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					                                                                                                       Exhibit JA-2
                                                                                                       Page 1 of 7

            At A Glance: American/British Airways/Iberia
                         Source:        oneworld At A Glance statistics (as of 5/16/08)




2007 FTE Employees                   85 700
                                     85,700                         42,000
                                                                    42 000                        22,514
                                                                                                  22 514

Headquarters                  Fort Worth, Texas            London, United Kingdom              Madrid, Spain

Destinations                           248                            154                           109

Countries                               52                            75                             44

                           Dallas/Fort Worth (DFW)
Primary Hubs                Chicago O’Hare (ORD)           London-Heathrow (LHR)          Madrid-Barajas (MAD)
                                 Miami (MIA)
Fleet                                  945                            249                           198

2007 Operating Revenue             $22.9 Billion                  £8.7 Billion                  €5.5 Billion

2007 Net Income                    $504 Million
                                   $                              £833 Million                  €446 Million

2007 Passengers                    119 Million                     33 Million                    32 Million

                          *Note: AA figures include                                       *Note: IB figures include
                              American Eagle                                                    Air Nostrum
                                                                                                                                            Exhibit JA-2

                                      Airports Served In 2008:                                                                              Page 2 of 7




Abilene, TX               Canouan Isl./Grenadines    Fort Lauderdale, FL          Jacksonville, FL       Marsh Harbour, Bahamas     Omaha, NE
Acapulco, Mexico          Caracas, Venezuela         Fort Myers, FL               Kalamazoo, MI          Maui, HI                   Ontario, CA
Aguascalientes, Mexico    Casa De Campo,  D.R.       Fort Smith, AR               Kansas City, MO        McAllen, TX                Orange County, CA
Albany, NY
Albany NY                 Cedar Rapids/IA City, IA
                          Cedar Rapids/IA City IA    Fort Wayne IN
                                                     Fort Wayne, IN               Key West, FL
                                                                                  Key West FL            Medellin, Colombia
                                                                                                         Medellin Colombia          Orlando, FL
                                                                                                                                    Orlando FL
Albuquerque, NM           Champaign/Urbana, IL       Frankfurt, Germany           Killeen, TX            Memphis, TN                Ottawa, Canada 
Alexandria, LA            Charleston, SC             Freeport, Bahamas            Kingston, Jamaica      Mexico City, Mexico        Palm Springs, CA
Amarillo, TX              Charlotte, NC              Fresno, CA                   Knoxville, TN          Miami, FL                  Panama City, Panama
Anchorage, AK             Chattanooga, TN            Ft. De France, Martinique    Kona, HI               Midland/Odessa, TX         Paris, France 
Anguilla, B.W. Indies     Chicago, IL                Ft. Walton Beach, FL         La Crosse, WI          Milan, Italy               Pensacola, FL
Antigua                   Chihuahua Mexico
                          Chihuahua, Mexico          George Town, Bahamas
                                                     George Town Bahamas          La Paz, Bolivia
                                                                                  La Paz Bolivia         Milwaukee, WI
                                                                                                         Milwaukee WI               Peoria IL
                                                                                                                                    Peoria, IL
Aruba                     Cincinnati, OH             Grand Cayman, Cayman Isl.    Lafayette, LA          Minneapolis/St. Paul, MN   Philadelphia, PA
Atlanta, GA               Cleveland, OH              Grand Junction, CO           Laredo, TX             Mobile, AL                 Phoenix, AZ
Austin, TX                College Station, TX        Grand Rapids, MI             Las Vegas, NV          Moline, IL                 Pittsburgh, PA
Baltimore, MD             Colorado Springs, CO       Green Bay, WI                Lawton, OK             Monroe, LA                 Pointe‐a‐Pitre, Guad.
Barbados                  Columbia, SC               Greensboro, NC               Leon, Mexico           Montego Bay, Jamaica       Port of Spain, Trinidad
Barcelona, Spain
Barcelona, Spain          Columbus, OH
                          Columbus, OH               Greenville/Spartanburg, SC
                                                     Greenville/Spartanburg, SC   Lexington, KY
                                                                                  Lexington, KY          Monterey, CA
                                                                                                         Monterey, CA               Port‐Au‐Prince, Haiti
                                                                                                                                    Port Au Prince, Haiti 
Barranquilla, Colombia    Corpus Christi, TX         Grenada                      Liberia, Costa Rica    Monterrey, Mexico          Portland, OR
Baton Rouge, LA           Cozumel, Mexico            Guadalajara, Mexico          Lihue Kauai, HI        Montevideo, Uruguay        Providence, RI
Belize City, Belize       Curacao, N.A.              Guatemala City, Guat.        Lima, Peru             Montreal, Canada           Providenciales T. & C. Isl.
Bermuda                   Dallas (Love), TX          Guayaquil, Ecuador           Little Rock, AR        Montrose, CO               Puerto Plata, D.R
Birmingham, AL            Dallas/Fort Worth, TX      Gulfport/Biloxi, MS          London(Heathrow), UK   Moscow, Russian Fed.       Puerto Vallarta, Mexico
Bloomington, IL
Bloomington, IL           Dayton, OH
                          Dayton, OH                 Gunnison, CO
                                                     Gunnison, CO                 Longview, TX
                                                                                  Longview, TX           Nashville, TN
                                                                                                         Nashville, TN              Punta Cana, D.R.
                                                                                                                                    Punta Cana, D.R.
Bogota, Colombia          Delhi, India               Halifax, Canada              Los Angeles, CA        Nassau, Bahamas            Quito, Ecuador
Bonaire, Neth. Antilles   Denver, CO                 Harrisburg, PA               Los Cabos, Mexico      Nevis Leeward Is.          Raleigh/Durham, NC
Boston, MA                Des Moines, IA             Hartford, CT                 Louisville, KY         New Orleans, LA            Reno, NV
Brussels, Belgium         Detroit, MI                Honolulu, HI                 Lubbock, TX            New York (JFK), NY         Richmond, VA 
Buenos Aires, Argentina   Dominica                   Houston (Hobby), TX          Madison, WI            New York(LGA), NY          Rio de Janeiro, Brazil
        ,
Buffalo, NY                      ,
                          Dublin, Ireland                     (
                                                     Houston(Bush), TX USA
                                                                    ),                    , p
                                                                                  Madrid, Spain                  ,
                                                                                                         Newark, NJ                            ,
                                                                                                                                    Rochester, MN
Burbank, CA               Dubuque, IA                Huntsville, AL               Managua, Nicaragua     Norfolk/VA Beach, VA       Rochester, NY
Calgary, Canada           El Paso, TX                Indianapolis, IN             Manchester, England    Nw Arkansas, AR            Rome, Italy
Cali, Colombia            Evansville, IN             Jackson Hole, WY             Maracaibo, Venezuela   Oakland, CA                Roswell, NM
Cancun, Mexico            Flint, MI                  Jackson,  MS                 Marquette, MI          Oklahoma City, OK          Sacramento, CA 
                                                                                                                                            Exhibit JA-2

                                      Airports Served In 2008:                                                                              Page 3 of 7




Salt Lake City, UT        San Pedro Sula, Honduras    Shanghai, China               Steamboat Springs, CO   Tortola Beef, B.V.I.     West Palm Beach, FL
Samana, D.R.              San Salvador, El Salvador   Shreveport, LA                Syracuse, NY            Traverse City, MI        White Plains, NY
San Angelo, TX
San Angelo TX             Santa Barbara CA
                          Santa Barbara, CA           Springfield, IL
                                                      Springfield IL                Tallahassee FL
                                                                                    Tallahassee, FL         Tucson, AZ 
                                                                                                            Tucson AZ                Wichita Falls, TX
                                                                                                                                     Wichita Falls TX
San Antonio, TX           Santa Cruz, Bolivia         Springfield/Branson, MO       Tampa, FL               Tulsa, OK                Wichita, KS
San Diego, CA             Santiago, Chile             St. Croix, U.S.V.I.           Tampico, Mexico         Tyler, TX                Zihuatanejo, Mexico
San Francisco, CA         Santiago, D.R.              St. Kitts, Leeward Islands    Tegucigalpa, Honduras   Vail,  CO                Zurich, Switzerland 
San Jose, CA              Santo Domingo,  D.R.        St. Louis, MO                 Texarkana, AR           Vancouver, Canada
San Jose, Costa Rica      São Paulo, Brazil           St. Lucia(West Indies         Tokyo, Japan            Waco, TX
San Juan, Puerto Rico
San Juan, Puerto Rico     Sarasota, FL
                          Sarasota, FL                St. Lucia, Windward Islands
                                                      St. Lucia, Windward Islands   Toledo, OH
                                                                                    Toledo, OH              Washington, D.C. (DCA)
                                                                                                            Washington, D.C. (DCA)
San Luis Obispo, CA       Savannah/H. Head, GA        St. Maarten, N.A.             Toronto, Canada         Washington, D.C. (IAD)
San Luis Potosi, Mexico   Seattle/Tacoma, WA          St. Thomas, U.S.V.I.          Torreon, Mexico         Wausau, WI
                                                                                                                                             Exhibit JA-2

                                         Airports Served In 2008:                                                                            Page 4 of 7




Aalborg, Denmark          Brussels, Belgium         Geneva, Switzerland          Lanzarote, Spain          Newcastle, United Kingdom        Stord, Norway
Aarhus, Denmark           Bucharest, Romania        Genoa, Italy                 Larnaca, Cyprus           Newquay, United Kingdom          Stornoway, UK
Aberdeen, UK              Budapest, Hungary         George, South Africa         Lisbon, Portugal          Nice, France                     Stuttgart, Germany
Abu Dhabi, UAE            Buenos Aires, Argentina   Gibraltar                    Livingstone, Zambia       Orlando, FL                      Sun City, South Africa
Abuja, Nigeria            Cagliari, Italy           Glasgow, United Kingdom      London (Gatwick), UK      Oslo, Norway                     Sydney, Australia
Accra, Ghana              Cairo, Egypt              Gothenburg, Sweden           London (Heathrow), UK     Palma De Mallorca, Spain         Tampa, FL
Algiers, Algeria          Calgary, Canada           Gran Canaria, Spain          London City Airport, UK   Paphos, Cyprus                   Tel Aviv, Israel
Alicante, Spain           Campbeltown, UK           Grand Cayman, Cayman Isl.    Londonderry, UK           Paris, France                    Tenerife/R. Sofia, Spain
Amsterdam, Netherlands    Cape Town, South Africa   Grenada, Grenada             Los Angeles, CA           Philadelphia, PA                 Thessaloniki, Greece
Antalya, Turkey           Casablanca, Morocco       Grenoble, France             Luanda, Angola            Phoenix, AZ                      Tirana, Albania
Antigua                   Catania, Italy            Hamburg, Germany             Lusaka, Zambia            Pisa, Italy                      Tiree Island, UK
Athens, Greece            Chennai, India            Harare, Zimbabwe             Luxembourg                Port Elizabeth, South Africa     Tobago, Trin. and Tob.
Atlanta, GA               Chicago, USA              Helsinki, Finland            Lyon, France              Port Of Spain, Trin. and Tob.    Tokyo, Japan
Bahrain, Bahrain          Copenhagen, Denmark       Hong Kong, Hong Kong         Madrid, Spain             Poznan, Poland                   Toronto, Canada
Baltimore, MD             Dallas/Fort Worth, TX     Houston (Bush), TX           Malaga, Spain             Prague, Czech Republic           Toulouse, France
Bangalore, India          Dar Es Salaam, Tanzania   Hurghada, Egypt              Malta, Malta              Pristina, Yugoslavia             Tripoli, Libya
Bangkok, Thailand         Delhi, India              Hyderabad, India             Manchester, UK            Providenciales, T. and C. Isl.   Tunis, Tunisia
Barbados                  Denver, CO                Ibiza, Spain                 Marrakech, Morocco        Reykjavik, Iceland               Turin, Italy
Barcelona, Spain          Detroit, MI               Innsbruck, Austria           Marseille, France         Rio De Janeiro, Brazil           Vancouver, Canada
Bari, Italy               Dhaka, Bangladesh         Inverness, United Kingdom    Mauritius, Mauritius      Rome, Italy                      Varna, Bulgaria
Barra, United Kingdom     Doha, Qatar               Islamabad, Pakistan          Mexico City, Mexico       Salzburg, Austria                Venice, Italy
Basel, Switzerland        Dresden, Germany          Islay, United Kingdom        Miami, FL                 San Francisco, CA                Verona, Italy
Beijing, China            Dubai, UAE                Isle Of Man, UK              Milan (Linate), Italy     Sao Paulo, Brazil                Victoria Falls, Zimbabwe
Belgrade, Yugoslavia      Dublin, Ireland           Istanbul, Turkey             Milan (Malpensa), Italy   Sarajevo, Bosnia/Herzegovina     Vienna, Austria
Benbecula, UK             Dubrovnik, Croatia        Izmir, Turkey                Montreal, Canada          Seattle, WA                      Warsaw, Poland
Bergen, Norway            Durban, South Africa      Jersey, United Kingdom       Moscow, Russia            Shanghai, China                  Washington, D.C. (IAD)
Berlin, Germany           Dusseldorf, Germany       Johannesburg, South Africa   Mumbai, India             Sharm El Sheik, Egypt            Wick, United Kingdom
Bermuda, Bermuda          Edinburgh, UK             Kiev, Ukraine                Munich, Germany           Shetland Sumburgh, UK            Windhoek, Namibia
Berne, Switzerland        Entebbe, Uganda           Kingston, Jamaica            Muscat, Oman              Singapore                        Zurich, Switzerland
Billund, Denmark          Faro, Portugal            Kirkwall, United Kingdom     Nairobi, Kenya            Sofia, Bulgaria
Bloemfontein, S. Africa   Fez, Morocco              Kolkata, India               Naples, Italy             St. Lucia
Bologna, Italy            Frankfurt, Germany        Krakow, Poland               Nassau, Bahamas           St. Petersburg, Russia
Bordeaux, France          Funchal, Portugal         Kuwait, Kuwait               New York, NY              Stockholm, Sweden
Boston, MA                Gdansk, Poland            Lagos, Nigeria               Newark, NJ                Stockholm, Sweden
                                                                                                                                            Exhibit JA-2

                                        Airports Served In 2008:                                                                            Page 5 of 7




Albacete, Spain           Cancun, Mexico             Helsinki, Finland            Marseille, France          Panama City, Panama       Sevilla, Spain
Algiers, Algeria          Caracas, Venezuela         Ibiza, Spain                 Melilla, Spain             Paris, France             St. Petersburg, Russia
Alicante, Spain           Casablanca, Morocco        Istanbul, Turkey             Menorca, Spain             Paris, France             Stockholm, Sweden
Almeria, Spain            Catania, Italy             Jerez Frontera, Spain        Mexico City, Mexico        Pisa, Italy               Strasbourg, France
Amsterdam, Netherlands
Amsterdam Netherlands     Chicago USA
                          Chicago, USA               Johannesburg, South Africa
                                                     Johannesburg South Africa    Miami, FL
                                                                                  Miami FL                   Porto, Portugal
                                                                                                             Porto Portugal            Tangier, Morocco
                                                                                                                                       Tangier Morocco
Asturias, Spain           Clermont Ferrand, France   La Coruna, Spain             Milan, Italy               Prague, Czech Republic    Tel Aviv, Israel
Athens, Greece            Copenhagen, Denmark        Lagos, Nigeria               Milan, Italy               Quito, Ecuador            Tenerife/Norte, Spain
Badajoz, Spain            Dakar, Senegal             Lanzarote, Spain             Montevideo, Uruguay        Rennes, France            Tenerife/Reina Sofia, Spain
Barcelona, Spain          Dublin, Ireland            Leon, Spain                  Montpellier, France        Rio De Janeiro, Brazil    Toulouse, France
Berlin, Germany           Dubrovnik, Croatia         Lille, France                Moscow, Russia             Rome, Italy               Turin, Italy
Bilbao Spain
Bilbao, Spain             Dusseldorf Germany
                          Dusseldorf, Germany        Lima, Peru
                                                     Lima Peru                    Munich Germany
                                                                                  Munich, Germany            Salamanca Spain
                                                                                                             Salamanca, Spain          Valencia Spain
                                                                                                                                       Valencia, Spain
Bogota, Colombia          Frankfurt, Germany         Lisbon, Portugal             Murcia, Spain              San Jose, Costa Rica      Valladolid, Spain
Bologna, Italy            Fuerteventura, Spain       Logrono, Spain               Nantes, France             San Juan, Puerto Rico     Venice, Italy
Bordeaux, France          Geneva, Switzerland        London, United Kingdom       Naples, Italy              San Sebastian, Spain      Vienna, Austria
Boston, MA                Genoa, Italy               Lyon, France                 New York, NY               S. Cruz La Palma, Spain   Vigo, Spain
Brussels, Belgium         Gibraltar                  Madrid, Spain                Nice, France               Santander, Spain          Vitoria, Spain
Bucharest, Romania
Bucharest Romania         Gran Canaria Spain
                          Gran Canaria, Spain        Malabo, Equatorial Guinea
                                                     Malabo Equatorial Guinea     Olbia, Italy
                                                                                  Olbia Italy                S de Compostela Spain
                                                                                                             S. de Compostela, Spain   Warsaw, Poland
                                                                                                                                       Warsaw Poland
Buenos Aires, Argentina   Granada, Spain             Malaga, Spain                Palermo, Italy             Santiago, Chile           Washington (Dulles), D.C.
Burgos, Spain             Guatemala City, Guat.      Malta, Malta                 Palma De Mallorca, Spain   Santo Domingo,  D.R.      Zaragoza, Spain
Cairo, Egypt              Havana, Cuba               Marrakech, Morocco           Pamplona, Spain            Sao Paulo, Brazil         Zurich, Switzerland
                                                                                                                                      Exhibit JA-2

