OST Filings for February 4, 2000

OST Docket Filings for February 4, 2000

Last Updated 02/07/00 11:31 AM

Applications and Renewals:

Aerolineas Marcos - U.S.- Mexico | Delta - U.S.- Harare, Zimbabwe

Answers and Replies:

A.S.T.A. vs. the Airlines - DOT/OST Letter | American/Swissair/Sabena - Joint Reply | FedEx - Motion for Confidential Treatment

U.S.- Argentina - Answer of Delta

Notices of Action Taken:

American Trans | Continental | Spanair - Department Action

Notices and Orders:

IATA | New Air - Confirming Oral Actions

Aerolineas Marcos, S.A. de C.V.

OST-96-1693	February 4, 2000	Application for Renewal of Exemption	U.S.- Mexico Charter Air Transportation
		Exhibit A: Changes in Operation
		Service List

Aerolineas Marcos changed its insurance company and now insures its aircraft with Chubb de Mexico, Companiade Seguros, S.A. ("Chubb"). Aerolineas Marcos carries a combined single limit of liability insurance that far exceeds the requirements of 14 C.F.R. 205. Chubb is preparing the Foreign Air Carriers Certificate of Insurance (OST Form 6411) for submission to the Federal Aviation Administration.

Counsel: Roller Bauer, Lee Bauer, 202.331.3300, airla@rollerbauer.com

Index

American Airlines, Inc., Swissair, Swiss Air Transport Company, Ltd., and N.V. Sabena S.A.

OST-99-6528	February 4, 2000	Joint Reply of American, Swissair and Sabena	Approval and Antitrust Immunity for Agreements
		American Airlines Company Press Release 2/01/00
		Service List

No answers were submitted on the January 28, 2000 response date established by the Department's notice. Before that notice was issued, ASTA submitted a letter (on November 23, 1999) expressing across-the-board opposition to antitrust immunity for any airline marketing alliance, including the one at issue here and that of Northwest/KLM/Alitalia, for example. Legend Airlines (on December 29, 1999) submitted a letter asking that action on our application be deferred until the Love Field controversy is resolved in Legend's favor. Both of these letters are basically public relations exercises intended to promote their authors' views on unrelated matters, and simply do not rise to the level of substantive opposition.

In addition, American wishes to inform the Department that, effective June 1, 2000, American will shift its Chicago-Zurich nonstop service to Dallas/Ft. Worth, as announced in the attached press release of February 1, 2000. As a result, American will no longer operate overlapping nonstop service with Swissair in the Chicago-Zurich city-pair. The only overlapping nonstop city-pair discussed in the "City-Pair Overlaps" section of the joint application (pp. 20-22) will be Chicago-Brussels, in which nonstop service will continue to be operated by American and Sabena.

Counsel: Steptoe Johnson, William Karas, 202.429.6223, wkaras@steptoe.com and American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com

Index

American Society of Travel Agents, Inc. and Joseph Galloway

OST-99-6410

February 4, 2000

U.S. DOT/OST - Letter

Alleged Violations of the Act Regarding Unfair Method of Competition in Air Transportation

By: Betsy Wolf

Index

American Trans Air, Inc.

OST-00-6808

Filed January 20, 2000
Issued February 4, 2000

Notice of Action Taken

U.S.- Canada

Scheduled foreign air transportation of persons, property, and mail between points in the United States and points in Canada.

By: Paul Gretch

Index

Continental Airlines, Inc.

OST-00-6794

Filed January 13, 2000
Issued February 4, 2000

Notice of Action Taken

Houston- Santa Cruz, Bolivia via Lima
Peru

Exemption under 49 U. S.C. 40109 to provide the following service: Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, and Santa Cruz, Bolivia, via Lima, Peru.' Continental has requested the authority for an indefinite duration.

Allocation of three weekly Peru-Bolivia fifth-freedom frequencies to provide the following service: Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, and Santa Cruz, Bolivia, via Lima, Peru, with local traffic rights between Lima and Santa Cruz.

Allocation of seven weekly Peru-Chile fifth-freedom frequencies to provide the following service: Scheduled foreign air transportation of persons, property, and mail between New York/Newark and Santiago, Chile, via Lima Peru, with local traffic rights between Lima and Santiago.

By: Paul Gretch

Index

Delta Air Lines, Inc.

