agreement permits EU and U.S. carriers to commence new or additional service between the United States andFrance at any time as they see fit. Simply put, there are significant nonstop, onestop, on-line, and interline services between the United States and France; competition is flourishing; and market entry is wide open. For the year ended February 2013, there were more than 3.22 million passengers traveling between the United States and France. 23 The SkyTeam Alliance accounted for approximately 43.5% of the U.S.-France market, with the Star and oneworld Alliances accounting for about 26.5% and 21.4%, respectively. 24 For its part, Air Tahiti Nui had less than 1% of the U.S.–France market [Exhibit JA-3] and 1.2% of the U.S.–Paris market. 25 And, 11 other carriers (excluding Air France, Delta, and KLM) had larger shares of the U.S.-France market than Air Tahiti Nui did. 26 Thus, the immunized Joint Venture with Air France and coordinated activities with the other Joint Applicants would result in a de minimis share increase for them in the U.S.–France market.

23 MIDT Data, YE February 2013. 24 MIDT Data, YE February 2013. 25 MIDT Data, YE February 2013. 26 MIDT Data, YE February 2013.Joint Application Page 52

\\DC - 033583/000001 - 4105117 v13 Indeed, even at a combined market share of about 44% for the Joint Applicants in the U.S.-France market, that is less than other homeland market shares of applicant-carriers for antitrust immunity in other cases. To this point, the Department has previously determined that large country-pair market shares do not mean that a market is uncompetitive, particularly where open entry (as in this case) permits other competitors and alliances to offer nonstop and on-line options. For example, when the Department granted antitrust immunity to SkyTeam, it emphasized: “[T]he proposed Delta-Air France-Alitalia-CSA alliance will have a large share of the U.S.-Czech Republic/France/Italy markets. Nonetheless,considering the competitive nonstop service offered and the openmarket conditions, we tentatively find that the proposed alliance will not allow the Joint Applicants to charge supra-competitive prices or toreduce service below competitive levels in these three country-tocountry markets.” SkyTeam I ATI, DOT Order 2001-12-18, at 13. That same determination applies with even greater force here. Given the availability of competitive nonstop, on-line, and interline service and the unrestricted opportunities to increase service under the EU-U.S. “Open Skies” Agreement, the “Joint Applicants will not be able to impose and sustain supra-competitive prices or reduce service below current competitive levels in the above U.S.-country pairs. . . . [I]t is likely that the services of the proposed alliance will be effectively disciplined by competition provided by other airline and alliance networks.” 2007 Star ATI, DOT Order 2006-12-17, at 13. (ii) U.S.-Netherlands; U.S.-Italy. Air Tahiti Nui does not operate any nonstop service between the United States, on the one hand, and the Netherlands or Italy, on the other hand. Indeed, AirJoint Application Page 53

\\DC - 033583/000001 - 4105117 v13 Tahiti Nui does not serve these countries at all. Accordingly, neither Air Tahiti Nui’s immunized Joint Venture with Air France nor its immunized cooperation/coordination with the other Joint Applicants will lead to any reduction, elimination or overlap of nonstop service in either of these country-pairs. D. City-Pairs. Air Tahiti Nui’s transatlantic service does not overlap with any nonstop service of Delta, KLM or Alitalia. Air France and Air Tahiti Nui provide overlapping nonstop transatlantic service on only one nonstop route, LAX–CDG, far fewer than were involved in the oneworld and U.S.-Japan Alliance cases for antitrust immunity. The oneworld carriers had eight nonstop overlapping transatlantic routes when the Department granted oneworld antitrust immunity. 2010 oneworld ATI, DOT Order 2010-2-8, at 21 (Table 5) (DFW/BOS/ORD/MIA/LAX/NYC-London, MIA-Madrid, NYC-Paris). The Star Alliance carriers had six nonstop overlapping U.S.–Tokyo routes when the Department granted ANA, United, and Continental antitrust immunity, and the oneworld Alliance carriers had three nonstop overlapping U.S.– Tokyo routes when the Department granted American and Japan Airlines antitrust immunity. 2010 U.S.-Japan Alliance Case, DOT 2010-10-4, at 9 (Table 3) (Star: WAS, CHI, SFO, HNL, NYC, LAX; oneworld: CHI, NYC, LAX). No. of Overlapping Nonstop City-Pair Routes DOT Order
2010 oneworld ATI 8 2010-2-8 2010 U.S.-Japan Alliance (UA/ANA - Star) 6 2010-10-4 2010 U.S.-Japan Alliance (AA/JAL - oneworld) 3 2010-10-4 2012 TN, AF, and other Joint Applicants 1Joint Application Page 54

\\DC - 033583/000001 - 4105117 v13 Furthermore, the LAX-CDG route is not really going from two competitors to one competitor since Air Tahiti Nui (i) operates less than daily service between LAX and CDG for 10 months of the year, (ii) has only 3 weekly winter season flights, and (iii) has no influence on the pricing behavior of other carriers because it is too small (0.1% U.S.-Europe share, 0.9% U.S.-France share), has no beyond-CDG connectivity, and has no global frequent flyer program. [Exhibits JA-2, JA-3, JA-4] Moreover, there is a vast array of one-stop service options on other carriers and alliances between these two cities which will provide strong competitive discipline on the route. Indeed, approximately 45% of the O&D traffic between LAX and Paris uses other than nonstop services. 27 [Exhibit JA-5] Thus, the AF-TN Joint Venture and Air Tahiti Nui’s immunized coordination with the Joint Applicants will face strong competition for passengers in this market from every major transatlantic carrier via a variety of competing hubs, including, inter alia, United (Newark, Washington, Chicago, Houston, San Francisco), American (Chicago, Dallas, Miami, New York), US Airways (Philadelphia), Lufthansa (Frankfurt, Munich), British Airways (London), SWISS (Zurich), and Air Canada (Toronto, Montreal). Each of these carrier/hub combinations has nonstop service to/from Paris and to/from LAX. As the Department stated in SkyTeam II ATI, “high market shares . . . overstate the influence of competitors offering nonstop services. For a large majority of travelers, other carriers or alliances offer connecting services that discipline the fares and services offered by nonstop carriers.” DOT Order 2008-4-17, at 12. The Department has also noted that “even if a transaction creates a partnership with a

