Served February 14, 2002
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OST Docket Filings for February 14, 2002 |
Last Updated 02/14/02 07:37 PM
Applications and Renewals:
Air Japan (2) - U.S.- Japan Renewal/Statement of Authorization | American - U.S.- Brazil Renewal
Delta - U.S.- Chile Renewal
US Airways (2)- Philadelphia/Pittsburgh/Charlotte- Paris Renewals; U.S.- France Certificate
U.S.- Ecuador - Gemini Renewal of Startup Date
Answers and Replies:
Compensation of Air Carriers - Comments | CRS (2) - Comments | Freedom (2)- Exhibits/Motion for Confidential Treatment
Market Based (3)- Comments | Southern Winds - Withdrawal of Objection of United | Sundance - Answer of Amerijet (Venezuela)
U.S.- U.K. Alliance Case (3)- Answer of FedEx/Virgin Atlantic//Joint Answer of United/Austrian/bmi/Lauda/Lufthansa/SAS
U.S.- Turkey Third-Country Codeshare (4)- Replies of Chicago/Continental/Delta/United
Notices of Action Taken:
Notices and Orders:
Aero Continente - Consent Order | CRS - Extension of Expiration Date
Small Community Air Service Development Pilot Program - Soliciting Community Proposals
Reporting Requirement for Disability-Related Complaints - Proposed Rulemaking
U.S.- U.K. Alliance Case - Suspending Procedural Date
| Order 02-2-12 | Issued February 14, 2002 Served February 14, 2002 |
Consent Order |
Violations of 49 U.S.C. $ 41301 and 49 U.S.C. $ 41712 |
Prior to July 2001 Aero Continente conducted numerous flights between Lima and Miami in a manner consistent with its exemption authority using, in most cases, the services of Aero Continente Chile as the wet lessor. A suspension of the Chilean carrier's authority in July 2001, however, abruptly terminated this wet lease service. In an attempt to provide substitute transportation, Aero Continente, the Peruvian carrier, arranged for Falcon Air Express and Miami Air International, both U.S. carriers, to provide service between Panama and Miami. Upon arrival at Panama City, pursuant to the interim service plan adopted by Aero Continente, passengers were transferred from the flights operated by the U.S. carriers to an Aero Continente flight for the continuation of the service to Lima. These joint services continued between mid-July and early August 2001, consisting of 17 round trip flights.
The Enforcement Office believes that Aero Continente's recent violations of its permit authority require formal enforcement measures. In order to avoid litigation, Aero Continente has agreed to the issuance of this order to cease and desist, to the payment of compromise civil penalties, and to the findings made below. By this order, Aero Continente is assessed $20,000 in compromise of potential civil penalties otherwise assessable under 49 U.S.C.
By: Roslaind Knapp
| OST-00-8299 | February 14, 2002 | Application
for Renewal of Exemption |
U.S.- Japan Services |
| Service List |
By this Application, AJX seeks a renewal of its existing exemption authority to conduct scheduled foreign air transportation of persons, property and mail between any point or points in Japan and any point or points in the United States and to conduct charters in accordance with Part 212 of the Department's rules.
Counsel: Zuckert Scoutt, Charles Simpson, 202.298.8660
| OST-02-11605 | February 14, 2002 | Application
for Statement of Authorization |
U.S.- Japan Same Country Codesharing |
| Service List |
AJX and ANA have entered into a code-share arrangement whereby AJX displays ANA's designator code on certain AJX flights. AJX was authorized initially to display ANA's code on AJX flights in the Osaka, Japan-Guam market. AJX and ANA now wish to extend their code-share service to the Osaka-Honolulu, Hawaii market. The parties anticipate starting this service on March 31, 2002.
Counsel: Zuckert Scoutt, Charles Simpson, 202.298.8660
| OST-96-1353 OST-97-2419 |
February 14, 2002 | Application
for Renewal of Exemptions |
U.S.- Brazil |
| Service List |
American Airlines, Inc., under 49 USC 40109, hereby applies for renewal of the captioned exemptions authorizing scheduled foreign air transportation of persons, property, and mail between the United States and named points in Brazil.