OST-98-3736	February 4, 2000	Application for Renewal of Exemption	U.S.- Harare, Zimbabwe
		Service List

Counsel: Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Index

Federal Express Corporation

OST-97-2494	February 4, 2000	Motion for Confidential Treatment	Form 41; Schedule B-7
		Service List

Counsel: Shaw Pittman, Nathaniel Breed, 202.663.8078

Index

New Air Corporation / JetBlue

Order 00-2-7 OST-99-5616 OST-99-6662	Issued February 4, 2000 Served February 4, 2000	Order Confirming Oral Actions and Issuing Effective Certificate	Certificate of Public Convenience and Necessity - Interstate Scheduled
		Certificate of Public Convenience and Necessity
		Service List

JetBlue states that it still intends to begin certificated operations on or about February I I from New York/JFK to Buffalo with an A-320 aircraft, adding a second A-320 in the following week for service to Ft. Lauderdale. A third aircraft and market are expected to be added in March, with two more aircraft and markets to be added in June. By January 2001, JetBlue expects to be providing service to nine markets with ten A-320s.

The company filed revised statements of pre-operating expenses covering the year 1999 and the first month of 2000, and pro-forma traffic and income data for the first year of proposed actual operations (February 2000-January 2001). These documents indicate that JetBlue expects to have expended approximately $76.3 million as of the end of January 2000 for expensed and capitalized pre-operating needs. This figure is about $9.3 million higher than predicted in its original application. JetBlue's newly revised first-year operating cost projection of $115.6 million represents an increase of $17.5 million over its original projection. The new cost projection includes higher estimates for a number of items, including fuel, aircraft leases, landing fees, airport premises, and salaries.

We have examined JetBlue's revised data and find them to be reasonable. As a result of the preoperating and projected operating cost increases, however, the amount of resources to which JetBlue will need access in order to continue to meet our financial fitness criteria has correspondingly increased. Dividing the company's revised total first-year operating cost estimate of $115.6 million by four yields a three-month working capital reserve requirement of $28.6 million. With the preponderance of pre-operating expenses already paid, we have calculated that JetBlue's total start-up funds requirement is $28.6 million. The company provided an update of the stockholder investment payments it has received. At the time of its application, JetBlue anticipated investments totaling $128.2 million. Its most recent accounting showed total investment received as $129.2 million. The company's banks verified that as of January 3, JetBlue had deposited funds available to it totaling $52.3. Thus, the company, at that time, had access to approximately $23.7 million more than is required to meet our financial fitness criteria.

By: Randall Bennett

Index

Spanair, S.A.

OST-00-6809

Filed January 20, 2000
Date of Action February 3, 2000

Department Action on Application

U.S.- Madrid, Lisbon

By: Gordon Bingham

Index

1999 U.S.- Argentina Combination Service Case

OST-99-6210	February 3, 2000	Answer of Delta Air Lines Electronic Submission	U.S.- Argentina
		Service List

It is obvious that United’s forecast has no basis in reality. Indeed, if United seriously thought that it could achieve a 93% load factor at Los Angeles, it would be hard pressed to explain why it has been wasting its current allocation of Argentina frequencies at New York and Chicago, which have, respectively, been operating only 54 and 55 percent load factors – nearly 40 points lower than United Delta is anxious to begin marketing its Atlanta-Buenos Aires services proposed to begin on September 1, 2000. The present procedural schedule will likely permit a final decision by May 2000, just four months in advance of the September 1 start date. This is barely adequate time to market and implement an important new international long-haul service, and, under no circumstances should this proceeding be delayed by Continental. The strength of Delta’s proposal makes Delta the most likely applicant to receive the year one award. Consequently, Delta would be most adversely impacted by the procedural delay proposed by Continental. Indeed, Delta’s Atlanta proposal will benefit over 55,000 more annual passengers than Continental, and Delta will provide by far the greatest expansion of network service benefits (not to mention the fact that New York/Newark is already one of the best served U.S.-Argentina gateways). Since Delta fully expects to begin service on September 1, 2000, it is critical to Delta’s marketing efforts that the issuance of a final decision not be delayed. On the other hand, since Continental’s markedly inferior Newark service proposal is unlikely to be authorized until at least year 2, Continental has nothing to lose by delaying the proceeding. Rebuttal exhibits provide ample opportunity for the other applicants to probe the obvious deficiencies of United’s erroneous and highly exaggerated forecast. Delta has already completed the necessary evaluation of United’s forecast and prepared rebuttal exhibits for timely submission in accordance with the Department’s procedural schedule. Continental should do the same. Indeed, even without the aid of rebuttal exhibits by the other applicants the Department staff would be fully capable of recognizing and rejecting United’s exaggerated claims for its Los Angeles service.

Counsel: Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Index

International Air Transport Association

OST-00-6826	Filed January 25, 2000	Approved January 28, 2000	Approval of Agreements
OST-00-6830	Filed January 27, 2000	Approved January 28, 2000	Approval of Agreements

By: Paul Gretch

Index