American Airlines 2006 Annual Report Download - page 27

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On February 14, 2006, the Antitrust Division of the United States Department of Justice (the “DOJ”) served the
Company with a grand jury subpoena as part of an ongoing investigation into possible criminal violations of the
antitrust laws by certain domestic and foreign air cargo carriers. At this time, the Company does not believe it is a
target of the DOJ investigation. The New Zealand Commerce Commission notified the Company on February 17,
2006 that it is also investigating whether the Company and certain other cargo carriers entered into agreements
relating to fuel surcharges, security surcharges, war risk surcharges, and customs clearance surcharges. On
February 22, 2006, the Company received a letter from the Swiss Competition Commission informing the
Company that it too is investigating whether the Company and certain other cargo carriers entered into
agreements relating to fuel surcharges, security surcharges, war risk surcharges, and customs clearance
surcharges. On December 19, 2006, the Company received a request for information from the European
Commission seeking information regarding the Company’s revenue and pricing announcements for air cargo
shipments to and from the European Union. On January 23, 2007, the Brazilian competition authorities, as part of
an ongoing investigation, conducted an unannounced search of the Company’s cargo facilities in Sao Paulo,
Brazil. The authorities are investigating whether the Company and certain other foreign and domestic air carriers
violated Brazilian competition laws by illegally conspiring to set fuel surcharges on cargo shipments. The
Company intends to cooperate fully with these investigations. In the event that these or other investigations
uncover violations of the U.S. antitrust laws or the competition laws of some other jurisdiction, such findings and
related legal proceedings could have a material adverse impact on the Company. Approximately 44 purported
class action lawsuits have been filed in the U.S. against the Company and certain foreign and domestic air
carriers alleging that the defendants violated U.S. antitrust laws by illegally conspiring to set prices and
surcharges on cargo shipments. These cases, along with other purported class action lawsuits in which the
Company was not named, were consolidated in the United States District Court for the Eastern District of New
York as In re Air Cargo Shipping Services Antitrust Litigation, 06-MD-1775 on June 20, 2006.
Plaintiffs are
seeking trebled money damages and injunctive relief. The Company has not been named as a defendant in the
consolidated complaint filed by the plaintiffs. However, the plaintiffs have not released any claims that they may
have against the Company, and the Company may later be added as a defendant in the litigation. If the
Company is sued on these claims, it will vigorously defend the suit, but any adverse judgment could have a
material adverse impact on the Company. Also, on January 23, 2007, the Company was served with a purported
class action complaint filed against the Company, American, and certain foreign and domestic air carriers in the
Supreme Court of British Columbia in Canada (McKay v. Ace Aviation Holdings, et al.). The plaintiff alleges that
the defendants violated Canadian competition laws by illegally conspiring to set prices and surcharges on cargo
shipments. The complaint seeks compensatory and punitive damages under Canadian law. American will
vigorously defend these lawsuits; however, any adverse judgment could have a material adverse impact on the
Company.
On June 20, 2006, the DOJ served the Company with a grand jury subpoena as part of an ongoing investigation
into possible criminal violations of the antitrust laws by certain domestic and foreign passenger carriers. At this
time, the Company does not believe it is a target of the DOJ investigation. The Company intends to cooperate
fully with this investigation. In the event that this or other investigations uncover violations of the U.S. antitrust
laws or the competition laws of some other jurisdiction, such findings and related legal proceedings could have a
material adverse impact on the Company. Approximately 52 purported class action lawsuits have been filed in
the U.S. against the Company and certain foreign and domestic air carriers alleging that the defendants violated
U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation. These cases,
along with other purported class action lawsuits in which the Company was not named, were consolidated in the
United States District Court for the Northern District of California as In re International Air Transportation
Surcharge Antitrust Litigation, M 06-01793 on October 25, 2006. Plaintiffs are seeking trebled money damages
and injunctive relief. American will vigorously defend these lawsuits; however, any adverse judgment could have
a material adverse impact on the Company.
American is defending a lawsuit (Love Terminal Partners, L.P. et al. v. The City of Dallas, Texas et al.) filed on
July 17, 2006 in the United States District Court in Dallas. The suit was brought by two lessees of facilities at
Dallas Love Field Airport against American, the cities of Fort Worth and Dallas, Southwest Airlines, Inc., and the
Dallas/Fort Worth International Airport Board. The suit alleges that an agreement by and between the five
defendants with respect to Dallas Love Field violates Sections 1 and 2 of the Sherman Act. Plaintiffs seek
injunctive relief and compensatory and statutory damages. American will vigorously defend this lawsuit; however,
any adverse judgment could have a material adverse impact on the Company.