27 MIDT Data, YE February 2013.Joint Application Page 55

\\DC - 033583/000001 - 4105117 v13 preponderant market share, the transaction would not substantially reduce competition if competitors have free and open access to the marketplace.” United/Air New Zealand, DOT Order 2001-3-4, at 12. In this case, the EU-U.S. “Open Skies” Agreement ensures such open access between the United States and France. Notably, the Department has granted antitrust immunity where the number of nonstop competitors would decrease from two to one, where the percentage of passengers using connecting service was far less than here, and where the alliance carriers’ market shares were far higher than here. For example, in the 2010 oneworld ATI case, the number of nonstop competitors in the Dallas/Ft. Worth– London market was reduced from two to one, with a resulting post-transaction market share of 82.9% for the immunized carriers. 2010 oneworld ATI, DOT Order 2010-2-8, at 21 (Table 5). By contrast, the Air Tahiti Nui-Air France market share in the LAX–Paris market would be approximately 56.7%, and the Joint Applicants’ combined market share would be 59.8%. 28 In the DFW-London situation, the Department noted that “travelers in the Dallas/Ft. Worth–London markets have multiple connecting options. As shown in the data, a relatively large percentage of passengers connect within the Dallas/Ft. Worth–London city pair.” 2010 oneworld ATI, DOT Order 2010-2-8, at 23. “As DFW pointed out in its reply, the connecting services available in the nonstop overlap markets discipline the fares charged for nonstop service.” 2010 oneworld ATI, DOT Order 2010-7-8, at 9. In that case, only 27% of the local O&D traffic used connecting service on the route. 2010 oneworld ATI, DOT Order 2010-2-8, at 21 (Table 5) & DOT Order 2010-7-8, at 9

28 MIDT Data, YE February 2013.Joint Application Page 56

\\DC - 033583/000001 - 4105117 v13 (“approximately one-quarter of the passengers already use connecting services in the overall [Dallas/Ft. Worth–London] city-pair”). Here, almost half of the traffic between LAX and Paris uses connecting service. In the U.S.-Japan Alliance Case, Washington–Tokyo was an overlap market for ANA and United where the number of competitors would be reduced from two to one as a result of the immunized alliance. 2010 U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 9 (Table 3). The Department did not find that fact dispositive, however: “While the Washington-Tokyo nonstop market would become even more concentrated on a nonstop basis than Chicago-Tokyo, there are other competitive factors that merit consideration. . . . The Star applicants note that over 30 percent of Washington-Tokyo local passengers choose connecting service, despite two current nonstop service options. This portion . . . indicates the competitive pressure of connecting service. . . . Post-transaction, two competitors toimmunized Star would offer connecting service in the WashingtonTokyo market, giving passengers ample opportunity for competitive options should nonstop fares be increased.” 2010 U.S.-Japan Alliance Case, DOT Order 2010-10-4, at 11-12. A much higher proportion of O&D traffic between LAX and Paris uses connecting service, demonstrating the effectiveness of connecting service as a viable and disciplining alternative for travel between LAX and Paris. In summary, the Department has previously granted antitrust immunity to alliances where the number of competitors on an overlapping route would decrease from two to one and where the percentage of connecting traffic was much lower than LAX-Paris.Joint Application Page 57

\\DC - 033583/000001 - 4105117 v13 Overlapping N/S Route Decreasing From 2 to 1 % of O&D Pax Who Connect or Use Other Than Nonstop Service 2010 oneworld ATI DFW-LHR 27% 2010 U.S. Japan Alliance (UA/ANA) WAS-NRT 30% 2012 AF, TN, and other Joint Applicants LAX-Paris 45%
Given these facts, the Joint Applicants submit that there should be no carveout from the grant of antitrust immunity. Any carve-out would create unnecessary inefficiencies that could impede the Joint Venture Partners’ ability to realize fully the substantial integrative efficiencies and public benefits of that Agreement. As the Department stated in SkyTeam II ATI: “carve outs could undermine the effectiveness of the . . . JV and jeopardize the public benefits.” DOT Order 2008-4- 17, at 10. And, it reaffirmed that point in 2010 oneworld ATI: “In short, we have concluded that the disadvantages of carve-outs outweigh the advantages in markets where there is joint venture cooperation. We find that this conclusion applies to the facts of this case as well.” DOT Order 2010-7-8, at 21. Indeed, any carve-out on the LAX–CDG trunk route would completely eviscerate the benefits of the AF-TN Joint Venture given that this route is key to the Joint Venture.E. There Is No Risk Of “Spillover” Between Immunized and NonImmunized Activities, Routes or Carriers. The antitrust immunity requested in the Joint Application will cover only foreign air transportation via transatlantic routings between the United States and Europe, principally involving the LAX-CDG trunk route and beyond-CDG routes. The requested immunity would not cover the LAX-Tahiti route on which Air Tahiti Nui currently codeshares on an arms’-length basis separately with both Air France andJoint Application Page 58

