Order 2010-11-10

Served: November 10, 2010

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10th Day of November, 2010

U.S.-Japan Alliance Case Docket DOT-OST-2010-0059

FINAL ORDER

I. SUMMARY

By this order, the Department of Transportation grants approval of, and antitrust immunity 

(“ATI”) for, the separate applications of (1) Star Alliance members All Nippon Airways Co., 

Ltd,1 Continental Airlines, Inc.,2 and United Air Lines, Inc. (“NH/CO/UA” or “Star”)3 and (2) 

American Airlines, Inc., and Japan Airlines International Co. Ltd. (“AA/JL” or “oneworld”). 

The decisions in this order are conditioned upon the U.S.-Japan Open Skies aviation agreement

being applied.

The Star applicants and oneworld applicants (collectively, the “ATI Applicants”)4 have 

requested a grant of immunity from the U.S. antitrust laws to operate two separate commercial 

alliances: for the Star applicants, a Joint Venture Agreement (“JVA”), and for the oneworld 

applicants, a Joint Business Agreement (“JBA”). We have concluded that, overall, each alliance 

will be procompetitive and is likely to generate substantial public benefits to the traveling and 

shipping public.

 1 All Nippon Airways Co., Ltd. includes its wholly-owned subsidiary, Air Japan Co., Ltd. 2 Continental Airlines, Inc. includes its wholly owned subsidiary, Air Micronesia, Inc. (“AMI”), and AMI’s 

subsidiary, Continental Micronesia, Inc. 

3 In conducting our analysis, we considered United and Continental to be separate entities. While the carriers’ 

shareholders approved a merger on September 17, 2010 and the merger closed on October 1, 2010, the Department’s 

pendente lite exemption (Order 2010-8-5), issued on August 30, 2010, is contingent upon Continental and United 

remaining separate and independently operated corporations pending the Department’s action on the air carriers’ de 

facto route transfer application. 4 The Department conducted separate analyses of each application. Where findings are specific to an individual 

application (NH/CO/UA or AA/JL), that application is noted. Where findings are relevant to both applications, the 

term “ATI Applicants” is used. Also, common names of carriers are used: ANA, Continental, United, American, 

and JAL, respectively.
2

II. SUMMARY OF THE RECORD

The ATI Applicants filed applications for antitrust immunity in separate dockets.

5 The 

Department consolidated the two cases into Docket DOT-OST-2010-0059 on March 31, 2010, 

noting that joint consideration would be more efficient and expeditious given the similar issues

and common facts of the applications.

On October 6, 2010, we issued an “Order to Show Cause” with our proposed decision. The 

show-cause order explained that we had tentatively decided to grant the separate requests for 

antitrust immunity of the Star applicants and the oneworld applicants, subject to conditions, and 

provided an opportunity for public comments.6 The comment period closed on October 27, 

2010, and replies were due on November 5, 2010. The responsive pleadings, which were 

directed only to the Star application, are summarized below. 

The Air Line Pilots Association, International (“ALPA”) filed comments reiterating its 

concerns about the effect of metal neutrality on flying opportunities for U.S. airline employees.7

 

ALPA believes that these concerns were not sufficiently addressed by the Star applicants in their 

initial reply to ALPA8 or by the Department in our show-cause order. Furthermore, ALPA 

argues that if the Department grants final approval to the Star application, and does so without 

imposing a “flying requirement condition,”9 the Department should require any revised or 

additional agreements between the Star applicants be submitted for separate approval and also be 

subject to public comment in a docketed proceeding.

The Association of Flight Attendants-CWA (“AFA”) requests the same conditions as those 

recommended by ALPA and states its support for ALPA’s response. 10

The Star applicants filed a reply.11 They express their overall support for the tentative 

decision and note that neither ALPA nor AFA has opposed the Department’s tentative decision. 

Arguing that ALPA and AFA have not justified their request that the Star application alone be 

subject to ALPA’s proposed condition, the Star applicants ask us to deny the parties’ request.

