Friday, January 22, 2010

Virgin Atlantic's Final Shot

Despite the Department of Transportation's claims that it will no longer accept new filings to the oneworld Alliance antitrust immunity docket, Virgin Atlantic Airways--one of the alliance's most steadfast opponents--filed comments earlier this week requesting that the Department deny oneworld's immunization request.  See Motion for Leave to File and Reply of Virgin Atlantic Airways, Dkt. No. OST-2008-0252 (Jan. 20, 2010) (available here).  While Virgin's filing reiterates the carrier's standing charge that the alliance, if immunized, will severely harm competition, it also draws in oneworld's recent attempt to keep JAL in its alliance:

What is most notable about [the oneworld antitrust immunity case] is the stark dichotomy between what the Joint Applicants are saying on the record in this docket versus what they are saying in the press and in the marketplace. For example, [British Airways] and [American Airlines] in this case claim that no remedies are required in order to preserve competition, yet in anticipation of an alliance between JAL and Delta (an alliance that which would involve lower levels of market concentration than would the BA/AA combine), American Airlines' CFO Tom Horton stated last month that slot give-ups and route carve-out are insufficient remedies for an anti-competitive alliance. In fact, Virgin Atlantic notes a recent statement made outside of this docket by the CEO of American Airlines. Comparing the prospects of antitrust approval for JAL-AA versus a potential JAL-Delta tie-up, Mr. Arpey stated: "[T]he JAL-American Airlines team, which does not have overlapping flights, will readily receive antitrust immunity. However, there would be 'zero possibility' of a JAL-Delta team receiving approval, as the two carriers have more than a combined 60 percent share in US-Japan flights." If American believes that the levels of market concentration on the Delta/JAL alliance are unacceptably high, then the Department surely must reject the linkup between American and BA, which involves even higher levels of market concentration and more route overlaps than those presented by the Delta/JAL case.

Id. at 8-9.

The oneworld Alliance's response to Virgin's filing is as brief as it is dismissive:

On January 20, 2010, Virgin Atlantic moved for leave to file an unauthorized response to the Joint Applicants’ Answer to the Department of Justice’s Comments. This is yet another in a string of unauthorized pleadings Virgin has filed containing no new information. Accordingly, the Joint Applicants will not be providing a substantive response.  We urge the Department to promptly issue a Show Cause Order in this docket.

See Letter of Carl B. Nelson, Jr. et al. to Dorothy Beard, Chief of Documentary Services, U.S. DOT, Unauthorized Response of Virgin Atlantic Airways (DOT-OST-2008-0252) (Jan. 21, 2010) (available here).

http://lawprofessors.typepad.com/aviation/2010/01/virgin-atlantics-final-shot.html

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