In OST-1996-1353, most recently renewed by Notice of Action Taken, April 21, 2000, American holds authority to serve from a point or points in the United States, via intermediate points, to Belem, Belo Horizonte, Brasilia, Manaus, Porto Alegre, Recife, Rio de Janeiro, Salvador, and Sao Paulo, Brazil, and beyond Brazil to Argentina, Chile, Paraguay, and Uruguay. Absent this renewal application, such authority would expire on April 21, 2002. In OST-1997-2419, most recently renewed by Notice of Action Taken, April 21, 2000, and amended by Notice of Action Taken, August 24, 2001, American holds authority to serve from the United States to Cuiaba, Curitiba, Florianopolis, Fortaleza, Foz do Iguacu, Goiania, Joinville, Natal, Navagantes, Parana, Porto Velho, Ribeirao Preto, Sao Luis, Teresina, Vilhena, and Vitoria, Brazil, and the right to integrate such authority with its U.S.-South America (Route 389) and other U.S.-Brazil exemption authority, for purposes of a codesharing arrangement between American and TAM - Linhas Aereas, S.A. Absent this renewal application, such authority would expire on April 21, 2002.
American also notes that it has two pending certificate applications for broad U.S.-Brazil authority, one in Docket 48301, filed on August 18, 1992, and the other in Docket 48343 (renewal and realignment of Route 389), filed on September 10, 1992. There were no answers in opposition to either of those applications with respect to Brazil, and each remains pending. American urges the Department to act promptly on these longstanding applications, which would obviate the need for seeking periodic exemption renewals.
Counsel: American, Carl Nelson, 202.496.5647, carl.nelson@aa.com
Computer Reservation System Regulations
| OST-97-2881 | February 14, 2002 | Comments
of Uniglobe Spencer Travel |
Computer Reservation System (CRS) |
By: Uniglobe Spencer Travel, Henry Ostrout
| OST-97-2881 | February 11, 2002 Docketed February 14, 2002 |
Comments
of Regent Travel Agency |
Computer Reservation System (CRS) |
By: Regent Travel Agency, Judy Nurre
| OST-02-11577 | February 12, 2002 | Proposed
Extension of Expiration Date
|
Computer Reservation System (CRS) |
The Department is proposing to amend its rules governing airline computer reservations systems (CRSs), 14 CFR Part 255, by changing the rules' expiration date from March 31, 2002, to March 31, 2003. If the expiration date is not changed, the rules will terminate on March 31, 2002. The proposed extension of the current rules will keep them in effect while the Department carries out its reexamination of the need for CRS regulations. The Department has tentatively concluded that the current rules should be maintained because they appear to be necessary for promoting airline competition and helping to ensure that consumers and their travel agents can obtain complete and accurate information on airline services. The rules were previously extended from December 31, 1997, to March 31, 1999, then to March 31, 2000, then to March 31, 2001, and most recently to March 31, 2002.
The Department recognizes that our reexamination of the rules should be completed as soon as possible, and the staff is moving forward promptly to bring the rulemaking to completion. Our rules must be updated to reflect current industry conditions, and we must consider whether the rules should be extended to the Internet, which is becoming increasingly important in airline distribution. CRS-related issues may arise that may require a decision before we complete our overall reexamination of the rules. The importance of some issues related to Orbitz, for example, caused us to review Orbitz' business plan before it launched its service to the public, and we are conducting a further review of Orbitz to see whether its actual operations present competitive issues. When expedited action is needed on other issues, we will address them promptly. We are aware that several parties have requested expedited action on specific proposed revisions to the CRS rules, such as rules limiting airline booking fees and giving travel agency subscribers additional rights to cancel CRS contracts.
We recognize that the airline distribution system and the CRS business are changing. The Internet's role in airline distribution is growing rapidly. Two of the systems -- Sabre and Galileo -- are no longer controlled by airlines. American and Southwest market Sabre, however, and United markets Galileo, so these two systems each have significant airline ties which could potentially lead to deceptive or unfair competitive practices if our rules expired. Whether the rules should be readopted in light of the changes in system ownership is, of course, an issue that we are carefully considering in our reexamination of the rules. 65 FR at 45554, 45556. As stated above, we recognize the importance of updating the rules to reflect all such developments.
