The Ashbacker doctrine states that an administrative agency must evalutate two or more licensing applications simultaneously if the applications are mutually exclusive. The doctrine applies only where the applicants are 'similarly situated.'

Even after reading American's objections, it's not clear to me why they thought Ashbacker applied in this case. According to the terms of the US-China agreement, the US was allowed an additional fourteen weekly frequencies starting August 1, 2004. These frequencies were limited to existing US entrants in the US-China market (e.g., Northwest and UA). In March 2005, the US would gain the right to seven additional frequencies and the right to designate a third carrier.

American wanted the August 2004 and March 2005 frequency allocation proceedings combined. They argued that awarding the slots to Northwest and United would only increase the dominance these two carriers had in the US-China market. They also complained about some shenanigans UA pulled in a prior round of frequency allocations, where UA promised to start ORD-Shanghai service but didn't.

Their argument for application of Ashbacker in this case seemed to rest on this: that awarding the slots to Northwest and UA would preclude judgment on whether awarding the slots to those carriers was anticompetitive. Though it's not explicitly stated in their objection, American appeared to want the DOT to award twenty-one slots and one new entrant designation in a single March 2005 proceeding (with the idea, perhaps, that American would get them all).

However, as Northwest and UA argued, Ashbacker doesn't apply because (1) the relevant applications are not mutually exclusive and (2) American is not 'similarly situated.' They noted that American is not a designated US-China carrier and may not be awarded that right in the March 2005 proceedings. Thus, unlike Northwest and UA, they have no present or future authority to fly to China. The fourteen slots are extremely valuable, are available now and both carriers propose to start service well before March 2005. In addition, since Northwest and UA applied for only seven frequencies each, their applications are not mutually exclusive. Even if they were, American would not have standing to object, since they have no present or future interest in the slots.

The DOT sided with Northwest and UA and told American to wait its turn. They did, however, impose two requirements: (1) Northwest and UA must start service by November 10, 2004 or their slots would be forfeited, and (2) in light of UA's previous actions, UA would be required to use its slots for ORD-Shanghai service only.