BEFORE THE 

 DEPARTMENT OF TRANSPORTATION 

 WASHINGTON, D. C. 

---------------------------------------------- 

 : DOT-OST-2010- 

U.S.-JAPAN ALLIANCE CASE : 0059 

 : 

---------------------------------------------- 

JOINT REPLY OF AMERICAN AIRLINES, INC. AND 

JAPAN AIRLINES INTERNATIONAL CO., LTD. 

Communications with respect to this document should be sent to: 

For Japan Airlines: 

TSUTOMU ANDO 

Executive Officer – 

 International Affairs 

Japan Airlines 

 International Co., Ltd. 

4-11, Higashi-shinagawa 

2-chome, Shinagawa-ku 

Tokyo 140-8637, Japan 

TORU MIZUNO 

Vice President – 

 International Affairs 

Japan Airlines 

 International Co., Ltd. 

4-11, Higashi-shinagawa 

2-chome, Shinagawa-ku 

Tokyo 140-8637, Japan 

YUKI SAITO 

Director, Government Affairs 

Japan Airlines 

 International Co., Ltd. 

1330 Connecticut Ave., N.W. 

Washington, D.C. 20036 

For American Airlines:

VIRASB VAHIDI 

Senior Vice President – 

 Planning 

American Airlines, Inc. 

P.O. Box 619616, MD 5634 

DFW Airport, Texas 75161 

KENJI C. HASHIMOTO 

Vice President – 

 Strategic Alliances 

American Airlines, Inc. 

P.O. Box 619616, MD 5635 

DFW Airport, Texas 75261 

WILLIAM K. RIS, JR. 

Senior Vice President – 

 Government Affairs 

American Airlines, Inc. 

1101 17th Street, N.W. 

Washington, D.C. 20036 
WILLIAM KARAS 

CAROL GOSAIN 

Steptoe & Johnson LLP 

1330 Connecticut Ave., N.W. 

Washington, D.C. 20036 

(202) 429-6223 

wkaras@steptoe.com 

cgosain@steptoe.com 

ROBERT A. WIRICK 

Director, Regulatory Affairs 

American Airlines, Inc. 

P.O. Box 619616, MD 5635 

DFW Airport, Texas 75261 

(817) 963-0394 

robert.wirick@aa.com 

 

W. BRUCE WARK 

Associate General Counsel 

JEFFREY A. OGAR 

Senior Attorney 

American Airlines, Inc. 

P.O. Box 619616, MD 5675 

DFW Airport, Texas 75261 

(817) 967-3458 

jeff.ogar@aa.com 

CARL B. NELSON, JR. 

Associate General Counsel 

American Airlines, Inc. 

1101 17th Street, N.W. 

Washington, D.C. 20036 

(202) 496-5647 

carl.nelson@aa.com 

July 9, 2010 
BEFORE THE 

 DEPARTMENT OF TRANSPORTATION 

 WASHINGTON, D. C. 

------------------------------------------ 

 : DOT-OST-2010- 

U.S.-JAPAN ALLIANCE CASE : 0059 

 : 

------------------------------------------ 

JOINT REPLY OF AMERICAN AIRLINES, INC. AND 

JAPAN AIRLINES INTERNATIONAL CO., LTD. 

 American Airlines, Inc. and Japan Airlines International 

Co., Ltd. hereby jointly reply to the answers filed in this 

docket on June 29, 2010 by the Dallas/Ft. Worth International 

Airport, the Allied Pilots Association, the City of Houston and 

the Greater Houston Partnership, and the Air Line Pilots 

Association. No other answers were filed. 

 American and JAL are seeking approval of and antitrust 

immunity for a bilateral alliance agreement and a metal neutral 

joint business agreement, as well as existing and future agreements implementing the transactions and arrangements contemplated by the alliance agreement and JBA. 

