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Last Updated 03/04/03 08:49 AM

Applications and Renewals: 

American and SN Brussels

America Trans Air, Inc. - Chicago-Cancun/ Chicago-Puerto Vallarta

EAS at Elko, NV - Request of SkyWest for Designation of Salt Lake City

EAS at Yellowstone, MT - Request of SkyWest to Terminate Service

Answers and Replies: 

EAS at Massena, NY - Petition for Reconsideration

Lan Ecuador/Lan Chile - Supplemental Submission of Continental and Northwest

Republic - Notice of Appearance of the International Brotherhood of Teamsters

Tokyo Narita Slots - Reply of American/ Reply of United Parcel Service

Notices of Action Taken:

Delta - Atlanta-Rio de Janeiro Dormancy

Notices and Orders:

Delta, Continental and Northwest - Request for Comments

EAS at Ponce, Puerto Rico -  Order Tentatively Reselecting Carrier and Setting Subsidy Rates

EAS at Quincy, Illinois-St. Louis, Missouri - Order Prohibiting Suspension of Service and Requesting Proposals

EAS at Topeka, Kansas - Order to Show Cause

Aerolane, Lineas Aereas Nacionales del Ecuador S.A. d/b/a Lan Ecuador / Linea Aerea Nacional Chile, S.A. (Lan Chile)

Ecuador's Ministry of Aviation has now confirmed that Northwest will require a designation and frequency allocation to codeshare on Continental's U.S.­Ecuador flights, and Ecuadorian counsel has confirmed that a separate frequency will be required for each codeshare flight. Since sufficient U.S. frequencies to permit Northwest codesharing on Continental's U.S.-Ecuador flights are currently unavailable, it is clear that Ecuador will not permit Northwest to codeshare on Continental's Ecuador flights.

Continental and Northwest request leave to submit this supplemental information. Both the Ministry of Aviation response and the Aviation Daily report constitute new information that could not have been provided in previous pleadings and address decisional issues raised in this proceeding. Under these circumstances, the Department should grant the motion for leave to file and consider this information in evaluating the Lan Ecuador and Lan Chile applications at issue.

Counsel: Continental and Crowell Moring, Bruce Keiner, 202-624-2500 / Northwest, Megan Rosia, 202 843-3193, megan.rosia@nwa.com

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American Airlines, Inc. and Delta Air Transport N.V. d/b/a SN Brussels Airlines

(A) American requests a statement of authorization and any necessary underlying exemption authority to display SN Brussels' "SN" designator code in conjunction with foreign air transportation of persons, property, and mail on flights operated by American (or its affiliates) between (1) points in the United States; (2) points in the United States and points in Belgium (either nonstop or via intermediate points in third countries); (3) points in the United States and points in third countries; and (4) points in Belgium and points in third countries.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com / Condon & Forsyth, Evelyn Sahr, 202-289-0500, esahr@condonlaw.com

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America Trans Air, Inc.

Renewal of ATA's Chicago/Midway-Cancun and Chicago/Midway-Puerto Vallarta exemption authority is consistent with the public interest. ATA's nonstop service to these vacation destinations provides passengers with a needed competitive alternative to service provided by American Airlines at Chicago O'Hare Airport.

Counsel: Brian Hunt, 317-240-7006

Renewal of ATA's Chicago/Midway-Grand Cayman exemption authority is consistent with the public interest. ATA's nonstop service provides passengers wit convenient, nonstop service to one of the principal Caribbean vacation areas.

Counsel: Brian Hunt, 317-240-7006

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Delta Air Lines, Inc.

We find that grant of Delta's request, in the particular circumstances presented, is in the public interest. We note that the waiver denial cases cited in the objections involved situations where we had already granted at least one, and sometimes more than one, dormancy waiver extension, and where we had expressly advised the holder of the waiver that further extensions of the waiver might not be forthcoming but would have to be evaluated in the circumstances presented and based on the record then before us. This case is different. Delta has, until recently, been actively conducting operations in the markets involved, and has, until now, not sought a dormancy waiver for these services. Moreover, neither American, Continental or any other carrier expressed an interest in using the frequencies at issue here. Under these circumstances, and taking into account the prevailing market conditions, we find that the limited relief sought by the carrier is warranted.] However, we are putting Delta on notice, as we-have other carriers in similar circumstances, that there should be no expectation that an additional request will similarly be granted. As we have previously done, we reserve the right to reexamine whether grant of this waiver continues to be in the public interest should another carrier seek to use the frequencies at issue. Any future request to extend the dormancy waiver for the frequencies at issue here will have to be considered in light of the specific arguments offered and responses thereto.

Delta's waiver from the dormancy condition is effective through December 31, 2003, or until the date on which Delta begins service with each of these frequencies, whichever occurs earlier. As to any frequency with which Delta does not begin service by December 31, 2003, its frequency allocation with respect to that frequency expires automatically.

By: Paul Gretch

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Delta Air Lines, Inc., Continental Airlines, Inc. and Northwest Airlines, Inc.

