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Last Updated 03/19/03 06:40 PM

Tom Ray's Office Will Bring Down Continental, Delta, & Northwest Comments 3/19 

Applications and Renewals: 

American and Cathay Pacific - Amendment - Mail Codeshare

IATA - Pricing Agreement

Answers and Replies: 

American and British Airways - Affidavits for Counsel to British Midland Airways

Apelair - Designation of Agent

CRS - Comments of Travel Agents/ Motion of Sabre

DHL International / European Air Transport - Answer of Federal Express

DHL Citizenship - Comments of DHL/ Federal Express/ Lynden Air/ UPS

EAS at Topeka, Kansas - Correspondence of Various Parties

Intra-Alaska Bush Service Mail Rates - Correspondence from UPS

Lanclos Air - Designation of Agent

Republic Airlines - Comments of Kenneth Moninski

Transatlantic, Transpacific, Transborder and Latin American Service Mail Rates - Revised Cost Data from Delta

Notices of Action Taken:

ACES - Columbia-US

America Trans Air - Chicago-Grand Cayman

United - Los Angeles-Guatemala City-San Salvador Blind Sector Codeshare with Air Canada

US Airways - Fort Lauderdale-Bermuda

Notices and Orders:

None

Aerolineas Centrales De Colombia, S.A. d/b/a ACES

Exemption from 49 U.S.C. 4133011 to conduct scheduled foreign air transportation of persons, property and mail between Barranquilla, Colombia, and Miami, FL.

By: Paul Gretch

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American Trans Air, Inc.

Scheduled foreign air transportation of persons, property, and mail between Chicago, Illinois, and Grand Cayman, Cayman Islands.

The authority granted is consistent with the aviation agreement between the United States and the United Kingdom.

By: Paul Gretch

Exemption for two years under 49 U.S.C. 40109 to provide the following service: Scheduled foreign air transportation of persons, property, and mail between the terminal point Chicago, Illinois (Midway), and the terminal point Zihuatanejo, Mexico, on a seasonal basis beginning December 13, 2003.

By: Paul Gretch

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American Airlines, Inc. and British Airways Plc

Counsel:  Squire Sanders, Elizabeth Collins, Charles Donley, Marshall Sinick

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American Airlines, Inc. and Cathay Pacific Airways Limited

Respectfully request an amendment to the statement of authorization granted by Notice of Action Taken, dated January 8, 2003, which permits, among other things, Cathay to display American's "AA" designator code on Cathy flights between the Cathay's U.S. gateways and Hong Kong, via intermediate points, and beyond Hong Kong to third country points. Joint Applicants request that the authorization be amended to permit Cathay also to display the "AA" code on Cathay's flights for the foreign air transportation of mail.

By Notice of Action Taken, dated January 8, 2003, in Docket OST-00-6824, the Department, among other things, granted Cathay a statement of authorization to placethe "AA" designator code on Cathay flights between its U.S. gateways and Hong Kong, via intermediate points, and beyond Hong Kong to third country points. Similarly, the Department granted American exemption authority to the extent necessary to permit it to place its "AA" code on Cathay flights as described above. The Department limited the authority to code share operations under the terms of the code share agreement, which agreement governed only the code share operations of passengers. At that time Joint Applicants gave notice that Cathay would carry the "AA" designator code between its U.S. gateways-- Los Angeles, San Francisco and New York/Newark-and Hong Kong via Tokyo, Japan, and beyond Hong Kong to Bangkok, Thailand, Kuala Lumpur and Penang, Malaysia and Singapore.

Cathay and American have now determined that the transportation of mail on the code share flights would not only contribute to the economic viability of the services but also would improve mail service between the U.S. and Asia.. Consequently, Cathay and American have entered into a mail code share agreement, which provides for mail code sharing on combination and all-cargo flights operated by Cathay on the routings described herein. A redacted copy of the agreement is attached hereto.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com / Cathay, Piper Rudnick, William Evans, 202-371-6030, bill.evans@piperrudnick.com 

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Apelair

Counsel: Luis Irizarry

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Computer Reservation Systems

Sabre has provided its own sensitive financial and commercial information to the Department. As described in the index below, this information comes directly from Sabre's records of its own subscriber non-renewal rates and transaction costs, as well as Sabre's analyses and calcula­tions of the market shares of competing CRSs and others in the air-travel information market, which are based in part on data received by Sabre under confidentiality restrictions. See Sterling Drug v. FTC, 450 F.2d 698, 708 (1971) (market share and sales data provided to agency afforded confiden­tial treatment; did not constitute the type of information which would customarily be released to the public).