                                          Airports Served In 2008:                                                                    Page 6 of 7




Alicante, Spain             Faro, Portugal         Jyvaskyla, Finland       Manchester, UK             Pisa, Italy               Tenerife/Norte, Spain
Amsterdam, Netherlands Frankfurt, Germany          Kajaani, Finland         Milan, Italy               Ponta Delgada, Portugal   Tenerife/Reina Sofia, Spain
Athens, Greece              Fuerteventura, Spain   Kauhava, Fiji            Moscow, Russia             Prague, Czech Republic    Tokyo, Japan
Bangkok, Thailand
Bangkok Thailand            Funchal, Portugal
                            Funchal Portugal       Kiev Ukraine
                                                   Kiev, Ukraine            Mumbai, India
                                                                            Mumbai India               Rhodes Greece
                                                                                                       Rhodes, Greece            Toronto Canada
                                                                                                                                 Toronto, Canada
Barcelona, Spain            Gdansk, Poland         Kittila, Finland         Munich, Germany            Riga, Latvia              Turku, Finland
Beijing, China              Geneva, Switzerland    Kokkola, Finland         Nagoya, Japan              Rimini, Italy             Vaasa, Finland
Berlin, Germany             Gothenburg, Sweden     Krakow, Poland           Naples, Italy              Rome, Italy               Venice, Italy
Boston, MA                  Gran Canaria, Spain    Kuopio, Finland          New York, NY               Rovaniemi, Finland        Verona, Italy
Brussels, Belgium           Guangzhou, China       Kuusamo, Finland         Nice, France               Salzburg, Austria         Vienna, Austria
Bucharest, Romania
Bucharest Romania           Hamburg Germany
                            Hamburg, Germany       Lanzarote, Spain
                                                   Lanzarote Spain          Osaka Japan
                                                                            Osaka, Japan               Savonlinna Finland
                                                                                                       Savonlinna, Finland       Vilnius, Lithuania
                                                                                                                                 Vilnius Lithuania
Budapest, Hungary           Helsinki, Finland      Larnaca, Cyprus          Oslo, Norway               Seoul, Rep. of Korea      Warsaw, Poland
Chania, Greece              Heraklion, Greece      Lisbon, Portugal         Ostersund, Sweden          Shanghai, China           Zurich, Switzerland
Copenhagen, Denmark         Hong Kong, China       Ljubljana, Slovenia      Oulu, Finland              St. Petersburg, Russia
Delhi, India                Ibiza, Spain           London, United Kingdom   Palma De Mallorca, Spain   Stockholm, Sweden
Dubai, UAE                  Innsbruck, Austria     Madrid, Spain            Paphos, Cyprus             Stuttgart, Germany
Dusseldorf, Germany
Dusseldorf, Germany         Ivalo, Finland
                            Ivalo, Finland         Malaga, Spain
                                                   Malaga, Spain            Paris, France
                                                                            Paris, France              Tallinn, Estonia
                                                                                                       Tallinn, Estonia
Ekaterinburg,  Russian Fed. Joensuu, Finland       Malta, Malta             Phuket, Thailand           Tampere, Finland
                                                                                                                                  Exhibit JA-2

                                       Airports Served In 2008:                                                                   Page 7 of 7




Abu Dhabi, UAE           Bahrain, Bahrain     Dammam, Saudi Arabia        Khartoum, Sudan          Mumbai, India             Tashkent, Uzbekistan
Aden, Yemen              Bangkok, Thailand    Delhi, India                Kiev, Ukraine            Munich, Germany           Tel Aviv, Israel
Al Ain, UAE              Barcelona, Spain     Detroit, MI                 Kuwait, Kuwait           Muscat, Oman              Tripoli, Libya
Aleppo, Syria
Aleppo Syria             Beirut Lebanon
                         Beirut, Lebanon      Doha, Qatar
                                              Doha Qatar                  Larnaca Cyprus
                                                                          Larnaca, Cyprus          New York, NY
                                                                                                   New York NY               Tunis Tunisia
                                                                                                                             Tunis, Tunisia
Alexandria, Egypt        Berlin, Germany      Dubai, United Arab Emirates London, United Kingdom   Paris, France             Vienna, Austria
Amman, Jordan            Budapest, Hungary    Frankfurt, Germany          Madinah, Saudi Arabia    Paris, France             Zurich, Switzerland
Amsterdam, Netherlands   Cairo, Egypt         Geneva, Switzerland         Madrid, Spain            Riyadh, Saudi Arabia
Aqaba, Jordan            Chicago, IL          Hong Kong, China            Milan, Italy             Rome, Italy
Ashgabat, Turkmenistan   Colombo, Sri Lanka   Istanbul, Turkey            Montreal, Canada         Sanaa, Yemen
Athens, Greece
Athens Greece            Damascus Syria
                         Damascus, Syria      Jeddah, Saudi Arabia
                                              Jeddah Saudi Arabia         Moscow, Russia
                                                                          Moscow Russia                    El Sheik, Egypt
                                                                                                   Sharm El Sheik Egypt
                                                   Exhibit JA-3
                                                   Page 1 of 2


Transatlantic Operations: American/British Airways/Iberia
                    Source:   OAG (Summer 2008)
                                                                                                         Exhibit JA-3
                                                                                                         Page 2 of 2


Transatlantic Operations: American/British Airways/Iberia
                                            Source:           OAG (Summer 2008)
                 City-Pair                    Operator                              City-Pair            Operator

              Atlanta-London                    BA                              Miami-London        AA     BA

             Baltimore-London                   BA                                Miami-Madrid      AA              IB

              Boston-London            AA       BA                                 Miami-Paris      AA

               Boston-Madrid                             IB                    Montreal-London             BA

                Boston-Paris           AA                                    New York-Barcelona     AA

              Calgary-London                    BA                            New York-Brussels     AA

             Chicago-Brussels          AA                                     New York-London       AA     BA

                   g
              Chicago-Dublin           AA                                      New York-Madrid                      IB

             Chicago-Frankfurt         AA                                       New York-Milan      AA

             Chicago-London            AA       BA                             New York-Paris       AA     BA

              Chicago-Madrid                             IB                    New York-Rome        AA

            Chicago-Manchester         AA                                      New York-Zurich      AA

             Chi     M
             Chicago-Moscow            AA                                      Orlando-London
                                                                               Ol d L d                    BA

               Chicago-Paris           AA                                    Philadelphia-London           BA

               Chicago-Rome            AA                                      Phoenix-London              BA

         Dallas/Fort Worth-Frankfurt   AA                                    San Francisco-London          BA

         Dallas/Fort Worth-London      AA       BA                             San Juan-Madrid                      IB

          Dallas/Fort Worth-Paris      AA                                       Seattle-London             BA

              Denver-London                     BA                                Tampa-London             BA

              Houston-London                    BA                             Toronto-London              BA

           Los Angeles-London          AA       BA                            Vancouver-London             BA

            Mexico City-London                  BA                            Washington-London            BA

            Mexico City-Madrid                           IB                   Washington-Madrid                     IB




*Bold indicates nonstop overlaps
                                                                                                Exhibit JA-4
                                                                                              PUBLIC VERSION

                            The Proposed Transaction

Multilateral Coordination Agreement                           •An agreement among AA, BA, IB, AY and RJ
                                                              creating integration among the four bilateral
  Bilateral Alliance Agreements                               alliance agreements

     Bilateral Alliance Agreements                         •Four agreements (AA/BA, AA/IB, AA/AY and
                                                           AA/RJ) providing for standard alliance
                       g        (“JBA”)
       Joint Business Agreement (     )
                                                               di ti
                                                           coordination




       •The JBA will create metal neutrality – an essential ingredient for
       maximizing the consumer benefits made possible by alliances
                                                                                       Exhibit JA-5
                                                                                     PUBLIC VERSION

                Revenue Sharing Creates Metal Neutrality

                                                        •   For example, AA operates behind-
            Key 
                                                            gateway service from Key West, FL
            W t
            West    Mi i
                    Miami              M d id
                                       Madrid               (EYW) to Miami (MIA)
Current




          Metal    EYW‐MIA   MIA‐MAD    Revenue Split
                                                             – Without a joint venture, AA and IB
          AA        6.8%      93.2%     100% to AA             each has an incentive to connect
                                                               traffic  t its      fli ht between
                                                               t ffi onto it own flight b t
          AA        6.8%                6.8% to AA
          IB                  93.2%     93.2% to IB
                                                               Miami and Madrid (MAD)




            Key 
            West    Miami              Madrid

          Metal    EYW‐MIA   MIA‐MAD    Revenue Split
JBA




                                                             – The JBA makes AA and IB
           AA
                                                               economically indifferent as to
                                                               which airline the customer selects
           AA
           IB
                                                                               Exhibit JA-6


    The Importance Of Interalliance Competition

•   The Department has frequently
    stated that vibrant interalliance
    competition is vital to the success
    of its Open Skies policy
                                          “Any consumer benefits created by a large
•   Industry data supports this                                                       Star’s
                                          multilateral immunized alliance such as Star s
                                          are likely to be greater in the face of the
    conclusion as well:                   enhanced competition made possible by a
     – Immunized membership in            more open air services agreement between the
        global alliances is lopsided      U.S. and Europe” Star (DOT-OST-2005-22922,
        toward Star and SkyTeam           Order 2006-12-17, p. 9)

     – Star and SkyTeam have larger       “We share American’s concern about the
        transatlantic booking shares      importance of enhanced competition. Our
        and market strength across        analysis indicates that the proposed alliance
        huge portions of their networks
           g p                            will maintain or gain a large share of several
                                                t    i      k t ” SkyTeam II (DOT OST
                                          country-pair markets” Sk T         (DOT-OST-
     – As a result, the positive fare     2007-28644, Order 2008-4-17, p. 12)
        trends DOT found in 2000 have
        been reversed by the lack of
        interalliance competition
                                                              Exhibit JA-7

       oneworld Currently Lacks Meaningful Transatlantic
                      Antitrust Immunity




Immunized with:           Immunized with:   Immunized with:




              (Pending)
                                                                                          Exhibit JA-8
    Star And SkyTeam Have Consolidated And Entrenched
                Positions Throughout Europe
                               g         p

•    Star’s existing 9-way antitrust
     immunity allows coordination at
     ten European hubs, including
     major connecting operations at:
       – Frankfurt/Munich (UA/LH)                                       Stockholm
                                                            Oslo
       – London (UA/BD)                                                                Helsinki

       – Zurich (UA/LX)
                                                                       Copenhagen


•    SkyTeam’s existing 6-way                           AMSTERDAM

     antitrust immunity allows                  LONDON
                                                                                                  Warsaw
                                                                   FRANKFURT
          di ti    t fi E
     coordination at five European
                                                                                 Prague
     hubs, including major
                                                PARIS                               Vienna
     connecting operations at:                                     MUNICH

      – Paris (DL/NW/AF)                                                 Milan
                                                          ZURICH
      – Amsterdam (DL/NW/KL)
      – Rome (DL/AZ)                                                 ROME


                                       Lisbon
•    oneworld’s existing antitrust
     immunity between American
     and Finnair does not allow for
     connecting operations, as AA
     does not fly to Helsinki
                                                                                       Exhibit JA-9
        oneworld Has Fallen Far Behind Star And SkyTeam In
                          Booking Share
                                 g
•      When all alliance members are counted, CO’s              U.S.-EU ATI Booking Shares
       switch to Star gives it a commanding lead in U.S.-          (Currently Immunized)
       EU bookings (41%) compared to SkyTeam (28%)
       and oneworld (21%)

                                                                                 27%             Star
•      The disparity is even greater when members of the          37%                            SkyTeam
       alliance with transatlantic antitrust immunity are                                        oneworld
       counted, as Star (27%) and SkyTeam (28%) dwarf
                                                                                 28%             Other
       oneworld (8%)                                                  8%
        – The proposed alliance will restore some
             balance, bringing oneworld up to 21%



                      U.S.-EU Booking Share
                                                                U.S.-EU ATI Booking Shares
                Source: MIDT (Year Ended May 2008)                 (Current Applications)
                 All Members          Immunized Members
               Current   CO In    Current    CO In   oneworld         16%
                         Star                Star       ATI                                      Star
                                                                                 35%             SkyTeam
        Star    33%      41%        27%       35%      35%
                                                                21%                              oneworld
    SkyTeam     36%      28%        28%       28%      28%
                                                                                                 Other
                                                                           28%
    oneworld    21%      21%        8%        8%       21%
      Other     10%      10%        37%       29%      16%
                                                                                                       Exhibit JA-10
                                                                                                       Page 1 of 2


Star And SkyTeam Have A Duopoly Position For Nearly
          Half Of All U.S.-Europe Bookings
•   Star and SkyTeam have a combined                  U.S.-Europe City-Pairs And Bookings By
                                     31 141
    market share of 80% or more in 31,141                     Alliance Booking Share
    city-pairs accounting for nearly half of all                 Source: MIDT (Year Ended May 2008)

    U.S.-Europe bookings                                                    Booking Share Threshold
     – This duopoly has a combined                                           (All Alliance Members)
         market share of 95% or more in                                        80% +                  95% +
         25,958 city-pairs accounting for
         nearly 1 in 5 U.S.-Europe bookings        Star + SkyTeam
                                                    City-Pairs                  31,141                 25,958
                                                    Bookings                  13,465,226              5,655,153
                                                    % of Total Bookings         45.7%                   19.2%
•   Either Star or SkyTeam has a market
    share of 80% or more on 20,919 city pairs      Star
                                                    City-Pairs                  12,160                 9,020
    accounting for over 1 in 7 U.S-Europe           Bookings                   3,298,745              514,539
    bookings                                        % of Total Bookings          11.2%                 1.7%

     – By contrast – the proposed alliance         SkyTeam
                                                       y
                                                    City-Pairs                    ,
                                                                                 8,759                  ,
                                                                                                       6,561
         would have a market share of 80%           Bookings                   1,001,453              106,843
         or more on just 2,048 city pairs           % of Total Bookings          3.4%                  0.4%
         accounting for just 1 in 83 U.S.-         oneworld
         Europe bookings                            City-Pairs                   2,048                 1,655
                                                    Bookings                    353,458                15,899
                                                    % of Total Bookings          1 2%
                                                                                 1.2%                   0.1%
                                                                                                        0 1%
                                                                                                               Exhibit JA-10
                                                                                                               Page 2 of 2


Star And SkyTeam Have A Duopoly Position For
    Nearly Half Of All U.S.-Europe Bookings
    U.S.-Europe City-Pairs With High Alliance By                    % Of U.S.-Europe Bookings In City Pairs With High
      % Of U.S.-Europe City-Pairs And Bookings
                                                                                Alliance Booking Shares
              Alliance Booking Share
                    Booking Shares
                                                                           Source: MIDT (Year Ended May 2008)
             Source: MIDT (Year Ended May 2008)
              Source: MIDT (Year Ended May 2008)
90.00%                                                         50.00%
                         Booking Share Threshold               45.00%
80.00%
                          (All Alliance Members)
                                                               40.00%
70.00%
70 00%                      80% +                  95% +
                                                               35.00%
60.00%SkyTeam
Star +
 City-Pairs                  31,141                 25,958     30.00%
 Bookings
50.00%                     13,465,226              5,655,153
 % of Total Bookings         45.7%                   19.2%
                                                               25.00%
Star
40.00%
 City-Pairs                  12,160                 9,020      20.00%
 Bookings                   3,298,745              514,539
30.00%
 % of Total Bookings          11.2%                 1.7%       15.00%
SkyTeam
20.00%
    y
 City-Pairs                   8,759
                               ,                    6,561
                                                     ,         10.00%
 Bookings                   1,001,453              106,843
10.00%                                                          5.00%
 % of Total Bookings          3.4%                  0.4%
oneworld
 0.00%                                                          0.00%
 City-Pairs                   2,048             1,655
                80%+ Share              95%+ Share                            80%+ Share                95%+ Share
 Bookings                    353,458            15,899
 % of Total Bookings          1.2%
                              1 2%               0.1%
                                                 0 1%
         Star+SkyTeam    Star    SkyTeam   oneworld                     Star+SkyTeam    Star   SkyTeam      oneworld
                                                                                                  Exhibit JA-11


Market Share Data Supports Conclusions About The Need
             For Interalliance Competition
                                                                       Percentage Point Difference:
•   DOT compared 1996 and 1999 O&D Survey data to
                                                          Fares In Transatlantic Open Skies City-Pairs vs. Fares
    quantify the benefits created by open skies and
                                                                                      p            y
                                                               In Transatlantic Non-Open Skies City-Pairs
    immunized alliances
                                                                            Source: O&D Survey
      – DOT showed that fares in open skies city-           30
         pairs were outperforming those in non-open
                                                            25
         skies city-pairs
                                                            20
•   In 2005 Th B ttl G              d t d thi t d i
    I 2005, The Brattle Group updated this study in         15
    the SkyTeam docket (DOT-OST-2004-19214)
    comparing 1999 and 2004 O&D Survey data                 10
      – Brattle found that the trends shown in DOT’s         5
          study had been reversed
                                                             0
          Brattle l improved upon DOT’ study at
      – B ttl also i             d      DOT’s t d t                                                 1999 vs. 1996
          DOJ’s suggestion by performing a regression       -5                                      2005 vs. 1999
          analysis
                                                           -10
            • This regression analysis supported
                Battle’s initial conclusion                -15