 The proposed American/JAL alliance will create metal 

neutrality between two of oneworld’s core transpacific members, 

American and JAL. The agreements provide for revenue sharing 

and closer integration, giving oneworld the ability to offer 
- 2 – 

consumers an effective competitive alternative to Star and 

SkyTeam in Asia, and will maximize the benefits made possible by 

the U.S.-Japan Open Skies Agreement. American and JAL will 

implement their alliance agreement immediately upon approval, 

and will implement the JBA within 18 months of the Department’s 

final order granting antitrust immunity. 

 A. PUBLIC SUPPORT FOR THE AMERICAN/JAL PROPOSAL 

 In its answer, Dallas/Ft. Worth International Airport 

cogently lays out why granting antitrust immunity to American 

and JAL is consistent with the public interest: 

 “The United States has negotiated an Open Skies 

 Agreement with Japan that will come into effect 

 if the AA/JAL and Star ATI applications are approved 

 by DOT and the Japanese authorities. . . . The Open 

 Skies Agreement will also make possible the grant of 

 antitrust immunity for the proposed alliances and as 

 a result create a more vibrant competitive environ- 

 ment on the transpacific routes. 

 “The grant of ATI to AA/JL will enhance competition 

 among the three global airline alliances – Star, 

 SkyTeam, and oneworld – by offering consumers an 

 effective competitive alternative to Star and 

 SkyTeam in Asia. SkyTeam, through Delta’s “west 

 coast” hub at Narita as well as the immunized 

 Delta/Korean alliance with a hub at Seoul, is 

 dominant in the U.S.-Japan and U.S.-Asia market. 

 Star too has a strong presence, with hubs at 

 Narita and an immunized United/Asiana alliance, 

 and its Asian position will be strengthened by 

 the Star application seeking approval of an immun- 

 ized alliance with Continental and ANA that is 

 being considered in this proceeding. Since one- 
- 3 - 

 world has no U.S.-carrier connecting hub at Narita 

 and no immunized alliance in Asia, the grant of 

 ATI as proposed in the AA/JAL application is 

 essential if oneworld is to compete effectively 

 with those two alliances and ensure the continued 

 presence of at least three major U.S. airlines in 

 this market” (pp. 1-2). 

 The American/JAL joint application has received widespread public support, including letters to the Department from: 

 ► 20 U.S. Senators and Representatives 

 ► 27 Governors 

 ► 46 Mayors 

 ► 78 airports 

 ► Transport Workers Union 

 ► Numerous chambers of commerce, economic development 

 organizations, and individual businesses 

 A list of support letters is attached. These letters 

reflect the views of elected officials, airports, labor, and 

business that granting ATI to American/JAL will create public 

benefits. As expressed by Senator Richard J. Durbin regarding 

ATI for American/JAL and United/Continental/ANA: 

 “The United States has developed Open Skies agree- 

 ments with other nations, opening up new foreign 

 markets to our domestic airlines. These agreements 

 have led to an increasing number of air carriers 

 forming global alliances. DOT should continue its 

 leadership in reviewing these alliances to ensure 

 they benefit consumers, protect workers, promote 

 competition and add to the long-term viability of 

 the U.S. aviation industry.” 
- 4 - 

 B. THE ALLIED PILOTS ASSOCIATION

 The Allied Pilots Association (APA), which represents 

American’s pilots, does not oppose the joint application, but 

requests that “the Department take steps to ensure that the U.S. 

carrier participants in metal neutral arrangements perform, at a 

minimum, reasonable shares of the flying covered by the arrangement” (p. 2). The APA seeks the following explicit condition: 

 “Under the JBA, revenues contributed by the nonstop 

 carriage of passengers on routes covered by the 

 JBA are pooled and shared between the parties. 

 The Joint Applicants shall ensure that over any 

 12 consecutive months, American’s share of the 

 revenues shall not exceed 130 percent of the share 

 of the available seat miles operated by AA on 

 on routes covered by the JBA” (p. 2). 

 The APA’s proposal mirrors the answer filed by the Air 

Line Pilots Association, which represents pilots at United and 

Continental. Those carriers are seeking ATI with ANA. 