Delta Air Lines, Northwest Airlines, and Continental Airlines have resubmitted their codeshare and frequent-flyer program reciprocity agreements to the Department for review.  The three airlines originally submitted those agreements for review under 49 U.S.C. § 41720 on August 23, 2002.  The Department determined that the agreements, if implemented as presented by the three airlines, could result in significant adverse impacts on airline competition unless the airlines agreed to six conditions that would limit the likelihood of competitive harm.  The three airlines have accepted three of the six conditions and, after consultations with the Department, have proposed alternative language for the remaining three conditions.  The Department is inviting interested persons to submit comments on whether the airlines’ proposed alternative language adequately addresses the competitive concerns relating to those three conditions.
 
Any comments should be submitted by March 18, 2003.

By: Read C. Van de Water

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Essential Air Service at Elko Nevada

We are requesting that the EAS service requirement for Elko, Nevada be changed to Salt Lake City, Utah. The current designation required trips to both Reno and Salt Lake City and we provide service to both without subsidy. The Elko/Reno route is operating at a loss and we would like to discontinue that part of the Brasilia service. We would continue to operate trips to Salt Lake City. Most passengers travel to travel to Salt Lake City where they have access to the Delta AirLines and access to the national air transportation system.

By: Eric Christensen

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Essential Air Service at Massena, New York

We are asking that the Department reconsider Order 2003-2-5 and reselect Air Midwest to provide essential air service at Massena, Ogdensburg and Watertown, New York, as described in Air Mid West's Proposal #2.  If however, you are unable to determine that providing commercial air service to our airports over the next two years through Albany and Pittsburgh is in keeping with the core objectives of EAS, we ask that the Department consider approving a one-year contract with Air Midwest to provide service from Massena and Ogdensburg to Albany and service from Watertown to Pittsburgh.

By: Joseph Tracy

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Essential Air Service at Ponce, Puerto Rico

By this order, the Department is tentatively reselecting Hyannis Air Service, Inc., d/b/a Cape Air, to continue to provide essential air service (EAS) at Ponce, Puerto Rico, for a new two-year period at an annual subsidy rate of $552,388, from January 1, 2003, through December 31, 2004.  We are also setting a past-period rate retroactive from January 1, 2002, through December 31, 2002, at $467,371 annually.

By: Read C. Van de Water

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Essential Air Service at Quincy, Illinois - St. Louis, Missouri

By this order, the Department is (a) prohibiting Corporate Airlines Inc., d/b/a American Connection from suspending its unsubsidized service from Quincy, IL to St. Louis, MO at the end of its 90-day notice period, and (b) requesting proposals, with or without subsidy requests, from carriers interested in providing replacement service.

By: Read C. Van de Water

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Essential Air Service at Topeka, Kansas

By this order, the Department is requesting interested persons to show cause why we should not terminate subsidy for essential air service at Topeka, Kansas, and allow Air Midwest, Inc. d/b/a US Airways Express to suspend service there as of May 1, 2003.  Objections to the Department's tentative decision are due within 20 days of the service date of this order.

By: Read C. Van De Water

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Essential Air Service at West Yellowstone, Montana

Sky West Airlines, Inc. gives 90 days notice, of its intent to terminate essential air service between West Yellowstone and Salt Lake City. SkyWest is unable to operate this service economically without a subsidy, and therefore, is filing this notice to advise the Department and the affected communities that it plans to terminate service on May 31, 2003.  We have traditionally provided summer only service during the months of June through September.  No other carrier currently serves West Yellowstone.  SkyWest provided three round trips last summer to Salt Lake City, Utah operating as Delta Connection, using 30-passenger Brasilia aircraft.

By: Eric Christensen

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Republic Airline, Inc. d/b/a Republic Airlines

Counsel: Baptiste Wilder, William Wilder, 202-223-0723

Counsel: Baptiste Wilder, William Wilder, 202-223-0723

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U.S.-Tokyo Air Services (Slots at Narita Airport)

This proceeding presents the Department with a simple question -- should the Narita slots at issue be awarded to American to fund additional services to the United States, or should UPS receive the slots merely to augment its intra-Asia network? We acknowledge that UPS's intra-Asia operations allow it to compete with FedEx and yield an indirect economic benefit to the U.S. However, American will use the slots directly for U.S.-Japan service from its largest hub at Dallas/Ft. Worth, thereby directly benefiting both passengers and shippers and enhancing competition in the market that is of primary concern to the Department -- the United States.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com 

In this proceeding, the fundamental issue for the Department is to determine where lies the greatest need for these slots, and which use of them will most benefit the U.S. public interest. The need today is clearly not for expanded passenger service between the U.S. and Japan. Demand for U.S. carrier transpacific travel has steadily fallen since 200l, and last year was 13% below 2000 levels, with U.S. airlines cutting capacity nearly 18% since then. In marked contrast, transpacific freight and express traffic was up 4.8% on all U.S. carriers last year over 2001, and all cargo traffic demand has been steadily rising since last May. Thus, the facts show that the U.S.-Japan passenger market has been especially weak, even while traffic on intra­Asian routes -and cargo demand-has grown.

Counsel: Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kelleydrye.com 

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