                                                           -20
•   The following year, Brattle used 2005 O&D Survey
    data in the Star docket (DOT-OST-2005-22922) to
    confirm that its conclusion in SkyTeam was
    accurate
     – Brattle did not argue that alliances are bad for
          consumers; to the contrary, Brattle’s
          conclusion was that more interalliance
          competition is necessary
                                                                                                       Exhibit JA-12

    The Proposed Alliance Will Create Some Competitive
                    Balance In Europe
•    The proposed alliance will make
     London Europe’s first hub with
     two competing immunized
     networks
      – oneworld: AA/BA                                                              Stockholm
                                                                      Oslo
      – Star: UA/BD                                                                                 Helsinki



                                                                                    Copenhagen
•    The AA/IB alliance in Madrid will
                                                           LONDON
     be able to expand service at one                               Amsterdam
     of Europe’s few airports with
                                                                                                               Warsaw
                                                                              Frankfurt
     significant room for growth
                                                                                              Prague

                                                            PARIS                                Vienna
                                                                              MUNICH
•    While AA does not currently fly
     to Helsinki or Amman, the                                       Zurich           Milan
     closer integration and marketing
     support made possible by the
                                                                                 Rome
     proposed alliance increases the
                                                  Madrid
     likelihood of new U.S. flag         Lisbon
     service to those cities
                                                                                 Exhibit JA-13
                                                                                PUBLIC VERSION

    The Consumer Benefit From Just Four Potential New
     T     tl ti R t I N         l      Milli A      ll
     Transatlantic Routes Is Nearly $50 Million Annually
•   The Brattle Group calculated the
                                                  Consumer Benefits From Potential New
    consumer benefits generated by
                        g            y                   Transatlantic Routes
    new service on just four potential      $50,000,000
    point-to-point transatlantic routes:
                                            $45,000,000

                                            $40,000,000
                                            $40 000 000

                                            $35,000,000

                                            $30,000,000


•   The Brattle Group estimated the         $25,000,000

    change in average fare and              $20,000,000
    stimulation of additional traffic and
    found $46.5 million in consumer         $15,000,000

    benefits
                                            $10,000,000

                                             $5,000,000

                                                    $0
                                                                                                 Exhibit JA-14
                                                                                                 Page 1 of 9

  The Proposed Alliance Creates New Behind/Beyond
                    Connectivity
                    C       ti it

New Integrated ATI City‐Pairs                             New Codeshare City Pairs
  185 Unique                      207 Unique               104 Unique                     143 Unique
      AA                               216
                                  BA/IB/AY/RJ                  AA                              216
                                                                                          BA/IB/AY/RJ
    Cities                          Unique 
                                    Cities                   Cities                         Unique 
                                                                                            Cities
I North/South
In N th/S th                   I Europe/Middle
                               In E / / //Middl
                                  BA/IB/AY/M             In N th/S th
                                                         I North/South                 In E / / //Middl
                                                                                       I Europe/Middle
                                                                                          BA/IB/AY/M
   America                        East/Africa               America                       East/Africa
                                    A/RJ Cities                                            A/RJ Cities




          38 295
    Up To 38,295 New                                              14 872
                                                            Up To 14,872 New
     Integrated ATI                                            Codeshare
       City Pairs
       City-Pairs*                                             City-Pairs*
                                                               City Pairs
*Assumes full liberalization. 34,216 under current air   *Assumes full liberalization. 12,524 under current air
services agreements                                      services agreements
                                                                                                                      Exhibit JA-14
                                                                                                                      Page 2 of 9

     Enhanced Codesharing Will Expand Transatlantic
                Service For Consumers
                S   i F C

•   AA, BA and IB currently codeshare                                           300

         limited b i
    on a li it d basis
     – AA currently places its code on                                          250
        flights to 64 BA/IB destinations




                                                                      nations
     – BA currently py places its code on




                                             Number of Codeshare Destin
                                                                                200




                                                                                                  Up 106%
        flights to 115 AA/IB destinations
     – IB currently places its code on




                                                                                          23%
        flights to 59 AA/BA destinations                                        150




                                                                                                                 1%
                                                                                                                          JBA




                                                                                                  U


                                                                                                            Up 331
                                                                                      Up 22
                                                       C
                                                                                                                          Currently

•   The JBA will fully integrate the three                                      100

    networks, making it feasible for:
     – AA to place its code on flights                                           50
        to 143 new destinations
     – BA to place its code on flights
                                                                                  0
        to 122 new destinations                                                       AA          BA        IB
     – IB to place its code on flights to                                                       Airline
        195 new destinations
                                                                                                                                                                            Exhibit JA-14
                                                                                                                                                                            Page 3 of 9
             The Joint Applicants Will Add Or Enhance AA Service
                              To 207 EMEA Cities
AAL   Aalborg, Denmark                   CTA   Catania, Italy                    JER   Jersey Channel Is., UK              MCT   Muscat, Oman                        SRP   Stord, Norway
AAR   Aarhus, Denmark                    CHQ   Chania Crete, Greece              JOE   Joensuu, Finland                    NBO   Nairobi, Kenya                      SYY   Stornoway, Scotland
ABZ   Aberdeen, Scotland UK              CFE   Clermont-Ferrand, France          JNB   Johannesburg, (Tambo) So.           NTE   Nantes, France                      SXB   Strasbourg, France
AUH   Abu Dhabi, U.A. Emirates           CPH   Copenhagen, Denmark                     Africa                              NAP   Naples, Italy                       STR   Stuttgart, Germany
ABV   Abuja, Nigeria                     DKR   Dakar, Senegal                    JYV   Jyvaskyla, Finland                  NCL   Newcastle, England                  NTY   Sun City, South Africa
ACC   Accra, Ghana                       DAM   Damascus, Syria                   KAJ   Kajaani, Finland                    NQY   Newquay/Cornwall, England           TLL   Tallinn, Estonia
ADE   Aden, Yemen                        DMM   Damman, Saudi Arabia              KAU   Kauhava, Finland                    NCE   Nice, France                        TNG   Tangier, Morocco
AAN   Al Ain, U.A. Emirates              DAR   Dar Es Salaam, Tanzania           KRT   Khartoum, Sudan                     OLB   Olbia, Italy                        TLV   Tel Aviv, (Ben Gurion) Israel
ABC   Albacete, (Los Llanos) Spain       DOH   Doha, Qatar                       KBP   Kiev, (Borispol) Ukraine            OSL   Oslo, Norway                        TFN   Tenerife, (Norte) Canary Is.
ALP   Aleppo, Syria                      DRS   Dresden, Germany                  KOI   Kirkwall Orkney Is., Scotland       OSD   Ostersund, Sweden                   TFS   Tenerife, (Sofia) Canary Is.
ALY   Alexandria, (El Nozha) Egypt       DXB   Dubai, U.A. Emirates              KTT   Kittila, Finland                    OUL   Oulu, Finland                       SKG   Thessaloniki, Greece
ALG   Algiers, Algeria                   DBV   Dubrovnik, Croatia                KOK   Kokkola/Pietarsaari, Finland        PMO   Palermo, Italy                      TIA   Tirana, Albania
ALC   Alicante, Spain                    DUR   Durban, South Africa              KRK   Krakow, (Balice Intl) Poland        PMI   Palma Mallorca, Spain               TRE   Tiree, Scotland
LEI   Almeria, Spain                     DUS   Dusseldorf, Germany               KUO   Kuopio, Finland                     PNA   Pamplona, Spain                     TLS   Toulouse, France
AMM   Amman, Jordan                      EDI   Edinburgh, Scotland               KAO   Kuusamo, Finland                    PFO   Paphos, Cyprus                      TIP   Tripoli, Libya
AMS   Amsterdam, Netherlands             EBB   Entebbe/Kampala, Uganda           KWI   Kuwait City, Kuwait                 PSA   Pisa, (Galileo) Italy               TUN   Tunis, Tunisia
AYT   A t l T k
      Antalya, Turkey                    FAO   F      Portugal
                                               Faro, P t l                       LCG   L C
                                                                                       La Coruna, S iSpain                 PDL   Ponta D l d A
                                                                                                                                 P t Delgada Azores, P t lPortugal   TRN   T i It l
                                                                                                                                                                           Turin, Italy
AQJ   Aqaba, Jordan                      FEZ   Fez, Morocco                      LOS   Lagos, Nigeria                      OPO   Porto, Portugal                     TKU   Turku, Finland
OVD   Asturias, Spain                    FUE   Fuerteventura, Canary Is.         ACE   Lanzarote, Canary Is.               POZ   Poznan, Poland                      VAA   Vaasa, Finland
ATH   Athens, Greece                     FNC   Funchal Maderia, Portugal         LCA   Larnaca, Cyprus                     PRG   Prague, Czech Rep.                  VLC        Valencia, Spain
BJZ   Badajoz, Spain                     GDN   Gdansk, Poland                    LPA   Las Palmas, Canary Is.              PRN   Pristina, Serbia                    VLL   Valladolid, Spain
BAH   Bahrain                            GVA   Geneva, Switzerland               LEN   Leon, Spain                         PLZ   Pt. Elizabeth, South Africa         VAR   Varna, Bulgaria
BRI   Bari, Italy                        GOA   Genoa, Italy                      LIL   Lille, France                       RNS   Rennes, France                      VCE   Venice, Italy
BRR   Barra Hebrides Is., Scotland       GRJ   George, South Africa              LIS   Lisbon, Portugal                    KEF   Reykjavik, Iceland                  VRN   Verona, Italy
BSL        Basel, Switzerland            GIB   Gibraltar                         LVI   Livingstone, Zambia                 RHO   Rhodes, Greece                      VFA   Victoria Falls, Zimbabwe
BEY   Beirut, Lebanon                    GLA   Glasgow, Scotland                 LJU   Ljubljana, Slovenia                 RIX   Riga, Latvia                        VIE   Vienna, Austria




                                                                                                                             %
                                                                                                                       Up 261%
BEG   Belgrade, Serbia                   GOT   Gothenburg, (Landvetter) Sweden   RJL   Logrono, Spain                      RMI   Rimini, Italy                       VGO   Vigo, Spain
BEB   Benbecula Hebrides Is., Scotland   GRX   Granada, Spain                    LDY   Londonderry, N. Ireland             RUH   Riyadh, Saudi Arabia                VNO   Vilnius, Lithuania
BGO   Bergen, Norway                     HAM   Hamburg(Fuhlsbuettel)             LAD   Luanda, Angola                      RVN   Rovaniemi, Finland                  VIT   Vitoria, Spain
TXL   Berlin, (Tegel) Germany                  Germany                           LUN   Lusaka, Zambia                      SLM   Salamanca, Spain                    WAW   Warsaw, (F. Chopin) Poland
BRN   Berne, Switzerland                 HRE   Harare, Zimbabwe                  LUX   Luxembourg                          SZG   Salzburg, Austria                   WIC   Wick, Scotland
BIO   Bilbao, Spain                      HEL   Helsinki, Finland                 LYS   Lyon, (St. Exupery) France          EAS   San Sebastian, Spain                WDH   Windhoek, Namibia
BLL   Billund, Denmark                   HER   Heraklion, Greece                 MED   Madinah, Saudi Arabia               SAH   Sanaa, Yemen                        ZAZ   Zaragoza, Spain
BFN   Bloemfontein, South Africa         HRG   Hurghada, Egypt                   SSG   Malabo, Equatorial Guinea           SPC   Santa Cruz La Palma, Canary Is.
BLQ   Bologna, Italy                     IBZ   Ibiza, Spain                      AGP   Malaga, Spain                       SDR   Santander, Spain
BOD   B d
      Bordeaux, F   France               INN   Innsbruck, Austria
                                               I b k A ti                        MLA   M lt
                                                                                       Malta                               SCQ   Santiago De Compostela, S i
                                                                                                                                 S ti        D C        t l Spain
OTP   Bucharest, (Otopeni) Romania       INV   Inverness, Scotland               RAK   Marrakech, Morocco                  SJJ   Sarajevo, Bosnia & Herzegovina
BUD   Budapest, Hungary                  ILY   Islay, Scotland                   MRS   Marseille, France                   SVL   Savonlinna, Finland
RGS   Burgos, Spain                      IOM   Isle of Man, UK                   MRU   Mauritius                           SVQ   Sevilla, Spain
CAG   Cagliari, Italy                    IST   Istanbul, (Ataturk) Turkey        MLN   Melilla, Spain                      SSH   Sharm El Sheikh, Egypt
CAI   Cairo, Egypt                       IVL   Ivalo, Finland                    MAH   Menorca, Spain                      LSI   Shetland Is., Scotland
CAL   Campbeltown, Scotland              ADB   Izmir, (Menderes) Turkey          MPL   Montpellier, France                 SOF   Sofia, Bulgaria
CPT   Cape Town, South Africa            JED   Jeddah, Saudi Arabia              MUC   Munich, Germany                     LED   St. Petersburg, Russian Fed.
CMN   Casablanca, Morocco                XRY   Jerez De La Frontera, Spain       MJV   Murcia, Spain                       ARN   Stockholm, (Arlanda) Sweden




  *Bold indicates existing codeshare city
                                                                                                                    Exhibit JA-14
                                                                                                                    Page 4 of 9
                            BA’s Network Will Have Added Or
                                                   U.S.
                           Enhanced Service To 135 U S Cities
ABI      Abilene, TX                  EVV   Evansville, IN               LSE   La Crosse, WI              RST   Rochester, MN
ABQ      Albuquerque, NM              EYW   Key West, FL                 MAF   Midland/Odessa, TX         RSW   Ft. Myers, FL
ACT      Waco, TX                     FAT   Fresno, CA                   MCI   Kansas City, MO            SAN   San Diego, CA
AEX      Alexandria, LA               FLL   Ft. Lauderdale, FL           MDT   Harrisburg, PA             SAT   San Antonio, TX
ALB      Albany, NY                   FNT   Flint, MI                    MEM   Memphis, TN                SAV   Savannah/Hilton Head, GA
AMA      Amarillo,
         Amarillo TX                  FSM   Ft Smith AR
                                            Ft. Smith,                   MFE   McAllen TX
                                                                               McAllen,                   SBA          Barbara,
                                                                                                                Santa Barbara CA
ANC      Anchorage, AK                FWA   Ft. Wayne, IN                MKE   Milwaukee, WI              SBP   San Luis Obispo, CA
AUS      Austin, TX                   GGG   Longview, TX                 MLI   Moline, IL                 SDF   Louisville, KY
AZO      Kalamazoo, MI                GJT   Grand Junction, CO           MLU   Monroe, LA                 SGF   Springfield, MO
BDL      Hartford, CT                 GPT   Gulfport/Biloxi, MS          MOB   Mobile, AL                 SHV   Shreveport, LA
BHM      Birmingham, AL               GRB   Green Bay, WI                MQT   Marquette, MI              SJC   San Jose, CA
BMI      Bloomington, IL              GRK   Killeen Gray AAF, TX         MRY   Monterey, CA               SJT   San Angelo, TX
BNA      Nashville, TN                GRR   Grand Rapids, MI             MSN   Madison, WI                SJU   San Juan, Puerto Rico
BTR      Baton Rouge, LA              GSO   Greensboro/Win-Salem, NC     MSP   Minneapolis/St. Paul, MN   SLC   Salt Lake City, UT
BUF      Buffalo, NY                  GSP   Greenville/Spartanburg, SC   MSY   New Orleans, LA            SMF   Sacramento, CA
BUR      Burbank, CA                  GUC   Gunnison, CO                 MTJ   Montrose, CO               SNA   Santa Ana, CA
CAE      Columbia, SC                 HDN   Steamboat Springs, CO        OAK   Oakland, CA                SPI   Springfield, IL
CHA      Chattanooga, TN              HNL   Honolulu Oahu, HI            OGG   Kahului Maui, HI           SPS   Wichita Falls, TX
CHS      Charleston, SC               HPN   Westchester Co., NY          OKC   Oklahoma City, OK          SRQ   Sarasota/Bradenton, FL
CID      Cedar Rapids/Iowa City, IA   HSV   Huntsville/Decatur, AL       OMA   Omaha, NE                  STL   St. Louis, MO
CLE      Cleveland,
         Cleveland OH                 ICT   Wichita KS
                                            Wichita,                     ONT   Ontario CA
                                                                               Ontario,                   STT   St. Thomas,
                                                                                                                St Thomas US Virgin Is   Is.
CLL      College Station, TX          IND   Indianapolis, IN             ORF   Norfolk/Va.Bch/Wmbg, VA    STX   St. Croix, US Virgin Is.
CLT      Charlotte, NC                JAC   Jackson, WY                  PBI   West Palm Beach, FL        SYR   Syracuse, NY
CMH      Columbus, OH                 JAN   Jackson-Evers, MS            PDX   Portland, OR               TLH   Tallahassee, FL
CMI      Champaign, IL                JAX   Jacksonville, FL             PIA   Peoria, IL                 TOL   Toledo, OH
COS      Colorado Springs, CO         KOA   Kona Hawaii, HI              PIT   Pittsburgh, PA             TUL   Tulsa, OK
CRP      Corpus Christi, TX           LAS   Las Vegas, NV                PNS   Pensacola, FL              TUS   Tucson, AZ
CVG      Cincinnati, OH               LAW   Lawton, OK                   PSP   Palm Springs, CA           TVC   Traverse City, MI
CWA      Wau (Central) WI             LBB   Lubbock, TX                  PVD   Providence, RI             TXK   Texarkana, AR
DAY      Dayton, OH                   LEX   Lexington, KY                RDU   Raleigh/Durham, NC         TYR   Tyler, TX
DBQ      Dubuque, IA                  LFT   Lafayette, LA                RIC   Richmond/Wmbg, VA          TYS   Knoxville, TN
DSM      Des Moines, IA               LIH   Lihue Kauai, HI              RNO   Reno, NV                   VPS   Ft. Walton Beach, FL
EGE      Vail/Eagle, CO               LIT   Little Rock, AR              ROC   Rochester, NY              XNA   Fayetteville, AR
ELP      El Paso, TX                  LRD   Laredo, TX                   ROW   Roswell, NM




