Order 00-7-27

United Air Lines, Inc. and British Midland Airways Limited

We have decided to finalize our tentative findings and conclusions in Order 2000-5-29. We have carefully considered the objections and answers filed in response to Order 2000-5-29, and find that finalization of that order is in the public interest.

As we noted in the show-cause order, the authority at issue here is consistent with the terms of the Air Services Agreement between the United States and the United Kingdom of Great Britain and Northern Ireland and the 1995 U.S.-U.K. MOC; and British Midland has been properly designated to conduct the proposed services.

The objectors have presented no new evidence that would cause us to alter our tentative findings and conclusions set forth in Order 2000-5-29. In particular, we stated in that order our sensitivity to U.S. carrier concerns regarding expanded access at London's Heathrow airport. However, we remain unpersuaded that our action finalizing Order 2000-5-29 conflicts with our objective of achieving additional entry for U.S. carriers at Heathrow. We stress our serious commitment to pursuing this goal through ongoing negotiations with the United Kingdom. To this end, U.S. and U.K. delegations recently met for further discussions of an open-skies aviation regime and will resume negotiations in the fall.

Further, we remain unconvinced that there are any competitive considerations stemming from the proposed United/British Midland code-share arrangement that would warrant withholding any of the authority at issue here. In Order 2000-5-29, we acknowledged the fact that further service enhancements of carriers already present at Heathrow could, to the degree that they translate into adverse effects on competition, have a negative impact on the market. We also recognized that, given the particular circumstances of the applications at issue here, any such potential problems would be offset by the addition of competitive benefits and the potential for facilitating further opportunities for consumers. We continue to hold these views.

By:  Bradley Mims

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