By: Read Van de Water
| OST-00-7233 | February 14, 2002 | Application for Renewal of Exemption |
U.S.- Chile |
| Service List |
Delta introduced and continues to operate daily nonstop roundtrip service between Atlanta and Santiago. Delta's existing service between Atlanta and Santiago provides strong competition with services to Chile that are operated by other U.S. and foreign flag carriers. Renewal of Delta's authority will allow Delta to continue to provide this important competitive service to consumers and to introduce new services that are consistent with the U.S.-Chile open skies agreement as market conditions warrant.
Counsel: Shaw Pittman, Alexander Van der Bellen, 202.663.8060
| OST-01-11206 | Februyary 13, 2002 Docketed February 14, 2002 |
Re: Response to Request for
Additional Information |
Scheduled Interstate Air Transportation |
| Table of Contents | |||
| Exhibits 19-24: Resumes, Key Personnel Questionnaire | |||
| Exhibit 25: 10-K 9/30/01 | |||
| Exhibit 26: Press Release 2/07/02 | |||
| Exhibit 27: Redacted Codeshare and Revenue Sharing Agreement | |||
| Exhibit 28: Unredacted Codeshare and Revenue Sharing Agreement | |||
| Exhibit 29: Statement of Intent | |||
| Exhibit 30: Amended Statement of Intent | |||
| Service List |
Mesa Air Group has more than sufficient working capital to start the Freedom operations. On January 3, 2002, Mesa announced that it had reached an agreement with lessors to provide financing for up to 20 64-seat Bombardier CRJ-700 and 84-seat 900 aircraft. The commitment is in the form of equity to be used in long-term U.S. leveraged leases. Mesa Air Group showed negative working capital as of June 30, 2001 due to the classification of $166.8 million in indebtedness as "Current portion of long-term debt." At that time, Mesa was in negotiations with Raytheon Aircraft Corporation, the debt holder, and according to the accounting regulations, these obligations (both short and long-term) had to be classified as current because of Mesa's non-payment. Subsequently, the dispute was resolved and the obligations were reclassified. (See the balance sheet information referenced above). Mesa obtained significant annual subsidy amounts related to its Beechcraft 1900D fleet as a result of these negotiations, which will further strengthen the Company's turboprop divisions.
Counsel: Freedom Airlines, George Lippemeier
| OST-01-11206 | February 13, 2002 Docketed February 14, 2002 |
Motion
to Withhold Information form Public Disclosure |
Scheduled Interstate Air Transportation |
Exhibit 28 contains detailed financial and cost and revenue information related to Mesa's current and Freedom's proposed operations on behalf of America West Airlines. It incorporates private, commercial and financial information of a type that is not usually disclosed to the public and would not, in this case, be disclosed to the public by Freedom Airlines, Mesa Airlines or America West Airlines. In fact, Mesa and America West have previously requested and received confidential treatment in their filings with the Securities and Exchange Commission in their 34 Act filings. Rather, it is being provided to the Department solely in support of the Application. Disclosure of this information would cause material harm to the competitive positions of Mesa Airlines, Freedom Airlines and America West Airlines and violate various contractual obligations of the parties.
Counsel: Freedom Airlines, George Lippemeier
Implementation of Small Community Air Service Development Pilot Program
| Order 02-2-11 OST-02-11590 |
Issued February 13, 2002 Served February 19, 2002 |
Order
Soliciting Community Proposals |
Solicitation of Proposals from Interested Communities |
| Attachment: Improved Service, Grant Application |
Order 2002-2-11 is instituting a new small community air service development pilot program by soliciting a initial round of proposals from interested communities and consortiums of communities. Proposals should be submitted no later than 60 days after the date of service of this order to ensure priority consideration.