As the Department is already well aware -- and as Sabre's Comments in these dockets confirm with publicly available facts -- competition is fierce in the travel distribution industry. Disclosure of the limited, closely-guarded confidential and proprietary information for which Sabre seeks protection would cause it irreparable harm. Disclosure would give Sabre's competi­tors insights into Sabre's financial affairs, competitive analyses and commercial strategy that the competitors could not otherwise obtain. Sabre has voluntarily provided the Department with this information in order to assist the Department and provide a more complete record upon which a decision may be made. Disclosure of the information Sabre has submitted under seal would serve to chill similar disclosures in future Department proceedings.

Counsel: Pillsbury Winthrop, Kenneth Quinn, 202-775-9800, kquinn@puillsburywinthrop.com 

Computer Reservation Systems - Travel Agent Comments/ Motion of Sabre

By: Richard White

By: Michelle McGuffog

By: Edward Adams

By:  Patrick Dunne

By:  World Travel

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DHL Airways Citizenship

Airways strongly disagrees with the IG's view that the Department's informal continuing fitness review procedures are not well suited to evaluate Airways' citizenship. These procedures, which the Department has used as a matter of longstanding policy and practice, are well tailored to evaluate citizenship questions such as those presented by the Airways reorganization. The Department's reasoning has best been articulated by Secretary Mineta in a letter on the same subject to then Chairman Ernest F. Hollings of the Senate Commerce, Science and Transportation Committee, dated September 25, 2002.

The Department's investigation was thorough -­involving meetings with the staff by Airways' officers and directors, and with counsel; a careful review of documents concerning the proposed corporate changes; and an evaluation by the Department of the full range of corporate relationships between Airways and its minority, foreign shareholder. On the basis of that investigation, which was fully consistent with Department precedent, the Department correctly determined that Airways continues to be a citizen, meeting the three applicable statutory requirements as well as the Department's "actual control" test. Moreover, all of the matters the IG raises in his letter have already been addressed by Airways for the Department's benefit in numerous pleadings previously filed in this and related dockets, which are incorporated herein by reference.

The most important policy consideration underpinning the citizenship requirement for US certificated carriers is to give the US Department of Defense access to emergency lift through the CRAF program. Airways has been, and remains a faithful participant in CRAF, and it has played a significant role in advancing US national security and military objectives as our nation approaches military conflict with Iraq. We have conducted our commercial activities in full accord with our responsibilities as US citizens. If our opponents were to have their way, this lift no longer would be available to the military.  As the Department is aware, Lynden Air Cargo has moved to join the UPS/Federal Express complaints against Airways. Lynden's intervention constitutes telling evidence of Airways' success in developing third-party business, because Lynden's complaint -- that it lost out to Airways in bidding for a military contract -- specifically contradicts the assertions that Airways has not developed third-party business. Ironically, Lynden is seeking to exploit this proceeding to undermine Airways' credentials and qualification to bid for such contracts, i.e., to develop third party business and to assist the military and nation in times of military necessity.

Counsel:  Lachter Clements, Stephen Lachter, 202-862-4321, lachter@starpower.net  

The burden is on DHL Airways to establish that it meets the requirements of U.S. law to hold an air carrier certificate.12 It currently is operating without an authoritative ruling by the Department that it does.13 Under these circumstances, the Department must establish, at a minimum, the following procedures: 

First, DHL Airways must file an application to the Department for a determination that it meets the citizenship requirements of U.S. law, both before and after its reorganization. That application must be accompanied by all relevant documents pertaining to the ownership and control of DHL Airways, authenticated and accompanied by verified statements that the documents are complete and that there are no other arrangements, express or implied, relevant to DHL Airways' ownership and control.

Second, the application must be assigned to an Administrative Law Judge to conduct an on-the-record, oral evidentiary hearing. Thereafter, the Administrative Law Judge should issue an initial or recommended decision on the application.

Third, to the extent that there is any further review of. the decision of the Administrative Law Judge, the Department must take all necessary steps to ensure that no informal, or off-the-record, communications or evidence influence the decision-makers and their advisors. Of course, this includes any communications that took place relevant to these issues during the Department's informal review.

Counsel:  Federal Express, Thomas Donaldson, 901-434-6664, gbleopard@fedex.com

The Department's recommendation to DHL Airways that it hire a marketing executive to increase its third party revenue raises profound questions of propriety. The Department effectively encouraged DHL Airways to compete unfairly and unlawfully with law-abiding U.S. taxpayers, like Lynden, that do not have the benefit of comparable foreign subsidies. Lynden has lost a contract for military carriage to DHL Airways under circumstances that defy any rational explanation other than as a response to the Department's recommendation. In the case of Lynden, therefore, the Department's recommendation to DHL Airways has had an effect in the market place. It is not, under any circumstances, a legitimate function of the Department to make recommendations to a carrier, particularly one receiving foreign financial benefits, on how it can compete more effectively with established air carriers like Lynden. The Department's conduct in this respect - which was not publicly disclosed until the IG's Findings were released - should be very carefully considered and independently reviewed.