 The joint applicants urge the Department to reject the 

APA’s condition. Under the JBA, American and JAL each has an 

incentive to increase its flying. The regulatory constraint 

sought by the APA, involving a specific percentage cap on 

American’s share of the revenues during a rolling 12 month 

period, is contrary to the deregulated marketplace, and would be 

inconsistent with the flexibility that the parties will require 

in the conduct of their joint operations. 
- 5 - 

 In the oneworld ATI docket, DOT-OST-2008-0252, the APA 

asked the Department “to deny the Joint Application or, at the 

very least, require the Joint Applicants to provide stringent 

protections for U.S. labor,” but there the APA did not propose 

specific language. In show-cause Order 2010-2-8, February 13, 

2010, the Department declined to impose conditions regarding 

labor: 

 “We understand APA’s root concern that the 

 alliance could threaten the jobs of U.S. 

 labor. With the changes we are requiring 

 to the joint venture agreement, we believe 

 the applicants will be in a better position 

 to increase overall capacity and share the 

 growth opportunities. While it is true that 

 the joint venture involves revenue sharing, 

 the joint venture partners must maintain their 

 networks and execute their business plans to 

 remain profitable under the venture. In short, 

 we believe that American, like its partners, 

 has the incentive to increase its flying if 

 possible, which could provide more opportun- 

 ities for its pilots and other labor groups” 

 (p. 34). 

 We also note that none of the Department’s grants of 

antitrust immunity, beginning with Northwest/KLM in 1993 and 

continuing to the present, has imposed labor conditions. In the 

two most recent final ATI orders, SkyTeam 2, Order 2009-6-26, 

June 26, 2009, and Star 2, Order 2009-7-10, July 10, 2009, there 

were no labor conditions, and none was sought. 
- 6 - 

 Indeed, in SkyTeam 2, several labor groups, including the 

Northwest Master Executive Council of the Air Line Pilots 

Association, filed in support of ATI without requesting labor 

conditions. It would be fundamentally unfair for the Department 

to impose labor conditions on American/JAL in this docket given 

that the Department has not done so in any of the more than two 

dozen ATI proceedings since 1993. 

CONCLUSION

 American and JAL have presented the Department with one 

of the most pro-competitive proposed alliances in the history of 

ATI proceedings. Approval of the joint application will bring 

into force the new U.S.-Japan open skies agreement initialed 

last December, will link two complementary networks, and will 

give oneworld its first truly integrated transpacific hub 

network to compete with Star and SkyTeam. No party disputed 

these benefits. Accordingly, American and JAL request that the 

Department move promptly to approve the proposed alliance and 

grant antitrust immunity under 49 USC 41308 and 41309. 