 *Bold indicates existing codeshare city
                                                                                                     Exhibit JA-14
                        BA’s Network Will Have Added Or                                              Page 5 of 9

                       Enhanced Service To 62 International
                          North/South American Cities
                                          FPO   Freeport, Bahamas               PUJ   Punta Cana, Dominican Rep.
   ACA     Acapulco, Mexico               GDL            j
                                                Guadalajara, Mexico             PVR   Puerto Vallarta, Mexico
   AGU     Aguascalientes, Mexico         GGT   George Town, Bahamas            SAL   San Salvador, El Salvador
   AUA     Aruba                          GUA   Guatemala City, Guatemala       SAP   San Pedro Sula, Honduras
   AXA     Anguilla, Leeward Is.          GYE   Guayaquil, Ecuador              SCL   Santiago, Chile
   AZS     Samana, Dominican Republic     LIM   Lima, Peru                      SDQ   Santo Domingo, Dominican Rep.
   BAQ     Barranquilla, Colombia         LIR   Liberia, Costa Rica             SJD   Los Cabos, Mexico
   BJX                  j     ,
           Leon/Guanajuato, Mexico        LPB   La Paz, Bolivia
                                                       ,                        SJO               ,
                                                                                      San Jose, Costa Rica
   BOG     Bogota, Colombia               LRM   Casa De Campo, Dominican Rep.   SKB   St. Kitts, Leeward Is.
   BON     Bonaire, Neth. Antilles        MAR   Maracaibo, Venezuela            SLP   San Luis Potosi, Mexico
   BZE     Belize City, Belize            MBJ   Montego Bay, Jamaica            SLU   St. Lucia, West Indies
   CCS     Caracas, Venezuela             MDE   Medellin, Colombia              STI   Santiago, Dominican Rep.
   CIW     Canouan Is., Windward Is.      MGA   Managua, Nicaragua              SXM   St. Maarten, Neth. Antilles
   CLO     Cali,
           Cali Colombia                  MHH   Marsh Harbour, Bahamas
                                                       Harbour                  TAM   Tampico,
                                                                                      Tampico Mexico
   CUN     Cancun, Mexico                 MTY   Monterrey, Mexico               TGU   Tegucigalpa, Honduras
   CUR     Curacao, Neth. Antilles        MVD   Montevideo, Uruguay             TRC   Torreon, Mexico
   CUU     Chihuahua, Mexico              NEV   Nevis, Leeward Is.              UIO   Quito, Ecuador
   CZM     Cozumel, Mexico                PAP   Pt. Au Prince, Haiti            VVI   Santa Cruz, Bolivia
   DOM     Dominica, West Indies          POP   Puerto Plata Dominican Rep.     YHZ   Halifax, Canada
   EIS                   Is
           Tortola/Beef Is., BVI          PTP   Pointe A Pitre Guadeloupe
                                                           Pitre,               YOW   Ottawa Canada
                                                                                      Ottawa,
   FDF     Ft. De France, Martinique      PTY   Panama City, Panama             ZIH   Ixtapa/Zihuatanejo, Mexico




*Bold indicates existing codeshare city
                                                                              Exhibit JA-14
                                                                              Page 6 of 9
                        BA’s Network Will Have Added Or
                       Enhanced Service To 40 EMEA Cities

   ABC       Albacete (Los Llanos) Spain   PNA   Pamplona Spain
   ACE       Lanzarote Canary Is.          RGS   Burgos Spain
   AGP       Malaga Spain                  RJL   Logrono Spain
   ALC       Alicante Spain                SCQ   Santiago De Compostela
   ALG       Algiers Algeria                     Spain
   BCN       Barcelona Spain               SDR   Santander Spain
   BIO       Bilbao Spain                  SLM   Salamanca Spain
   BJZ       Badajoz Spain                 SSG   Malabo Equatorial Guinea
   BOG       Bogota Colombia               SVQ   Sevilla Spain
   EAS       San Sebastian Spain           TFN   Tenerife(Norte) Canary Is.
   GRX       Granada Spain                 TFS   Tenerife(Sofia) Canary Is.
   IBZ       Ibiza Spain                   TNG   Tangier Morocco
   LCG       La Coruna Spain               VGO   Vigo Spain
   LEI       Almeria Spain                 VIT   Vitoria Spain
   LEN       Leon Spain                    VLC   Valencia Spain
   LIM       Lima Peru                     VLL   Valladolid Spain
   LIS       Lisbon Portugal               XRY   Jerez De La Frontera Spain
   MAH       Menorca Spain                 ZAZ   Zaragoza Spain
   MJV       Murcia Spain
   MLN       Melilla Spain
   OPO       Porto Portugal
   OVD       Asturias Spain
   PMI       Palma Mallorca Spain




*Bold indicates existing codeshare city
                                                                                                                  Exhibit JA-14
                           IB’s Network Will Have Added Or                                                        Page 7 of 9

                          Enhanced Service To 147 U.S. Cities
ABI      Abilene, TX                  EGE   Vail/Eagle, CO               LRD   Laredo, TX                 ROW   Roswell, NM
ABQ      Albuquerque, NM              ELP   El Paso, TX                  LSE   La Crosse, WI              RST   Rochester, MN
ACT      Waco, TX                     EVV   Evansville, IN               MAF   Midland/Odessa, TX         RSW   Ft. Myers(Sw Fl Reg.), FL
AEX      Alexandria, LA               EYW   Key West, FL                 MCI   Kansas City, MO            SAN   San Diego, CA
ALB      Albany, NY                   FAT   Fresno, CA                   MCO   Orlando, FL                SAT   San Antonio, TX
AMA      Amarillo TX
         Amarillo,                    FLL   Ft Lauderdale, FL
                                            Ft. Lauderdale               MDT   Harrisburg PA
                                                                               Harrisburg,                SAV                     Head,
                                                                                                                Savannah/Hilton Head GA
ANC      Anchorage, AK                FNT   Flint, MI                    MEM   Memphis, TN                SBA   Santa Barbara, CA
ATL      Atlanta, GA                  FSM   Ft. Smith, AR                MFE   McAllen, TX                SBP   San Luis Obispo, CA
AUS      Austin, TX                   FWA   Ft. Wayne, IN                MKE   Milwaukee, WI              SDF   Louisville, KY
AZO      Kalamazoo, MI                GGG   Longview, TX                 MLI   Moline, IL                 SEA   Seattle/Tacoma, WA
BDL      Hartford, CT                 GJT   Grand Junction, CO           MLU   Monroe, LA                 SFO   San Francisco, CA
BHM      Birmingham, AL               GPT   Gulfport/Biloxi, MS          MOB   Mobile, AL                 SGF   Springfield, MO
BMI      Bloomington, IL              GRB   Green Bay, WI                MQT   Marquette, MI              SHV   Shreveport, LA
BNA      Nashville,
         N h ill TN                   GRK   Kill
                                            Killeen G AAF TX
                                                    Gray AAF,            MRY   Monterey, CA
                                                                               M                          SJC   S Jose, CA
                                                                                                                San J
BTR      Baton Rouge, LA              GRR   Grand Rapids, MI             MSN   Madison, WI                SJT   San Angelo, TX
BUF      Buffalo, NY                  GSO   Greensboro/Win-Salem, NC     MSP   Minneapolis/St. Paul, MN   SLC   Salt Lake City, UT
BUR      Burbank, CA                  GSP   Greenville/Spartanburg, SC   MSY   New Orleans, LA            SMF   Sacramento, CA
BWI      Baltimore, MD                GUC   Gunnison, CO                 MTJ   Montrose, CO               SNA   Santa Ana, CA
CAE      Columbia, SC                 HDN   Steamboat Springs, CO        OAK   Oakland, CA                SPI   Springfield, IL
CHA      Chattanooga, TN              HNL   Honolulu Oahu, HI            OGG   Kahului Maui, HI           SPS   Wichita Falls, TX
CHS      Charleston,
         Charleston SC                HPN                   County,
                                            Westchester County NY        OKC              City
                                                                               Oklahoma City, OK          SRQ   Sarasota/Bradenton FL
                                                                                                                Sarasota/Bradenton,
CID      Cedar Rapids/Iowa City, IA   HSV   Huntsville/Decatur, AL       OMA   Omaha, NE                  STL   St. Louis, MO
CLE      Cleveland, OH                IAH   Houston, TX                  ONT   Ontario, CA                STT   St. Thomas, US Virgin Is.
CLL      College Station, TX          ICT   Wichita, KS                  ORF   Norfolk/Va.Bch/Wmbg, VA    STX   St. Croix, US Virgin Is.
CLT      Charlotte, NC                IND   Indianapolis, IN             PBI   West Palm Beach, FL        SYR   Syracuse, NY
CMH      Columbus, OH                 JAC   Jackson, WY                  PDX   Portland, OR               TLH   Tallahassee, FL
CMI      Champaign, IL                JAN   Jackson-Evers, MS            PHL   Philadelphia, PA           TOL   Toledo, OH
COS      Colorado Springs, CO         JAX   Jacksonville, FL             PHX   Phoenix, AZ                TPA   Tampa, FL
CRP      C       Ch i ti
         Corpus Christi, TX           KOA   K
                                            Kona Hawaii, HI
                                                   H     ii              PIA   P i IL
                                                                               Peoria,                    TUL   Tulsa,
                                                                                                                T l OK
CVG      Cincinnati, OH               LAS   Las Vegas, NV                PIT   Pittsburgh, PA             TUS   Tucson, AZ
CWA      Wau, (Central) WI            LAW   Lawton, OK                   PNS   Pensacola, FL              TVC   Traverse City, MI
DAY      Dayton, OH                   LAX   Los Angeles, CA              PSP   Palm Springs, CA           TXK   Texarkana, AR
DBQ      Dubuque, IA                  LBB   Lubbock, TX                  PVD   Providence, RI             TYR   Tyler, TX
DEN      Denver, CO                   LEX   Lexington, KY                RDU   Raleigh/Durham, NC         TYS   Knoxville, TN
DFW      Dallas/Ft. Worth, TX         LFT   Lafayette, LA                RIC   Richmond/Wmbg, VA          VPS   Ft. Walton Beach, FL
DSM      Des Moines, IA               LIH   Lihue Kauai, HI              RNO   Reno, NV                   XNA   Fayetteville, AR
DTW      Detroit, MI                  LIT   Little Rock, AR              ROC   Rochester, NY

 *Bold indicates existing codeshare city
                                                                                                                                   Exhibit JA-14
                                  IB’s Network Will Have Added Or                                                                  Page 8 of 9


                                Enhanced Service To 65 International
                                    North/South American Cities

                                         DOM    Dominica, West Indies           MTY   Monterrey, Mexico
                                                                                                 y                     TAM        p
                                                                                                                             Tampico, Mexico
ACA     Acapulco, Mexico                 EIS    Tortola/Beef Is., BVI           NAS   Nassau, Bahamas                  TGU   Tegucigalpa, Honduras
AGU     Aguascalientes, Mexico           FDF    Ft. De France, Martinique       NEV   Nevis, Leeward Is.               TRC   Torreon, Mexico
ANU     Antigua, West Indies             FPO    Freeport, Bahamas               PAP   Pt. Au Prince, Haiti             UVF   St. Lucia (Hewanorra) W. Indies
AUA     Aruba                            GCM    Grand Cayman Is., West Indies   PLS   Providenciales, Turks & Caicos   VVI   Santa Cruz, Bolivia
AXA     Anguilla, Leeward Is.            GDL    Guadalajara, Mexico             POP   Puerto Plata, Dominican Rep.     YHZ   Halifax, Canada
AZS     Samana, Dominican Republic       GGT    George Town, Bahamas            POS   Pt. of Spain, Trinidad           YOW   Ottawa, Canada
BAQ     Barranquilla, Colombia           GND    Grenada, Windward Is.           PTP   Pointe A Pitre, Guadeloupe       YUL   Montreal, Canada
BDA     Bermuda Bermuda
        Bermuda,                         GYE    Guayaquil Ecuador
                                                Guayaquil,                      PUJ           Cana
                                                                                      Punta Cana, Dominican Rep Rep.   YVR   Vancouver Canada
                                                                                                                             Vancouver,
BGI     Barbados                         KIN    Kingston, Jamaica               PVR   Puerto Vallarta, Mexico          YYC   Calgary, Canada
BJX     Leon/Guanajuato, Mexico          LIR    Liberia, Costa Rica             SAL   San Salvador, El Salvador        YYZ   Toronto, Canada
BON     Bonaire, Neth. Antilles          LPB    La Paz, Bolivia                 SAP   San Pedro Sula, Honduras         ZIH   Ixtapa/Zihuatanejo, Mexico
BZE     Belize City, Belize              LRM    Casa De Campo, Dom. Rep.        SJD   Los Cabos, Mexico
CIW     Canouan Is., Windward Is.        MAR    Maracaibo, Venezuela            SKB   St. Kitts, Leeward Is.
CLO     Cali, Colombia                   MBJ    Montego Bay, Jamaica            SLP   San Luis Potosi, Mexico
CUR     Curacao, Neth. Antilles          MDE    Medellin (Cordova) Colombia     SLU   St. Lucia, West Indies
CUU     Chihuahua, Mexico                MGA    Managua, Nicaragua              STI   Santiago, Dominican Rep.
CZM     Cozumel, Mexico                  MHH    Marsh Harbour, Bahamas          SXM   St. Maarten, Neth. Antilles




      *Bold indicates existing codeshare city
                                                                                                                      Exhibit JA-14
                                                                                                                      Page 9 of 9
                              BA’s Network Will Have Added Or
                             Enhanced Service To 42 EMEA Cities

AAL       Aalborg Denmark              DXB      Dubai U.A. Emirates
                                                Dubai U.A. Emirates          NQY      Newquay/Cornwall England UK
AAR       Aarhus Denmark               EDI      Edinburgh Scotland UK        OSL      Oslo Norway 
ABZ       Aberdeen UK                  GLA      Glasgow UK                   SIN      Singapore 
ARN       Stockholm(Arlanda) Sweden      GOT    Gothenburg(Landvetter) Sweden  SJJ    Sarajevo Bosnia & Herzegovina
BCN       Barcelona Spain                ILY    Islay Scotland UK              SRP    Stord Norway
BEB       Benbecula Hebrides Is. Scotland UK
                                         INV    Inverness Scotland UK          SYY    Stornoway Scotland UK
BGI       Barbados                       IOM    Isle of Man UK                 TRE    Tiree Scotland UK
BGO       Bergen Norway                  JER    Jersey Channel Is. UK          WAW    Warsaw Poland
BKK       Bangkok Thailand               KOI    Kirkwall Orkney Is. Scotland UKYUL    Montreal Canada 
BLL       Billund Denmark                LGW    London(Gatwick) UK           YVR      Vancouver Canada 
BRR       Barra Hebrides Is. Scotland UK LSI    Shetland Is.(Sumburgh) Scotland UK
                                                                              YYZ     Toronto Canada 
BSL       Basel Switzerland              MAD    Madrid Spain 
BUD       Budapest Hungary             MAN      Manchester UK 
CAL       Campbeltown Scotland UK
                                       NBO      Nairobi Kenya
CPH       Copenhagen(Intl) Denmark
DUB       Dublin Ireland               NCL      Newcastle UK 




   *Bold indicates existing codeshare city
                                                                                     Exhibit JA-15


    U.S.-LHR Flights Have Room For Connecting Traffic
           Despite Th Si Of Th Local Market
           D    it The Size  The L   lM k t
                                                       Bookings With Connections Beyond EU Hubs
                                                                By Home Market Alliance
•   Heathrow already accounts for                         Source: MIDT (Year Ended December 2007)
    more t       tl ti          ti
          transatlantic connecting
                                           3,500,000
    alliance traffic than Charles de
    Gaulle or Schiphol
                                           3,000,000
     – More than half of BA’s LHR
         bookings connect beyond           2,500,000
         London
                                           2,000,000

•         U.S.-EU
    With U.S. EU Open Skies and
    improved integration, oneworld will    1,500,000

    be able to connect even more traffic
    over Heathrow – perhaps even           1,000,000

    rivaling Star at Frankfurt
                                            500,000
      – AA’s connecting bookings
         through LHR have increased
                                                  0
         70% since 2004                                  CDG       AMS         LHR         FRA
                                                       (DL/AF)   (NW/KL)     (AA/BA)     (UA/LH)
                                                                                      Exhibit JA-16


     Madrid Has Great Potential To Expand oneworld’s
               Transatlantic Connectivity
               T      tl ti C        ti it

•   MAD is one of the few hub airports in the
                                                                Movements Per Hour – MAD
    EU with significant capacity for
                                                                   Actual vs. Capacity
    expansion
     – Recent infrastructure developments
        have increased capacity to 120
        aircraft movements per hour
                            p
                                                Capacity
•   IB has improved its beyond-MAD network
    over the past three years to 85
    destinations (with traffic up
    approximately 37%)
      – 58% of IB’s passengers on U.S.-MAD
         flights are connecting beyond MAD
                                                   ctua
                                                  Actual
•   An integrated oneworld will help IB
    facilitate further improvements at MAD to
    compete with Star and SkyTeam hubs
      – Two new connecting banks
      – E h         d d h i
          Enhanced codesharing                             60       80      100      120      140
                                                                              Exhibit JA-17