\\DC - 033583/000001 - 4105117 v13 American Airlines. This situation, however, will not present any risk of spillover of confidential competitive information between immunized and non-immunized activities, routes or carriers. In fact, the Department has granted antitrust immunity in similar situations. Having immunized and non-immunized sectors is analogous to the situations where the Department has imposed segment “carve-outs” from a grant of antitrust immunity. 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, DOT Order 2002-1-6, at 6 & Appx. A (immunity did not extend to pricing, inventory or yield management coordination, or revenue pooling [“PIYMCRP”] with respect to unrestricted coach-class fares or business/first class fares for local U.S. point-of-sale passengers flying nonstop between Atlanta/Cincinnati and Paris); American/LanChile, DOT Order 1999-9-9, at 21 and Appx. A (immunity did not extend to PIYMCRP with respect to unrestricted coach-class fares or business/first class fares for local U.S. point-of-sale passengers flying nonstop between Miami and Santiago); United/Air Canada, DOT Order 1997-9-21, at 18 & Appx. A (immunity did not extend to PIYMCRP with respect to local U.S. point-of-sale passengers flying nonstop between Chicago/Toronto and San Francisco/Toronto). The affected airlines in those cases were able effectively to manage those carve-outs, and so toowould Air France and Air Tahiti Nui be able to manage the immunized and nonimmunized segments without running afoul of the antitrust laws. Indeed, in thisJoint Application Page 59

\\DC - 033583/000001 - 4105117 v13 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 non-immunized 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.S-Tahiti routings, nor will Air Tahiti Nui share any competitively sensitive information with American Airlines. Similarly, the Department granted antitrust immunity for an SAS-Icelandair alliance without any special conditions to address hypothetical spillover even though (i) SAS was also a member of a separate immunized alliance with United and Lufthansa ( see DOT Order 1996-11-1), (ii) there was no plan for Icelandair to join that 3-carrier immunized group, and (iii) SAS and Icelandair did not plan to coordinate their alliance services with Lufthansa and United. SAS/Icelandair, DOT Order 2000-10-13, at 2 n.1, 16-17. In the present Joint Application, the scope of the requested antitrust immunity is limited to foreign air transportation via a transatlantic routing and expressly excludes foreign air transportation between French Polynesia and the United States. As in these other cases, the carriers will be able to segregate activities and compartmentalize information exchanges to avoid spillover between the immunized and non-immunized activities, routes or carriers. Despite the compelling precedent discussed above, Air France and Air Tahiti Nui have decided to eliminate any possible concern about hypothetical spillover by entering into Antitrust Compliance Protocols. The Antitrust Compliance ProtocolsJoint Application Page 60

\\DC - 033583/000001 - 4105117 v13 will govern the conduct of all Air France and Air Tahiti Nui personnel responsible for any coordination between Air France and Air Tahiti Nui that may occur pursuant to the grant of immunity. [ See Appendix D.] The Antitrust Compliance Protocols will ensure that the integration of Air France’s and Air Tahiti Nui’s foreign air transportation via transatlantic routings will not result in any spillover of competitively-sensitive information relating to transpacific routes or improper coordination with respect to their non-immunized foreign air transportation. The Antitrust Compliance Protocols 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]Joint Application Page 61

\\DC - 033583/000001 - 4105117 v13 [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. 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. By limiting the kinds of data and information that may be exchanged only to data and information related solely to transatlantic routings, there should be no concern about which employees will be participating in the Joint Venture or what their other responsibilities for the company may include. Using the analogy of a “clean room”, it does not matter who has access to the data or what their jobs are, if there is no competitively sensitive information to which anyone should be denied access. Thus, the Antitrust Compliance Protocols explicitly prohibit agreements,Joint Application Page 62

\\DC - 033583/000001 - 4105117 v13 discussion or exchange of competitively sensitive information regarding pricing, inventory availability, and entry into or exit from transpacific segments. Even though the “clean room” concept should alleviate any concerns about who has access to the data and information, the Antitrust Compliance Protocols go even further and contain an additional level of protection. Thus, the Antitrust Compliance Protocols limit the number of persons from Air France and Air Tahiti Nui who have access to the data and information, confine discussions of the data and information only to those persons, and establish requirements for annual compliance training to assure that those persons have a complete understanding of the prohibitions contained in the Antitrust Compliance Protocols. In particular, Subpart II of the Antitrust Compliance Protocols specifies that the carriers will compile specific lists of employees to be involved in AF-TN Joint Venture activities, limit communications relating to the AF-TN Joint Venture only to these listed employees, provide those employees with annual antitrust compliance training including specific training to ensure compliance with the Antitrust Compliance Protocols, and certify distribution of the Compliance Protocols on an annual basis to each management employee of Air France and Air Tahiti Nui with responsibilities for any coordination between the carriers pursuant to the requested immunity. Again, since there will be no competitively sensitive information involving transpacific routings, any hypothetical risk of spillover is eliminated. In terms of the structure and process contemplated for the AF-TN Joint Venture, the AF-TN Joint Venture Agreement is set forth in Appendix A to the JointJoint Application Page 63

