[Federal Register Volume 67, Number 163 (Thursday, August 22, 2002)]
[Notices]
[Page 54525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21555]


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DEPARTMENT OF TRANSPORTATION

Office of the Secretary


Review Under 49 U.S.C. 41720 of United/US Airways Agreements

AGENCY: Office of the Secretary, Department of Transportation.

ACTION: Extension of waiting period.

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SUMMARY: United Air Lines and US Airways have submitted code-sharing 
and frequent flyer program reciprocity agreements to the Department for 
review under 49 U.S.C. 41720. That statute requires such agreements 
between major U.S. passenger airlines to be submitted to the Department 
at least thirty days before the agreements' proposed effective date and 
authorizes the Department to extend the waiting period for any such 
agreement. The Department has determined to extend the waiting period 
for the United/US Airways agreements for an additional thirty days.

FOR FURTHER INFORMATION CONTACT: Thomas Ray, Office of the General 
Counsel, 400 Seventh St. SW., Washington, DC 20590, (202) 366-4731.

SUPPLEMENTARY INFORMATION: As provided by 49 U.S.C. 41720, on July 25 
United and US Airways submitted code-sharing and frequent flyer program 
reciprocity agreements to the Department more than thirty days before 
the airlines planned to implement them. The statute authorizes us to 
extend the waiting period by 150 days with respect to a code-sharing 
agreement and by 60 days for the other types of agreements covered by 
the advance-filing requirement.
    We have been reviewing the agreements, the comments submitted by 
outside parties, and other information in our possession, and we have 
been consulting with the Justice Department. We have also given 
interested parties an opportunity to submit comments on the agreements. 
67 FR 50745 (August 5, 2002). As has been the case with respect to all 
agreements submitted under 49 U.S.C. 41720 since its enactment, our 
review of the United/US Airways agreements has been informal. See 67 FR 
50745.
    The purpose of our review is to see whether we should begin a 
formal investigation under section 41712 of the arrangements between 
United and US Airways, or take other action as a result of the 
agreements. United and US Airways will not need to obtain our approval 
before implementing their agreements after the end of the statutory 
waiting period (either the original waiting period or any extended 
period established by us). To block two airlines from implementing an 
agreement, we would normally need to issue an order under 49 U.S.C. 
41712 (formerly section 411 of the Federal Aviation Act) in a formal 
enforcement proceeding that determines that the agreement's 
implementation would be an unfair or deceptive practice or unfair 
method of competition that would violate that section. Our informal 
review of the agreements accordingly focuses on whether they would 
significantly reduce competition.
    We have concluded that we need additional time to determine whether 
the agreements or specific provisions in the agreements raise questions 
under 49 U.S.C. 41712 that may require us to request modifications of 
the agreements or to institute an enforcement proceeding. The 
agreements present important issues that require additional 
investigation by us. We have therefore determined to extend the waiting 
period by another thirty days, from August 24 to September 23. We 
understand that the two airlines wish to be able to implement the 
agreements promptly, and we therefore intend to conclude our review as 
soon as reasonably possible.
    We recognize that the Air Carrier Association of America (``ACAA'') 
filed a motion to suspend proceedings and open a docket. ACAA argues 
that all information relating to the application should be made public, 
including all discussions between US Airways and the Air Transportation 
Stabilization Board (``ATSB''), the board that is considering a loan 
guarantee application filed by United and that has conditionally 
approved a loan guarantee application filed by US Airways. Docket OST-
2002-12986. We have given ACAA and all other interested persons the 
ability to comment on the United/US Airways agreements. If ACAA has 
evidence and analysis indicating that the United/US Airways agreements 
in whole or in part may involve unfair methods of competition, it has 
had the opportunity to submit that material for our consideration.
    In addition, the ACAA motion incorrectly assumes that the ATSB 
based its conditional approval of the US Airways application on the 
airline's ability to implement its agreements with United. The letter 
released by the ATSB did not make the implementation of those 
agreements a necessary condition to approval of the loan guarantee 
application. The ATSB has been expressly informed and is fully aware 
that this Department and the Justice Department have independent 
responsibilities for preventing unlawful anti-competitive conduct in 
the airline industry and that this Department has other independent 
regulatory responsibilities over the airline industry and the airports 
used by commercial airlines. This Department intends to carry out all 
of its regulatory responsibilities regarding the agreements before it 
completely independent of any matters that may or may not be pending 
before the ATSB.

    Issued in Washington, DC, on August 19, 2002.
Read C. Van de Water,
Assistant Secretary for Aviation and International Affairs.
[FR Doc. 02-21555 Filed 8-20-02; 2:43 pm]
BILLING CODE 4910-62-P