    The Consumer Benefits Of AA/BA/IB Behind/Beyond
       Codesharing A N     l      Milli A     ll
       C d h i Are Nearly $100 Million Annually
•   The Brattle Group analyzed
                                                   Consumer Benefits From Immunized
    transatlantic routes where AA                       AA/BA/IB Codesharing
    interlined traffic with BA and IB to   $100,000,000
    estimate the minimum level of
    consumer benefits associated with       $90,000,000

    enhanced behind/beyond y                                         AA/IB
                                            $80 000 000
                                            $80,000,000
    codesharing
                                            $70,000,000

•   The Brattle Group assumed a             $60,000,000
    17.45%
    17 45% fare reduction associated
                                            $50,000,000
    with immunized codesharing from
    Tom Whalen’s 2007 study                 $40,000,000             AA/BA
                                            $30,000,000
•   The Brattle Group conservatively
    estimated an annual $92.2 million       $20,000,000

    consumer benefit associated with
                                            $10,000,000
    AA/BA/IB antitrust immunity
     – This figure would rise with the              $0

        inclusion of AY/RJ in the
        analysis
                                                      Exhibit JA-18


                 Integrated Corporate Contracts
Corporate travel managers for
large global accounts want a                      Star and SkyTeam
single contract with immunized                    deliver this product
alliances and only one market                     given their broad
share target per route                            transatlantic
                                                  antitrust immunity




           COMPANY




     oneworld can offer only
     individual carrier deals that
     are stapled together and
     negotiated separately,
     resulting in conflicting market
     share targets
                                                                                                                            Exhibit JA-19



      Fare Combinability: an Example                                                                      LAX‐LHR           LHR‐LAX 
                                                                                                          (AA 134)
                                                                                                          (AA 134)          (BA 278)
                                                                                                                            (BA 278)


 Lowest    Los Angeles to London          Los Angeles to London            London to Los Angeles                               g
                                                                                                               London to Los Angeles
           H2                             NLX7E3U                          BFFNA                               QLXNCNAU
  Fares    One Way               $1,211   Round Trip              $418     One Way                   $1,215    Round Trip               $418




 Online           Passenger chooses between 2 AA                         Los Angeles to London            OR
                                                                                                               London to Los Angeles
                                                                         NLX7E3U                               QLXNCNAU
 Options            nonstops and 3 BA nonstops                                                     $418        Round Trip               $418
                                                                         Round Trip

                 Must fly both segments on either AA or BA                                                 Total Passenger Cost: $418


 Current:         Passenger chooses among 5 AA/BA                                                              London to Los Angeles
                                                                         Los Angeles to London             +
   Non-            nonstops but loses the lower fare                     H2                                    BFFNA
                                                                         One Way                 $1.211        One Way                 $1.215
Combinable
 Interline      Passenger flies AA one segment, BA the other
                                                                                                          Total P         C t $2 426
                                                                                                          T t l Passenger Cost: $2,426



 With ATI:        Passenger chooses from 5 oneworld                      Los Angeles to London            OR
                                                                                                               Los Angeles to London
                                                                                                                                       $209
                                                                                                                                       $
                                                                         NLX7E3U
                                                                                                  $209         QLXNCNAU
Combinable         nonstops and k
                       t              the lower f
                              d keeps th l      fare                                               $418        Round Trip               $418
                                                                         Round Trip
 Interline
                Passenger flies AA one segment, BA the other.                                              Total Passenger Cost: $418
                  Passenger pays ½ of each roundtrip ticket
                                                        Exhibit JA-20


       Metal Neutrality Will Create Incentives For Facility
                         Rationalization
                         R ti    li ti

LHR




                            120 minute T3/T5
                              connections



                                                     T1/T2 Will Become
                                                       Heathrow East
                                                      Terminal (HET)

   The JBA will create
 economic incentives for
  AA and BA to allocate
T3/T5 gates in a way that
 maximizes connectivity
 ma imi es connecti it
                                                                                       Exhibit JA-21



         a sat a t c Competition: 00 s 008
       Transatlantic Co pet t o 2002 vs. 2008


AA/BA II – 2002                                    oneworld - 2008
•   Bermuda II governed U.S.-UK aviation,          •   U.S.-EU Open Skies has replaced restrictive
    restricting access to Heathrow                     bilaterals, opening Heathrow to new entry

•   Secondary slot trading was not explicitly
    S     d      l     di               li i l     •   S
                                                       Secondary slot trading is now legal in the
                                                              d    l     di   i      l   li h
    allowed in the EU, but a 1999 High Court           EU, allowing new entrants to gain access
    decision approved the practice in the UK           through free market transactions

•   Immunized alliances were still in their        •   Immunized alliances are now fully matured;
    infancy; no evidence that interalliance slot       interalliance slot transfers are now
    transfers would take place                         commonplace

•   Facility constraints limited new entry at      •   Star and SkyTeam will have their own
    Heathrow b U.S. carriers
    H th       by U S      i                           t    i l t H th
                                                       terminals at Heathrow

•   AA/BA would have been the largest              •   Star and SkyTeam are now far larger than
    immunized alliance, creating fears that the        the proposed five-way alliance; oneworld
                                    p
    transaction could create market power                                     y         p
                                                       needs antitrust immunity to compete
                                                       effectively


                                                                                                    1
                                                                                                  Exhibit JA-22
                                                                                                  Page 1 of 2


The Proposed Alliance Will Not Reduce
Competition I The U.S.-Europe Market
C      titi In Th U S E        M k t
          U.S.-EU Booking Shares (Immunized Groupings)*
                        Source: MIDT (Year Ended March 2008)




                         24%
                        CO/US/
                        VS/OA
                                                                                               8%
                       Other
   28%
                                                22%
         DL/NW/AF/                                                                             12%
         KL/AZ/OK



                     UA/LH/AC/BD/LO/                                                           2%
                     LX/NZ/OS/SK/TP
                         27%



                                                                Carriers above 1% MIDT share listed in order of size
                          *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                                                       Exhibit JA-22
                                                                                                       Page 2 of 2

       U.S.-Europe Annual Passenger Bookings By Carrier
                                         Source: MIDT (Year Ended March 2008)


Code              Carrier            Bookings     Share        Code                  Carrier         Bookings     Share

DL            Delta Air Lines        3,586,829   12.17%         BD                British Midland     143,320     0.49%
BA                         y
              British Airways        3,129,596
                                     3 129 596   10 62%
                                                 10.62%         TP               TAP Air Portugal
                                                                                              g       139,329
                                                                                                      139 329     0 47%
                                                                                                                  0.47%
UA           United Air Lines        3,112,356   10.56%         OA               Olympic Airways      124,537     0.42%
LH              Lufthansa            2,779,675    9.43%         AC                 Air Canada         121,128     0.41%
AA          American Airlines        2,425,470    8.23%         MP               Martinair Holland    112,844     0.38%
CO          Continental Airlines     2,386,489
                                     2 386 489    8 10%
                                                  8.10%         SQ              Singapore Airlines
                                                                                   g p                96,887
                                                                                                      96 887      0 33%
                                                                                                                  0.33%
VS            Virgin Atlantic        1,574,318    5.34%         NZ               Air New Zealand      68,887      0.23%
AF              Air France           1,496,252    5.08%         AY                    Finnair         66,856      0.23%
US             US Airways            1,407,446    4.78%         GJ                    Eurofly         63,950      0.22%
 KL            y
         KLM Royal Dutch Airlines    1 190 128
                                     1,190,128    4 04%
                                                  4.04%         EK               Emirates Airlines    63,117
                                                                                                      63 117      0.21%
                                                                                                                  0 21%
NW          Northwest Airlines       1,187,566    4.03%         OK              CSA Czech Airlines    61,467      0.21%
AZ                Alitalia           788,974      2.68%         S4              Sata International    55,326      0.19%
 LX               Swiss              594,698      2.02%         MA               Malév Hungarian      45,130      0.15%
SK         Scandinavian Airlines     511 155
                                     511,155      1.73%
                                                  1 73%         DE                   Condor           30 993
                                                                                                      30,993      0.11%
                                                                                                                  0 11%
 IB                Iberia            482,341      1.64%         E0                 Eos Airlines       30,269      0.10%
LO          LOT Polish Airlines      352,861      1.20%         SN               Brussels Airlines    27,481      0.09%
 EI             Aer Lingus           324,070      1.10%         9W                 Jet Airways        25,213      0.09%
OS           Austrian Airlines       219 953
                                     219,953      0.75%
                                                  0 75%         TN                 Air Tahiti Nui     24 669
                                                                                                      24,669      0.08%
                                                                                                                  0 08%
 FI             Icelandair           186,251      0.63%         MH               Malaysia Airlines    23,817      0.08%
 AI              Air India           149,847      0.51%        Other                                  106,712     0.36%
 LT      LTU International Airways   144,954      0.49%        Total                                 29,463,161   100%
                                                                                          Exhibit JA-23
                                                                                          Page 1 of 9
The Proposed Alliance Will Not Reduce
  Competition I The U.S.-UK M k t
  C     titi In Th U S UK Market
      U.S.-UK Booking Shares (Immunized Groupings)
               Source: MIDT (Year Ended March 2008)




     34%                                                                               14%



                                        40%

                                                                                       26%

    12%


            14%



                                                   Carriers above 1% MIDT share listed in order of size

                  *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                                                            Exhibit JA-23
                                                                                                            Page 2 of 9

       U.S.-UK Annual Passenger Bookings By Carrier
                                       Source: MIDT (Year Ended March 2008)

Code            Carrier            Bookings     Share        Code                   Carrier               Bookings    Share

BA           British Airways       2,010,697    25.8%         IB                     Iberia                4,920      0.1%

VS           Virgin Atlantic        ,   ,
                                   1,411,476        %
                                                18.1%         MP                Martinair Holland           ,
                                                                                                           3,590         %
                                                                                                                      0.0%

AA         American Airlines       1,067,711    13.7%         SK              Scandinavian Airlines        3,280      0.0%

UA          United Air Lines       786,747      10.1%         GF                    Gulf Air               1,647      0.0%

CO        Continental Airlines     768,655      9.9%          PK        Pakistan International Airlines    1,493      0.0%
DL           Delta Air Lines       494,003      6.3%          AZ                     Alitalia              1,241      0.0%

US            US Airways           305,035      3.9%          EK                Emirates Airlines           842       0.0%

NW         Northwest Airlines      271,858      3.5%          AY                     Finnair                507       0.0%

BD       British Midland Airways   140,703      1.8%          SQ               Singapore Airlines           320       0.0%

 KL     KLM Royal Dutch Airlines   137,029      1.8%          DE                    Condor                  246       0.0%

 AI             Air India           73,982      0.9%          SN                Brussels Airlines           240       0.0%

NZ          Air New Zealand         56,305      0.7%          KE                Korean Air Lines            137       0.0%

AC            Air Canada            55,838      0.7%          LO               LOT Polish Airlines          125       0.0%

AF             Air France           41,717      0.5%          TS                   Air Transat              125       0.0%

LH             Lufthansa            36,859
                                    36 859      0 5%
                                                0.5%          Y2               Globespan Airways
                                                                                     p        y             113       0 0%
                                                                                                                      0.0%

 E0           Eos Airlines          30,119      0.4%          LT          LTU International Airways         107       0.0%

 EI            Aer Lingus           21,129      0.3%          TP                TAP Air Portugal            100       0.0%

MY           Maxjet Airways         18,747      0.2%          OS                Austrian Airlines            88       0.0%

 Y7             Silverjet           13,777      0.2%          AM                  Aeromexico                 48       0.0%

KU          Kuwait Airways          12,724      0.2%          9W                  Jet Airways                47       0.0%

 FI            Icelandair           9,845       0.1%         Other                                          280       0.0%

 LX              Swiss              5,042       0.1%         Total                                        7,789,494   100%
                                                                                          Exhibit JA-23
                                                                                          Page 3 of 9
The Proposed Alliance Will Not Reduce
 C     titi In Th U S S i M k t
 Competition I The U.S.-Spain Market
      U.S.-Spain Booking Shares (Immunized Groupings)
                  Source: MIDT (Year Ended March 2008)




            21%
                                                                                       9%


                                                                                       7%

                                        37%


    31%                                                                                21%
                    LH/UA/LX




                  11%



                                                   Carriers above 1% MIDT share listed in order of size

                  *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                                                           Exhibit JA-23
                                                                                                           Page 4 of 9

       U.S.-Spain Annual Passenger Bookings By Carrier
                                         Source: MIDT (Year Ended March 2008)

Code              Carrier            Bookings     Share        Code                    Carrier           Bookings    Share

 IB                Iberia            364,381      20.9%         SN                Brussels Airlines        795       0.0%

DL            Delta Air Lines           ,
                                     333,139          %
                                                  19.1%         AC                   Air Canada            711          %
                                                                                                                     0.0%
CO          Continental Airlines     175,478      10.1%         NZ                Air New Zealand          593       0.0%

AA           American Airlines       156,382      9.0%          OS                 Austrian Airlines       582       0.0%

US              US Airways           139,869      8.0%          AI                     Air India           434       0.0%
AF              Air France           132,560      7.6%          DE                     Condor              353       0.0%

BA            British Airways        118,256      6.8%          QR                  Qatar Airways          325       0.0%

LH              Lufthansa             87,130      5.0%          LO               LOT Polish Airlines       180       0.0%

 KL      KLM Royal Dutch Airlines     51,266      2.9%          AM                   Aeromexico            154       0.0%

UA           United Air Lines         44,414      2.6%          AB                    Air Berlin           137       0.0%

 LX                Swiss              39,331      2.3%          9W                   Jet Airways            84       0.0%

AZ                Alitalia            16,180      0.9%          TN                  Air Tahiti Nui          74       0.0%

TP           TAP Air Portugal         13,263      0.8%          KE                Korean Air Lines          45       0.0%

VS            Virgin Atlantic         13,086      0.8%          OK               CSA Czech Airlines         44       0.0%

 EI                    g
                Aer Lingus            12 768
                                      12,768      0 7%
                                                  0.7%          AT                 Royal Air Maroc
                                                                                     y                      41       0.0%
                                                                                                                     0 0%

NW          Northwest Airlines        10,993      0.6%          SQ                Singapore Airlines        39       0.0%

 JK               Spanair             10,897      0.6%          AY                     Finnair              37       0.0%

UX              Air Europa            4,998       0.3%          S3              Santa Barbara Airlines      28       0.0%

 A7             Air Comet             4,162       0.2%          MA          Malév Hungarian Airlines        27       0.0%

SK         Scandinavian Airlines      3,204       0.2%          S4               SATA International         19       0.0%

 LT      LTU International Airways    2,504       0.1%         Other                                       148       0.0%

MP           Martinair Holland        1,054       0.1%         Total                                     1,740,165   100%
                                                                                                 Exhibit JA-23
                                                                                                 Page 5 of 9
The Proposed Alliance Will Not Reduce
C     titi In Th U S Fi l d M k t
Competition I The U.S.-Finland Market
      U.S.-Finland Booking Shares (Immunized Groupings)
                          Source: MIDT (Year Ended March 2008)



                  7%




                        Othe
                VS/FI
          13%


                           er
                                                                                              34%
                                               44%



    36%
                                                                                              10%




                                                          Carriers above 1% MIDT share listed in order of size

                         *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                                                       Exhibit JA-23
                                                                                                       Page 6 of 9

      U.S.-Finland Annual Passenger Bookings By Carrier
                                        Source: MIDT (Year Ended March 2008)


Code             Carrier            Bookings     Share        Code                  Carrier          Bookings   Share

AY               Finnair             49,488      22.6%         SN               Brussels Airlines       77      0.0%
LH             Lufthansa             32,705
                                     32 705      14.9%
                                                 14 9%         EK              Emirates Airlines        62      0.0%
                                                                                                                0 0%
AA         American Airlines         25,222      11.5%         NZ               Air New Zealand         47      0.0%
SK        Scandinavian Airlines      24,456      11.2%         AI                   Air India           35      0.0%
BA           British Airways         21,664      9.9%          OK              CSA Czech Airlines       31      0.0%
UA          United Air Lines         19 937
                                     19,937      9.1%
                                                 9 1%          MH               Malaysia Airlines
                                                                                    y                   30      0.0%
                                                                                                                0 0%
 KL     KLM Royal Dutch Airlines     11,849      5.4%          EI                  Aer Lingus           27      0.0%
AF             Air France            7,196       3.3%          BD                British Midland        18      0.0%
NW         Northwest Airlines        6,374       2.9%          AZ                    Alitalia           15      0.0%
VS              g
             Virgin Atlantic         4 968
                                     4,968       2 3%
                                                 2.3%          SQ              Singapore Airlines
                                                                                  g p                   13      0.0%
                                                                                                                0 0%
 FI            Icelandair            4,442       2.0%          AC                 Air Canada            11      0.0%
DL           Delta Air Lines         3,875       1.8%          MY                Maxjet Airways         5       0.0%
US            US Airways             1,286       0.6%          AB                  Air Berlin           5       0.0%
MP          Martinair Holland        1 252
                                     1,252       0.6%
                                                 0 6%          TK               Turkish Airlines        3       0.0%
                                                                                                                0 0%
CO         Continental Airlines      1,191       0.5%          AS                Alaska Airlines        3       0.0%
 LT     LTU International Airways     765        0.3%          9W                 Jet Airways           2       0.0%
 LX              Swiss                745        0.3%          MA         Malév Hungarian Airlines      2       0.0%
OS          Austrian Airlines         499        0.2%
                                                 0 2%          E0                 Eos Airlines          2       0 0%
                                                                                                                0.0%
DE               Condor               345        0.2%          QR                Qatar Airways          1       0.0%
LO         LOT Polish Airlines        175        0.1%          TP               TAP Air Portugal        1       0.0%
 IB               Iberia              134        0.1%         Total                                  218,958    100%
                                                                                            Exhibit JA-23
                                                                                            Page 7 of 9
The Proposed Alliance Will Not Reduce
C      titi In Th U S J d M k t
Competition I The U.S.-Jordan Market
          U.S.-Jordan Booking Shares (Immunized Groupings)
                     Source: MIDT (Year Ended March 2008)