\\DC - 033583/000001 - 4105117 v13 Application. It provides for the establishment of a Steering Committee and working groups to coordinate Joint Venture activities in various subject matter areas. As reflected in the Agreement, the working groups are assigned specific subject matter areas. Since the Agreement has not been implemented, the Joint Applicants have not yet identified and designated their members for each of these working groups. However, it is anticipated that the members would include appropriate Senior Vice-President, Vice-President and/or Director (or equivalent) level management personnel with responsibilities for the subject matters in question. The Joint Venture Partners also anticipate that other employees with responsibility for alliance activities would be involved in AF-TN Joint Venture activities. Thus, for example, international network planners with responsibility for transatlantic markets would be involved in AF-TN Joint Venture network planning activities; pricing analysts with responsibility for transatlantic markets would be involved in Joint Venture pricing activities; sales and marketing employees with responsibility for transatlantic markets would be responsible for Joint Venture sales and marketing activities; and so forth. As discussed above, given the “clean room” approach of the Antitrust Compliance Protocols, the fact that some participants in AF-TN Joint Venture activities may have responsibility in markets without immunity should not be of concern because the Antitrust Compliance Protocols will ensure that no competitively-sensitive information relating to such markets will be exchanged or considered in AF-TN Joint Venture discussions.Joint Application Page 64

\\DC - 033583/000001 - 4105117 v13 VII. THE EXTENSIVE BENEFITS FLOWING FROM THE PROPOSED ALLIANCE CANNOT BE ACHIEVED WITHOUT ANTITRUST IMMUNITY. The Joint Applicants will not implement the Alliance Agreements without antitrust immunity. Although Air France and Air Tahiti Nui have already agreed to some of the most important components of the Joint Venture relationship, including the fundamental governance structure, the geographic and market scope of the Joint Venture, and the process for determining each carrier’s contribution to the Joint Venture, the Joint Venture Partners cannot complete their negotiations of certain components of their Joint Venture relationship or implement the Joint Venture without exchanging confidential and highly sensitive transatlantic segment information and competitive data. The AF-TN Joint Venture Agreement expressly provides for coordinated scheduling, yield management, inventory allocation, and pricing, joint purchasing, joint decision-making on new routes, and revenue sharing. ( See generally AF-TN Joint Venture Agreement) These are precisely the types of activities for which antitrust immunity is required. To proceed with such activities absent antitrust immunity would be an open invitation for lawsuits (regardless of whether there was any basis for them), given the widely recognized risk of private antitrust litigation. 29 Indeed, the Department itself has acknowledged that the cooperation and integration benefits from such agreements cannot be attained without immunity:

29 Airlines have had to defend themselves in multiple lawsuits driven by plaintiffs’ counsel involving antitrust claims, regardless of the lack of merit. See, e.g., In re Northwest Airlines Corp. Antitrust Litig., 208 F.R.D. 174 (E.D. Mich.), review denied, 310 F.3d 953 (6 th Cir. 2002), cert. denied , 539 U.S. 904 (2003); In re Airline Ticket Commission Antitrust Litig., 268 F.3d 619 (8 th Cir. 2001). The risk of antitrust litigation remains a significant concern.Joint Application Page 65

\\DC - 033583/000001 - 4105117 v13 “These second-stage commercial agreements, such as the [JV 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. . . . [I]t would be impractical for [the Joint Applicants] to proceed with plans to integrate [all of the Joint Applicants] into these agreements absent a further grant of immunity.” 2007 Star ATI, DOT Order 2006-12-17, at 17. “The specific terms of the 4-way JV, with its emphasis on a common bottom line, create a greater risk or antitrust litigations.” SkyTeam II ATI, DOT Order 2008-4-17, at 14. Moreover, the Joint Applicants need the antitrust immunity to encompass the Bilateral Cooperation Agreements and Multilateral Coordination Agreement in order to implement these other agreements among the carriers and achieve the additional benefits and efficiency resulting from them. Antitrust immunity for the Multilateral Coordination Agreement is needed to avoid the potential immunity gap between the two joint ventures and to allow for coordination activities necessary for the efficient operation of the two joint ventures. Air France will be coordinating with Air Tahiti Nui on the Los Angeles-Paris route under the AF-TN Joint Venture Agreement. Air France will also be coordinating with Delta, KLM and Alitalia on U.S.-EU routes under the SkyTeam Joint Venture Agreement. In addition, [ confidential ]

[ end confidential ] Coordination between the two joint ventures will support the realization of additional consumer benefits. The Alliance Agreements are a broad but highly integrated package of cooperative programs, activities, and products that must be implemented on aJoint Application Page 66

\\DC - 033583/000001 - 4105117 v13 comprehensive basis in order to realize the full range of contemplated benefits and efficiencies. Piecemeal implementation of the Alliance Agreements is not commercially viable. Simply put, the Joint Applicants are unwilling to take this next step without antitrust immunity because they cannot do so without creating an unacceptable risk of exposure under the antitrust laws. Therefore, if immunity is denied here, the biggest losers will be travelers, shippers, and communities using transatlantic services who would not be able to enjoy the substantial public interest and competition benefits of the AF-TN Joint Venture Agreement, the Bilateral Cooperation Agreements, and the Multilateral Coordination Agreement.\\DC - 033583/000001 - 4105117 v13 CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Joint Application has been served this 15 th day of April 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

### EXHIBIT JA-2: AIR TAHITI NUI’s U.S.–EUROPE MARKET SHARE IS ONLY ONE-TENTH OF 1%

Source: MIDT Data, YE 02/2013 DL, 15.0%

UA, 14.0%

BA, 11.0%

LH, 10.1% Others, 7.7% AA, 7.3% US, 5.7% VS, 5.5% AF, 5.0% LX, 2.8% KL, 2.6% AZ, 2.1% IB, 1.8% TK, 1.7% SK, 1.7% LY, 1.6% AC, 1.2% AB, 1.2%

