Application for Renewal of Exemption
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OST Docket Filings for February 17, 2000 |
Last Updated 02/18/00 02:14 PM
Applications and Renewals:
Aeromexico - Mexico City- Austin | American/Japan - Joint Notice | American/Swissair/Sabana - Notice of Commencement Date
British Midland - Manchester- Chicago/Washington | Chautauqua - Termination of Service | Cook/Duggan vs. Northwest - Complaint
TAMPA - Columbia- Miami | United and British Midland - Amendment | Virgin Atlantic - Chicago- London
Answers and Replies:
American/Cathay - Joint Reply | Pacific Wings - Letter form Hawaii | United/Air New Zealand - Motion/Reply | United/British Midland - Reply of St. Louis
Notices of Action Taken:
Notices and Orders:
Tanquan - Extending Service Obligation
Aerovias de Mexico, S.A. de C.V.
| OST-96-1896 | February 17, 2000 | Application for Renewal of Exemption
|
Mexico City- Austin |
| Service List |
By this application, Aeromexico seeks renewal of its exemption authority to provide service between Mexico City, Mexico, and Austin, Texas. Aeromexico currently is serving Austin on a connecting basis, but it has plans to serve the market directly in the future and, thus, desires to retain the nonstop operating rights. The authority is set to expire on February 24, 2000.
Counsel: Verner Liipfert, William Evans, 202.371.6030
American Airlines, Inc. and Cathay Pacific Airways, Limited
| OST-00-6824 | February 17, 2000 |  Joint Reply of American and Cathay
Pacific
|
Hong Kong, Los Angeles, San Francisco, and New York |
| Service List |
All three answers in essence urge the Department to defer action on the American/Cathay Pacific application pending negotiation of an amended U.S.-Hong Kong Air Transport Agreement, which presently does not provide for codesharing services. In our application, we recognized that discussions between the two sides were initially held on January 19-20, 2000, and that formal negotiations are scheduled for April. We then expressed our view that "the ultimate result of those negotiations will be a bilateral framework in which the American/Cathay Pacific and comparable codeshare arrangements can thrive". Accordingly, the need for a negotiated codesharing provision in the U.S.-Hong Kong bilateral agreement is not in dispute.
However, United and Northwest venture far beyond the matter of codesharing in what they would demand from the U.S.-Hong Kong negotiations. In a tactic that appears designed to protect its transpacific dominance, United insists on "a full open skies agreement," with "both third-country codeshare opportunities and fifth freedom rights to establish a competitive network of services over Hong Kong". Northwest asserts that "Hong Kong must grant the United States broad fifth freedom and third-country codesharing rights". While American and Cathay Pacific do not believe that it is appropriate to use this proceeding to engage in an extended discussion of the pending governmental negotiations, we do wish to observe that the U.S. has added codesharing provisions to a number of bilateral agreements without insisting on full open skies, open third-country codesharing, or broad fifth freedom rights in return. In this regard, we cite the codesharing provisions in U.S. bilateral agreements with such non-open skies partners as Brazil, China, and France, to name a few.
American, for its part, also wishes to comment that it is, particularly disingenuous for United and Northwest, which have long enjoyed exclusive fifth freedom rights at Tokyo, to demand that Cathay Pacific be denied codesharing authority with its chosen U.S. partner airline unless the U.S. secures extensive new fifth freedom rights at Hong Kong. It certainly is ironic to hear United and Northwest -- the only two U.S. carriers with fifth freedom rights at Tokyo -- arguing that competition would be impaired unless they receive broad fifth freedom authority at Hong Kong as well, in return for approval of the proposed third/fourth freedom codesharing arrangement between American and Cathay Pacific. These, however, are matters that will be addressed in the upcoming U.S.-Hong Kong bilateral negotiations. American and Cathay Pacific remain confident that the two sides will achieve a balanced codesharing provision sufficient to support the grant of our joint application in full.
Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com, and Verner Liipfert, Russell Pommer, 202.371.6000
American Airlines, Inc. and Japan Airlines Co. Ltd.
| OST-99-4994 Undocketed |
February 17, 2000 | Joint Notice of American and Japan Airlines
Regarding Codeshare Services |
U.S.- Japan Codesharing |
| Service List |
Effective April 19, 2000, American will display the "JL" designator code on flights operated by American or American Eagle in the following additional city-pairs:
Effective April 19, 2000, American will resume display of the "JL" designator code in the following city-pairs in which codeshare service was temporarily suspended, effective December 31, 1999, per American's notice of November 4, 1999:
Effective April 2, 2000, Japan Airlines will temporarily suspend display of the "AA" designator code in the following markets:
Counsel: Steptoe Johnson, William Karas, 202.429.6223, wkaras@steptoe.com and American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com
American Airlines, Inc., and Swissair, Swiss Air Transport Company, Ltd. and N.V. Sabena S.A.
| OST-99-6528 | February 17, 2000 | Joint Applicant's Notification of Planned Commencement Date
of Their Alliance |
Approval and Antitrust Immunity for Agreements |
| Service List |
Swissair/Sabena hereby notify the Department that their cooperation with Delta will end on August 5, 2000. Also, the joint applicants hereby inform the Department that they plan to commence the cooperative activities described in the joint application immediately thereafter, on August 6, 2000.
Counsel: Steptoe Johnson, William Karas, 202.429.6223, wkaras@steptoe.com and American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com
British Midland Airways Limited
| OST-00-6954 | February 17, 2000 | Application
for Exemption and Motion to Shorten Answer Period
|
Manchester. England- Chicago, Illinois- Washington, D.C. |
| Operating License | |||
| Service List |
The significant and notable changes between the authority now being requested by British Midland and United are the addition of British Midland's request to initiate its own service on the Manchester-Chicago/Washington (Dulles), D.C. routes and the deferral of British Midland's request to codeshare on United's flights between London (Heathrow) and United's U.S. gateway cities. None of these narrowed requests raise any legitimate competitive issues even with the current unfortunate impasse between the United Kingdom and the United States Governments concerning the hoped-for liberalization of Bermuda II. All Manchester-U.S. routes are open -entry routes and neither British Midland nor United offer any nonstop or direct service in the Manchester-U.S. markets. Presently. American, British Airways, Continental and Delta/Virgin Atlantic operate Manchester-U.S nonstop service: American operates service to Chicago, British Airways, Continental and Delta to New York. Delta to Atlanta, and Virgin Atlantic to Orlando. Continental also holds out single-flight-number service to Boston while Delta does so to Philadelphia. British Midland's proposed service would therefore represent the first competitive service to Chicago and the first nonstop service to Washington. D.C. Additionally, allowing British Midland. shortly to be a designated British carrier, the right to hold out its services on a codeshare basis to U.S. cities beyond the Chicago/Washington, D.C. , gateways would be equally procompetitive. The transatlantic sectors over which this connecting traffic would flow again are the open-entry 'Manchester-U.S. routes. It is also the case that both of British Midland's requests are embraced within and fully consistent with the U.S.-U.K. bilateral.
Counsel: Squire Sanders Dempsey, Marshall Sinick, 202.626.6651
| OST-00-6953 | February 17, 2000 | Notice of Termination of Service
|
Staunton, Virginia |
| Article: New Service by United Express | |||
| Service List |
After Chautauqua's termination of service, Staunton will continue to receive substantially more than the level of service established by the Department as essential. Based upon published information, effective April 2, 2000, Atlantic Coast Airlines, Inc., operating as United Express, will commence six daily nonstop roundtrip flights between Staunton and Washington Dulles International Airport, using Jetstream 32 Aircraft, offering 114 seats each way each day. See attached ACA Press Release, which sets forth ACA’s planned schedules. As a result, Staunton will receive more than three times the level of EAS frequencies and almost twice the level of EAS seats to and from ACA's and United's hubs at Washington-Dulles.
Counsel: Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com
Compania Mexicana de Aviacion, S.A. de C.V.
| OST-99-5006 | Filed February 10, 2000 Issued February 17, 2000 |
Notice
of Action Taken |
San Luis Potosi, Mexico- San Antonio, Texas |
By: Paul Gretch
Linda G. Cook and Emma P. Duggan vs. Northwest Airlines, Inc.
| OST-00-6951 | February 16, 2000 | Complaint
Against Northwest |
Discrimination Against any Otherwise Qualified Individual with a Disability |
| Re: Filing of Complaint |
Complaint of Linda G. Cook and Emma P. Duggan pursuant to 14 C.F.R. Section 302.201, against Northwest Airlines, Inc., regarding discrimination against any otherwise qualified individual with a disability, by reason of such disability in the provision of air transportation.