                                                                                        1%
                                                                                        2%
     9%




   12%                                    70%
         AF/DL                                                                          66%



     9%




                                                     Carriers above 1% MIDT share listed in order of size

                    *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                                                         Exhibit JA-23
                                                                                                         Page 8 of 9

       U.S.-Jordan Annual Passenger Bookings By Carrier
                                        Source: MIDT (Year Ended March 2008)


Code             Carrier            Bookings     Share        Code                   Carrier           Bookings   Share

 RJ          Royal Jordanian        172,929      66.1%         OS               Austrian Airlines        142      0.1%
AF              Air France           19,479
                                     19 479      7.5%
                                                 7 5%          NZ               Air New Zealand          127      0 0%
                                                                                                                  0.0%
UA           United Air Lines        13,623      5.2%          AZ                    Alitalia             45      0.0%
US             US Airways            11,843      4.5%          HP                America West             30      0.0%
LH              Lufthansa            9,933       3.8%          LY              El Al Israel Airlines      23      0.0%
DL            Delta Air Lines        8,595
                                     8 595       3.3%
                                                 3 3%          SV               Aerosvit Airlines         11      0 0%
                                                                                                                  0.0%
VS            Virgin Atlantic        5,826       2.2%          DE                    Condor               10      0.0%
BA            British Airways        5,767       2.2%          AI                   Air India             9       0.0%
AA          American Airlines        2,728       1.0%          LX                     Swiss               6       0.0%
NW          Northwest Airlines       1 925
                                     1,925       0 7%
                                                 0.7%          OA               Olympic Airlines
                                                                                  y p                     5       0.0%
                                                                                                                  0 0%
 IB               Iberia             1,665       0.6%          TN                 Air Tahiti Nui          5       0.0%
EK           Emirates Airlines       1,311       0.5%          CI                China Airlines           5       0.0%
MS               Egyptair            1,262       0.5%          AC                  Air Canada             4       0.0%
 KL            y
         KLM Royal Dutch Airlines    1,079
                                     1 079       0.4%
                                                 0 4%          SQ              Singapore Airlines
                                                                                  g p                     3       0 0%
                                                                                                                  0.0%
EY            Etihad Airways          722        0.3%          GJ                    Eurofly              1       0.0%
GF               Gulf Air             683        0.3%          AT               Royal Air Maroc           1       0.0%
MP          Martinair Holland         542        0.2%          SU                    Aeroflot             1       0.0%
CO         Continental Airlines       503        0 2%
                                                 0.2%          KE               Korean Air Lines          1       0.0%
                                                                                                                  0 0%
TK            Turish Airlines         429        0.2%         Total                                    261,420    100%
QR            Qatar Airways           147        0.1%
                                                                                             Exhibit JA-23
                                                                                             Page 9 of 9

  The Proposed Alliance’s Home Country Market
Shares Are Consistent With Department Precedents
                     Country-Pair Market Shares*
                     Source: MIDT (Year Ended March 2008)




90%
80%
      UA




70%
      LH




60%
                DL




50%
                       UA LH
                           H
                D




                                                                       AA BA
40%
                NW




                                                           DL
                                               UA




                                                                                   AA
30%




                                                                                                AA
                                   DL

20%




                                                                                   BA
      LO




10%
                                   AZ




                                                           AF
                                               LH
                KL




                                                                       AY
                       LX
           RJ




                                                                                                IB
 0%




                     *Star/SkyTeam include currently immunized carriers only. oneworld includes all Joint Applicants
                                                                        Exhibit JA-24
                                                                        Page 1 of 2
London Is – And Will Remain – Europe’s Most
  Competitive Major Transatlantic Gateway
               Booking Share, U.S-LON/PAR/FRA/AMS
                     Source: MIDT (Year Ended May 2008)
    LON-U.S.                                              PAR-U.S.




                                                                48.0%
    44.4%

    FRA-U.S.
                                                          AMS-U.S.




                                                              57.3%
                                                              57 3%
    66.9%
                                                                    Exhibit JA-24
                                                                    Page 2 of 2

London Is – And Will Remain – Europe’s Most
  Competitive Major Transatlantic Gateway
               Seat Share, LHR Operations To/From U.S.
                              Source: OAG
  LHR-U.S.                                               CDG-U.S.




       15.9%

   58.1%                                                     64.8%
               Heathrow will be Europe’s only hub
               with:

                T   i    i d       ti
               •Two immunized operations

  FRA-U.S.     •No alliance with more than 60% of        AMS-U.S.
               seats to the U.S.

               •Nonstop competition from a strong
               nonaligned carrier like Virgin Atlantic

                                                             81.5%
   83.2%
   83 2%
                                                                                                        Exhibit JA-25


      U.S.-EU Open Skies Allowed Star And SkyTeam
     To Q i kl L    hA dE        d H th     S   i
     T Quickly Launch And Expand Heathrow Service

  New Gateway
  Existing Gateway with 
  E isting Gate a ith
  Increased Service




 Seattle



                                                                                    SkyTeam launched 7 daily flights from:
                                      Minneapolis/
                                                                                    •Atlanta (1 – DL)
                                      St Paul
                                      St. Paul                          JFK
                                                                       Newark       •Detroit (1 – NW)
                                                       Detroit
                                                                 Philadelphia       •Los Angeles (1 – AF)
                           Denver                                                   •Minneapolis/St. Paul (1 – NW)
                                                                                    •New York (2 – DL)
                                                                                    •Seattle (1 – NW)

Los Angeles                                          Atlanta


       New Carriers                                                             Star launched 6 daily flights from:
                                    Houston                                     •Denver (1 – UA)
                                                                                 H     t
                                                                                •Houston (2 – CO)
                                                                                •Newark (2 – CO)
                                                                                •Philadelphia (1 – US)
                                                                                                 Exhibit JA-26
                                                                                                PUBLIC VERSION


       eat o s ot Separate e e a t a et
      Heathrow Is Not A Sepa ate Relevant Market

•   In 2002, DOT noted “that from interior U.S.
    cities served by American to both Gatwick and
                   y                                   Average Yields, One-Stop AA Itineraries
    Heathrow, American’s fares to Heathrow are             Source: MIRS (Year Ended March 30, 2008)
    consistently and substantially higher” (Order
    2002-1-12, p. 42)

•   This consumer preference was not found in
                 U.S. EU
    year before U.S.-EU Open Skies took effect on
    March 30, 2008 – LHR yields for premium traffic
    (F/J/Full Y) were only 2.4% higher than LGW
    yields from U.S. behind-gateway cities where
    comparable service to both airports was
    offered
                                   only,
      – By focusing on AA data only brand
          preferences and cabin mix are eliminated                                                      LHR
          as variables                                                                                  LGW
      – O&Ds were screened to eliminate circuity
          or connectivity as variables as well
            • For all fare types, the 20 O&Ds
                                  PPDEW,
               selected have 5+ PPDEW at least 1
               PPDEW to both LHR and LGW, and a
               ratio between the two of 5:1 or less
            • For premium fare types, the 17 O&Ds
               selected have at least 100 pax total,
               at least 50 pax to both LHR and LGW,
                  d     ti b t      th t     f51
               and a ratio between the two of 5:1 or            All F
                                                                    Fares          P   i   Fares
                                                                                   Premium F
               less                                         ABQ/AUS/CUN/DCA/DEN/ ABQ/AUS/ELP/IAH/ICT/
                                                            IAH/LAS/MCO/MEX/MSY/ LAS/MCI/MEX/MSY/OKC/
                                                            OKC/PDX/PHX/SAN/SAT/ PHX/SAT/SJO/SJC/SNA/
                                                             SJC/SLC/TPA/TUL/TUS       TUL/TUS
                                                                                                         Exhibit JA-27
                                                                                                         Page 1 of 6

    The Overwhelming Majority Of Passengers On AA/BA
    Overlaps Will Continue To Enjoy Competitive Service
                                                              Percentage Of Bookings On AA/BA Nonstop
            Comparison Of AA/BA Overlap O&Ds
            Source: MIDT (Year Ended March 2008)              Overlaps With Significant Competitive Choice
                                                                    p         g            p
                                                                        Source: MIDT (Year Ended March 2008)
Overlap   Before/     Total        JBA        #2       #2
 Route     After    Bookings      Share     Carrier   Share    100.0%

NYCLON    6-to-5      1.6MM       51.8%       VS      27.1%
                                                                90.0%                  2+ choices
LAXLON    6t 5
          6-to-5      466K        40 2%
                                  40.2%       VS      27 3%
                                                      27.3%     80.0%

BOSLON    3-to-2      319K        68.8%       VS      23.2%
                                                                                       3+ choices
                                                                70.0%

CHILON    4-to-3      291K        51.4%       UA      26.2%     60.0%

MIALON    3-to-2      259K        65.7%       VS      27.1%     50.0%


DFWLON    2-to-1       99K        84.5%     Connect   15.4%     40.0%                   5 choices
                                                                30.0%
•The proposed alliance will allow oneworld to
compete against Star and SkyTeam, while                         20.0%
point-to-point competition from Virgin Atlantic
                                                                10.0%
and others ensures continued competition in
London                                                           0.0%
                                                                                                                                 Exhibit JA-27
                                                                                                                                 Page 2 of 6
                                             Overlap City-Pair Analysis
                 New York-London                                                       Los Angeles-London
Carrier         Serving           Seat Share           Booking Share     Carrier         Serving             Seat Share           Booking Share
                                  (OAG: S08)          (MIDT: Y/E 3/08)                                       (OAG: S08)          (MIDT: Y/E 3/08)
  BA             LHR                38.4%                  33.4%           VS             LHR                  20.3%                  27.3%
  VS             LHR                22.8%                  27.1%           BA             LHR                  33.3%                  27.2%
  AA             LHR                14.7%                  18.4%           UA             LHR                  8.5%                   13.6%
  CO            LHR/LGW             9.9%                   6.8%            AA             LHR                  16.3%                  13.0%
DL/AF*          LHR/LGW             7.4%                   4.4%          AF/DL*           LHR                  8.9%                    N/A
   AI            LHR                4.2%                   3.4%            NZ             LHR                  12.5%                  10.9%
   E0            STN                  -                    1.8%           Other          Connect                 -                    8.0%
  KU             LHR                1.4%                   0.8%           Total                                23,467                465,634
   ZX            LGW                1.3%                    N/A                                              seats/week             bookings

 Other          Connect               -                    3.9%
 Total                              57,269               1,633,801
                                  seats/week             bookings

  NYC-LON           NYC-PAR            NYC-FRA             NYC-AMS         LAX-LON           LAX-PAR                 LAX-FRA          LAX-AMS

oneworld: 52%     SkyTeam: 48%            Star: 81%      SkyTeam: 68%    oneworld: 40%     SkyTeam: 50%              Star: 69%      SkyTeam: 68%

 Virgin: 27%        Star: 23%        SkyTeam: 16%          Star: 26%       Star 28%          Star: 21%          SkyTeam: 13%          Star: 26%

  Star: 8%        oneworld: 22%      oneworld: 3%        oneworld: 4%     Virgin 28%       oneworld: 16%        Air India: 10%      oneworld: 5%

SkyTeam: 4%         Other: 7%          Other: 0%           Other: 2%     SkyTeam: 3%       Air Tahiti: 12%      oneworld: 3%          Other: 1%

  Other: 9%                                                                Other: 2%         Other: 7%            Other: 0%
                                                                                                                               Exhibit JA-27
                                                                                                                               Page 3 of 6
                                             Overlap City-Pair Analysis
                  Boston-London                                                           Chicago-London
Carrier         Serving           Seat Share           Booking Share     Carrier         Serving           Seat Share           Booking Share
                                  (OAG: S08)          (MIDT: Y/E 3/08)                                     (OAG: S08)          (MIDT: Y/E 3/08)
  BA             LHR                50.4%                  39.7%           AA             LHR                37.9%                  26.9%
  AA             LHR                31.7%                  29.1%           UA             LHR                20.3%                  26.2%
VS/CO*           LHR                17.9%                  23.2%           BA             LHR                28.3%                  24.5%
 Other          Connect               -                    8.0%            VS             LHR                7.6%                   13.4%
 Total                              10,905                318,950           AI            LHR                5.8%                   3.6%
                                     t /   k
                                  seats/week             bookings
                                                         b ki             Other          Connect               -                    5.5%
                                                                          Total                              24,570                290,936
                                                                                                           seats/week             bookings




  BOS-LON           BOS-PAR            BOS-FRA             BOS-AMS         CHI-LON           CHI-PAR               CHI-FRA          CHI-AMS

oneworld: 69%     SkyTeam: 57%            Star: 79%      SkyTeam: 79%    oneworld: 51%     SkyTeam: 38%            Star: 66%      SkyTeam: 47%

 Virgin: 23%      oneworld: 23%      SkyTeam: 9%           Star: 10%       Star 29%        oneworld: 31%      oneworld: 18%         Star: 45%

  Star: 4%          Star: 11%        oneworld: 6%        oneworld: 5%     Virgin 13%       SkyTeam: 29%       SkyTeam: 5%         oneworld: 7%

SkyTeam: 2%         Other: 9%          Other: 6%           Other: 6%     SkyTeam: 2%         Other: 2%          Other: 9%           Other: 1%

  Other: 2%                                                                Other: 5%
                                                                                                                               Exhibit JA-27
                                                                                                                               Page 4 of 6
                                             Overlap City-Pair Analysis
                   Miami-London                                                     Dallas/Fort Worth-London
Carrier         Serving           Seat Share           Booking Share      Carrier         Serving          Seat Share           Booking Share
                                  (OAG: S08)          (MIDT: Y/E 3/08)                                     (OAG: S08)          (MIDT: Y/E 3/08)
  BA             LHR                53.3%                  42.4%            AA             LHR               68.8%                  52.2%
  AA             LHR                22.3%                  23.3%            BA             LHR               31.2%                  32.3%
VS/CO*           LHR                24.4%                  27.1%           Other          Connect              -                    15.4%
 Other          Connect               -                    7.2%            Total                             5,026                 98,711
 Total                              8,850                 258,725                                          seats/week             Bookings
                                     t /   k
                                  seats/week             B ki
                                                         Bookings




  MIA-LON           MIA-PAR               MIA-FRA          MIA-AMS         DFW-LON            ATL-PAR           ORD-FRA             DTW-AMS

oneworld: 66%     oneworld: 45%           Star: 73%      Martinair: 59%   oneworld: 85%     SkyTeam: 82%           Star: 66%      SkyTeam: 89%

 Virgin: 26%      SkyTeam: 44%       SkyTeam: 18%        SkyTeam: 18%        Star 9%          Star: 14%       oneworld: 18%          Star: 9%

  Star: 5%          Star: 10%        oneworld: 8%          Star: 15%      SkyTeam: 5%       oneworld: 4%      SkyTeam: 5%         oneworld: 2%

SkyTeam: 2^         Other: 1%          Other: 1%         oneworld: 7%       Other: 1%         Other: 0%         Other: 9%           Other: 0%

  Other: 1%                                                Other: 1%
                                                                                     Exhibit JA-27
                                                                                     Page 5 of 6
                              Overlap City-Pair Analysis
              Miami-Madrid                                       New York-Paris
Carrier   Serving   Seat Share    Booking Share     Carrier   Serving   Seat Share    Booking Share
                    (OAG: S08)   (MIDT: Y/E 3/08)                       (OAG: S08)   (MIDT: Y/E 3/08)
  IB       MAD        66.8%           46.0%           AF       CDG        49.2%           34.2%
  AA       MAD        33.2%           35.9%           AA       CDG        11.5%           18.4%
Other     Connect       -             18.1%          CO        CDG        16.2%           17.4%
Total                 4,624          87,300           DL       CDG        5.0%            10.6%
                    seats/week      Bookings          AI       CDG        10.5%           5.5%
                                                      A0       ORY        5.6%            1.9%
                                                      EC       ORY        2.0%             N/A
                                                    Other     Connect       -             12.0%
                                                    Total                 30,332         617,942
                                                                           t /   k
                                                                        seats/week      Bookings
                                                                                        B ki
                                                                                          Exhibit JA-27
                                                                                          Page 6 of 6

          No Remedies Are Required As A Condition For
                      Granting Immunity
•   Slot remedies are neither justified
    nor necessary in light of U.S.-EU
    Open Skies, interalliance transfers
    and secondary trading of Heathrow             Comparison Of Overlap City-Pairs
    slots                                            SkyTeam II vs. oneworld
                                                     Source: MIDT (Year Ended May 2008)
     – Likewise, the opening of
          Terminal 5 and the plans to     90.0%
          build HET make facility         80.0%
          remedies unnecessary
                                          70.0%

                                          60.0%
•   In SkyTeam II, the Department set a
    precedent of granting antitrust       50.0%
    immunity without carve-outs or        40.0%
    other remedies where a joint          30.0%
    venture was part of the application
                                          20.0%
    (Order 2008-4-17, p. 10)
      – SkyTeam’s market shares on
         SkyTeam s                        10.0%
         overlap city pairs are higher    0.0%
         than those in this application
      – There is no basis for treating
         oneworld any differently than
         SkyTeam
                                                         Exhibit JA-28
                                                           Page 1 of 2

                          DOCUMENTS PRODUCED

1.   All agreements or arrangements between or among AA/BA/IB/AY/RJ
     that include AA and that impact international alliance activities
     (including revenue sharing, codeshare agreements, joint marketing
     agreements, FFP agreements, agency override programs, special
     prorate agreements, market share programs and other associated
     incentive programs).