EI, 1.1% CO, 0.6% TN, 0.1%

### EXHIBIT JA-3: AIR TAHITI NUI’s U.S.–FRANCE MARKET SHARE IS LESS THAN 1.0%

Source: MIDT Data, YE 02/2013 AF, 29.5%

AA, 12.7%

DL, 12.0% UA, 10.7% Others, 8.1% BA, 7.2% US, 5.2% LH, 4.9% LX, 2.1% AC, 1.9% KL, 1.5% IB, 1.4% FI, 1.1% TN, 0.9% CO, 0.5%

AZ, 0.2%

### EXHIBIT JA-4: AIR TAHITI NUI’s ROUTE NETWORK IS VERY LIMITED, SERVING ONLY FOUR CITIES WITH ITS OWN AIRCRAFT FROM TAHITI

Source: Air Tahiti Nui Website

## EXHIBIT JA-5: APPROXIMATELY 45% OF LAX-PARIS TRAFFIC USES OTHER THAN NONSTOP SERVICE

Nonstop 55% Connecting/Indirect/ Other than Nonstop, 45%

Nonstop Connecting/Indirect/ Other than Nonstop

Source: MIDT Data, YE 02/2013\\DC - 033583/000001 - 4105117 v13 Appendix A

THE ALLIANCE AGREEMENTS

 AF-TN Joint Venture Agreement

 AF-TN “Free Flow” Codeshare Agreement

 Multilateral Coordination Agreement

 Bilateral Cooperation Agreements between Air Tahiti Nui, on the one hand, and Air France, KLM, Delta, and Alitalia, on the other hand.

[Confidential Treatment Requested under 14 C.F.R. § 302.12 for the AF-TN Joint Venture Agreement and AF-TN Codeshare Agreement]\\DC - 033583/000001 - 4105117 v13 Appendix B

ADDITIONAL DOCUMENTS AND INFORMATION To expedite the Department’s consideration of this Joint Application, the Joint Applicants are providing the Department with additional information and documents typically requested by the Department for purposes of evaluating applications for antitrust immunity.
A. Document Production and Responses to Interrogatories. The Joint Venture Partners are concurrently submitting – with corresponding motions for confidential treatment – internal corporate documents of senior executives from CY 2012 discussing coordination with, or otherwise relating to any alliance or arrangement between or among, Air Tahiti Nui, on the one hand, and the other Joint Applicants, on the other hand. Appendix C to the Joint Application provides written responses to interrogatories comparable to those in other antitrust immunity proceedings. B. Transatlantic Routes and Services

. The transatlantic routes of the Joint Applicants between the United States and Europe are set forth in Attachment B-1 to this Appendix B. The Joint Applicants have no other immediate plans to make service or equipment changes as a result of receiving immunity for the AF-TN Joint Venture and other Alliance Agreements, other than the expansion of services discussed in the Joint Application. The Joint Applicants may make service and/or equipment changes in the future, provided that they have received immunity and are able to discuss the coordination of such services.Appendix B Page 2 of 5

\\DC - 033583/000001 - 4105117 v13 C. Codeshare Partners. The current codeshare partners of each Joint Applicant are published in the OAG. D. Origin Destination Traffic Data

. These data are discussed in Appendix C, Response to Interrogatory No. 6, and provided as Attachment B-2 to this Appendix B. E. The SkyTeam Alliance. Delta, Air France, KLM, Alitalia, and Czech Airlines (“CSA”) have received antitrust immunity for alliance agreements. See DOT Order 2008-5-32, amended by DOT Order 2009-6-26. Korean Air Lines, a SkyTeam Alliance member, has antitrust immunity for alliance agreements with Delta, Air France, Alitalia, and CSA. See DOT Order 2002-6-18. CSA and Korean Air Lines are not part of this Joint Application. Aeroflot Russian Airlines, Aerolineas Argentinas, Aeromexico, Air Europa, China Airlines, China Eastern, China Southern, Kenya Airways, MEA Airlines, Saudia Airlines, TAROM Airlines, Vietnam Airlines, and Xiamen Air are non-immunized members of the SkyTeam Alliance. If antitrust immunity is granted here, the Joint Applicants’ relationships with these non-immunized SkyTeam members will continue to be managed on an independent, arms’-length basis, just as they have been in the past.There will be no changes in the relations between the Joint Applicants and these nonimmunized SkyTeam members as a result of an award of antitrust immunity in this proceeding.Appendix B Page 3 of 5

\\DC - 033583/000001 - 4105117 v13 F. Other Antitrust-Immunized Relationships. Delta, Air France, KLM, Alitalia, and CSA have antitrust immunity for alliance agreements, and Delta, Air France, KLM, and Alitalia are members of the immunized SkyTeam TATL JV. See DOT Order 2008-5-32, amended by DOT Order 2009-6-26. CSA is not part of this Joint Application. Delta, Air France, Alitalia, CSA, and Korean Air have antitrust immunity which they have held since 2002. See DOT Order 2002-6-18. Korean Air is not part of this Joint Application. Delta also has antitrust immunity with Virgin Australia, V Australia, Pacific Blue Airlines (NZ), and Pacific Blue Airlines (Australia). See DOT Order 2011-6-9. None of the Virgin Australia and Pacific Blue carriers are part of this Joint Application. G. Exchange of Equity or Ownership Interests. The arrangement proposed in this Joint Application does not involve any additional cross-ownership among the Joint Applicants. H. Airlines Serving LAX and CDG. The U.S. and foreign passenger airlines that operate scheduled service at LAX and at CDG are published in the OAG. I. Competitive Access to Paris–CDG and Related Facilities. Information about such access is discussed in Appendix C, Response to Interrogatory No. 7. J. Labor Issues. The transaction and resulting immunized AF-TN Joint Venture and cooperation/coordination with the other Joint Applicants raises no significant laborAppendix B Page 4 of 5

