United States Court of Appeals, District of Columbia Circuit
ABC AEROLINEAS, S.A. DE C.V., D/B/A INTERJET, PETITIONER
UNITED STATES DEPARTMENT OF TRANSPORTATION, RESPONDENT
February 26, 2018
Petitions for Review of Final Orders of the United States
Department of Transportation
Moffett B. Roller argued the cause and filed the briefs for
Christopher S. Perry, Acting Deputy Assistant General
Counsel, U.S. Department of Transportation, argued the cause
for respondent. With him on the brief were Robert B.
Nicholson and Frances Marshall, Attorneys, U.S. Department of
Justice, and Paul M. Geier, Assistant General Counsel.
Before: Garland, Chief Judge, and Silberman and Sentelle,
Senior Circuit Judges.
GARLAND, CHIEF JUDGE
condition of approving a cooperation agreement between two
airlines, the Department of Transportation required those
airlines to give competitors 24 pairs of their takeoff and
landing slots at Mexico City's Benito Juárez
International Airport. The Department did not permit the
airlines to give any of those slots to petitioner Interjet,
because Interjet already had more than 300 slots at that
airport. Interjet challenges the Department's orders
implementing this decision, contending that they were
arbitrary, capricious, and contrary to law. Because the
Department's decision was reasonable and consistent with
its statutory mandate, we deny Interjet's petitions for
Federal Aviation Act, 49 U.S.C. § 40101 et
seq., tasks the United States Department of
Transportation (DOT) with regulating the economic aspects of
commercial air travel. One of its many provisions, 49 U.S.C.
§ 41309, sets forth requirements for airlines seeking to
cooperate with their competitors. Under that provision, the
Secretary of Transportation "shall approve" a
cooperation agreement "when the Secretary finds it is
not adverse to the public interest and is not in violation of
this part." Id. § 41309(b). The Secretary
may not, however, approve any agreement that
"substantially reduces or eliminates competition,"
unless she makes certain findings not relevant to this case.
Id. § 41309(b)(1). If the Secretary approves a
cooperation agreement, she may "exempt a person affected
by the order from the antitrust laws," as necessary to
allow the agreement to operate. Id. § 41308(b).
Federal Aviation Act also instructs DOT to consider numerous
factors in deciding whether an agreement is in the public
interest. Several relate to the importance of competition:
The Department must take into account "the availability
of a variety of adequate, economic, efficient, and low-priced
services"; must "plac[e] maximum reliance on
competitive market forces and on actual and potential
competition"; and must strive to "avoid
unreasonable industry concentration, excessive market
domination, monopoly powers, and other conditions that would
tend to allow at least one air carrier or foreign air carrier
unreasonably to increase prices, reduce services, or exclude
competition in air transportation." Id. §
40101(a)(4), (6), (10).
case arises out of an application for approval of a
cooperation agreement filed by Delta Airlines and Aeromexico,
Mexico's flag carrier. The airlines sought to
"coordinate their respective passenger services on
routes between the United States and Mexico." Joint
Application for Approval of and Antitrust Immunity for
Alliance Agreements 1 (Mar. 31, 2015) (J.A. 4). The airlines
explained that, if the Department of Transportation approved
the agreement and granted them antitrust immunity, they would
implement "metal neutrality," meaning that each
airline would treat the other's flights as if they were
its own. Id. at 3 (J.A. 6). According to the
airlines, such an arrangement would allow them to increase
U.S.-Mexico air service. Id. 15-22 (J.A. 18-25).
deciding whether to approve the airlines' application,
DOT requested public comments. Six other airlines, four
airports, two nonprofits, and one city filed comments
concerning the proposed agreement. In addition, the
Department requested further information from the applicant
airlines, as well as from various Mexican authorities.
the public comment period closed, the Department filed an
order that tentatively approved the agreement and granted the
applicants antitrust immunity. The Department concluded that,
with certain conditions, the agreement would be in the public
interest and would not substantially reduce or eliminate
competition. Order to Show Cause 2 (Nov. 4, 2016) (J.A. 115).
As relevant here, it proposed requiring the applicant
airlines to divest 24 pairs of their takeoff and landing
authorizations ("slots") at Mexico City's
Benito Juárez International Airport (MEX), as well as
six pairs of slots at New York City's John F. Kennedy
International Airport (JFK). Id.The Department
explained that the "Joint Applicants control nearly 50%
of the MEX slots, the allocation of which is dependent on
confusing and often unwritten rules, making it extremely
difficult for new entrants to launch competitive
service." Id. at 1 (J.A. 114). The divestiture,
the Department said, was "necessary to support new entry
needed to discipline the coordinated services and planned
growth of the joint venture." Id. at 21 (J.A.
of its proposed remedy, DOT stated that it would determine
which airlines were eligible for the divested slots.
"[B]ecause the aim of the divestitures is to implement
new competitive service," DOT determined that only
carriers "with a limited presence, or no presence, at
the respective airports" would be eligible to receive
slots. Id. at 24 (J.A. 137). At MEX, this policy
resulted in the exclusion of Interjet, which had 313 slots --
the second most after Aeromexico. At JFK, this policy
resulted in the exclusion of JetBlue. Id. at 25
(J.A. 138). Finally, DOT determined ...