2.   All documents discussing the strategic objectives or rationale in
     forming the AA/BA/IB/AY/RJ alliance and/or Joint Business
     Agreement (JBA).

3.   All documents that discuss or explain the structure and process
     contemplated for the coordination of the JBA.

4.   All documents relating to any analysis of the traffic and revenue
     effects of the JBA on the joint venture partners and other
     airlines (including the extent to which the traffic and revenue
     for the JBA will be stimulated versus diverted from other
     carriers/alliances).

5.   All studies, surveys, analyses and reports, including all backup
     detail, completed by or for an officer or director (or
     individuals exercising similar functions) of AA/BA/IB/AY/RJ that
     identify, examine, forecast and/or quantify the effects and
     benefits of the proposed alliance on international service or
     competition to, from or via the European Union Member States (EU)
     and the United States, with respect to market shares,
     competition, competitors, fares, markets, potential for traffic
     growth or expansion into geographic markets, including those
     that: (a) use QSI modeling or other similar methodologies to
     evaluate changes in traffic, market share or economic operating
     results that accrue from anticipated improvements to the
     Partners’ services; (b) compare or analyze planned changes to
     AA/BA/IB/AY/RJ schedules after the implementation of the proposed
     alliance; (c) show schedule, frequency and equipment changes that
     AA/BA/IB/AY/RJ would expect to make within the first two years
     after DOT immunization of the proposed alliance; (d) discuss any
     service or operational changes anticipated at AA/BA/IB/AY/RJ hub
     airports resulting from the proposed alliance; and (e) discuss
     the impact of the proposed alliance on CRS/GDS displays.

6.   All documents completed by or for an officer or director (or
     individuals exercising similar functions) that address the
     subject of competition in air travel between the United States
     and the EU, as well as air travel beyond or behind the EU to and
     from the United States.

7.   All documents relating to changes AA/BA/IB/AY/RJ would make to
     transatlantic capacity after the DOT’s decision on the ATI
     application is made.


                                    
                                                          Exhibit JA-28
                                                            Page 2 of 2

8.    All documents relating to the sources and estimated value of any
      cost savings that AA/BA/IB/AY/RJ will be able to achieve only if
      they are granted ATI.

9.    All documents relating to the impact of the proposed AA/BA/IB/
      AY/RJ alliance on existing immunized alliances (such as AA/AY and
      AA/SN).

10.   All documents relating to the definition of a relevant market for
      competitive analysis (e.g., network, transatlantic, O&D city-
      pair).

11.   All documents relating to the potential for new entry in markets
      in which the proposed AA/BA/IB/AY/RJ alliance would compete.

12.   All documents relating to the anticipated effect of the
      AA/BA/IB/AY/RJ alliance on interline agreements and the level of
      interline traffic with other carriers.

13.   All documents discussing the effects or benefits of immunizing
      the AA/BA/IB/AY/RJ alliance on: (a) AA/BA/IB/AY/RJ; (b) oneworld;
      (c) other airline partners; (d) other airlines, competitors and
      potential new entrants; (e) consumers; (f) market shares; (g)
      fares; (h) traffic/revenue mix, share gap and share shift
      changes; (i) marketing; (j) corporate contracting; (k) traffic
      growth or expansion into geographic markets; or (l) Heathrow slot
      transactions.

14.   All documents that discuss the competitive, revenue or marketing
      effects of marketing alliances between major U.S. carriers or
      between U.S. and foreign carriers for passenger and air cargo
      transportation to points throughout the world via the United
      States (including codeshare, FFP, airport lounge, and prorate
      agreements), whether or not AA is a part of these arrangements.

15.   All documents that discuss competition among alliances for
      passenger and air cargo transportation to points throughout the
      world via the United States.

16.   All documents reflecting any consideration by AA/BA/IB/AY/RJ to
      seek additional immunized international alliances (other than
      that among the Parties).

17.   All documents relating to the criteria that will be used to
      determine the markets in which AA/BA/IB/AY/RJ will codeshare
      (including any flight number limitations and how flight numbers
      will be allocated).

18.   MIDT data with directional net passenger bookings for all U.S.-
      International (worldwide) origin and destination airport pair
      markets for all airlines for the one-year period ending July 31,
      2007


                                     
  EXHIBIT JA-19
   Affidavit Of
The Brattle Group
           PUBLIC VERSION




            BEFORE THE
U.S. DEPARTMENT OF TRANSPORTATION




    Docket No. DOT-OST-2008-_____




     Prepared for the Joint Applicants:
            American Airlines
             British Airways
                   Iberia
                  Finnair
             Royal Jordanian


                    by


             James D. Reitzes
                   and
              Dorothy Robyn




           The Brattle Group
      1850 M Street NW, Suite 1200
         Washington, DC 20036
           tel: 202.955.5050
           fax: 202.955.5059




             August 14, 2008
                                         PUBLIC VERSION



The Joint Applicants asked us to calculate the magnitude of two types of consumer benefits that
would plausibly result from a grant of antitrust immunity to the oneworld Alliance’s transatlantic
members, primarily American Airlines (AA), British Airways (BA) and Iberia (IB): the benefits
from (1) improved vertical price coordination on those connecting routes on which AA already
offers interline service with either BA or IB, and (2) the introduction of daily nonstop service by
oneworld on four new transatlantic routes. We present those results below. To set the stage for
our discussion of those specific sources of consumer surplus, we summarize the analysis we did
in 2005 and 2006 on the post-1999 impact of the existing immunized alliances on transatlantic
fares. That analysis points to the significant consumer benefits that a third immunized alliance
would bring, more generally, by subjecting SkyTeam and Star to robust competition.

I.       Introduction

The more than 90 Open Skies agreements that the U.S. government has negotiated since 1992,
including the recently implemented “Open Skies-Plus” agreement with the European Union,
represent a major and unambiguous source of economic benefits to U.S. consumers. In other
work, we have quantified the consumer benefits from transatlantic Open Skies agreements,
specifically, and estimated the additional gains that a fully deregulated transatlantic market
would bring.1

As one source of benefits, transatlantic Open Skies agreements have facilitated deeper forms of
vertical integration between certain U.S. and European carriers by allowing those carrier
alliances based in Open Skies markets to obtain antitrust immunity. The efficiencies of such
vertical integration have been well documented in the economic literature. Most significant, the
formation of an immunized alliance can lead to lower airfares for connecting (interline)
passengers (i.e., passengers who must fly on two or more airlines to reach their destination).
Because alliance partners can coordinate pricing and share revenue, each partner “internalizes”
the effect of its fare on demand for travel on the other leg of the interline route, resulting in the
elimination of “double marginalization” (i.e., successive markups). Immunized alliances also
can facilitate the coordinated scheduling of connecting flights and sharpen incentives for allied
carriers to invest in the facilities and technology needed to make multi-carrier travel more
seamless. The improved connections that result can stimulate passenger demand and increase
economies of passenger density, permitting carriers to offer service across a wider and more
efficient network.




1
     Boaz Moselle, et al., "The Economic Impact of an EU-U.S. Open Aviation Area,” Study Prepared for the
     European Commission, The Brattle Group (December 2002); and James D. Reitzes, et al., “The
     Effectiveness of Dutch Airport Transport Policy,” Study prepared for the Dutch Ministry of Transport
     (December 2002). See also, Dorothy Robyn, et al., “Beyond Open Skies: The Economic Impact of a U.S.-
     EU Open Aviation Area,” in Deep Integration: How Transatlantic Markets are Leading Globalization,
     edited by Daniel S. Hamilton and Joseph P. Quinlan, Johns Hopkins University Center for Transatlantic
     Relations and Centre for European Policy Studies, 2005; and Alfred E. Kahn and Dorothy Robyn, “The
     Sky Must Be No Limit to Global Competition,” Financial Times (February 15, 2006).


                                                    1
                                             PUBLIC VERSION

Although the formation of immunized alliances, on balance, appears to be beneficial to
consumers, there is evidence that the lack of competition among immunized alliances has limited
the benefits of Open Skies agreements, at least in recent years. In 2005 and 2006, we looked at
the post-1999 impact of the existing immunized alliances—SkyTeam, Star, and the much smaller
Wings alliance—on transatlantic fares.2 We found a reversal of the pro-consumer trends that the
Department of Transportation (DOT) had documented in the late 1990s. Based on those
findings, we urged DOT to refrain from allowing further consolidation of the existing immunized
alliances. We also encouraged DOT to increase the number of competing immunized alliances.

With oneworld carriers now applying for antitrust immunity, DOT has that opportunity. Simply
stated, the deeper vertical integration that immunity allows would significantly strengthen the
oneworld alliance, bringing a much-needed third competitor to a market that is increasingly
dominated by the SkyTeam and Star alliances.

In Section II below, we briefly recap our 2005/2006 analysis of the post-1999 impact of
immunized alliances on transatlantic fares. That analysis points to the significant benefits that
another strong alliance would bring, generally, by subjecting SkyTeam and Star to robust
competition. Then we look at two specific sets of consumer benefits that antitrust immunity for
oneworld would plausibly provide. In Section III, we estimate the increase in consumer surplus
associated with the improved price coordination (elimination of double marginalization) that AA,
BA and IB would be able to achieve on transatlantic connecting routes. In Section IV, we
quantify the gain in consumer surplus from the introduction of daily nonstop service by
oneworld on four transatlantic routes—service that Joint Applicants maintain would become
economically attractive if they had the ability to share revenue or profits.

II.       Brattle’s 2005/2006 Analysis: Evidence of Insufficient Inter-Alliance Competition

In a 2005 report submitted on behalf of AA in the SkyTeam proceeding,3 we replicated and
updated DOT’s 1999 and 2000 studies which found that immunized alliances had contributed to
significant declines in average fares. DOT’s findings were based on a comparison of trends from
1996 to 1999 in Open Skies markets, which were dominated by immunized alliances, versus
non-Open Skies markets.4 Our updated analysis, which looked at fare changes from 1999 to
2004, revealed a reversal of those pro-consumer trends. We found that transatlantic fares had



2
      Report by The Brattle Group, Docket No. DOT-OST-2004-19214 (June 24, 2005); Brattle Reply (July 15,
      2005); and Brattle Surreply (August 9, 2005). Report by James D. Reitzes and Dorothy Robyn, The
      Brattle Group, Docket No. DOT-OST-2005-22922 (August 9, 2006); Brattle Reply (August 29, 2006).
      See also, James D. Reitzes and Dorothy Robyn, “An Economic Analysis of How Antitrust-Immunized
      Alliances Have Affected Transatlantic Competition,” The Transportation Antitrust Update, Issue No. 16
      (Spring 2007), pp. 18-29.
3
      Report by The Brattle Group, June 24, 2005, op. cit.
4
      “International Aviation Developments: Global Deregulation Takes Off,” U.S. Department of
      Transportation, Office of the Secretary (December 1999); “Transatlantic Deregulation: The Alliance
      Network Effect,” Department of Transportation, Office of the Secretary (October 2000). DOT also found
      that alliances had contributed to significant increases in passenger volumes based on its analysis of trends
      from 1992 to 1999.


                                                         2
                                                                        PUBLIC VERSION

increased significantly in Open Skies markets—the markets dominated by immunized
alliances—whereas in non-Open Skies markets fares had increased negligibly or decreased.
Moreover, this surprising pattern was most pronounced on connecting routes—the very routes on
which alliances should have delivered the biggest consumer benefits.

In a 2006 report submitted on behalf of AA in a proceeding related to the Star alliance, we
further updated the DOT analysis to incorporate fare data from 2005.5 We found a clear
continuation of the trend we had identified the previous year: from 1999 to 2005, transatlantic
fares had increased significantly more in Open Skies markets than in non-Open Skies markets,
with the connecting routes exhibiting the most pronounced differences. Figure 1 from that
report, shown below, displays our results.6


                                                                                  Figure 1

                                                  Transatlantic Markets, Changes in Average Fares                          Open Skies
                                                                   1999 v. 2005                                            Non-Open Skies
                        25%
                                 23.1%
                                                           22.3%
                                                                                                                           20.8%
                                                                                                         20.0%
                        20%
                                                                                     17.8%


                        15%
                                                                                                                 11.8%
                                                                    10.8%
      Percent Change




                        10%                                                                                                        9.0%



                        5%



                        0%
                                                                                             -0.3%


                        -5%
                                         -4.5%



                       -10%
                                Behind - Beyond          Behind - Gateway           Gateway - Beyond   Gateway - Gateway       Total
    Source : DOT Origin & Destination data provided by Data Base Products, Inc.




5
                       Report by Reitzes and Robyn (August 9, 2006), op. cit.
6
                       Ibid., p. 3.


                                                                                     3
                                           PUBLIC VERSION

We ruled out various “benign” explanations for these surprising findings. We found little
evidence that the existing immunized alliances had increased their product quality, or improved
their passenger mix, relative to non-alliance carriers. Nor did we find support for the hypothesis
that the relatively lower fare trend in non-Open Skies markets was due to exogenous factors in
the U.S.-London Heathrow market and therefore not a valid benchmark.7 Finally, evidence that
fare increases in Open Skies markets reflected greater demand was, at best, ambiguous.

By contrast, we found clear evidence for the non-benign explanation for our results—namely, the
exercise of market power by the existing immunized alliances across their networks. Among
other things, individual alliances had been able to expand their market share on certain routes
even as their fares were increasing. We acknowledged that the expansion of market share could
reflect the alliances’ greater efficiency, but we noted that the two explanations—efficiency and
market power—were not necessarily inconsistent: if an immunized alliance exhibits significantly
greater efficiencies, weakened rival carriers (e.g., less efficient non-alliance carriers) will be forced
either to improve their own efficiency or to cut back their service or exit alliance-dominated city-pair
markets altogether, allowing the alliance carriers to gain market share and raise fares over time.

We concluded that, whatever the explanation, the move toward alliances had produced an
increasingly concentrated transatlantic market, which highlighted the importance of competition
among alliances.8 Thus, we cautioned aviation regulators to be wary of taking steps that would
result in further consolidation of international networks. Instead, we argued, the goal should be
to increase the number of competing global alliances (networks) while at the same time making
it easier for individual alliances to interconnect.9

With oneworld’s application for antitrust immunity, DOT now has the opportunity to stimulate
robust interalliance competition. The deeper vertical integration that immunity allows would
significantly strengthen the oneworld alliance competitively. This would bring a much-needed
third competitor to a market that has become increasingly dominated by the still-expanding
SkyTeam and Star alliances. As the parties’ Application indicates, there are a large number of
transatlantic city-pair markets in which the Star and SkyTeam alliances, either individually or
jointly, account for a dominant market share. Many of those markets are connecting markets.
Thus the consumer benefits from creating a third strong alliance are potentially quite significant.

The difficulties that oneworld has faced in trying to compete with the better coordinated
SkyTeam and Star alliances are well-known. They are reflected in the limited degree to which
oneworld member carriers code-share with one another or feed their passenger traffic into one
another’s networks. While self-defeating for the alliance overall, this lack of coordination is
rational for individual members given the incentives and constraints they face.

7
    For a systematic examination of the product quality and Heathrow hypotheses based on data from our
    2005 study, see Reitzes and Robyn, The Transportation Antitrust Update, op. cit.
8
    We drew particular attention to the vulnerability of connecting passengers who are effectively captive to a
    particular alliance by virtue of their proximity to that alliance’s European hub. We noted that in other
    network industries, such as railroads, pipeline and telecommunications, the “favored” network must
    provide interconnections to competitors on regulated terms, including at a regulated price, to lessen its
    ability to exercise significant market power. By contrast, the aviation system relies on competition among
    airline networks to reduce the number of captive passengers who are vulnerable to such market power.
9
    Ibid., pp. 8-9.


                                                      4
                                              PUBLIC VERSION



Antitrust immunity will reduce those impediments, allowing oneworld members to share profits
and engage in other cost- and risk-sharing activities. Below, we examine two specific sources of
benefits to consumers: lower interline fares and expanded service offerings. In addition, carriers
enjoying antitrust immunity can better coordinate schedules and seat inventories (another source
of lower fares), and more confidently make the long term investments required to co-locate gates
and ticket counters, develop more tightly-integrated baggage handling and passenger service
systems, and in other ways improve the quality of the passenger experience. As a result,
oneworld will be able to compete on an equal footing with rival immunized alliances.

III.       Coordinated Pricing

A major source of benefits from antitrust immunity is carriers’ improved ability to coordinate
prices and schedules on interline routes. If carriers are allowed to coordinate in setting prices,
they will take into account the fact that a lower combined fare will raise demand for the city-pair
as a whole. That is, each carrier will “internalize” the effect of its own fare on demand for travel
on the other carrier. Resulting fares will be lower, which will benefit passengers, and carriers
will earn higher profits. Although code-sharing by non-immunized interline carriers can achieve
some of the benefits of price coordination, antitrust immunity provides significantly greater
benefits because interline carriers can more closely mimic the behavior of a single, online carrier.