LIST OF LETTERS SUPPORTING 

AMERICAN/JAPAN AIRLINES ATI 
U.S. Senator Richard J. Durbin Illinois

U.S. Senator Charles E. Schumer New York

U.S. Senator Kirsten E. Gillebrand New York

U. S. Representative Gregory W. Meeks New York

U. S. Representative Michael E. McMahon New York

U. S. Representative Joseph Crowley New York

U. S. Representative Yvette D. Clarke New York

U. S. Representative Timothy H. Bishop New York

U. S. Representative Edolphus Towns New York

U. S. Representative Charles R. Rangel New York

U. S. Representative John J. Hall New York

U. S. Representative Nita M. Lowey New York

U. S. Representative Carolyn B. Maloney New York

U. S. Representative Michael A. Arcuri New York

U. S. Representative Gary L. Ackerman New York

U. S. Representative Eliot L. Engel New York

U. S. Representative Steve Israel New York

U. S. Representative William L. Owens New York

U. S. Representative Daniel B. Maffei New York

U. S. Representative Anthony D. Weiner New York

Governor Mike Beebe Little Rock AR

Governor Arnold Schwarzenegger Sacramento CA

Governor Jack A. Markell Dover DE

Governor Linda Lingle Honolulu HI

Governor Chester J. Culver Des Moines IA

Governor C. L. "Butch" Otter Boise ID

Governor Mark  Parkinson Topeka KS

Governor Steven L. Beshear Frankfort KY

Governor Bobby Jindal Baton Rouge LA

Governor Jeremiah W. (Jay) Nixon Jefferson City MO

Governor Haley Barbour Jackson MS

Governor Beverly Eaves Perdue Raleigh NC

Governor John Hoeven Bismarck ND

Governor Bill Richardson Santa Fe NM

Governor Jim Gibbons Las Vegas NV

Governor David A. Paterson Albany NY

Governor Ted Strickkland Columbus OH

Governor Brad Henry Oklahoma City OK

Governor Edward G. Rendell Harrisburg PA

Governor Donald L. Carcieri Providence RI

Governor Mark Sanford Columbia SC

Governor M. Michael Rounds Pierre SD

Governor Rick Perry Austin TX

Governor James H. Douglas Montpelier VT

Governor Jim Doyle Madison WI
Governor Joe Manchin III Charleston WV

Governor Dave Freudenthal Cheyenne WY

Lt. Gov. Lee Fisher Columbus OH

Lt. Gov. David Dewhurst Austin TX

ST Senator Glenn Coffee OK

ST Rep Chris Benge OK

ST Rep Joe Straus TX

ST Rep Richard Thompson WV

Mayor Samuel L. Jones Mobile AL

Mayor Todd Strange Montgomery AL

Mayor Bob McCaslin Bentonville AR

Mayor Mark Stodola Little Rock AR

Mayor Horace G. Shipp Texarkana AR

Mayor Ashley Swearengin Fresno CA

Mayor Helene Schneider Santa Barbara CA

Mayor Mike Anderson Fort Walton Beach FL

Mayor Carlos Alvarez Miami‐Dade County FL

Mayor Michael C. Wiggins Pensacola FL

Mayor John R. Marks III Tallahassee FL

Mayor Otis S. Johnson Savannah GA

Mayor Roy D. Buol Dubuque IA

Mayor Richard M. Daley Chicago IL

Mayor John Thodos East Moline IL

Mayor Jim Ardis Peoria IL

Mayor Timothy J. Davlin Springfield IL

Mayor Jonathan Weinzapfel Evansville IN

Mayor Lorenz "Lo" Walker Bossier City LA

Mayor James E. Mayo Monroe LA

Mayor Thomas M. Menino Boston MA

Mayor Ardell F. Brede Rochester MN

Mayor Anthony G. Chavonne Fayetteville NC

Mayor Dennis R. Walaker Fargo ND

Mayor Phillip S. Burch Artesia NM

Mayor David Coss Santa Fe NM

Mayor Byron W. Brown Buffalo NY

Mayor Stephanie A. Miner Syracuse NY

Mayor Dewey F. Bartlett, Jr. Tulsa OK

Mayor Donald R. Mull Alcoa TN

Mayor Dennis Phillips Kingsport TN

Mayor Jane Myron Johnson City TN

Mayor Norm Archibald Abilene TX

Mayor D. Mark Conlee Bryan TX

Mayor Ben White College Station TX

Mayor Joe Adame Corpus Christi TX
Mayor Thomas C. Leppert Dallas TX

Mayor Mary Lib Saleh Euless TX

Mayor Mike Moncrief Fort Worth TX

Mayor Raul G. Salinas Laredo TX

Mayor Tom Martin Lubbock TX

Mayor Alvin New San Angelo TX

Mayor Stephen A. Mayo Texarkana TX

Mayor Lanham Lyne Wichita Falls TX

Mayor Paul D. Fraim Norfolk VA

Mayor Richard L. Kaysen Cheyenne WY

President City Council Georgia Adams Broyles Cheyenne WY

County Board County of Marquette Board Marquette MI

County Executive Allegheny County Executive Pittsburgh PA

County Nashville & Davidson County Nashville TN

City Manager City of Waco City Manager's Office Waco TX

County Commission Kanawha County Commission Charleston WV

Airport Northwest Arkansas Regional Airport Bentonville AR