\\DC - 033583/000001 - 4105117 v13 issues. Other than Air France and KLM, the Joint Applicants will remain independent carriers. Indeed, the Joint Applicants believe that the long-term impact of the transaction will be positive for all existing employees, and no significant impact on unionized employees is anticipated under the AF-TN Joint Venture Agreement or other Alliance Agreements. K. Civil Reserve Air Fleet Commitments. Granting this Joint Application for antitrust immunity will have no impact on Delta’s CRAF commitments. L. Computer Reservations Systems. The grant of antitrust immunity here should also cover the coordination of (1) the presentation and sale of the carriers’ airline services in CRS’s and (2) the operations of their respective international reservations system. Under longstanding Department precedent, the scope of immunity covers coordination of CRS activities. See DOT Order 1993-1-11, at 15-16. The Joint Applicants recognize, however, that the immunity will not extend to the Joint Applicants’ management of any interest they may now, or in the future, have in an individual CRS. See DOT Order 1998-10-20, at 18. M. Duration of Approval and Immunity. The Joint Applicants request that the Department approve, and grant antitrust immunity for, the Alliance Agreements for a period of at least five years, subject to review of the Alliance Agreements in five years. N. Conditions. In addition to the CRS-related condition above, the Joint Applicants will accept the standard conditions that the Department has attached to previous grants of antitrustAppendix B Page 5 of 5

\\DC - 033583/000001 - 4105117 v13 immunity relating to: (a) non-participation in certain IATA-related tariff coordination activities; (b) O&D survey data reporting requirements; (c) operation under a common brand or common name; and (d) the submission for prior review of subsequent subsidiary agreements implementing the Alliance Agreements. See, e.g., DOT Orders 2002-1-6, 2011-6-9.ATTACHMENT B-1: NONSTOP TRANSATLANTIC SERVICES

JV Year Yr 12-13 IATA Season Frequencies TypicalWeek Airline NDOD July December AF ATLCDG 14 14

BOSCDG 14 7 CDGCUN 4 CDGDTW 7 7 CDGIAD 14 7 CDGIAH 7 7 CDGJFK 35 28 CDGLAX 15 10 CDGMCO 3 CDGMEX 14 7 CDGMIA 7 6 CDGORD 7 CDGSFO 14 7 CDGYUL 20 14 CDGYYZ 7 7 LAXPPT 3 3 Total AF 181 128 KL AMSATL 7 7

AMSDEL 7 7 AMSDFW 5 AMSIAD 10 7 AMSIAH 7 7 AMSJFK 14 14 AMSLAX 10 7 AMSMEX 7 7 AMSORD 7 5 AMSSFO 7 5 AMSYUL 7 7 AMSYVR 7 5 AMSYYC 7 5 AMSYYZ 14 7 Total KL 116 90 AZ BOSFCO 7 5

EWRFCO 7 FCOJFK 14 14 FCOLAX 7 FCOMIA 7 6 FCOORD 5 FCOYYZ 7 6 JFKMXP 6 4 MIAMXP 3 3 Total AZ 63 38DL AGPJFK 6 AMSATL 21 12 AMSBOM 7 7 AMSBOS 14 7 AMSDTW 28 21 AMSEWR 7 5 AMSJFK 7 7 AMSMEM 4 AMSMSP 21 14 AMSPDX 7 5 AMSSEA 13 7 ARNJFK 7 ATHJFK 7 ATLBCN 7 ATLBRU 7 5 ATLCDG 7 7 ATLDUB 7 5 ATLDUS 7 5 ATLFCO 7 7 ATLFRA 7 7 ATLLHR 18 14 ATLMAD 7 5 ATLMAN 7 5 ATLMUC 7 7 ATLMXP 6 ATLSTR 7 5 ATLVCE 5 ATLZRH 7 5 BCNJFK 7 5 BOSLHR 7 7 BRUJFK 7 7 CDGCVG 7 7 CDGDTW 7 5 CDGJFK 7 7 CDGMSP 7 7 CDGORD 4 CDGPHL 7 CDGPIT 5 CDGSEA 7 6 CDGSLC 7 5 CPHJFK 7 DTWFCO 7 DTWFRA 7 7 DTWLHR 10 7 DUBJFK 7 7 FCOJFK 14 FRAJFK 7 7ISTJFK 7 JFKKEF 5 JFKLHR 21 21 JFKMAD 7 5 JFKMXP 7 7 JFKNCE 7 4 JFKPRG 7 JFKPSA 4 JFKSNN 7 JFKSVO 7 7 JFKVCE 7 5 JFKVLC 4 JFKZRH 7 LHRMSP 7 7 Total DL 500 306

TOTAL - ALL 860 562Appendix B

ATTACHMENT B-2 (MIDT Traffic Data)

[Confidential Treatment Requested under 14 C.F.R. § 302.12]\\DC - 033583/000001 - 4105117 v13 Appendix C RESPONSES TO DOT’S PRIOR ATI INTERROGATORIES

