Wednesday, September 23, 2009
Posted by D. Daniel Sokol
Benjamin Bradshaw (O'Melveny & Myers) & Bimal Patel (O'Melveny & Myers) ask, Final Descent? The Future of Antitrust Immunity in International Aviation.
ABSTRACT: It is no secret that the Department of Justice (“DOJ”) and the Department of Transportation (“DOT”) traditionally have not seen eye to eye on the issue of antitrust immunity in international aviation. This year is no different. Indeed, 2009 has brought arguably the widest rift between the agencies since the modern era of immunity grants began following the conclusion of the U.S.-Netherlands Open Skies agreement in 1992. The lightning rod of course was Continental Airlines’ bid to join the Star Alliance, including its request to team with United in the so-called Atlantic Plus-Plus (“A++”) joint venture—an integrated and (now) immunized agreement involving Air Canada, Continental, Lufthansa, and United.
The A++ agreement not only elevated the serious disagreements between DOJ and DOT on whether, and in what circumstances, air carriers should be immune from the antitrust laws, but it saw the rise of significant Congressional opposition to the mere concept of antitrust immunity, with a key Member of Congress proposing legislation to phase out current grants of antitrust immunity.
Meanwhile, carriers remain caught in the middle of the agency positions, arguing on the one hand that competing carriers’ immunity requests should be limited or denied, but not so forcefully as to jeopardize their own calls for immunity. Given DOJ’s and DOT’s deep-seated and very public differences of opinion over antitrust immunity, as well as Congress’s readiness to jump into the fray, antitrust immunity in international aviation finds itself at a crossroads.