Monday, January 11, 2010

Finding Approval

While the oneworld Alliance antitrust immunity application remains in limbo, Star Alliance partners United, Continental, and All Nippon Airways are looking to deepen their relationship with full immunity for the transpacific market.  See Joint Application of All Nippon Airways Co., Ltd., Continental Airlines, Inc., and United Airlines, Inc., Dkt. No. OST-2009-0350 (Dec. 23, 2009).  The carriers are reportedly confident that their application will win approval from the Department of Transportation before the United States and Japan finalize their open skies agreement this October.  See Doug Cameron, Airlines Expect Antitrust Approval From Japan in 4 Months, Dow Jones Newswire, Dec. 24, 2009 (available here).  That may be easier said than done.  The oneworld application, as discussed previously on the blog, was supposed to have been concluded last October.  The DOT has extended the filing deadline to today, but has not given word when it will render a final decision.  Speed, one might say, is not of the DOT's essence.

Meanwhile, as Star's application sits before the DOT, the airlines are facing an uncertain regulatory climate in Japan.  Unlike the U.S., Japan does not have statutory standards and procedures in place for immunizing alliances from its competition code.  See id.  In 2002, the Japanese Fair Trade Commission approved the merger of Japanese Airlines and Japanese Air System only after the two airlines agreed to freeze or reduce fares on certain routes and surrender slots at Haneda Airport.  See Koki Arai, An Airline Merger in Japan: A Case Study Revealing Principles of Japanese Merger Control, 4 J. Indus. Comp. & Trade 207 (2004). It will be interesting to see if similar conditions are imposed on the Star Alliance or if Japanese regulators will construct an analytical/remedial framework for alliances that is distinct from their merger review.

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