Airport Fort Smith Regional Airport Fort Smith AR

Airport Little Rock National Airport Little Rock AR

Airport Texarkana Regional Airport Texarkana AR‐TX

Airport Fresno Yosemite International Airport Fresno CA

Airport Palm Springs International Airport Palm Springs CA

Airport San Francisco International Airport San Francisco CA

Airport Colorado Springs Airport Colorado Springs CO

Airport Denver International Airport Denver CO

Airport Grand Junction Regional Airport Grand Junction CO

Airport Jacksonville Aviation Authority Jacksonville FL

Airport Miami International Airport Miami FL

Airport Pensacola Gulf Coast Regional Airport Pensacola FL

Airport Sarasota Bradenton Intl Airport Sarasota FL

Airport Savannah Hilton Head Intl Airport Savannah GA

Airport Central Illinois Regional Airport Bloomington IL

Airport Metropolitan Airport Authority Moline IL

Airport Metropolitan Airport Authority of Peoria Peoria IL

Airport University of Illinois ‐ Willard Airport Savoy IL

Airport Abraham Lincoln Capital Airport Springfield IL

Airport Evansville Regional Airport Evansville IN

Airport Fort Wayne‐Allen County Airport Authority Fort Wayne IN

Airport Manhattan Regional Airport Manhattan KS

Airport Blue Grass Airport Lexington KY

Airport Louisville Regional Airport Authority Louisville KY

Airport Alexandria International Airport Alexandria LA

Airport Baton Rouge Metropolitan Airport Baton Rouge LA

Airport Lafayette Regional Airport Lafayette LA

Airport Lake Charles Regional Airport Lake Charles LA
Airport Monroe Regional Airport Monroe LA

Airport Shreveport Airport Authority Shreveport LA

Airport Kent County Department of Aeronautics Grand Rapids MI

Airport Rochester International Airport Rochester MN

Airport Springfield‐Branson National Airport Springfield MO

Airport Lambert St. Louis International Airport St. Louis MO

Airport Gulfport‐Biloxi International Airport Gulfport MS

Airport Fayetteville Regional Airport Fayetteville NC

Airport Asheville Regional Airport Fletcher NC

Airport Piedmont Triad Airport Authority Greensboro NC

Airport Raleigh‐Durham Airport Authority Raleigh‐Durham NC

Airport Municipal Airport Authority Fargo ND

Airport Omaha Airport Authority Omaha NE

Airport Roswell International Air Center Roswell NM

Airport Santa Fe NM Aviation Division Santa Fe NM

Airport Reno‐Tahoe Airport Authority Reno NV

Airport Albany County Airport Authority Albany NY

Airport Buffalo Niagara International Airport Buffalo NY

Airport Syracuse Hancock International Airport Syracuse NY

Airport Cincinnati/Northern Kentucky Intl Airport Cincinnati OH

Airport Columbus Regional Airport Authority Columbus OH

Airport Toledo‐Lucas County Port Authority Toledo OH

Airport Dayton International Airport Vandalia OH

Airport Lawton‐Ft. Sill Regional Airport Lawton OK

Airport Tulsa International Airport Tulsa OK

Airport Wilkes‐Barre/Scranton International Airport Avoca PA

Airport Pittsburgh International Airport Pittsburgh PA

Airport Charleston County Aviation Authority Charleston SC

Airport Columbia Metropolitan Airport Columbia SC

Airport GSP International Airport Greenville SC

Airport Sioux Falls Regional Airport Authority Sioux Falls SD

Airport Tri‐Cities Regional Airport Blountville TN

Airport Chattanooga Metropolitan Airport Authority Chattanooga TN

Airport Metropolitan Knoxville Airport Authority Knoxville TN

Airport Metropolitan Nashville Airport Authority Nashville TN

Airport City of Austin Aviation Department Austin TX

Airport Corpus Christi International Airport Corpus Christi TX

Airport Dallas/Ft. Worth International Airport Dallas/Fort Worth TX

Airport City of Killeen Aviation Services Killeen TX

Airport East Texas Regional Airport Longview TX

Airport San Angelo Regional Airport San Angelo TX

Airport Waco Regional Airport Waco TX

Airport Wichita Falls Department of Aviation Wichita Falls TX

Airport Norfolk Airport Authority Norfolk VA

Airport Austin Straubel International Airport Green Bay WI

Airport La Crosse Municipal Airport La Crosse WI

Airport Dane County Regional Airport Madison WI
Airport General Mitchell International Airport Milwaukee WI