By: Read Van de Water
Market Based Actions to Relieve Airport Congestion and Delay
| OST-01-9849 | January 28, 2002 Docketed February 13, 2002 |
Comments
of Denise Herrmann |
Public Comment to Relieve Airport Congestion and Delay |
By: Denise Herrmann
| OST-01-9849 | January 31, 2002 Docketed February 13, 2002 |
Comments
of Caren Gerszberg |
Public Comment to Relieve Airport Congestion and Delay |
By: Caren Gerszberg
| OST-01-9849 | November 5, 2001 Docketed February 13, 2002 |
Comments
of Mark Friedland |
Public Comment to Relieve Airport Congestion and Delay |
By: Mark Friedland
Procedures for Compensation of Air Carriers
| OST-01-10885 | January 11, 2002 | Comments
of Wiggins Airways |
Procedures for Compensation of Air Carriers |
By: Wiggins Airways
Reporting Requirement for Disability-Related Complaints
| OST-02-11473 | February 13, 2002 | Notice
of Proposed Rulemaking |
Reporting Requirement for Disability-Related Complaints |
This document proposes to require most certificated U.S. air carriers and foreign air carriers operating to and from the U.S. that conduct passenger-carrying service to record and categorize complaints that they receive alleging inadequate accessibility or discrimination on the basis of disability according to the type of disability and nature of complaint, prepare a summary report of those complaints, submit the report annually to the Department of Transportation's (Department or DOT) Aviation Consumer Protection Division, and retain copies of correspondence and record of action taken on disability-related complaints for three years. Under procedures established by the Paperwork Reduction Act of 1995, before seeking OMB approval to collect information from the public, Federal agencies must solicit public comment on proposed collections of information. Interested persons are invited to submit comments regarding this proposal and comments must be received on or before April 15, 2002.
By: Blane Workie
Servicios Aereos Ilsa, S.A. de C.V.
| OST-96-1959 | Filed January 16, 2002 Issued February 13 2002 |
Notice
of Action Taken |
U.S.- Mexico Charter Air Transportation |
Exemption to permit the applicant to continue to conduct passenger charter operations between Mexico and the United States, and other passenger charter operations in accordance with 14 CFR Part 212, using small equipment.
By: Paul Gretch
| February 14, 2002 | Withdrawal
of Objection of United Air Lines to Application |
U.S.- Argentina |
Counsel: Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com
| OST-02-11437 | February 14, 2002 | 
Answer of Amerijet International
|
U.S.- Venezuela |
At its most basic level, Amerijet is simply unable to determine whether the authority at issue here is being sought by a properly constituted and designated Venezuelan carrier or by a U.S. company acting on behalf of a Venezuelan company. The subject application purports to be filed by Sundance Venezuela, but the application is actually submitted by Sundance Air, Inc., a U.S. corporation (hereinafter "Sundance U.S."), and signed by Bert van Toornburg, represented to be the President of Sundance U.S. and not represented to have any authority from or affiliation with Sundance Venezuela.
Similarly, the application does not provide adequate
information to permit the Department and interested parties to determine the
nature and operating history of Sundance Venezuela. Part 211 of the Department's
Regulations requires foreign companies applying for economic authority from the
Department to provide certain basic information regarding their history and
scope of operations. Material supplied by Sundance Venezuela falls far short of
satisfying that requirement.
Moreover,
the limited material Sundance Venezuela has provided is internally inconsistent
and confusing. At one point, Sundance Venezuela states that its operations have
"just started," but other exhibit material suggests that Sundance
Venezuela has been doing something since sometime in the year 2000. And the
applicant has offered financial information on the operations of the company
during the entire calendar year 2001. From these ambiguities
alone, further information on the operating history of the applicant is
required. Unless the key management employees identified in Sundance Venezuela's
exhibit material were only recently employed (contrary to other
representations), it is hard to understand how all of them, in addition to other
necessary employees, could be compensated from the total amount of $95,000
reported as payroll and employee expenses for calendar year 2001.
Counsel: Crispin Brenner, John Richardson, 202.371.2588
| OST-96-1000 OST-97-3034 OST-99-6205 |
February 14, 2002 | Application
for Amendment of Existing Exemption Authority |
Philadelphia, Pittsburgh, Charlotte- Paris |
| Service List |
In light of the recently signed U.S.-France open skies agreement, and the recent applications of other U.S. carriers in this market,' US Airways, Inc., hereby applies, pursuant to 49 U.S.C. § 40109 and Subpart C of the Department's Rules of Practice, to amend its existing exemption authority, which permits scheduled foreign air transportation of persons, property, and mail between Pittsburgh, Charlotte, and Philadelphia on the one hand, and Paris on the other, to permit US Airways to engage in scheduled foreign air transportation of persons, property, and mail between any point or points in the United States and any point or points in France and its territories, either directly or via intermediate points, and beyond France to any point or points in third countries. US Airways further requests authority to integrate this authority with its existing certificates and exemptions, to the extent permitted by applicable international agreements. Such authority will give US Airways the flexibility to exercise the rights and opportunities available to U.S. carriers under the new open skies agreement.