 5 The NH/CO/UA Application was filed on December 23, 2009, in Docket DOT-OST-2009-0350; the AA/JL 

Application was filed on February 12, 2010, in Docket DOT-OST-2010-0034. 6 See Order 2010-10-4 (October 6, 2010). 7 [Public] Answer of the Air Line Pilots Association, International (“ALPA”) (October 27, 2010); See Letter to 

Dorothy Beard, Chief of DOT Dockets, from Russell Bailey, Senior Attorney for ALPA (October 27, 2010). 8 Joint Reply of All Nippon Airways Co., Ltd., Continental Airlines, Inc., and United Air Lines, Inc. (July 9, 

2010).

9 See [Public] Answer of the Air Line Pilots Association, International (October 27, 2010), at 5. 10 Answer of the Association of Flight Attendants-CWA (“AFA”) (October 27, 2010). 11 Reply of All Nippon Airways Co., Ltd., Continental Airlines, Inc., and United Air Lines, Inc. (October 29, 

2010).
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III. DECISION

The requests for which our tentative decisions are made final are for grants of antitrust 

immunity covering a series of alliance agreements for NH/CO/UA (the “Star ATI Alliance 

Agreements”)12 and AA/JL (the “oneworld ATI Alliance Agreements”),

13 respectively.

As explained in the Show Cause Order, under 49 U.S.C §§ 41308-41309, we normally 

engage in a two-step analysis of foreign air transportation agreements submitted for our 

approval. While the public interest determination under both §§ 41309(b) and 41308(b) entails a 

comparison of anti-competitive effects and public benefits, the standard in § 41308(b) (“required 

by” rather than “not adverse to”) is higher.14 

The intended commercial effects of the ATI Applicants’ respective joint venture agreements

are similar to those resulting from a merger. As part of our overall analysis, we apply the 

Clayton Act test, which is used to predict the competitive effects of a proposed merger.15

We have decided to approve (1) the Star application and (2) the oneworld application, permitting 

the ATI Applicants to implement their separate alliances, subject to conditions. In arriving at our 

decision, we have applied the relevant legal and policy standards to the facts of each case and 

have considered the views expressed by commenting parties. There is no opposition to our basic 

tentative decision to approve the applications. ALPA and AFA, however, asked that we modify 

one of our standard conditions.

 

In this regard, the Department already uses a process through which members of an immunized 

alliance must submit to the Department, for prior approval, any subsequent subsidiary 

agreements. We find that this process, which has worked well since its formulation,16 is 

adequate to allow us to address their concerns properly if circumstances merit. ALPA and AFA

have not convinced us that the Star applicants should be held to a different reporting and review 

standard or that the Department’s review process is not sufficient in the case of the Star 

applicants.

Against this background, we are today making our findings and conclusions final. 

ACCORDINGLY:

1. We approve and grant antitrust immunity to the ATI Alliance Agreements between 

(1) All Nippon Airways Co., Ltd, Continental Airlines, Inc., and United Air Lines, 

 12 Star ATI Alliance Agreements are the business agreements listed on page 1 of Exhibit JA-1 of the Joint 

Application of ANA, Continental and United for Antitrust Immunity (December 23, 2009).

13 oneworld ATI Alliance Agreements are the business agreements discussed on page 1 of the Joint Application of 

American and JAL for Antitrust Immunity (February 12, 2010).

14 See, e.g., Star Alliance, Docket OST-2008-0234, Show Cause Order 2009-4-5, at 18 (April 7, 2009), quoting

Northwest/KLM, Order 93-1-1, at 11 (January 11, 1993). 15 See Acquisition of Northwest/Wings Holdings, Inc., Show Cause Order 92-11-27, at 13 (November 16, 1992); 

SkyTeam II, Show Cause Order 2008-4-17, at 5 (April 9, 2008). 16 See, e.g., Order 96-5-27 (United and Lufthansa, May 21, 1996), at 18; Order 97-9-21 (United and Air Canada, 

September 19, 1997), at 18; and Order 2009-7-10 (United and Continental, Air Canada, Austrian, bmi, Lufthansa, 

LOT, SAS, Swiss, and TAP), at 27.
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Inc., and (2) American Airlines, Inc., and Japan Airlines International Co. Ltd.,17

insofar as such agreements relate to foreign air transportation. Our approval and 

grant of immunity are subject to the condition that the U.S.-Japan Open Skies 

aviation agreement is applied. Subject to the other conditions described in the 

ordering paragraphs below, the approval and grant of antitrust immunity shall remain 

in effect indefinitely, subject to Ordering Paragraph 7, provided that the ATI 

Applicants:

a. Submit for prior approval subsequent subsidiary agreements implementing their 

most recent Alliance Agreements;

