FOR IMMEDIATE RELEASE
Thursday, April 22, 1999
Contact: Bill Adams
Telephone: (202) 366-5580
DOT 62-99
AMERICAN-LAN CHILE
ANTITRUST IMMUNITY TENTATIVELY APPROVED
U.S. Secretary of Transportation Rodney E. Slater today announced a tentative decision granting antitrust immunity to American Airlines and Linea Aerea Nacional Chile (LAN Chile), permitting the two carriers a new degree of flexibility in coordinating their operations and enhancing the service options available to consumers.
"Building upon the new Open-Skies arrangement with Chile, we have taken a significant new step in the direction of providing the greatest opportunity for a globalized airline industry to form, grow and respond to market forces with minimal government interference," said Secretary Slater. "Chile is one of the fastest growing international markets in the world, and the benefits to consumers will be far-reaching."
The authority tentatively granted would provide the two airlines with immunity from U.S. antitrust laws to the extent necessary to enable them to plan and coordinate services over their respective route systems. The carriers will continue to be independent companies and will retain their separate corporate and national identities.
The decision is contained in a DOT show-cause order in which the department tentatively found that granting immunity would advance important public benefits. The tentative grant of immunity would be subject to certain exclusions involving operations over the Miami-Santiago, Chile route. If made final, the department would review this limitation within 18 months.
Other exceptions to the grant of immunity relate to the two airlines participation in ownership interests in computer reservation systems and in fare coordination sponsored by the International Air Transport Association (IATA). The airlines would have to withdraw from IATA tariff coordination with respect to prices between the United States and Chile, as well as between the United States and any other countries whose carriers are or become members of immunized alliances with U.S. carriers.
The grant of immunity would also be subject to certain reporting requirements, and the two airlines would have to submit their agreements for review in three years. The decision would not allow American and LAN Chile to adopt a common name or brand.
The department directed interested parties to respond to its tentative decision within 28 days after the service date of the order, after which it will reach a final decision.
On October 28, 1997, delegations of governments from the U.S. and Chile initialed an agreement regarding a new Open Skies aviation relationship between the two countries.
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