December 28, 1998

Joel Stephen Burton, Esq.
Donald T. Bliss, Esq.
O’Melveny & Myers
555 13th Street, NW
Washington, DC  20004

Dear Messrs. Burton and Bliss:

You have inquired about the scope of 49 U.S.C. 41716, recent legislation relating to certain types of joint venture agreements.  In particular, you ask whether the legislation imposes a waiting period on certain joint venture agreements entered into by US Airways with either a foreign air carrier or a company that is not an airline, such as a rental car company or tour operator.

Your first question is whether the provision applies to agreements other than between “major air carriers.”  In our opinion, it does not.  First, the language of the statute expressly refers to “any other…arrangement…between 2 or more major air carriers” in section 41716(a)(1).  Although this phrase appears in subparagraph (B) of that paragraph, the term “other” supports the position that Congress also contemplated only agreements between major air carriers in subparagraph (A).  This reading is reinforced by legislative history, in which the section-by-section analysis notes that the section “(1) defines the sort of alliances between major airlines that are covered by this section.”  H. Rept. 105-822 (Part I), dated October 15, 1998 (See description of Section 401).  (Emphasis added.)

Your second question addresses the statute’s applicability to three particular types of agreements.  The legislation would not apply to the first two
categories, interline ticketing and baggage agreements and Special Protection Agreements, unless the Department chose to cover them by regulation.  The third category, “blocked space ticket purchase agreements between US Airways and wholesale tour operators or charter companies,” is not covered by virtue of the law’s application only to agreements between major air carriers; between such carriers, of course, such agreements would be covered as specified in subparagraph (A) of section 41716(a)(1).

Joel Stephen Burton, Esq.
Donald T. Bliss, Esq.
December 28, 1998
page 2

Thank you for bringing this question to the Department’s attention.  I hope
that you find this explanation helpful.  If you have further questions, please contact me at 202/366-4702.

Sincerely,

Nancy E. McFadden