[Federal Register Volume 60, Number 21 (Wednesday, February 1, 1995)]
[Notices]
[Pages 6343-6345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2498]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
[Docket No. 49973]
Order on Discussion Authority Regarding a Smoking Ban on
Transatlantic Flights
January 24, 1995.
SUMMARY: We are publishing the entire order as an appendix to this
document.
EFFECTIVE DATE: January 30, 1995.
FOR FURTHER INFORMATION CONTACT:
Peter Bloch, U.S. Department of Transportation. Office of the Assistant
General Counsel for International Law, Room 10105, 400 Seventh Street,
S.W., Washington, D.C. 20590. (202) 366-9183.
Patrick V. Murphy,
Acting Assistant Secretary for Aviation and International Affairs.
Order
On December 15, 1994, a joint application was filed by American
Airlines, British Airways, Continental Airlines, KLM Royal Dutch
Airlines, Northwest Airlines, Trans World Airlines, United Air Lines,
and USAir (Joint Applicants) requesting approval of, and antitrust
immunity for, discussions to be held for the purpose of reaching a
voluntary agreement to ban all smoking on commercial transatlantic
flights. They propose to announce a date and place for such discussions
and to invite representatives of all interested U.S. and foreign air
carriers and international airport and civic groups to participate.
In support of their application, the Joint Applicants state that
such a grant is consistent with the public interest because eliminating
the exposure of passengers and crew to passive smoke would serve the
public health. They cite [[Page 6344]] several U.S. and other
governmental initiatives under way to ban smoking on international
flights and assert that the voluntary action they advocate will produce
faster results and avoid the possibility of different or conflicting
rules for different countries.
The Joint Applicants also state that the antitrust immunity they
seek is consistent with Department precedent. They state that, under
either of the two tests the Department has employed for granting
antitrust immunity, their application merits approval.
Answers in response to the Joint Application were filed by the
National Smokers Alliance, the Coalition on Smoking or Health, and
Congressman Richard J. Durbin.\1\ The National Smokers Alliance, a
nonprofit membership organization seeking accommodation for smokers,
opposes the grant of antitrust immunity on the grounds that the purpose
of the discussions is to eliminate competition in the provision of air
services and to reduce consumer options. It states that individual
carriers should make decisions banning smoking in a competitive
environment, subject to the economics of the marketplace, and cites the
voluntary ban by one U.S. carrier, Delta, as evidence that such an
approach can achieve antismoking goals.
\1\Congressman's Durbin's comments were filed by United
Airlines, which requests that they be accepted. We will grant that
request.
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The Coalition on Smoking or Health, representing the American
Cancer Society, the American Heart Association and the American Lung
Association, supports grant of the discussion immunity. The Coalition
believes that a voluntary agreement among carriers in the important
transatlantic market would probably lead to similar agreements on other
international routes, greatly increasing the prospects of worldwide
compliance with the resolution of the International Civil Aviation
Organization (ICAO) calling for smokefree international flights by July
1, 1996. Congressman Durbin also urges prompt approval of the requested
discussion authority, observing that the efforts of the U.S. and other
countries to achieve implementation of the ICAO resolution through
intergovernmental agreement is a slow process, and states that a
voluntary agreement among carriers would provide an important public
health benefit that is clearly in the public interest.
The Joint Applicants filed a request for leave to file a reply to
the answers of the National Smokers Alliance and the Coalition on
Smoking or Health, which we will grant. The Joint Applicants contend
that the Coalition's comments highlight the important public benefit
and strong U.S. policy of achieving a smoke-free environment on
international flights that underlie the discussion immunity request,
while the position of the Alliance that the proposed discussions would
be anticompetitive underscores the reluctance of the carriers to
proceed without that immunity.
As required by statute, we have given the Attorney General and the
Secretary of State a copy of the application and the opportunity to
submit written comments on the application. Neither the Attorney
General nor the Secretary of State has submitted any comments.
Decision
The Department has decided to grant the requested discussion
immunity, subject to several conditions traditionally imposed to
protect the public interest when potentially anticompetitive discussion
authority is granted. The United States has a firmly-established policy
that smoking should be banned on international flights, because
eliminating smoking on international airline flights will provide
important public health benefits. We are granting the application,
because the discussions proposed by the carrier applicants should
hasten the achievement of that goal in transatlantic markets.
We assume for the purposes of our decision here that both the
purpose and effect of the proposed discussions would be to
substantially reduce competition among carriers in the provision of air
transportation. In such instances, we may authorize intercarrier
discussions and grant them antitrust immunity where we find that the
discussions are necessary to meet a serious transportation need or to
achieve important public benefits and that such benefits or need cannot
be secured by reasonably available alternatives that are materially
less anticompetitive. 49 U.S.C. 41308, 41309.
The purpose of the discussions in this case is to secure the
important public benefit of smoke-free air travel in a faster and more
orderly fashion than the present process of government regulation and
intergovernmental negotiation. The discussions are also consistent with
a strong and clearly articulated U.S. policy.
The public health and safety benefits of eliminating smoking and
passive smoke contamination of aircraft were addressed in regulatory
proceedings prompted by the enactment of section 335 of Public Law 101-
164 and resulting in the adoption of the smoking ban on most domestic
flight segments set forth in Part 252 of the Department's regulations,
14 CFR Part 252. In the case of international flights, the U.S. has
sponsored, and in 1992 ICAO adopted, a resolution urging member states
to ban smoking on all international flights by July 1, 1996. In
November, 1994, the U.S., Canada and Australia announced the signing of
an agreement to ban smoking on flights by their carriers operating
nonstop between their territories.
