13117915.2 

UNITED STATES OF AMERICA 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, DC. 

Agreements Adopted by the 

International Air Transport 

Association Relating to the Traffic 

Conferences 

 Docket OST-2010-___________ 

IATA’S APPLICATION FOR 

FURTHER EXEMPTION FROM CONDITION #2 

The International Air Transport Association (“IATA”) hereby requests that the 

Department grant IATA a further exemption from condition #2 most recently imposed by Order 

68-7-55 on the Provisions for the Conduct of the IATA Traffic Conferences. The requested 

exemption is designed to facilitate prompt implementation of routine but essential interline 

coordination agreements. It would reduce the resources now devoted by the Department to 

review of such agreements while fully satisfying both the public’s and the Department’s need for 

information on IATA Traffic Conferences’ activities and providing for pre-effectiveness review 

and Department action in the case of agreements perceived by the Department to raise significant 

issues under 49 U.S.C. § 41309. Departmental review, as appropriate, would supplement the 

central role of market forces and competition law in safeguarding the interests of U.S. passengers 

and shippers. 

Background

Condition #2, as imposed by Order 68-7-55 (July 12, 1968) and affirmed by Order 85-5-

32 (May 6, 1985), provides: 
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That the U.S. air carrier members of IATA shall submit to the 

[Department] for appropriate action all recommended practices, 

agreements, and resolutions adopted by IATA and each of its 

conferences and permanent conference committees. 

The term “appropriate action” has been construed to mean either approval or exemption prior to 

being declared effective by IATA or implemented by its members.1

Currently, IATA members reach a large number of interline agreements within the 

Traffic Conferences (as approved by Order 2007-3-23 (March 30, 2007)). The time required for 

Department action, even on matters not involving significant policy issues, can be substantial, 

because the Department’s limited resources must respond to many other priorities. IATA 

submits that eliminating delay in implementing non-controversial agreements, or noncontroversial amendments, as the Department has done in the past will benefit the traveling and 

shipping public. The limited exemption that IATA proposes is designed to reduce such delay 

while preserving the information flow the Department requires to determine whether preeffectiveness review is appropriate in the public interest. 

IATA’s Proposal

Under the exemption that IATA proposes, IATA would continue to file agreements now 

addressed by Condition #2 (and related IATA documentation) adopted in IATA Traffic 

Conferences in a public docket maintained by the Department at least 30 days prior to their 

intended effective date. The Department and interested parties would then have 30 days from the 

date of filing to review an agreement and, if the Department deems it warranted, to advise IATA 

to submit the agreement for pre-effectiveness review and action. If the Department so advises 

IATA, then IATA would submit the agreement for pre-effectiveness review and appropriate 

action (as it does today). If the Department does not give IATA such notice, then IATA would 

 

1

 U.S. air carrier members of IATA have given IATA a power-of-attorney to make such submissions on their behalf. 
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be free to declare the agreement effective without further Department action.2

 IATA’s proposal 

also contemplates that the Department could extend the 30-day initial examination period and the 

limitation on declaration of effectiveness for up to 60 additional days by so notifying IATA prior 

to expiration of the original 30-day period. 

IATA recognizes that the Department has a public interest responsibility to review and 

act upon certain types of IATA resolutions and recommended practices that may significantly 

affect U.S. consumer and shipper interests. IATA has listed such resolutions and recommended 

practices in Attachment A to this Application and is prepared to continue filing any amendments 

to, or substitutes for, these resolutions and recommended practices for review and appropriate 

action. DOT would retain authority to modify that list as future circumstances may warrant. 

IATA thus proposes that DOT further exempt IATA from Condition #2, as follows: 

We now further exempt IATA from Condition #2 imposed on 

IATA’s Provisions for the Conduct of the IATA Traffic 

Conferences, Agreement 1175, as amended by Order 68-7-55, as 

follows: 

a. Except as provided in b. below, IATA shall file each 

recommended practice, agreement and resolution in a designated 

information docket at least 30 days before the date on which IATA 

seeks to declare such recommended practice, agreement or 

resolution effective. Such filings shall include the IATA minutes 

or meeting reports associated with such recommended practice, 

agreement or resolution. IATA is authorized to declare such 

recommended practice, agreement or resolution effective not less 

than 30 days after filing; provided, that such recommended 

practice, agreement or resolution shall not be declared effective if 

the Department notifies IATA on or before the 30th day after filing 

that either: (i) the Department requires not more than 60 additional 

days to review such recommended practice, agreement or 

resolution, in which case IATA shall defer declaration of 

effectiveness for the additional days requested by the Department; 

 

2

 Where IATA declares an agreement effective without pre-effectiveness Department action, that agreement will not 

be deemed to have been approved by the Department and will not enjoy immunity from application of the U.S. 

antitrust laws. 
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or (ii) the Department, within the initial 30-day filing period or 

such additional period the Department has requested, requires the 

recommended practice, agreement or resolution to be filed for 

appropriate action, in which case IATA shall not declare such 

recommended practice, agreement or resolution effective until 

appropriate action has been taken by the Department. 

b. All amendments or modifications to recommended practices, 

agreements and/or resolutions listed in the Appendix to this Order 

and all new recommended practices, agreements and resolutions 

addressing substantially similar subjects, shall continue to be filed 

for appropriate action. The Department may amend the Appendix, 

at its discretion, on written notice to IATA. 

c. IATA, at its discretion, may file any recommended practice, 

agreement or resolution for approval and antitrust immunity 

pursuant to Sections 41308 and 41309 of the Transportation Code 

but shall not declare any such recommended practice, agreement or 

resolution effective until the Department shall have acted on 

IATA’s application. 

