Document ID: DOT-OST-2009-0092-0387
Agency: dot
Document Type: Notice
Title: Practice Regarding Proposed Airline Mergers and Acquisitions
Posted Date: 2015-01-16T05:00Z

[Federal Register Volume 80, Number 11 (Friday, January 16, 2015)]
[Notices]
[Pages 2468-2469]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00599]

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DEPARTMENT OF TRANSPORTATION

U.S. Department of Transportation Notice of Practice Regarding 
Proposed Airline Mergers and Acquisitions

AGENCY: Office of the General Counsel, U.S. Department of 
Transportation (DOT).

ACTION: Notice of DOT authorities and practice.

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SUMMARY: This notice explains the U.S. Department of Transportation's 
(DOT) authorities and practice in the areas of proposed airline mergers 
and acquisitions.

SUPPLEMENTARY INFORMATION: 

I. Background

    This Notice describes the U.S. Department of Transportation's 
practice and authorities with regard to airline mergers and 
acquisitions, including those that involve a transfer of slots. The 
Notice is not proposing any changes, new procedures, or new approaches.

II. Legal Authority To Review Slot Transactions Resulting From Proposed 
Airline Mergers and Acquisitions

    The DOT has authority over slot transactions that stem from 
proposed airline mergers and acquisitions.\1\ The authority arises from 
several statutory provisions, as outlined below.
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    \1\ With respect to slot transactions, this Notice relates to 
the DOT's practice for reviewing slot transactions that result from 
proposed airline mergers or acquisitions. It does not apply to DOT's 
review of standalone slot transactions. For more information 
regarding DOT's authority and proposed procedures for reviewing 
standalone slot transactions at the New York City area airports, 
please see the notice of proposed rulemaking titled, Slot Management 
and Transparency for LaGuardia Airport, John F. Kennedy 
International Airport, and Newark Liberty International Airport, RIN 
2120-AJ89, available in the docket for the rulemaking at 
www.regulations.gov.
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    Under 49 U.S.C. 41712, DOT is authorized to prohibit airline 
conduct comparable to antitrust violations. Specifically, DOT may 
prohibit conduct that it determines is an ``unfair method of 
competition.'' \2\ In addition, like several other agencies with 
respect to their regulated entities, DOT has independent authority 
under the Clayton Act.\3\ This independent authority derives from 15 
U.S.C. 21, under which DOT may prohibit airline acquisitions and 
mergers that may reduce competition or tend to create a monopoly in the 
airline industry.\4\
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    \2\ See 49 U.S.C. 41712, authorizing DOT to investigate and 
prohibit any unfair or deceptive practice or an unfair method of 
competition of an air carrier, foreign air carrier, or ticket agent.
    \3\ Section 7 of the Clayton Act, 15 U.S.C. 18, prohibits 
mergers and stock acquisitions whose effect ``may be substantially 
to lessen competition, or to tend to create a monopoly'' in a 
relevant market.
    \4\ See 15 U.S.C. 21, authorizing the Secretary to enforce 
section 7 of the Clayton Act, and 15 U.S.C. 18, prohibiting U.S. and 
foreign air carrier acquisitions that may substantially lessen 
competition or tend to create a monopoly.
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    The DOT/Federal Aviation Administration (FAA) also has authority to 
administer airline slots under 49 U.S.C. 40103.\5\ This authority 
permits the FAA to assign the use of airspace to ensure its efficient 
use and modify or revoke a slot assignment when required in the public 
interest. Section 40101, Title 49, directs DOT and the FAA, in carrying 
out aviation programs, to consider certain enumerated factors, plus 
additional factors that may be considered in the Secretary or FAA 
Administrator's discretion, as being in the public interest,\6\ 
including furthering airline competition.
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    \5\ See 49 U.S.C. 40103(b), authorizing the FAA to ``develop 
plans and policy for the use of the navigable airspace and assign by 
regulation or order the use of the airspace necessary to ensure . . 
. the efficient use of airspace [and] to modify or revoke an 
assignment when required in the public interest.''
    \6\ See 49 U.S.C. 40101(a), which directs the Secretary to 
consider identified matters, ``among others,'' as being in the 
public interest. See also 49 U.S.C. 40101(d), which directs the 
Administrator to consider identified matters (including enhancing 
safety) ``among others,'' as being in the public interest.
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III. The DOT Review of Airline Merger or Acquisition Transactions

    With respect to DOT's competition and public interest review 
authorities, DOT's practice has been to use its expertise with respect 
to the airline industry to provide the Department's views and otherwise 
assist the U.S. Department of Justice (DOJ) in DOJ's analysis of 
airline mergers or acquisitions. The DOT will continue this practice 
for airline mergers and acquisitions under DOJ review. DOT will consult 
with DOJ, inform DOJ as early as possible regarding any concerns, and 
defer to DOJ judgment where DOJ determines that a merger or acquisition 
violates the antitrust laws and should be enjoined. The DOT will not 
duplicate review or enforcement activities carried out by DOJ and will 
not create undue expense or burdens upon parties to an airline merger 
or acquisition.
    In the event that DOT has concerns that fall outside the DOJ 
competition review process, DOT, in the discretion of the Secretary, 
may seek independent resolution of these concerns, as has been its 
practice. In doing so, DOT will work with the relevant parties, 
including DOJ, as it did in the recent merger between US Airways and 
American Airlines, to determine whether public interest remedies are 
appropriate, and if so, to pursue such remedies. In that case, DOT 
applied the Section 40101 public interest policy considerations to 
maintain and enhance service to small communities with respect to the 
merger between US Airways and American Airlines. The DOT entered into 
an agreement under which the carriers committed to use certain slots at 
Reagan Washington National Airport to

[[Page 2469]]

preserve nonstop service from DCA to small and medium-sized 
communities.\7\ In the event that DOT exercises its public interest 
authority, DOT will confer with DOJ to ensure that any public interest 
remedies it seeks to impose are harmonized with any antitrust relief 
sought or imposed by DOJ.
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    \7\ See Agreement regarding Merger Between US Airways Group, 
Inc. and AMR Corporation, (Nov. 12, 2013), available at http://www.dot.gov/sites/dot.dev/files/docs/FinalAgreement_DOT_US_AA_.pdf. 
Under the Agreement, New American committed to schedule all DCA 
commuter slots held or operated by New American entities to serve 
medium, small and non-hub airports for five years.

    Issued in Washington, DC, on January 9, 2015.
Kathryn B. Thomson,
General Counsel.
[FR Doc. 2015-00599 Filed 1-15-15; 8:45 am]
BILLING CODE 4910-9X-P