Airport Central Wisconsin Airport Mosinee WI

Union Transport Workers Union New York NY

Chamber Mobile Area Chamber of Commerce Mobile AL

Chamber Bentonville Bella Vista Chamber of Commerce Bentonville AR

Chamber Grand Junction Area Chamber Grand Junction CO

Chamber Pensacola Chamber of Commerce Pensacola FL

Chamber Dubuque Area Chamber of Commerce Dubuque IA

Chamber Chicagoland Chamber of Commerce Chicago IL

Chamber Pekin Area Chamber of Commerce Pekin IL

Chamber Rochester Area Chamber of Commerce Rochester MN

Chamber Missouri Chamber of Commerce and Industry Jefferson City MO

Chamber Springfield Area Chamber of Commerce Springfield MO

Chamber Johnson City Chamber of Commerce Johnson City TN

Chamber Kingsport Area Chamber of Commerce Kingsport TN

Chamber North San Antonio Chamber of Commerce San Antonio TX

Econ Dev The Beacon Council Miami FL

Econ Dev Illinois Manufacturers' Association Oak Brook IL

Econ Dev Greater Bossier Economic Development Bossier City LA

Econ Dev Missouri Economic Development Board Springfield MO

Econ Dev Greater Jamaica Development Corporation Jamaica NY

Econ Dev Association for a Better New York New York NY

Econ Dev Partnership for New York City New York NY

Econ Dev Charleston Area Alliance Charleston WV

Econ Dev Cheyenne Area Convention & Visitors Bureau Cheyenne WY

Econ Dev Cheyenne LEADS Cheyenne WY

Business Dubuque Bank and Trust Dubuque IA

Business Honkamp Krueger & Company Dubuque IA

Business Premier Bank Dubuque IA

Business AEP‐SWEPCO Shreveport LA

Business The Business Council New York NY

Business York College, The City University of New York Jamaica NY

Travel Travel Leaders Memphis TN
CERTIFICATE OF SERVICE

 

 I hereby certify that I have this day served the foregoing 

document by email on the following persons: 

 

sascha.vanderbellen@delta.com jhill@dlalaw.com 

scott.mcclain@delta.com bill@mietuslaw.com 

sametta.c.barnett@delta.com mgoldman@sgbdc.com 

kquinn@pillsburywinthrop.com rsilverberg@sgbdc.com 

bkeiner@crowell.com dhainbach@ggh-airlaw.com 

mrosia@crowell.com mcmillin@woa.com 

bruce.rabinovitz@wilmerhale.com eskraft@jamhoff.com 

jeffrey.manley@united.com dpdean@jamhoff.com 

bob.kneisley@wnco.com dkirstein@yklaw.com 

robert.land@jetblue.com jyoung@yklaw.com 

msinick@ssd.com donna.kooperstein@usdoj.gov 

cdonley@ssd.com dwight.moore@ustranscom.mil 

gbleopard@fedex.com john.allen@faa.gov 

dvaughan@kelleydrye.com byerlyjr@state.gov 

kevin.montgomery@polaraircargo.com recohn@hhlaw.com 

jrichardson@johnlrichardson.com cjsimpson@zsrlaw.com 

lhalloway@crowell.com pmurphy@lopmurphy.com 

efaberman@wileyrein.com lachter@starpower.net 

mroller@rollerbauer.com anita.mosner@hklaw.com 

howard.kass@usairways.com rpommer@atlasair.com 

benjamin.slocum@usairways.com gmurphy@crowell.com 

sophy.chen@hklaw.com russell.bailey@alpa.org 

david.heffernan@wilmerhale.com 

 

 

 _______________________________ 

 CARL B. NELSON, JR. 

July 9, 2010