By: Linda Cook and Emma Duggan
| OST-00-6773 | February 17, 2000 | Re:
State of Hawaii |
30-Days Notice to Terminate EAS at Kalaupapa, Molokai, Hawaii |
Counsel: Shaw Pittman, Nathaniel Breed, 202.663.8078
Transportes Aereos Mercantiles Panamericanos, S.A. (TAMPA)
| OST-00-6955 | February 17, 2000 | Application
for Emergency Exemption
|
Columbia- Miami- Panama; All Cargo |
| Service List |
The U.S.-Colombia Air Transport Agreement provides for service between Miami
and Colombia via intermediate points. TAMPA holds exemption authority to serve Caracas, Venezuela, and now seeks to add Panama as only its second U.S.-Colombia intermediate point. Tampa has been serving the Panama market from Colombia for several years, and has strong commercial and economic ties with Panamanian shippers. Tampa intends to enter into a blocked-space agreement with COPA, a Panamanian air carrier, on the Miami-Panama portion of the flight. The remainder of the cargo will be utilized by TAMPA for its U.S.-Colombia cargo operations.Counsel: Winthrop Stimson, John Gillick, 202.775.9800, gillickj@winstim.com
| Order 00-2-23 OST-99-6244 OST-99-6245 |
Issued February 17, 2000 Served February 22, 2000 |
Order Extending Service Obligation |
90-Day Notice to Terminate Essential Service at Port Alexander, Alaska |
Order 2000-2-23 Extending Taquan Air's Service obligation at Port Alexander and Hydaburg, Alaska, for an additional 30 days, through March 20, 2000.
By: Randall Bennett
United Air Lines, Inc. and Air New Zealand Limited
| OST-99-6680 | February 17, 2000 | Contingent Motion for Leave to File and Reply of Air New
Zealand and United |
Approval of and Antitrust Immunity for Alliance Agreements |
| Service List |
Air Pacific has advanced no public interest justification for denying the public the efficiencies and service benefits that would be derived from an immunized Air New Zealand/United alliance. Rather, Air Pacific "conditionally" opposes approval of a coordinated Air New Zealand/United alliance unless it can also obtain antitrust immunity for its own alliance operations. Notably, Air Pacific has not filed an application seeking immunity for its American/Qantas relationships, although it is free to do so. Any such application would be analyzed on the same statutory public interest standards as the Air New Zealand/United application.
Contrary to Air Pacific's claim, competition between the United States and the Pacific Islands will not be reduced by a grant of immunity for the Air New Zealand/United alliance. United itself has never conducted operations that directly compete with either Air Pacific or Air New Zealand on such Pacific Island routes. Thus, Air Pacific's claim that the grant of immunity would lead to the alliance being "dominant" on these routes is wholly illusory. Indeed, the United/Air New Zealand code sharing is already in place in the Pacific Islands, competing with Air Pacific's substantial joint operations with American and Qantas. What Air Pacific apparently hopes to avoid is competing with the more efficient, coordinated service that Air New Zealand and United could produce under an immunized alliance. But these are precisely the type of service enhancements that generate the public benefits upon which grants of immunity are predicated. As the Department stated in its recent report on international alliances, immunized alliances operating in the transatlantic are "providing improved and more competitive services," "stimulating demand," and "leading to procompetitive changes in the industry structure.", These are among the benefits that will be generated in the South Pacific from a grant of immunity to Air New Zealand/United.
Counsel: Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com
United Air Lines, Inc. and British Midland Airways Ltd.
| OST-00-6842 OST-00-6851 |
February 17, 2000 | Amendment to Joint Application of United and British
Midland for Statement of Authorization and Motion for Leave to File
|
U.S.- U.K. Codesharing |
| Appendix 1: Codeshare Markets | |||
| Service List |
The amended joint application would authorize United to offer code-share services on British Midland's flights between Manchester, England and the U.S. gateways of Chicago, IL and Washington, DC. British Midland would offer code-share services to U.S. points served by United beyond the U.S. gateways of Chicago and Washington. United would also offer code-share services between Birmingham, London, Manchester and East Midlands, on the one hand, and other points in the U.K. and third countries, on the other hand. As amended, the requested code-share authorizations will enable United and British Midland to code share to the fullest extent such services may be authorized consistent with the bilateral air services agreement between the U.S. and the U.K. Although Annex 1, Section 5, para. 10 of that agreement has not been formally signed by the parties and code sharing under those provisions remains subject to the discretion of the governments, those provisions define the types of code sharing the parties have been prepared to allow. The code-share services proposed by United and British Midland between the U.S. and Manchester would offer additional competitive options for passengers between Manchester and U.S. points served by United on its domestic network, including the gateways of Chicago and Washington. United's additional code-share service on flights operated by British Midland between U.K. points and between the U.K. points of Birmingham, London, Manchester and East Midlands, on the one hand, and third country points in Europe, on the other hand, will offer additional competitive opportunities for passengers using United's transatlantic services.
