OST Filings for February 6, 2002

Renew exemption to conduct scheduled foreign air transportation of property and mail between Tel Aviv, Israel, via the intermediate point Luxembourg (with a technical stop in Gander, Newfoundland), and the coterminal points New York, NY, and Chicago, IL; and all-cargo charters pursuant to 14 CFR 212 of the Department’s regulations.

By: Paul Gretch

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Edelweiss Air, Ltd.

OST-98-3304

February 5, 2002

Family Assistance Plan of Edelweiss Air

Foreign Air Carrier Plans to Address Needs of Families of Victims of Aircraft Accidents

Counsel: Zucket Scoutt, Rachel Trinder, 202.298.8660

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Federal Express Corporation

OST-97-2494

February 5, 2002
Docketed February 6, 2002

Motion for Confidential Treatment

Form 41; Schedule B-7

Counsel: Shaw Pitman, Nathaniel Breed, 202.663.8078

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Mesa Airlines, Inc.

Order 02-02-3 OST-97-2842	Issued February 5, 2002 Served February 8, 2002	Order Authorizing Subsidy for Increased Program-Wide	Essential Air Service at Massena, Ogdensburg and Watertown, NY
		Appendix A & B: EAS Service

By Order 2000-4-2, issued April 3, 2000, Mesa was selected to continue providing essential air service at Massena, Ogdensburg and Watertown, for a two-year period from October 1, 1999, through September 30, 2001. Subsidy was set at an annual rate of $1,115,507 for Mesa's provision of three round trips each weekday, and three each weekend, between Massena, Ogdensburg and Watertown, and Pittsburgh, with 19-seat Beech 1900 aircraft. By Order 2001-10-17, issued October 31, 2001, the Department extended Mesa's expired subsidy rate for Upstate New York until further notice, subject to adjustment retroactive to October 1, 2001, pending the resolution of the Department's final fiscal year 2002 budget.

The Department is now conducting a carrier selection case for Upstate New York and proposals to provide essential air service have been submitted by Mesa and CommutAir. Although negotiations have been completed with both carriers, the State of New York has requested that the Department delay final action on the selection decision pending further study by the communities and the State of the air service needs for the region.

In the meantime, Mesa and the Department have agreed to an annual subsidy rate of $1,905,432 for a new two-year rate term for a level of service identical to that now being provided by the carrier. Thus, we will set this new rate as a final rate for Mesa, retroactive to October 1, 2001, until further Department action, pending the completion of the carrier selection case.

By: Read Van de Water

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Societe Air France and Comair Inc.

OST-00-6939

February 6, 2002

Notice of Societe Air France and Comair of Additional Codeshare Points

U.S.- France Blanket Codeshare Authority

Pursuant to the blanket statement of authorization granted to Comair, Inc. and Societe Air France by Department Action dated March 3, 2000, Air France and Comair hereby notify the Department that Comair plans to display the "AF" designator code of Air France on flights operated by Comair between Cincinnati (CVG) and each of the points listed in Exhibit A.

"AF" Designator To Be Displayed On Comair Operated Flights Effective March 8, 2002

Cincinnati (CVG) to/from:

Cleveland (CLE)
Columbus (CMH)
Louisville (SDF)
Oklahoma City (OKC)
Orlando (MCO)
Raleigh/Durham (RDU)
Richmond (RIC)

Counsel: Silverberg Goldman, Michael Goldman, 202.944.3305, and Shaw Pittman, Robert Cohn, 202.663.8060

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TWA Airlines LLC

OST-01-10500

February 5, 2002
Docketed February 6, 2002

Motion for Confidential Treatment

Form 41; Schedule B-7

Counsel: American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

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US Airways, Inc.

OST-97-2128

Filed January 18, 2002
Issued February 6, 2002

Notice of Action Taken

Charlotte/Philadelphia- Cancun, Mexico

Scheduled foreign air transportation of persons, property, and mail between (1) the terminal point Charlotte, North Carolina, and the terminal point Cancun, Mexico, and (2) the terminal point Philadelphia, Pennsylvania, and the terminal point Cancun, Mexico.

By: Paul Gretch

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U.S.- U.K. Alliance Case

OST-01-11029	February 6, 2002	Motion of Virgin Atlantic Airways for Leave to File Late Answer Microsoft Word File	U.S.- U.K. Alliance Case
		Service List

Virgin Atlantic's London based senior staff responsible for directing Virgin Atlantic's participation in this proceeding did not become aware of the Motion to Dismiss, or the Notice shortening the response date, until after the close of business London time on February 1, 2002. Moreover, these same senior staff officers were out of the office on foreign travel during the first part of this week and thus were unable to review and participate in the submission of a response to the Motion to Dismiss in a timely fashion.

Counsel: Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com

OST-01-11029	February 6, 2002	Answer of Virgin Atlantic Airways in Support of Motion to Dismiss Microsoft Word File	U.S.- U.K. Alliance Case
		Service List

There is an additional significant basis to doubt the feasibility of the successful negotiation of an Open Skies Agreement between the U.S. and the UK. On January 31, 2002, the Advocate General for the Commission of the European Communities (EC) issued its much-anticipated Opinion on the challenge by the EC to alleged breaches of Community law by seven Member States of the European Union arising from their having signed Open Skies Agreements with the United States in violation of Community common rules. The AG concluded that in three critical areas -- pricing, CRS and nationality - the Member States have breached European Community law by reaching Open Skies Agreements with the United States. The DOT is very much aware of these legal proceedings, of course. Indeed, the expedited procedural schedule in this proceeding has been grounded in the DOT's hope that the United States and the United Kingdom could conclude an Open Skies Agreement before a ruling in the EC litigation that might preclude the UK from signing such an agreement.

If adopted by the ECJ, the AG Opinion would preclude the UK from signing an Open Skies Agreement with the United States. Since a U.S.-UK Open Skies Agreement is a necessary precondition to the grant of antitrust immunity to carriers in the U.S.-UK trade, it follows that this proceeding should be terminated forthwith. Moreover, the AG Opinion contains analysis, and makes findings, that have present effect on the ability of the United Kingdom to continue in Open Skies discussions with the United States.

Perhaps the most confounding of the three areas covered by the AG Opinion is the nationality issue. From the EC perspective, discrimination in the treatment of airlines or citizens of non-contracting parties undermines the purpose of the Community at its core: The right of citizens of any Member State to establish and conduct business in any other Member State. If the right of establishment within the Community is undermined, the glue that binds the Member States into a functioning economic unit will fissure, and Community cohesiveness will unravel. From the U.S. perspective, acceding to the request of EC contracting parties to permit the designation of any EC Member State under a particular bilateral Open Skies Agreement would allow EC countries who have thus far refused to sign Open Skies Agreements with the United States (in addition to the UK, Greece, Ireland and Spain) to obtain the benefits of Open Skies (by establishing an airline in the territory of an Open Skies contracting party) without reciprocally opening its markets to U.S. airlines. Logic informs that the United States could not agree to such an unbalanced outcome.

All sides agree that there cannot be antitrust immunity alliances in the U.S.-UK trade unless and until the United Kingdom and the United States conclude an Open Skies Agreement. In the light of the opinion of the Advocate General, it is now clear that Community law precludes the United Kingdom from negotiating or signing such an agreement. That being the case, the DOT should dismiss this proceeding.

Counsel: Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com

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