Previous economic studies have documented these effects. Using cross-sectional data on
transatlantic routes, Brueckner and Whalen found that immunized alliance partners charged
interline fares that were 18-28 percent below the prices charged by non-allied airlines on the
same route.10 More recently, Whalen extended this body of research using panel data.11 His
data, from DOT’s Origin & Destination (O&D) Survey, cover an eleven-year period (1990 to
2000) during which the major U.S.-European alliances were formed and, in some cases,
terminated. Whalen found that immunized fares were about 13-20 percent lower than traditional
interline fares and code-sharing fares were about 5-9 percent lower.12




10
       Jan K. Brueckner and W. Tom Whalen, “The Price Effects of International Airline Alliances,” Journal of
       Law & Economics, 43 (2) (2000), pp. 503-545. Brueckner and Whalen used data from the third quarter of
       1997. See also Jan K. Brueckner, “International Airfares in the Age of Alliances: The Effects of
       Codesharing and Antitrust Immunity,” The Review of Economics and Statistics, 85 (1) (2003), pp. 105-
       118.
11
       W. Tom Whalen, “A Panel Data Analysis of Code-Sharing, Antitrust Immunity and Open Skies Treaties
       in International Aviation Markets,” Review of Industrial Organization, 30 (2007), pp. 39-61.
12
       Whalen, op. cit., p. 40. Whalen found that online (i.e., single carrier) fares were 16-22 percent lower than
       traditional interline fares but the difference between these fare reductions and those achieved with
       immunized fare coordination (13-20 percent) was not statistically significant.



                                                          5
                                     PUBLIC VERSION


       Methodology

The consumer benefit, or “consumer surplus,” that immunity would provide through improved
pricing coordination has two components. First, existing interline passengers would enjoy
increased consumer surplus if their fare was reduced as a result of immunized price coordination.
Second, the price reductions would stimulate additional traffic, and each new passenger would
enjoy a surplus.

To produce indicative estimates of these benefits, we carried out three sets of calculations.
Below, we describe in a simplified way the steps we went through with respect to AA-BA
interline passengers. We followed the identical process for AA-IB interline passengers.

First, we calculated the relevant traffic volumes and fares for each interline route. Using MIDT
data for the period June 2007 through May 2008, we identified a) the number of routes on which
AA engages in interlining with BA, and b) the number of passengers (both interline and non-
interline) on each route. As shown in Table 1, AA and BA interline on more than 18,000 routes,
and they carried nearly 275,000 interline passengers on those routes during the year we
examined. (AA and IB interline on more than 5,000 routes and carry more than 83,000 interline
passengers.) Then, using DOT O&D Survey data for 2007, we calculated the average fare
charged by all carriers on each route.

                                        Table 1
                    Routes with AA-BA and AA-IB Interline Passengers

                                                               AA-BA        AA-IB

            Number of routes with interline passengers         18,315      5,338
            Interline passengers on those routes              274,206     83,147
            Total passengers on those routes                 14,952,867 5,268,065



Second, we calculated the potential consumer benefits from immunized price coordination for
existing interline passengers. The size of the benefit depends on the degree to which existing
passengers fly on traditional interline flights versus code-share flights (code-share passengers
already receive some of the benefits of price coordination, and thus will benefit less than
traditional interline passengers from immunized fares). MIDT data do not distinguish between
traditional interline passengers and code-share passengers, however. Thus, we conservatively
assumed that all 275,000 AA-BA interline passengers currently travel on code-share flights, even
though many AA-BA interline routes have no code-sharing.




                                               6
                                             PUBLIC VERSION

To calculate the size of the fare reductions on AA-BA interline routes, we used Whalen’s panel
study results, which distinguish between code-share and immunized fares. Using one of two
alternative data aggregation approaches that he employs,13 we calculated that immunized fares
are approximately 17.45 percent lower than code-share fares.14 Consistent with that approach,
we then calculated an estimated fare reduction for all of the passengers on the route, not just the
AA-BA passengers. That estimate is roughly equal to 17.45 percent times the share of
passengers on a given route that AA-BA passengers comprise.15 Finally, we applied that
adjusted fare reduction to the average fare on the route and multiplied by the total number of
passengers on the route. The result is the additional consumer benefit that existing passengers
will enjoy as a result of immunized price coordination.

Third, we computed the potential consumer benefits for the new passengers—passengers who
would fly because of these fare reductions. Using a price elasticity measure of -1.7, meaning
that a 1.0 percent reduction in fares will produce a 1.7 percent increase in traffic,16 we estimate
that the fare reductions due to immunized price coordination would result in 80,741 new
passengers annually on AA-BA routes. To calculate the consumer benefit for these new
passengers, we assume that they are willing to pay an amount that is roughly equal to the average
of the old (higher) fare and the new (lower) fare.17 This is equivalent to saying that new
passengers enjoy (only) half of the fare reduction. Thus, the consumer surplus for new
passengers is equal to our estimated number of new passengers times half of the fare reduction.




13
     Whalen aggregated the O&D fare data both at the route-carrier level and at the route level. In the route-
     carrier dataset, each observation is unique to a specific route and carrier pair, whereas in the route dataset,
     the observations are not carrier-specific. The two approaches produced similar results in his analysis. We
     used the route-level results for our analysis because they are not affected by changes in passenger mix.
     Consistent with Whalen’s approach, the use of route-level results calls for the calculation of fare effects
     for all passengers, as discussed below. By contrast, with the route-carrier results, the calculation of fare
     effects is limited to those passengers who directly benefit from coordinated fares.
14
     This figure (17.45 percent) represents the difference between Whalen’s regression coefficients for
     immunity (-0.2201) and code-sharing (-0.0456) for his route-level analysis. The figures Whalen reports in
     the text, which we cite at the beginning of this section, are log transformations of the regression
     coefficients and are based on results from both his route-carrier level and route level approaches.
15
     Although Whalen does not fully explain the intuition behind this approach to calculating the effect of
     pricing coordination on average fares, it appears to reflect the reasonable assumption that rival carriers on
     a specific route (whether or not they are alliance members) will reduce their fares in response to a drop in
     fares by an alliance engaging in immunized price coordination. Moreover, Whalen’s route-level approach
     links the magnitude of the competitive response to the share of total traffic on the route that is flying on
     these newly immunized fares. That assumption too seems reasonable.
16
     “Air Travel Demand,” IATA Economics Briefing Nº9, based on a May 2008 report; see the demand
     elasticity for transatlantic service at the route/market level.
17
     If one ordered new passengers in terms of their willingness to pay, the first one would be willing to pay an
     amount just equal to (or a penny less than) the old fare: the fact that the new passenger opted not to fly at
     the old fare tells us she was unwilling to pay it. The last one would be willing to pay an amount exactly
     equal to the new fare; if the fare were any higher, he would decline to fly. Assuming that demand is linear
     within the relevant fare range, the “average” new passenger is thus willing to pay an amount roughly
     midway between the old and new fares.


                                                         7
                                                          PUBLIC VERSION

Table 2 illustrates these calculations for one specific route. During the one-year period we
examined, 147 passengers flew from St. Louis to Lyon, France (STL-LYS) using AA-BA
interline service, and they represented 29 percent of the total number of passengers who flew that
route. Immunized price coordination by AA and BA would reduce the average fare paid by all
STL-LYS passengers by approximately 17.45 percent times 0.29, or about 5 percent. This
amount, equivalent to $72, represents the per-passenger gain in consumer surplus for existing
passengers. In addition, the fare reduction would generate an 8.4 percent increase in passenger
volume, or 43 new passengers a year. Their gain in consumer surplus is half that of existing
passengers, or $36 per passenger.

                                                     Table 2
                     Illustrative Calculation of Additional Consumer Surplus for STL-LYS

     Route             AA-BA       Total    AA-BA          Average     Average Fare      Total        Additional Consumer Surplus
                       Interline Passengers Interline       Fare         change        Passenger     Current      New       Total
                      Passengers             Share                                      Change      Passengers Passengers


                          [1]        [2]        [3]              [4]    [5]    [6]      [7]   [8]       [9]       [10]       [11]




LYS< >STL                 147        506      29.1%       $1,460.74    -4.9% -$72.21   8.4% 42.5     $36,536     $1,535   $38,071


Sources and Notes:
[1] and [2]: MIDT Data Year Ending May 2008
[3] = [1] / [2]
[4]: DOT's Origin and Destination Survey, DB1B data, Year 2007
[5] = e -0.1745*[3] - 1
[6] = [4] * [5]
[7] = [5] * -1.7
[8] = [2] * [7]
[9] = - [2] * [6]
[10] = - [8] * [6] / 2
[11] = [9] + [10]



                          Results

Table 3 shows our results summed across all routes. We estimate that immunized price
coordination would result in an increase in consumer surplus of $72.5 million a year on AA-BA
interline routes. On AA-IB interline routes, the comparable figure is $19.7 million, for a total
annual gain in consumer surplus of $92.2 million. Most of that additional consumer benefit
($90.8 million) is the result of fare reductions for existing passengers. The other $1.4 million
represents the gain in consumer surplus to the new passengers who would fly because of the
reduced fares.




                                                                       8
                                         PUBLIC VERSION


                                          Table 3
               Additional Consumer Surplus from Immunized Price Coordination

                                                               AA-BA          AA-IB           Total
                                                                  [1]            [2]          [1] + [2]


Increased Annual Passenger Volume                               80,741         24,281        105,022

Increase in Consumer Surplus ($ million/year)
  From Price Reduction for Existing Customers                    71.6           19.2           90.8
  From Increased Traffic                                          0.9           0.5            1.4
  Total                                                          72.5           19.7           92.2



IV.      Service on New Routes

The oneworld Applicants maintain that, with a closely integrated alliance, they would have more
incentive and opportunity to launch new transatlantic spokes into Europe, particularly into
markets in which SkyTeam and Star are particularly strong. This is a plausible claim. For such
service to be viable, the applicant carriers would have to pool their feed traffic. In theory, they
could do that now; in practice, however, they have little incentive to combine their feed traffic
absent the ability to share the resulting revenue or profits.
The Applicants identify three specific routes on which they would look seriously at launching
nonstop service:                                [REDACTED]                                . All
three routes are currently dominated by Star or Skyteam. They also note their interest in offering
nonstop service on a new route                  [REDACTED]
                                                       . Below, we estimate the annual consumer
benefits that the addition of daily service on these four routes would generate.

                 Methodology

We use a Cournot Model to simulate how incumbent carriers would alter their output decision
(i.e., the number of passengers they serve) on these four routes in response to the introduction of
daily nonstop service by oneworld. We fit the model to existing data (fare data from DOT’s
2007 O&D Survey and quantity data from MIDT for the year ending May 2008). We then
calculate the market-clearing price for that new quantity of passengers. We assume
conservatively that entry into nonstop markets affects only the corresponding nonstop fares.18
Based on the overall change in the number of passengers and the fares charged on each route, we
are able to calculate the associated consumer benefits.


18
      For example, we assume that the introduction of nonstop [REDACTED] service by oneworld will affect
      only          [REDACTED] nonstop fares and will not affect fares for (connecting) passengers who
      originate or terminate in            [REDACTED]             (or for passengers who travel between
      [REDACTED] via another gateway).


                                                    9
                                         PUBLIC VERSION

To elaborate, we develop a simple model for each of the four routes which assumes that an
incumbent carrier will choose the number of seats that maximizes its profits, given its
expectations as to the number of seats that other incumbents will offer (and the air fares that will
necessarily clear the market as a result of those output decisions).19 For example,


[REDACTED]route, since that will determine the price it can command in that market. (For
simplicity of exposition, we assume that every seat offered for sale is in fact sold.)
We then introduce new entry on each route: that is, we ask how each incumbent’s output
decision would change in response to the additional output that oneworld entry would generate.
Specifically, we assume that oneworld would offer daily service on all four routes, and that it
would transport 100 nonstop passengers per day (36,500 passengers per year) to
        [REDACTED], and 150 nonstop passengers per day (54,750 passengers per year) to
[REDACTED]            . These output assumptions are conservative considering the capacity on
most transatlantic flights and recognizing the likely appeal of nonstop service to these
destinations on a combined oneworld flight.

                 Results

Not surprisingly, our model indicates the incumbent firm or firms respond to oneworld’s entry
on each route by reducing the quantity of seats sold. Because this response only partially offsets
the addition of seats by oneworld, however, the net effect of oneworld entry is to increase the
total quantity of seats sold. Moreover, since the increase in quantity leads to a reduction in air
fares, consumers unambiguously benefit.
We estimate that the addition of a daily flight on each of these four routes would generate
approximately $46 million in annual consumer benefits, as shown in Table 4. The two smallest
routes, to [REDACTED]         , generate the largest benefits (roughly $13 million in annual
benefits each). The benefits from the         [REDACTED] service are large because only one
carrier ([REDACTED]) currently serves the route and because oneworld entry would increase
the existing traffic by more than half, driving down fares by one third. Although three carriers
serve the                             [REDACTED]                                     ,    oneworld
entry would increase the existing traffic by nearly 10 percent, leading to a fare reduction of more
than 5 percent.

                                            Table 4
                    Effects of oneworld Entry with One Daily Nonstop Flight



                                             [REDACTED]




19
     In addition to incorporating this (Cournot) assumption, we also assume that the overall elasticity of
     demand for a given route is -1.7, and we conservatively assume a linear demand curve.


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                                                   PUBLIC VERSION

See the Appendix for more detail on our methodology and consumer benefit calculations.


                                                       APPENDIX

This appendix provides a technical description of the analysis summarized in Section IV of the
report. Specifically, we present the necessary steps to: (1) simulate the price and quantity effects
of oneworld entry into the four specified routes in the context of a Cournot model of oligopoly
behavior; and (2) derive the estimated $46 million in increased consumer surplus. We assume
that an air carrier’s choice variable is the quantity of passengers it will transport (i.e., ticket sales
quantity) on a specified nonstop route, taking its rivals’ quantity decisions as given. To simplify
the analysis, we assume that carriers offer the same service to all nonstop passengers.
These simulations proceed in three stages. In Stage I, we specify a general model of Cournot
quantity competition. In Stage II, we calibrate the model to solve for incumbent carriers’
implied marginal costs associated with transporting passengers on a particular route. In Stage
III, we use the calibrated models to simulate the effect of oneworld’s entry, with a single (round-
trip) nonstop flight per day, on each of the four routes.


Stage I: Model Specification

Assuming a linear industry demand function consistent with the sale of a homogeneous
product,20 each of n incumbent air carriers serving an international nonstop route chooses a sales
quantity that is the best response to the quantity decisions of the other n-1 carriers serving that
route. Under profit-maximizing behavior, the “best response” function for carrier i is as follows
given the output decisions made by its rivals:


[1]               qi = −
                           [a + b∑ q   −i   − ci   ]    , i = {1,2,…,n},
                                 2b

where qi is the quantity of passengers transported by carrier i, ci is the (constant) marginal cost of
carrier i, and a and b are the intercept and slope terms of the linear demand equation.
The general n-firm Cournot model, with linear demand, consists of a system of n linear
equations, as defined above. The Cournot-Nash equilibrium solution to this model is the set of n
quantities such that each firm’s sales quantity is a best response to the quantity decisions of the
n-1 other firms in the market.




20
      The general inverse demand function is expressed as: P = a + bQ, where P is the market price, Q is the
      total annual quantity of seats sold across all carriers for a given route, and b < 0.



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                                             PUBLIC VERSION



Stage II: Model Calibration

We obtain pre-entry price data for equation [1], from DOT’s 2007 O&D Survey, and we obtain
quantity data from MIDT (year ending May 2008). We calibrate the unknown demand
parameters, a and b, using this data and an exogenously specified price elasticity of demand for
nonstop passengers for each route that is assumed to be equal to -1.7.21
For each incumbent firm, we solve for an implicit estimate of its marginal cost by finding the
cost value that is consistent with profit maximization under Cournot behavior, given that
carrier’s observed sales quantity, the average price for the route, and the assumed price elasticity
of demand for the route.


Stage III: Entry Simulation

With fully specified linear Cournot models, we simulate the effect of oneworld entering each
route with a single nonstop flight per day.22 In effect, we ask how each incumbent’s output
decision would change if, in addition to reacting to the output decisions of the other incumbent
rivals, the airline also had to respond to the additional output associated with oneworld’s entry.
With a fully specified linear Cournot model of quantity (seat) sales, we simulate the impact of
oneworld’s entry by using the incumbent carriers’ marginal costs (as determined in Stage II), as
well as the relevant demand parameters, to solve for the post-entry sales levels that
simultaneously satisfy the best-response functions of all incumbent carriers (i.e., equation [1]).
The aggregate quantity and price effects for each of the four entry scenarios are shown in Table 4
of the report.




21
     Given an initial price, sales quantity and industry elasticity, the slope b is equal to the price-to-sales ratio
     (P/Q) divided by the industry elasticity.
22
     We assume that on two routes (          [REDACTED]                 ) oneworld would carry 150 passengers
     per flight (54,750 passengers per route per year). On the other two routes (        [REDACTED] ),            we
     assume that oneworld would carry 100 passengers per flight (36,500 passengers per
     route per year).


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                                            PUBLIC VERSION


Consumer Benefits

Because entry by oneworld is associated with higher consumer sales and thus lower fares,
consumers unambiguously benefit from entry on each route: more consumers purchase air travel
on each route and each consumer pays a lower fare.
Consumer surplus is a measure of the difference between how much consumers value the ability
to travel on a given route and the cost to them of that travel (i.e., their fare). For a given market
price and quantity pair (Pi, Qi), the expression for consumer surplus is given by:
                                Qi                       Qi

[2]               CS ( Pi , Qi ) = ∫ P(Q )dQ − Pi Qi =   ∫ {a + bQ}dQ − P Q
                                                                        i   i
                                 0                       0


The additional consumer surplus associated with oneworld’s entry, as reported in Table 4 of the
report, is expressed as follows:

[3]               ∆CS = a(QEntry − Q0 ) +
                                         b 2
                                         2
                                              (               )
                                            QEntry − Q02 − (PEntry QEntry − P0 Q0 ) , where P0, Q0 is the
      existing average price and total quantity, and P Entry , Q Entry is the average price and total
      quantity associated with entry.




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