[Federal Register Volume 80, Number 11 (Friday, January 16, 2015)]
[Notices]
[Pages 2468-2469]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-00599]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
U.S. Department of Transportation Notice of Practice Regarding
Proposed Airline Mergers and Acquisitions
AGENCY: Office of the General Counsel, U.S. Department of
Transportation (DOT).
ACTION: Notice of DOT authorities and practice.
-----------------------------------------------------------------------
SUMMARY: This notice explains the U.S. Department of Transportation's
(DOT) authorities and practice in the areas of proposed airline mergers
and acquisitions.
SUPPLEMENTARY INFORMATION:
I. Background
This Notice describes the U.S. Department of Transportation's
practice and authorities with regard to airline mergers and
acquisitions, including those that involve a transfer of slots. The
Notice is not proposing any changes, new procedures, or new approaches.
II. Legal Authority To Review Slot Transactions Resulting From Proposed
Airline Mergers and Acquisitions
The DOT has authority over slot transactions that stem from
proposed airline mergers and acquisitions.\1\ The authority arises from
several statutory provisions, as outlined below.
---------------------------------------------------------------------------
\1\ With respect to slot transactions, this Notice relates to
the DOT's practice for reviewing slot transactions that result from
proposed airline mergers or acquisitions. It does not apply to DOT's
review of standalone slot transactions. For more information
regarding DOT's authority and proposed procedures for reviewing
standalone slot transactions at the New York City area airports,
please see the notice of proposed rulemaking titled, Slot Management
and Transparency for LaGuardia Airport, John F. Kennedy
International Airport, and Newark Liberty International Airport, RIN
2120-AJ89, available in the docket for the rulemaking at
www.regulations.gov.
---------------------------------------------------------------------------
Under 49 U.S.C. 41712, DOT is authorized to prohibit airline
conduct comparable to antitrust violations. Specifically, DOT may
prohibit conduct that it determines is an ``unfair method of
competition.'' \2\ In addition, like several other agencies with
respect to their regulated entities, DOT has independent authority
under the Clayton Act.\3\ This independent authority derives from 15
U.S.C. 21, under which DOT may prohibit airline acquisitions and
mergers that may reduce competition or tend to create a monopoly in the
airline industry.\4\
---------------------------------------------------------------------------
\2\ See 49 U.S.C. 41712, authorizing DOT to investigate and
prohibit any unfair or deceptive practice or an unfair method of
competition of an air carrier, foreign air carrier, or ticket agent.
\3\ Section 7 of the Clayton Act, 15 U.S.C. 18, prohibits
mergers and stock acquisitions whose effect ``may be substantially
to lessen competition, or to tend to create a monopoly'' in a
relevant market.
\4\ See 15 U.S.C. 21, authorizing the Secretary to enforce
section 7 of the Clayton Act, and 15 U.S.C. 18, prohibiting U.S. and
foreign air carrier acquisitions that may substantially lessen
competition or tend to create a monopoly.
---------------------------------------------------------------------------
The DOT/Federal Aviation Administration (FAA) also has authority to
administer airline slots under 49 U.S.C. 40103.\5\ This authority
permits the FAA to assign the use of airspace to ensure its efficient
use and modify or revoke a slot assignment when required in the public
interest. Section 40101, Title 49, directs DOT and the FAA, in carrying
out aviation programs, to consider certain enumerated factors, plus
additional factors that may be considered in the Secretary or FAA
Administrator's discretion, as being in the public interest,\6\
including furthering airline competition.
---------------------------------------------------------------------------
\5\ See 49 U.S.C. 40103(b), authorizing the FAA to ``develop
plans and policy for the use of the navigable airspace and assign by
regulation or order the use of the airspace necessary to ensure . .
. the efficient use of airspace [and] to modify or revoke an
assignment when required in the public interest.''
\6\ See 49 U.S.C. 40101(a), which directs the Secretary to
consider identified matters, ``among others,'' as being in the
public interest. See also 49 U.S.C. 40101(d), which directs the
Administrator to consider identified matters (including enhancing
safety) ``among others,'' as being in the public interest.
---------------------------------------------------------------------------
III. The DOT Review of Airline Merger or Acquisition Transactions
With respect to DOT's competition and public interest review
authorities, DOT's practice has been to use its expertise with respect
to the airline industry to provide the Department's views and otherwise
assist the U.S. Department of Justice (DOJ) in DOJ's analysis of
airline mergers or acquisitions. The DOT will continue this practice
for airline mergers and acquisitions under DOJ review. DOT will consult
with DOJ, inform DOJ as early as possible regarding any concerns, and
defer to DOJ judgment where DOJ determines that a merger or acquisition
violates the antitrust laws and should be enjoined. The DOT will not
duplicate review or enforcement activities carried out by DOJ and will
not create undue expense or burdens upon parties to an airline merger
or acquisition.
In the event that DOT has concerns that fall outside the DOJ
competition review process, DOT, in the discretion of the Secretary,
may seek independent resolution of these concerns, as has been its
practice. In doing so, DOT will work with the relevant parties,
including DOJ, as it did in the recent merger between US Airways and
American Airlines, to determine whether public interest remedies are
appropriate, and if so, to pursue such remedies. In that case, DOT
applied the Section 40101 public interest policy considerations to
maintain and enhance service to small communities with respect to the
merger between US Airways and American Airlines. The DOT entered into
an agreement under which the carriers committed to use certain slots at
Reagan Washington National Airport to
[[Page 2469]]
preserve nonstop service from DCA to small and medium-sized
communities.\7\ In the event that DOT exercises its public interest
authority, DOT will confer with DOJ to ensure that any public interest
remedies it seeks to impose are harmonized with any antitrust relief
sought or imposed by DOJ.
---------------------------------------------------------------------------
\7\ See Agreement regarding Merger Between US Airways Group,
Inc. and AMR Corporation, (Nov. 12, 2013), available at http://www.dot.gov/sites/dot.dev/files/docs/FinalAgreement_DOT_US_AA_.pdf.
Under the Agreement, New American committed to schedule all DCA
commuter slots held or operated by New American entities to serve
medium, small and non-hub airports for five years.
Issued in Washington, DC, on January 9, 2015.
Kathryn B. Thomson,
General Counsel.
[FR Doc. 2015-00599 Filed 1-15-15; 8:45 am]
BILLING CODE 4910-9X-P