Counsel: O'Melveny Myers, Joel Stephen Burton, 202.383.5300
| OST-02-11601 | February 14, 2002 | Application
for Certificate of Public Convenience and Necessity |
U.S.- France |
| Service List |
In light of the broad traffic rights granted under the
recently signed U.S.-France bilateral, US Airways seeks certificate authority
to allow US Airways to engage in scheduled foreign air transportation of
persons, property and mail between any point or points in the United States and
any point or points in France and its territories, either directly or via
intermediate points, and beyond France to any point or points in third
countries. Specifically, US Airways requests certificate authority, as described
above, to engage in the scheduled foreign air transportation of persons,
property, and mail as follows:
From points behind the United States via the United States
and intermediate points to a point or points in France and beyond;
From points behind the United States via the United States
and intermediate points to the French Departments of America and beyond;
From points behind the United States via the United States
to New Caledonia and/or Wallis and Futuna;
From points behind the United States via the United States
and intermediate points to French Polynesia and beyond; and
US Airways currently serves Paris from Philadelphia. US Airways temporarily suspended its nonstop Pittsburgh-Paris service post September 11. US Airways plans to re-institute this service on March 16, 2002, using a B-767 aircraft with 203 seats.
Counsel: O'Melveny Myers, Joel Stephen Burton, 202.383.5300
U.S.- Ecuador All Cargo Frequency Allocations
| OST-00-7513 | February 14, 2002 | Application
of Gemini Air Cargo for Renewal of Exemption from Startup
Deadline |
U.S.- Ecuador |
| Service List |
Although Gemini expects that it will commence its scheduled all-cargo service to Ecuador very shortly, Gemini is requesting an extension through March 9, 2002, in the event there continues to be a delay in the issuance of the necessary authorization. Gemini has made an extraordinary effort to obtain scheduled all-cargo authority from the Government of Ecuador -- more than it has expended to obtain authority from any other country. Gemini is on the brink of starting its scheduled all-cargo service to Ecuador. It would not be in the public interest for the Department to deny this Application for a modest extension of the startup deadline, especially when any other airline designated by the United States would face a long delay before it could commence scheduled flights to Ecuador. A refusal to grant the extension would also be a disservice to Ecuadoran officials who also have dedicated a substantial amount of time and energy to processing Gemini's applications, correspondence, and supporting documentation.
Counsel: Roller Bauer, Moffet Roller, 202, 331.3300, mroller@rollerbauer.com
| OST-01-11029 | Served February 14, 2002 | Notice
Suspending Procedural Dates and Requesting Comment |
U.S.-U.K. Alliance Case |
We
believe that there is good cause to suspend until further notice the deadlines
of February 15 for Objections and Comments and of February 25 for Answers
regarding our order to show cause, except to the extent indicated below.
We
have a request by American and British Airways to dismiss their application and
to suspend the procedural dates of this proceeding, and a request by United and
bmi to proceed towards a final decision on their application. We would like the
parties to comment on the implications for proceeding to a final decision on the
application of United/bmi in light of the relief requested by American/British
Airways. In this context, we also ask the parties to address our tentative
findings on the United/bmi application.
We
request that these comments be filed by February 22, 2002, and replies by March
l, 2002.
By: Read Van de Water
| OST-01-11029 | February 14, 2002 | Answer
of Federal Express Corporation to Motion to Suspend Procedural Dates |
U.S.-U.K. Alliance Case |
| Service List |
Indeed, it is ironic that these two countries-which share a similar vision on so many things at this time-cannot make progress on a matter that would significantly benefit consumers and shippers on both sides of the Atlantic. Events since September 11 have highlighted the very special relationship that binds these two countries. FedEx In this respect, the Order exceeds the Department's authority. The only lawful condition the Department can impose is one that restores the competitive status quo ante by, for example, requiring the parties to divest slots so that one other carrier can replace American in the overlapping markets. Instead, the Order attempts to address by regulatory fiat the effects of Bermuda 2's restriction on entry at Heathrow. This is not an IATCA proceeding. Addressing this restriction is the government's responsibility and it must be addressed at the negotiating table.