Counsel:  Pierre Murphy, 202-822-8050, pmurphy@lopmurphy.com 

The EC Decision details how Deutsche Post deliberately sought to hide its acquisition of a controlling interest in a German express carrier "Trans-o-Flex" by using third­party intermediaries under its own funding and control to acquire a majority of the shares of Trans-o-Flex. Only after the EC launched an independent investigation of Deutsche Post's misleading conduct was Deutsche Post compelled to reveal the documentation on the transactions, thus revealing its effective control of Trans-o-Flex.

The findings of the Inspector General leave several matters open, such as Mr. Robinson's relationship with the foreign DHL entities, as well as the credit guarantee. As, seen in the best light for DHL Airways, there are material issues of disputed fact to be resolved, and UPS urges that a full oral evidentiary hearing before an ALJ is required.

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

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DHL International E.C. / European Air Transport N.V.

If granted this amendment, DHLIEC flights would display the two-letter designator code of DHL Airways while operating its own aircraft or freighters wet-leased from EAT to an additional intermediate point. U.S. air carriers must comply with the U.S. rules that restrict their operations. FAA rules prohibit U.S. carriers from wet-leasing aircraft from foreign carriers. Thus, as a U.S. air carrier, DHL Airways would be unable to wet-lease the freighters from EAT itself. However, the DHL network evades this restriction by wet-leasing the freighters in DHLIEC's name, while at the same time offering services using the designator code of DHL Airways.

The proposed expansion of the authorities issued to DHLIEC and EAT would allow the DHL network to expand its exploitation of favorable legal regimes while simultaneously maintaining its access to U.S. government cargoes. The Department should reject this attempt by the DHL network to seek an unfair competitive advantage over U.S. air carriers that cannot engage in similar wet-lease arrangements, especially in light of the pending actions concerning DHL Airways' certificate.

DHL Airways itself does not have a network to expand, and it does not offer air cargo/express services to any segment of the public. Its only direct marketing is to the U.S. government. Under the corporate reorganization of the DHL International network, DHL Airways is not a full-service provider of air cargo/express services. DHL Airways offers air services to the shipping public only through an indirect air carrier, DHL Worldwide Express, Inc. (a subsidiary of DHL International) to which it provides ACMI (or wet-lease) services. DHL Airways offers limited charter services directly to the United States government, but those services are not available to other shippers in the United States.

Counsel:  Federal Express, Thomas Donaldson, 901-434-6664, gbleopard@fedex.com

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Essential Air Service at Topeka, Kansas

As the Governor I respectfully request that you reconsider your decision. I understand the need for cuts in budgets but there must be another way. It is ironic that the State who is recognized as the air capital of the county (Wichita) would not have air service its capital city. Please reconsider your decision and keep the promise made when de-regulation occurred.

By: Joe Aleshire, Harry Felker, Dean Feller, David Stremming, Randy Tomlin

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International Air Transport Association

PTC12 SATL-EUR 0105 dated 11 February 2003 TC12 South Atlantic-Europe Resolutions r1-r12 PTC12 SATL-EUR 0106 dated 4 March 2003 - Minutes PTC12 SATL-EUR Fares 0028 dated 14 February 2003 - Tables Intended effective date: 1 April 2003.

Counsel:  IATA, David O'Connor, 202-293-9292

PTC2 EUR 0500 dated 21 March 2003 Mail Vote 281 - Resolution 010u TC2 Within Europe Special Passenger Amending Resolution from Austria to Europe PTC2 EUR 0501 dated 21 March 2003 Mail Vote 283 - Resolution 010w TC2 Within Europe Special Passenger Amending Resolution from UK to Europe PTC2 EUR 0502 dated 21 March 2003 Mail Vote 275 - Resolution 010t TC2 Within Europe Special Passenger Amending Resolution from Spain to Europe PTC2 EUR 0503 - dated 21 March 2003 Mail Vote 285 - Resolution 010x TC2 Within Europe Special Passenger Amending Resolution from Belgium to Europe Intended effective dates: 26 March 2003, 28 March 2003, 1 April 2003

Counsel:  IATA, David O'Connor, 202-293-9292

PTC12 MATL-EUR 0075 dated 11 February 2003 TC12 Mid Atlantic-Europe Resolution r1-r23 PTC12 MATL-EUR 0076 dated 7 March 2003 - Minutes PTC12 MATL-EUR Fares 0024 dated 14 February 2003 Intended effective date: 1 April 2003

