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June 3,2011

Christine A. Varney Assistant Attorney General Department ofJustice Antitrust Division 950 Pennsylvania Avenue, NW Washington, DC 20530 Dear Ms. Varney, As you may know, on April 21, a group ofStarAlliance airlines including Lufthansa, United, Continental and Air Canada submitted a motion to the Department ofTransportation seeking an expansion oftheir current antitrustimmunity, as granted by the DOT in Order 2009-7-10 within Docket OST-2008-0234. In 2009, your Departmentoffered what we believed to be a critically importantanalysis and critique ofthe global immunitythe airlines sought atthetime. We writeto requestthatyou issue an opinion on the currentlyproposed expansion ofthe controversial immunity. With airfares on the rise for U.S. consumers, especially in international travel, we think it is especially importantto limit the antitrustimmunity our nation grants to airline partnerships. Additionally, we have the following concerns about the current motion:
• In your 2009 report, your department was concerned aboutpossible anti-competitive effects ofimmunizing airline partnerswith hubs atboth ends ofcertain city-pairs. This new application seeks immunization that would add three such hub-to-hub pairs: Washington/Dulles to Brussels, Chicago to Brussels and Newarkto Brussels. The immunized partners would face no non-stop competitors on the Dulles

- Brussels route, and only one non-stop competitor on the Chicago

- Brussels route, while holding the dominant hub presence atboth ends.

• Three ofthe airlines involved in this request for antitrust immunity expansion are currently subjects ofantitrust probes the European Commission launched in February 2011. One of the routes under scrutiny overseas - Brussels to Lisbon

- is included in the U.S. application.

• Lufthansa

- which wholly-owns four ofthe ten airlines seeking the expansion and partially owns the 11th airline they seekto add

- is reportedly the subject ofan investigation that the German competition authority, Bundeskartellamt, announced in April 2011. The reported investigation concerns an alleged requirement thatbusiness customers turn over sensitive

JOHN W. WILHELM, PRESIDENT GENERAL OHICERS: Sherrl Chle-sl'.**S~(f~tary·Trusuref:** Ptttr Ward,**R~o,din, Sl!cr~tary;**  D. Taylor.**Gtn~nt** Viet Prtslde-nt; Tho Thi Do,**G~neral** Vi<. Prtsident fo( lmmlClahon, eMi RIghts and OIYf'rsltyinformation about their dealings with Lufthansa's competitors in order to get discounts. Lufthansa has not commented. 1
• In 2009, the European Commission opened an antitrust investigation into Air Canada, Continental, Lufthansa and United, all ofwhich are involved in the current request for immunity expansion. The EC has not released a final decision from theirinvestigation. We askthat the Department ofJustice do the following:
• Issue an analysis on the motion for antitrustimmunity expansion as filed In Docket OST2008-0234 on April 21, 2011.
• Revisit the anti-competitive effects ofimmunization ofairlines on hub-to-hub city-pairs. We believe it is necessary not only to examine possible carve outs for the Dulles-Brussels, Chicago-Brussels and Newark-Brussels pairs noted above but also to reconsider the Frankfurt

- Dulles/Chicago carve outs. As you know, yourdepartmentrecommended that the Department ofTransportation maintain the Frankfurt

- Dulles / Chicago carve outs but Order 2009-7-10 nonetheless allowed the inclusion ofthose routes in the Atlantic Plus Plus immunity.We would like to see an analysis ofthe effects ofending those carve-outs.
• Analyze the competitive effects ofAtlantic Plus Plus Joint Venture since the 2009 Order. It concerns us that in April, 2011, the LosAngeles Times reported thatthe cheapest round-trip flight from Los Angeles International Airportto Frankfurt, Germany, in the first weekofMay 2009 was $499, butthat in 2011 the least-expensive flight for the sametime period on the same route was $1,067.

• Gather information from the ongoing European and German antitrust probes involved the airline applicants. We agree withthe previously stated sentiments ofSenators Leahy, Kohl and Hatch that such immunity must be granted "sparingly." Yet, the current motion would expand antitrustimmunity that has already proven controversial at a time when the airlines involved are facing antitrust scrutiny elsewhere in theworld. We hope thatthe Department ofJustlce is able to find the time and resources necessaryto engage in this important and timely issue. Sincerely,

# ~kJ.w~ John W. W!lhelm President


### cc: See Enclosed

1See the original article In the Financial Times Deutschland at htt.p:/Iwww.ftd.de/unternehmenfhandei**dlenstleister/;~rQsskundenrabatte-karteIlamt-knQepft-sich-Jufthansa -yor/6Q044544,html.**  or the English language summary at http;IIwww.the!ocal.de/nationaI!20110428-3467S.htmi.
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### J. Molins General Counsel North America Deutsch Lufthansa AG 1640 Hempstead Turnpike East Meadow. NY 11554 Arthur.molins@dlh.de StephenJ. Morrissey Managing Director, Regulatory United Airlines and Continental Airlines 1025 ConnecticutAve. N.W., Ste. 1210 Washington, DC 20036 steve.mordssey@united.com Hershel I. Kamen Vice President-International, Regulatory and Policy United Airlines and Continental Airlines 1350 1St., NW, Ste. 1250 Washington, DC 20005 hershel.kamen@united.com Daniel A. Weiss Managing Director, International United Airlines and Continental Airlines 1350 I St., NW, Ste. 1250 Washington. DC 20005 Dan.weiss@united,com Thomas Newton Bolling Associate General Counsel, Regulatory, Alliances and International UnitedAirlines and Continental Airlines 1350 I St., NW, Ste. 1250 Washington, DC 20005 Thomas.bolline@coair.com Michael Goldman Silverberg, Goldman and BikoffLLP Counsel for ScandinavianAirlines System 1l0130th Street NW, Washington, DC 20007 mgoldman@sgbdc.com Max Sandlin Lobbyist

- Air Canada Mercury LLC 601 Pennsylvania Avenue NW North Building, Suite 1000 Washington DC 20004 agust@mercuryllc.coID Rui Pinto Lobbyist

- TAP Air Portugal Bristol Group 6112 Stegen Drive Alexandria, VA 22310**tia~Qpinto@bristolgrQup.ne** Ray LaHood Department ofTransportation U.S. Department ofTransportation 1200 New JerseyAve, SE Washington, DC 20590