To seize this opportunity, the United States should show leadership on this issue and revive the talks. It should urge Her Majesty's Government to work promptly and firmly toward a new liberal arrangement, which will serve the broader national interests of both countries much better than if they do nothing. Narrow commercial interests have been allowed to define the landscape of this debate for too long. Now is the time for governments to lead and decide.
Counsel: FedEx, Nancy Sparks, 202.756.2461, nssparks@fedex.com
| OST-01-11029 | February 14, 2002 | Joint
Answer of United Air Lines, Austrian, bmi, Lauda, Lufthansa and SAS
to Motion of American and British Airways to Dismiss Application |
U.S.-U.K. Alliance Case |
| Service List |
Regardless of the Department's ultimate ruling on American/BA's motion to withdraw, the Department should remain steadfast in its stated position that the Joint Applicants and other parties have a due process right to respond to the show-cause order and, insofar as it would apply to the Joint Applicants' applications, reject American/BA's belated request to suspend the established and ongoing procedural schedule on which the Joint Applicants have relied in good faith.
Counsel: Wilmer Cutler, Bruce Rabinovitz, 202.663.6960, brabinovitz@wilmer.com, and Squire Sanders, Marshall Sinick, 202.626.6651, msinick@ssd.com
| OST-01-11029 | February 14, 2002 | Motion
of Virgin Atlantic Airways for Leave to File Late-Filed Answer and
Answer in Support of Motion to Dismiss
|
U.S.-U.K. Alliance Case |
| Service List |
Virgin Atlantic supports the Motion to Dismiss. In their Motion, American and British Airways state that developments in the European Court of Justice have left little doubt that the EU is moving toward a multilateral negotiating regime on aviation agreements. This view coincides broadly with the arguments and evidence presented in Virgin Atlantic's Answer submitted in support of the previous Motion to Dismiss filed by Continental, Delta and Northwest. Answer of Virgin Atlantic Airways Limited in Support of Motion of Continental, Delta and Northwest to Dismiss, filed February 6, 2001. Virgin Atlantic reiterates that argument here. The Advocate General to the ECJ has found that EU Member States may not conclude agreements with outside States in the areas of intra-EU pricing, CRS or citizenship. These findings are likely to be upheld by the Court. Moreover, the AG's findings impose present obligations on the UK that preclude agreement to the ownership and control (citizenship) clause. That being the case, the UK is not in a position to sign an Open Skies Agreement with the United States, and that, in turn, precludes the United States from conferring antitrust immunity on any airline alliance in the US-UK trade.
Counsel: Garfinkle Wang, Elliott Seiden, 703.522.0900, eseiden@gandwplc.com
U.S.-Turkey Combination Service Third-Country Code-Share Opportunities
| OST-02-11273 | February 14, 2002 | Reply of the City of Chicago in Support
of the Application of United Air Lines |
U.S.-Turkey Combination Service Third-Country Code-Share Opportunities |
Chicago is the third largest U.S.-Istanbul market. Traffic from Chicago to Istanbul is robust and growing, with the number of passengers on Turkish Airlines alone increasing by 41 during the period 1999-2001. United has requested seven weekly frequencies to introduce additional third-country code-share service between O'Hare (and nine other U.S. gateways) and Istanbul via Frankfurt.
Counsel: Pillsbury Winthrop, Kenneth Quinn, 202.775.9898, kquinn@pillsburywinthrop.com
| OST-02-11273 | February 14, 2002 |
Reply of Continental Airlines
|
U.S.-Turkey Combination Service Third-Country Code-Share Opportunities |
Only by awarding Continental' frequencies for U.S.-Turkey codeshare service can the Department ensure that new competition for U.S.-Turkey passengers will be injected into the U.S.-Turkey market pending the termination of codeshare limitations next year. Since Delta and United are both engaged in antitrust-immunized codeshare alliances with their U.S.-Turkey partners, neither carrier will offer any new competition, any on-line connection or any new on-line fare which could not be offered through its antitrust-immunized alliances. Every single one of the service benefits alleged by Delta and United can be provided today as on-line services by their partners. In sharp contrast, Continental competes with KIM, its codeshare partner, and can offer new U.S.-Turkey fares and services independently. Only by selecting Continental will the Department provide an entirely new network to compete with existing U.S.-Turkey services, and only by providing Continental, the only new entrant in this proceeding, with U.S.-Turkey frequencies will the Department take full advantage of the new opportunities available under the U.S.Turkey bilateral aviation agreement. Continental urges the Department to grant it seven frequencies for New York/Newark-Istanbul service via Amsterdam immediately and, in the interest of expedition, withdraws its request for seven frequencies to offer Houston-Amsterdam-Istanbul service.