1. Please describe (i) what criteria will be used to determine the markets in which You will codeshare, (ii) whether the four digit flight number limitation and number of potential codesharing partners involved will limit the Joint Applicants' potential codesharing and, if so, how the Joint Applicants will allocate flight numbers. (i) Air France and Air Tahiti Nui intend to determine, coordinate, and prioritize new codesharing markets in order to optimize benefits for the traveling public based on several considerations such as traffic growth potential, revenue growth potential, and the extent to which it can expand and extend their on-line networks. Codesharing on the principal trunk route between LAX and CDG will be the top priority, as will codesharing on certain beyond-CDG routes. As part of the AF-TN Joint Venture, Air France and Air Tahiti Nui will expand their codesharing on the LAX–CDG route. Air France and Air Tahiti Nui have also identified several beyond-CDG routes for codesharing to be implemented as part of their immunized coordination and cooperation: [ confidential ]Appendix C Page 2 of 8

\\DC - 033583/000001 - 4105117 v13 [end confidential] These beyond-CDG codeshare segments will substantially expand Air Tahiti Nui’s presence in Europe and will improve the Joint Venture Partners’ connectivity from Europe to Tahiti via LAX. In addition, subject to appropriate regulatory and third-party approvals and the antitrust immunity requested here, [ confidential ] [end confidential] (ii) The Joint Applicants do not believe that codesharing services resulting from antitrust immunity, cooperation, and coordination with Air Tahiti Nui will face a lack of available four-digit flight numbers in the foreseeable future. With its relatively limited flight operations, Air Tahiti Nui does not currently use a significant number of flight numbers. In any event, none of the Joint Applicants are on the verge of exhausting the full complement of 9,999 four-digit flight numbers, so this is not a practical constraint on the anticipated expanded codesharing the Joint Applicants would implement following the grant of antitrust immunity sought herein.

2. Explain what changes You would make to Your transatlantic capacity after the DOT decision on the Joint Application is made. Potential changes to capacity on the LAX-CDG route are discussed in the Joint Application.Appendix C Page 3 of 8

\\DC - 033583/000001 - 4105117 v13 3. Describe the sources of, and estimate the value of, any cost savings that You will be able to achieve only if You were granted ATI (i.e., that could not be achieved without ATI). With the antitrust immunity sought here, Air Tahiti Nui and Air France will be able to garner efficiencies and additional cost savings from the expanded and deeper integration made possible by the Joint Venture which, in turn, can be passed on to passengers. For example, joint procurement activities under the Joint Venture Agreement and the Bilateral Coordination Agreement could enable Air Tahiti Nui to negotiate for better, lower-priced contracts with suppliers. 30 The enhanced harmonization of in-flight and airport products, marketing efforts, informationtechnology, and frequent flyer programs will also drive costs lower, as will the colocation and sharing of facilities at select airports (absent the immunity necessary to implement long-term metal neutrality, there would be no real incentive to co-locate and share facilities). It is difficult to forecast precisely the exact amount of cost savings that will be produced through the improved integrative efficiencies enabled by the AF-TN Joint Venture and coordination/cooperation with the other Joint Applicants. The immunized AF-TN Joint Venture will enable Air France to offer [confidential]

[end confidential] The AF-TN Joint Venture will also enable Air Tahiti Nui to offer

30 While certain forms of joint purchasing may be theoretically available in the absence of antitrust immunity, the Joint Applicants are unlikely to enter into such collaborations absent the depth and continuity of relationships that form as a result of antitrust immunity.Appendix C Page 4 of 8

\\DC - 033583/000001 - 4105117 v13 seamless, immunized codesharing on [confidential] [end confidential] without having to incur the costs of operating such tag routes with its own aircraft and crews.

4. Explain specifically what consumer benefits that will result from the Alliance/Joint Venture cannot be achieved without antitrust immunity. For each type of consumer benefit noted, please describe how the Joint Applicants are currently cooperating in that, and how that cooperation would change if You were granted ATI.
See Discussion in Joint Application, Parts V, VI, and VII.

5. Please discuss the anticipated effects of the Alliance/Joint Venture on your interline agreements and level of interline traffic with carriers that are not part of the Alliance/Joint Venture. Approval of, and antitrust immunity for, the AF-TN Joint Venture Agreement and other Alliance Agreements is not expected to have a material effect on the terms of interline agreements or level of interline traffic carried by the Joint Applicants. Each of the Joint Applicants maintains interline agreements with a host of non-SkyTeam carriers, and none of the Joint Applicants have any plans to change those agreements on the basis of a grant of antitrust immunity in this proceeding.

6. Origin Destination Traffic Data. Using MIDT data for the most recent 12- month period available, provide directional net passenger bookings for allTahitian origin and destination airport pair markets for all airlines and all U.S.-toEurope origin and destination airport pair markets that Air Tahiti Nui provided service in for the period. Include the following data elements: Field 1: Trip Originating Airport Field 2: Booked Point of Sale Country Code Field 3: Airport Path and Marketing Carrier Designator String by LegAppendix C Page 5 of 8

\\DC - 033583/000001 - 4105117 v13 Example: A Paris–Los Angeles–Papeete directional trip with segments marketed by TN, AF respectively would be reported as “CDG TN LAX AF PPT”. Use a “//” to represent the marketing carrier on any ARNK (Arrival Not Known) segments. Field 4: Volume of Net Bookings Include an explanation of the trip break methodology used to create directional trips from itinerary data. These data have been submitted on CD, see Attachment B-2 to Appendix B of the Joint Application. 31 [confidential]

[end confidential]

7. Describe the extent to which airport facilities, including gates and slots, are available to U.S.-flag carriers that want to begin or increase service to the countries affected by the Joint Venture/Alliance. Airport facilities, including necessary facilities, are generally available at Paris (CDG) for other U.S.-flag carriers seeking to begin or expand service at this gateway city. There may, of course, be some congestion at peak hours, as at all busy international airports. However, the Joint Applicants are unaware of any U.S.-flag carrier wishing to launch service that has not been able to do so because of access constraints at CDG.