Reasons for Approving IATA’s Proposed Exemption

When Condition #2 was originally imposed, the airline industry was comprehensively 

regulated under U.S. law and U.S. carriers were required to file for approval and consequent 

antitrust immunity all agreements affecting foreign air transportation. The IATA Traffic 

Conferences then addressed a broad scope of issues, including rates and fares, governing both 

on-line and interline international air transportation. Condition #2 was thus appropriate for both 

legal and policy reasons. 

As airline deregulation has progressed in the U.S. and liberalization has become an 

increasingly prevalent international norm, the burden imposed on IATA members and DOT 

resources by the universality of Condition #2 has often exceeded its regulatory benefit. As a 

legal matter, Section 41309 of the Transportation Code no longer mandates the filing of 

agreements and Section 41308 makes antitrust immunity discretionary in most cases. IATA 

Traffic Conferences have confined their activities to the facilitation and standardization of 
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interline service and rarely require antitrust immunity for the implementation of new 

recommended practices and/or resolutions. Even in the competition law sensitive area of 

interlineable fares, IATA has moved to a market-based FlexFare system which it has made 

effective without antitrust immunity after Department Orders exempting FlexFare resolutions 

from Condition #2. See, e.g., Order 2006-12-24 (January 2, 2007), Order 2009-10-9 

(October 22, 2009). Similarly, DOT recently exempted, on a worldwide basis, resolutions 

adopted by IATA’s passenger and cargo agency conferences. Order 2008-4-45 (May 5, 2008). 

Thus, given the applicability of antitrust and competition laws around the world, Condition #2

serves a continuing regulatory purpose only in those limited cases where it facilitates review of 

IATA recommended practices and/or resolutions that touch on significant non-competition 

regulatory concerns or provide a vehicle for filings that IATA would otherwise choose to make 

under Section 41309. 

In a series of Orders addressing the IATA Cargo and Passenger Services Conferences, the 

Department exempted modifications to specific groups of resolutions and recommended 

practices from Condition #2. Orders 2002-1-15 (January 29, 2002); 2002-7-3 (July 1, 2002); 

2003-6-15 (June 10, 2003); 2005-7-29 (July 20, 2005) (Passenger); 2002-8-16 (Aug. 13, 2002); 

2003-7-22 (July 18, 2003) and 2003-11-19 (November 17, 2003) (Cargo). Those exemptions 

have facilitated prompt enhancement of the interline system without any countervailing 

detriment to consumer interests or regulatory oversight. Thus, IATA believes that it is timely 

and appropriate to further implement the policy underlying those exemptions. 

IATA’s proposed further exemption from Condition #2 would continue to permit the 

Department and the traveling and shipping public to be fully informed of the work and proposed 

actions of the IATA Traffic Conferences before any recommended practice, agreement or 
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resolution is declared effective. It would lift the regulatory burden of the Department’s taking 

action, and the consequent effectiveness delay, in cases where detailed regulatory review is not 

required. At the same time, it would preserve filings for appropriate action on matters of known 

regulatory sensitivity as specifically listed in the Appendix or as designated by the Department 

after initial review. 

WHEREFORE, IATA respectfully requests that the further exemption from Condition #2 

proposed herein be granted. 

Dated: May 3, 2010 

Respectfully submitted, 

Douglas Lavin 

Regional Vice President – North America 

International Air Transport Association 

IATA Washington 

601 Pennsylvania Avenue, N.W. 

Suite 300 – North Building 

Washington, DC 20004 

Bert W. Rein 

Bruce L. McDonald 

WILEY REIN LLP 

1776 K Street, NW 

Washington, DC 20006 

202.719.7000 

Counsel for the 

International Air Transport Association 
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Attachment A 

The following are subject areas where the Department has advised IATA that any 

recommended practice, agreement or resolution, or amendment thereto, should be filed for and 

receive appropriate DOT action before being declared effective by IATA or implemented by 

IATA members: 

1. Flex Fares to or from the United States or its territories. 

2. Air Waybill – Conditions of contract (Resolution 600b). 

3. Carriage concluded and evidenced by electronic means – Conditions of contract 

(Resolution 600i). 

4. Acceptance and carriage of passengers requiring special assistance (Resolution 700). 

5. Ticket notices (Resolution 724). 

6. Conditions of carriage for cargo (Recommended Practice 1601). 

7. Cargo security (Recommended Practice 1630). 

8. Carriage of cargo using electronic data interchange (Recommended Practice 1670). 

9. General conditions of carriage (passenger and baggage) (Recommended Practice 

1724).