Review of American/JetBlue Agreements, 51552-51553 [2020-18193]

Agencies

• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 85, Number 162 (Thursday, August 20, 2020)]
[Notices]
[Pages 51552-51553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18193]


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DEPARTMENT OF TRANSPORTATION


Review of American/JetBlue Agreements

AGENCY: Office of the Secretary of Transportation (OST), Department of 
Transportation (DOT).

ACTION: Extension of waiting period.

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SUMMARY: American Airlines, Inc. (American) and JetBlue Airways 
Corporation (JetBlue) have submitted cooperative agreements, including 
code-sharing and alliance agreements, to the U.S. Department of 
Transportation (Department) for review. The statute requires such joint 
venture agreements between major U.S. passenger airlines to be 
submitted to the Department at least 30 days before the agreements may 
take effect and authorizes the Department to extend the waiting period 
for these agreements beyond the initial 30-day period. The Department 
has determined to extend the waiting period for the American/JetBlue 
agreements for an additional 90 days.

DATES: The waiting period will now expire on November 19, 2020.

FOR FURTHER INFORMATION CONTACT: Todd Homan, Director, Office of 
Aviation Analysis, 1200 New Jersey Avenue SE, Washington, DC 20590 or 
(202) 366-5903.

SUPPLEMENTARY INFORMATION:  On July 22, 2020, American and JetBlue 
submitted cooperative agreements, including code-sharing and alliance 
agreements, to the Department. We are informally reviewing the 
agreements submitted by the two carriers under 49 U.S.C. 41720. The 
statute requires such joint venture agreements between major U.S. 
passenger airlines to be submitted to the Department at least 30 days 
before the agreements may take effect.

[[Page 51553]]

Pursuant to 49 U.S.C. 41720(a)(1), this requirement currently covers 
code-sharing agreements, long-term wet leases involving a substantial 
number of aircraft, and agreements concerning frequent flyer programs. 
By publishing a notice in the Federal Register, we may extend the 
waiting period by up to 150 days in the case of a joint venture 
agreement with respect to code-sharing and by up to 60 days for other 
types of agreements. At the end of the waiting period (either the 30-
day period or any extended period established by us), the parties are 
free to implement their agreement unless the Department has taken 
action. If we determine that the agreements' implementation would 
constitute an unfair or deceptive practice or unfair method of 
competition, the Department would issue an order under 49 U.S.C. 41712 
and institute a formal enforcement proceeding.
    In the past, we have conducted the reviews authorized by 49 U.S.C. 
41720 informally. The airline parties to joint venture agreements have 
filed the agreements directly with the Department staff that reviews 
them. Further, we have not established a docketed proceeding on any 
such agreements. As part of the Department's informal review of the 
agreements under Section 41720, we focus on whether they would reduce 
competition or would violate antitrust laws or principles. Our review 
is analogous to the review of notifiable mergers and acquisitions 
conducted by the Justice Department and the Federal Trade Commission 
under the Hart-Scott-Rodino Act, 15 U.S.C. 18a, since we are 
considering whether we should institute a formal proceeding for 
determining whether an agreement would violate section 41712.
    In our review, we consult the Justice Department, which is 
responsible for enforcing the antitrust laws and may file suit and seek 
injunctive relief against the parties to an airline agreement, whether 
or not the agreement is subject to 49 U.S.C. 41720. We seek to avoid 
duplicative proceedings by this Department and the Justice Department.
    Joint venture agreements featuring code-sharing and other forms of 
cooperation between separate entities do not constitute a merger and, 
in contrast to the antitrust-immunized alliances between U.S. and 
foreign airlines, are less likely to lead to a substantial integration 
of the partners' operations. Such agreements, however, would likely 
reduce competition if their terms or the resulting relationship among 
the airline partners would create the potential for collusion on price 
and service levels in markets where the airlines compete, or if the 
agreements and the airlines' relationship could otherwise significantly 
reduce competition, for example, by unreasonably restricting each 
airline's ability to set its own fares and service levels.
    The joint venture agreements submitted by the parties require the 
Department to undertake a detailed review of the carriers' submission 
and analysis of its impacts to competition, as well as analyzing the 
benefits of the transaction. While American and JetBlue submitted 
agreements on July 22, 2020, they are still negotiating and finalizing 
several alliance agreements material to the transaction. The two 
carriers also filed prior to completing their document production 
process. We need adequate time to review these documents once they are 
filed. Extending the waiting period will also facilitate the Department 
coordinating, as contemplated by 49 U.S.C. 41720(f), with the Antitrust 
Division of the Department of Justice, which is responsible for 
ensuring that the agreements comply with the antitrust laws of the 
United States. We have therefore determined to extend the waiting 
period by 90 days, from August 21, 2020, to November 19, 2020.
    We understand the need to complete our review as expeditiously as 
possible, so that American and JetBlue will know our views on whether 
and under what terms they may go forward with the agreements. We may 
therefore terminate the waiting period upon earlier completion of our 
review.

    Authority: 49 U.S.C. 41720(c)(2).

    Dated: August 14, 2020.
Joel Szabat,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 2020-18193 Filed 8-19-20; 8:45 am]
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