31 The Joint Applicants have requested confidential treatment for the entire MIDT data set being submitted. The Joint Applicants do not object to the Department’s public use of MIDT data in summary form in its decision, but the Joint Applicants are constrained from publishing the full content of the MIDT database purchased from a commercial vendor.Appendix C Page 6 of 8

\\DC - 033583/000001 - 4105117 v13 8. Describe (i) the current state of cooperation between and among the Joint Applicants for passenger and cargo traffic, and (ii) how and to what extent cargo will be included in the Joint Venture/Alliance. (i) Air France and Air Tahiti Nui have had a longstanding blocked-space codeshare agreement that encompasses flights between Paris and Los Angeles and between Los Angeles and Papeete, Tahiti, as well as a Special Prorate Agreement. With the proposed Joint Venture, there will be a new AF-TN arrangement providing for codesharing on a free-flow basis on the Los Angeles and Paris segment and to beyond–CDG points. Delta and Air Tahiti Nui have a limited frequent flyer relationship whereby Delta SkyMiles can be redeemed (but not accrued) on Air Tahiti and a Special Prorate Agreement

. Air France, Delta, KLM, and Alitalia are members of the immunized SkyTeam Alliance and participate in the SkyTeam TATL JV. (ii) The AF-TN Joint Venture does not encompass coordination with respect to cargo.

9. Explain what relation the Joint Applicants will have with any other partner carrier that offers transpacific services (e.g., (i) Delta’s ATI with Virgin Australia and Pacific Blue; (ii) Korean Air, which is not a member of the TATL JV), if the Joint Application is approved. The relationships between the Joint Applicants and current partners that offer transpacific services will not change after the Department rules on the Joint Application. Delta also has antitrust immunity with Virgin Australia, V Australia, and Pacific Blue Airlines (NZ/Aust.). See DOT Order 2011-6-9. None of the Virgin Australia or Pacific Blue carriers are part of this Joint Application, and nothing will change as a result of a grant of antitrust immunity here. The same is true for Korean Air Lines, which has anAppendix C Page 7 of 8

\\DC - 033583/000001 - 4105117 v13 immunized alliance with Delta, Air France, Alitalia, and CSA. See DOT Order 2002-6- 18. China Airlines and China Southern are non-immunized SkyTeam Alliance members operating transpacific services and engage in codesharing with certain of the Joint Applicants. None of these other carriers are a party to this Joint Application, nor will any participate in the antitrust immunity here.

10. Origin Destination Fare Data. For all itineraries that Air Tahiti Nui participates in, all itineraries involving Tahiti that touch a U.S. or European point. If possible, use O&D data representing an internal 100% census of itineraries meeting the above criteria. Data should be submitted on a quarterly basis for the most recent year ended period for which data are available. Provide all information for any itinerary that was begun during the periods described above irrespective of when the full itinerary was completed. Provide the itinerary in an origin-destination (by direction of travel) format, referred to as “market directional.” Provide the number of (1) passengers, (2) market fare, (3) purchase class, (4) period, (5) airport sequence, (6) operating carrier code sequence, (7) change in operating carrier flag, (8) ticketing/marketing carrier code sequence, (9) change in ticketing/marketing carrier flag, (10) origin, (11) destination, (12) number of market coupons, (13) sequence number of each market directional that makes a full itinerary, (14) total distance flown (all kilometers converted to miles), (15) distance between the origin and destination(all kilometers converted to miles), (16) unique itinerary identifier, (17) oneway/round-trip itinerary identifier, (18) reporting carrier, and a (19) full itinerary online identifier. Fares must include all taxes, fees, and applicable surcharges (particularly any fuel surcharges paid). Provide the passenger counts summarized by the unique combination of period, flight sequence, ticketing/marketing carrier sequence, operating carrier sequence, reporting carrier, directional market fare, one-way/round-trip itinerary identifier, full itinerary online identifier, and purchase class value. For itineraries that include a segment provided by ground transportation, note the ground segment as ‘—‘ in the “tkcarriergroup” and “opcarriergroup” variables. Provide a description of the methodologies used to determine market directional trip breaks within itineraries and the prorate for assigning the market directional fare from the full itinerary fare. The purchase class values should provide detailAppendix C Page 8 of 8

\\DC - 033583/000001 - 4105117 v13 that allows for the evaluation of a given itinerary’s level of service purchased. The classes should be broken down by both Restricted and Unrestricted fares sold in First Class, Business Class, Premium Economy, and Economy cabins. Provide the data electronically as a comma separated value (CSV) or other delimited text file format. If a format other than CSV is selected to provide the meta-data detail necessary to allow for the loading of the data into a relational database environment. A sample format is below:ItinIDMktSeqMktCouponsPeriodOriginDestAirportGroupTkCarrierChangeTkCarrierGroupOpCarrierChangeOpCarrierGroupRPCarrierPassengersMktFareMktMilesFlownNonStopMilesItinin_RoundtripItin_Onlinepurchase_class

1 1 2 2012

1 PPT CDG PPT:LAX:C

DG 0 TN:TN 1 TN:AF TN 5 900 9765 9765 1 0 ?
The Department already has this information from Air France. Air Tahiti Nui is separately submitting to the Department its information in response to this request, under a request for confidential treatment of the data.

* * *\\DC - 033583/000001 - 4105117 v13 Appendix D

ANTITRUST COMPLIANCE PROTOCOLS

[Confidential Treatment Requested under 14 C.F.R. § 302.12]