Despite such initiatives, however, the process of negotiating and
implementing smoking bans with dozens of governments is a slow and
uncertain process due to the complexities of dealing with so many
different countries. Furthermore, failure to achieve agreement with all
of the countries of a given region would create confusion for
passengers and present significant crew and aircraft coordination
problems for airlines. A voluntary agreement among carriers in the
important transatlantic market will clearly help avoid such problems
while making it more likely that the goals of the U.S. and most of the
world's nations under the ICAO resolution can be achieved.
We also find that there are no reasonably available alternatives to
the requested discussions having a materially less anticompetitive
effect. Direct governmental action would not be a market solution and
would present the difficulties noted above. And, while the National
Smokers Alliance points to an independent action by one U.S. carrier to
ban smoking on at least some of its international flights, we find no
basis to believe that a pure reliance on individual carrier marketing
decisions will either avoid the difficulties faced by direct government
action or significantly contribute to the realization of U.S. policies
and objectives.
The applicants assert that each of them would be reluctant to ban
smoking on its own transatlantic flights because doing so could cost it
a significant number of passengers. As a result, notwithstanding
Delta's own decision to bar smoking on its flights, the applicant
carriers might well delay prohibiting smoking until smoking was
prohibited by government action. This causes us to find that
independent carrier action is not a reasonably available alternative
which would achieve the same result as the proposed discussions, the
early elimination of smoking from most transatlantic service. The
United States wishes to bar smoking on international
[[Page 6345]] flights as soon as possible. In our judgment, the
discussions proposed by the applicants may achieve the United States'
goal--the elimination of smoking--much sooner than independent action
by individual airlines.
We also find that the requested approval and grant of antitrust
immunity to discuss a voluntary agreement to ban smoking on
international commercial flights in transatlantic service is
appropriately limited in nature and well-calculated to achieve a result
consistent with our objective of eliminating smoking on all
international flights. As noted, the Joint Applicants propose to
announce a date and place for such discussions, and to invite
representatives of all interested domestic and foreign air carriers, as
well as representatives of international airports and interested civic
groups. We will also require that representatives of airline employee
unions or associations and private consumer groups (including the
commenters in this proceeding) be invited to attend, although the
latter may be limited to observer status.
We have determined to grant the request for discussion authority
and antitrust immunity in this order, rather than through a show-cause
proceeding. The discussions sought by the applicants seek to carry out
an established public policy goal of the United States, the prohibition
of smoking on international flights. Implementing that goal as soon as
possible will provide important public health benefits. We are willing
to grant antitrust immunity in this instance because, unlike most
situations where it has been sought, the purpose of the discussions at
issue here is fully consistent with the public interest. To the extent
that consumer service options would be curtailed by an agreement, such
a result is inherent in the public policy decision to eliminate smoking
aboard aircraft. Furthermore, any agreement reached by the carriers may
not be implemented without our approval, and interested persons will
have an opportunity to comment on any application for such approval.
In addition, to minimize any adverse impact on the public interest,
we will condition our approval and grant of antitrust immunity upon the
following express conditions: (1) The discussion authority is limited
to 120 days from the date of publication of this order; (2) advance
notice of any meeting shall be given to all identifiable entities and
groups noted above, as well as to the Department of Transportation, the
Department of Justice, and the Federal Trade Commission; (3)
representatives of the Department of Transportation, the Department of
Justice and the Federal Trade Commission shall be permitted to attend
the meetings authorized by this order; (4) the Joint Applicants or a
representative shall file within 14 days with the Department a report
of each meeting held including inter alia the date, place, attendance,
a copy of any information submitted to the meeting by any participant,
and a summary of the discussions and any proposed agreements; (5) any
agreement reached must be submitted to the Department for approval and
must be approved before its implementation; (6) the attendees at such
meetings must not discuss rates, fares or capacity; and (7) the
discussions will be held in the metropolitan Washington, D.C. area.
Accordingly,
1. The Department approves the request for discussion authority
filed by the Joint Applicants in this docket, subject to the
restrictions listed below, under section 41308 of title 49 of the
United States Code, for 120 days from the date of publication of this
order, for discussions directed toward eliminating smoking on all
international flights in transatlantic service;
2. The Department exempts persons participating in the discussions
approved by this order from the operation of the antitrust laws under
section 41309 of Title 49 of the United States Code;
3. The Department's approval is subject to the following
conditions:
(a) Advance notice of any meeting shall be given to all
identifiably interested air carriers, foreign air carriers,
international airports, airline employee unions or associations, civic
groups and consumer groups, as well as to the Department of
Transportation, the Department of Justice, and the Federal Trade
Commission;
(b) Representatives of the entities and groups listed in
subparagraph (a) above shall be permitted to attend all meetings
authorized by this order;
(c) The Joint Applicants or a representative shall file within 14
days with the Department a report of each meeting held including inter
alia the date, place, attendance, a copy of any information submitted
to the meeting by any participant, and a summary of the discussions and
any proposed agreements;
(d) Any agreement reached must be submitted to the Department for
approval and must be approved before its implementation;
(e) Attendees at such meetings must not discuss rates, fares or
capacity;
(f) The Department shall retain jurisdiction over the discussions
to take such further action at any time, without a hearing, as it may
deem appropriate; and
(g) Any meetings authorized by this order shall be held in the
metropolitan Washington, D.C. area.
4. Petitions for reconsideration may be filed pursuant to our rules
in response to this order;
5. We will serve a copy of this order on all parties served by the
Joint Applicants in this docket, as indicated by the service list
attached to their Application, on all parties filing Answers to the
Application, and Congressman Richard J. Durbin; and
6. We will publish a copy of this order in the Federal Register.
By:
Patrick V. Murphy,
Acting Assistant Secretary for Aviation and International Affairs.
[FR Doc. 95-2498 Filed 1-31-95; 8:45 am]
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