United has opposed and continues to oppose the application of American Airlines, Inc. and British Airways in Docket OST-99-6507 to the extent those carriers seek to code share on services to, from or via London's Heathrow or Gatwick airports. United's opposition is based on the American/BA alliance's dominance of U.S.-London services, where they together control 53% of the total frequencies. As long as the protectionist terms of the Bermuda II Agreement allow these carriers to maintain this dominant market share in the largest U.S. transatlantic market, unchallenged by other carriers or alliances, the U.S. should exercise its discretion to disallow American/BA code sharing at London Heathrow and Gatwick airports, even though such code sharing is technically within the terms of Annex 1, Section 5, para. 10, of the U.S./U.K. bilateral. Here, by contrast, as explained in the text, code sharing by United and British Midland as proposed would promote competition and is, therefore, fully consistent with the public interest. The Department should, as a result, exercise its discretion and grant United and British Midland the authority they request.
Counsel: Squire Sanders Dempsey, Marshall Sinick, 202.626.6651 and Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com
| OST-00-6842 OST-00-6851 |
February 17, 2000 | Motion for Leave to File and Reply of the St. Louis
Parties |
U.S.- U.K. Codesharing |
The most recent round of U.S.-U.K. bilateral talks was clearly not productive. This result deprives TWA and St. Louis of the opportunity to compete for the extremely valuable right to serve London's Heathrow Airport from TWA's hub at St. Louis. Heathrow access is critical to TWA's ability to compete profitably in the transatlantic market. The Department should, under no circumstances, grant new authority under the U.S.-U.K. bilateral agreement until such time as a reasonable expansion of Heathrow opportunities is made available to U.S. carriers including TWA. Maintaining the status quo for U.S.-U.K. bilateral rights clearly serves the public interest. Approving the applications of United and British Midland would send the message that the Department, and its negotiating position including its ultimate open skies objectives, can be disregarded without negatively impacting U.K. interests. The U.S. needs to take a firm position in support Of Heathrow expansion. This proceeding offers an excellent opportunity to do so. Deferral of action herein should send a clear message to the British that it is long past time for reasonable negotiations to liberalize Bermuda 2
Counsel: Steptoe Johnson, Richard Taylor, 202.429.6459
Virgin Atlantic Airways Limited
| OST-00-6952 | February 17, 2000 | Application
for Exemption
|
London's Heathrow Airport-Chicago's O'Hare International Airport |
| Service List |
Application of Virgin Atlantic Airways Limited for exemptions from Subpart K and S of 14 C.F.R. Part 93 to the extent necessary to enable Virgin to continue daily non-stop combination service between London's Heathrow Airport and Chicago's O'Hare International Airport beyond the April 1, 2000 expiration of its two current slot exemptions and throughout the 2000 summer season. A timely request for slots to support continuation of its Chicago service during the 2000 summer season. Again, however, the FAA informed Virgin that it would be unable to accommodate Virgin's request.
U.S. airlines have more than equivalent rights of access. As the Department knows, the United States has enjoyed two designations in the Chicago-London market since September 1995, when United Air Lines, Inc., was added to the market as part of a "mini-deal" between the U.S. and U.K. governments. Even if the Department grants the slot exemptions sought herein, U.S. carriers will continue to enjoy a better than two-to-one frequency advantage over U.K. carriers during the 2000 summer season.
Virgin's participation in the U.S.-U.K. and other international markets -- has brought important new economic benefits to the City of Chicago and the surrounding region. Indeed, Virgin Holidays has been instrumental in developing expanded tourism to all of Virgin's U.S. destinations. Its new Chicago service therefore has already stimulated growing numbers of U.K. visitors to Chicago and adjacent communities. The continuation of Virgin's uniquely attractive service therefore will generate significant further economic benefits for the United States.
Counsel: Wilmer Cutler, Jeffrey Shane, 202.663.6000
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