Counsel:  IATA, David O'Connor, 202-293-9292

PTC12 MEX-EUR 0057 dated 18 February 2003 TC12 North Atlantic Mexico-Europe Resolutions r1-r20 PTC12 MEX-EUR 0058 dated 11 March 2003 PTC12 MEX-EUR Fares 0021 dated 21 February 2003 Intended effective date: 1 May 2003

Counsel:  IATA, David O'Connor, 202-293-9292

PTC12 NMS-ME 0189 dated 28 February 2003 Mail Vote 267 - TC12 Mid Atlantic-Middle East Resolutions r1-r10 PTC12 NMS-ME 0190 dated 4 March 2003 Mail Vote 268 - TC12 South Atlantic-Middle East Resolutions r11-r20 PTC12 NMS-ME 0191 dated 14 March 2003 - Minutes PTC12 NMS-ME Fares 0099 dated 28 February 2003 (Mid Atlantic) - Tables PTC12 NMS-ME Fares 0103 dated 7 March 2003 (South Atlantic) Intended effective date: 1 April 2003

Counsel:  IATA, David O'Connor, 202-293-9292

PTC12 NMS-ME 0185 dated 18 February 2003 TC12 North Atlantic-Middle East Resolutions r1-r26 PTC12 NMS-ME 0191 dated 14 March 2003 PTC12 NMS-ME Fares 0097 dated 21 February 2003 Intended effective date: 1 April 2003

Counsel:  IATA, David O'Connor, 202-293-9292

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Intra-Alaska Bush Service Mail Rates

By: John Bonafilia

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Lanclos Air Transport LLC

Counsel: Luis Irizarry

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

I am supportive of Republic's overall efforts to obtain Certification as a scheduled air carrier, as its benefits to the domestic airline industry, US Airways, the State of Kentucky, and the public at large are undeniable. It is clear that the initiation of service by Republic will maintain convenient air service to many communities, while relieving US Airways of a substantial cost burden. I remain hopeful that the deployment of regional jets as part of its reorganization plan will allow US Airways to emerge from bankruptcy protection in the near future. In addition, the "Jets for Jobs" program negotiated by US Airways and its regional partners will provide much needed employment for hundreds of aviation professionals until they are recalled to the network carrier when economic conditions improve.

The Application is silent to the reason that Republic's parent company Republic Airlines Holdings, Inc. has elected to create a new entity for the operation of up to 23 regional jets. Given that Chautauqua Airlines, an RAH subsidiary company, already operates 62 of the same aircraft type, it seems illogical that a separate company and its requisite overhead costs is necessary for this purpose. The February 26 edition of the Indianapolis Star has reported that the formation of Republic is a result of the continued rejection of the "Jets for Jobs" program by the pilots of Chautauqua. I believe that is appropriate for the Department to inquire as to the justification of an existing airline or related company to seek Economic Authority for any new operation. I would remind the Department that recent questions regarding abuse of the certification process (Boston­Maine Airways Corp., OST 00-7668; Potomac Air, Inc., OST 2000-8536) have been raised by other interested parties. Given the taxpayer cost required to examine and process any Application, the intent of the Applicant should be clear, and if not, should be challenged by the Department during the initial review phase.

By:  Kenneth Moninski, k_moninski@hotmail.com 

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Transatlantic, Transpacific, Transborder and Latin American Service Mail Rates Investigation

Delta has reexamined its accounting and Form 41 cost data as they relate to international mail rates.' Delta hereby submits this revised cost data, together with an estimate of the adjusted rate. Delta requests that the Department revise the interim rates established by the Show Cause Order and issue a Final Order as soon as possible establishing the rates for 2003 consistent with the corrected data.

As a result of the issues identified in this proceeding, Delta is in the final stages of completing a comprehensive review of its recent Form 41 data, which Delta expects to complete by April 24, 2003. However, given the importance of setting new, corrected rates for the industry, Delta has broken out and accelerated its review of the key mail rates elements. Delta expects that further accounting corrections, if any, identified in the course of the more comprehensive Form 41 review would have only a de minimus effect on mail rates.

Counsel:  Shaw Pittman, Robert Cohn, 202-663-8060, robert.cohn@shawpittman.com

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United Airlines, Inc.

Application of United Air Lines, Inc., for a Statement of Authorization to display "AC" designator code of Air Canada on flights operated by United (Los Angeles-Guatemala City/San Salvador) (Blind-Sector)

By: Michael Bodman

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US Airways, Inc.

Scheduled foreign air transportation of persons, property, and mail between Ft. Lauderdale, Florida, and Bermuda. 

The authority granted is consistent with the aviation agreement between the United States and the United Kingdom.

By:  Paul Gretch

By: James Tarlton

By: William Sherry

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