18

b. Resubmit the oneworld and Star ATI Alliance Agreements before five years from 

the date of issuance of the final order in this case; and

c. Obtain prior approval if they choose to operate or hold out service under a 

common name or use common brands;

2. We direct the oneworld applicants and the Star applicants to file with the Director of 

the Office of Aviation Analysis the following as evidence of implementation: 

a. For the oneworld applicants, a verified statement(s) in Docket OST-2010-0059 

attesting that the Joint Business Agreement has been executed and implemented 

pursuant to the terms described in the Joint Application, Exhibit JA-2 (Joint 

Business Agreement), and a complete and unredacted copy of the most recent 

American/Japan Airlines Joint Business Agreement and any appendices; and

b. For the Star applicants, a verified statement(s) in Docket OST-2010-0059 

attesting that the Joint Venture Agreement has been executed and implemented 

pursuant to the terms described in the Joint Application, Exhibit JA-1 (Joint 

applicants’ Alliance Agreements), and a complete and unredacted copy of the

most recent ANA-Continental-United Transpacific Joint Venture Agreement and 

any appendices;

We determine that, unless the ATI Applicants make the filings described in this 

ordering paragraph within eighteen months of the issuance of a final order in this 

case, the authority herein shall expire and the grant of antitrust immunity shall be 

automatically withdrawn from the non-compliant ATI Applicants;

 17 The Alliance Agreements shall mean the Star ATI Alliance Agreements (the business agreements listed on page 

1 of Exhibit JA-1 of the Joint Application of ANA, Continental and United for Antitrust Immunity (December 23, 

2009)) and the oneworld ATI Alliance Agreements (the business agreements discussed on page 1 of the Joint 

Application of American and JAL for Antitrust Immunity (February 12, 2010)). 18 Regarding this requirement, we do not expect the ATI Applicants to provide the Department with minor 

technical understandings that are necessary to implement fully their day-to-day operations but that have no 

additional substantive significance. We do, however, expect and direct them to provide the Department with all 

unredacted contractual instruments that implement or materially alter, modify, or amend the cooperation 

agreements, joint ventures, or confidentiality/antitrust guidelines. All documents shall be submitted to the Director, 

Office of Aviation Analysis.
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3. We direct the ATI Applicants to submit annual progress reports to the Office of 

Aviation Analysis, beginning one year from the date of issuance of this order, and 

continuing each year thereafter while their respective ATI Alliance Agreements are 

effective;19

4. We direct All Nippon Airways Co., Ltd., Continental Airlines, Inc., United Air Lines, 

Inc., American Airlines, Inc., and Japan Airlines International Co. Ltd. to withdraw, 

or to remain withdrawn, from participation in any International Air Transport 

Association tariff coordination activities that discuss any proposed through fares, 

rates, or charges applicable between the United States and any countries whose 

airlines have been or are subsequently granted antitrust immunity, or renewal thereof, 

to participate in similar alliance activities with a U.S. airline(s); 

5. We delegate to the Director, Office of International Aviation, the authority to 

determine the applicability of the directive set forth in Ordering Paragraph 4 as to 

specific prices, markets, and tariff coordination activities, consistent with the scope 

and purpose of the condition, as previously described; 

6. We direct All Nippon Airways Co., Ltd., Continental Airlines, Inc., United Air Lines, 

Inc., American Airlines, Inc., and Japan Airlines International Co. Ltd. to begin or to 

continue to report full-itinerary Origin-Destination Survey of Airline Passenger 

Traffic for all passenger itineraries that include a U.S. point;

7. We determine that we may amend, modify, or revoke this authority at any time 

without hearing; and

8. We will serve this Order on all parties on the service list in this docket. 

By:

SUSAN L. KURLAND

Assistant Secretary for Aviation

and International Affairs

(SEAL)

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

 19 We expect the ATI Applicants to deliver the progress report by the close of business on the anniversary date of 

this order. If that date falls on a weekend or federal holiday, the ATI Applicants may deliver the report by the close 

of business on the following business day.