Counsel: Crowell Morning, Bruce Keiner, 202.624.2615, rbkeiner@crowell.com
| OST-02-11273 | February 14, 2002 |
Consolidated Reply of Delta Air Lines
|
U.S.-Turkey Combination Service Third-Country Code-Share Opportunities |
Delta requires an additional allocation of seven
frequencies, so that it can maintain twice-daily year-round service to Turkey.
Delta's six-gateway proposal serving Istanbul via Milan ranks as one of most
efficient and beneficial uses for seven of the fourteen available frequencies.
By contrast, the competing applications of Continental and United are each
subject to serious flaws and weaknesses, meriting, at best, secondary
consideration.
So long as Delta receives an award of seven frequencies, Delta would not object to Continental receiving seven frequencies. However, to the extent the Department must chose between an award to Delta or Continental, Delta is clearly the superior choice. Continental's proposal ranks last in terms of the critical nonstop-to-nonstop connecting benefits emphasized by the Department in third-country codeshare cases. Indeed, Continental's answer is conspicuously devoid of any discussion of the service benefits of its proposal. This is because they are so minimal. Continental would serve just two U.S. gateways, compared to six for Delta. Moreover, Continental has requested a full seven frequencies to fund a single poorly-timed eastbound Houston connection, serving, in effect, just one gateway per service opportunity.
Delta is the only U.S. carrier that has seized the open-entry direct service opportunities that are available to all carriers under the U.S.-Turkey transitional open skies agreement - a fact for which Delta should be rewarded, not punished. United attempts to turn a vice into a virtue, proclaiming that "United, unlike Delta, relies exclusively on third-country code share service in order to compete in the U.S.-Turkey market." United's decision to eschew hard-won direct service rights is no justification to reward United with triple the number of Turkey codeshare frequencies as Delta. United is, of course, free to supplement its codeshare frequencies with direct service at any time.
Counsel: Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com
| OST-02-11273 | February 14, 2002 | Consolidated Reply of United Air Lines
- With Exhibits |
U.S.-Turkey Combination Service Third-Country Code-Share Opportunities |
The record in this case
overwhelmingly supports the allocation of seven of the 14 newly available
U.S.-Turkey third-country code-share frequencies to United. Only United would
use these frequencies to offer meaningful additional consumer benefits. United
will offer improved roundtrip one-stop connections to Istanbul at ten U.S.
gateways, more than any other applicant. United's services via Frankfurt will
offer more convenient elapsed times than those proposed by the other carriers at
their gateways. Moreover, only United will offer the convenience of an afternoon
departure westbound from Istanbul with a same-day connection to the U.S. The
other applicants offer only early morning departures, between 6:00-6:30 am,
requiring passengers to leave for the airport before daylight.
The other applicants also have focused on their corporate benefits, rather than public benefits, to support their applications. Delta argues the importance of allowing it to add a code share with Alitalia, apparently to reward that carrier and its homeland for supporting an open skies agreement and to enable Delta.to improve its new relationship with Alitalia. Delta would use the additional frequencies to increase its schedule to a total of three daily U.S.-Istanbul services, more than any other U.S. carrier. Delta, already by far the largest U.S. carrier in the U.S.-Turkey market, would use additional frequencies to solidify its market position without offering any discernible additional benefit to passengers.
Continental hopes to receive the award of all 14 of the available frequencies merely because it is a "new entrant" carrier. The service Continental would offer is, however, not new but would duplicate code-share service currently offered by Northwest on the same KLM flights between Amsterdam and Istanbul. Continental would serve only two U.S. gateways (Newark and Houston). Any corporate benefits of new entry for Continental are far outweighed by the superior consumer benefits offered by United's second daily Istanbul service. The Department should decide this code-share proceeding, as it has those in the past, on the basis of public benefits. On that basis, it is clear that seven of the frequencies should be awarded to United for its second daily U.S.-Istanbul service.
Counsel: Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com
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