Wednesday, October 6, 2010

DOT to Immunize Japan/U.S. Alliances

The Department of Transportation announced today that it is prepared to grant two Japan/U.S. airline alliances--ANA/United/Continental and JAL/American Airlines--approval and antitrust immunity.  See Press Release, Dep't of Transp., DOT Proposes to Approve Antitrust Immunity for U.S.-Japan Aviation Alliances (Oct. 6, 2010) (available here).  A full copy of the Show Cause Order is available here.

Undoubtedly the relative speed of the applications' approval will raise a few questions about the DOT's diligence in carrying out its analysis of the joint ventures in question.  Perhaps the most powerful explanation of why the alliances were cleared is contained in the ANA/United/Continental application for antitrust immunity itself:

In the negotiations [for a U.S./Japan Open Skies agreement], the Japanese delegation unambiguously communicated that U.S. approval of [the three airlines' antitrust immunity application] on terms acceptable to the Japanese Government is a condition precedent to the entry into force of [the] Open Skies [agreement].

See Joint Application of All Nippon Airways Co., Ltd., Continental Airlines, Inc. & United Airlines, Inc., at 6 n.9, Dkt. No. OST-2009-0350 (Dep't of Transp. Dec. 23, 2009) (available here) (emphasis added).

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