OST-97-3092 / Undocketed / Continental and Aeroflot / Reply of Regional Business Partnership (Newark) / December 3, 1997

Application of :

AEROFLOT RUSSIAN INTERNATIONAL AIRLINES

for an exemption from 49 U.S.C. § 41301

Application of :

CONTINENTAL AIRLINES, INC.

for an exemption pursuant to § 40109 (Miami-Moscow)

Joint Application of:

AEROFLOT RUSSIAN INTERNATIONAL AIRLINES, CONTINENTAL AIRLINES, INC. AND CONTINENTAL EXPRESS, INC.

for statements of authorization under Parts 207 and Part 212 of the Department's Regulations to engage in code-sharing

 

CONSOLIDATED REPLY OF

REGIONAL BUSINESS PARTNERSHIP (NEWARK)

AND MOTION FOR LEAVE TO FILE

 

The Regional Business Partnership (Newark) urges the Department to approve the joint requests of Aeroflot, Continental and Continental Express for code-share authority so the area served by Newark International Airport can

 

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start receiving the substantial benefits the code-share will provide. If the Department is persuaded by Delta and United that the approval must await further negotiations with Russia, however, the Department should defer, not dismiss, the Aeroflot/Continental code-share requests.

The Regional Business Partnership states as follows in support of its position:

1. Houston and the Regional Business Partnership have shown that the proposed Aeroflot/Continental/Continental Express code-sharing will enhance competition and benefit U.S. travelers and shippers greatly. Neither Delta nor United questions these benefits. The benefits resulting from the proposed code-share will be significant for passengers who rely on Newark International Airport. The proposed code-share will expand price and service options for travelers in the huge Newark/New York gateway, including the many travelers in the Newark/New York/Connecticut metropolitan area who prefer Newark International Airport to the traditional, slot-controlled JFK, where all nonstop Newark/New York-Moscow service is now offered. At the same time, the codeshare service will enhance the successful development of Newark as an international hub and the growth of New Jersey as an international trade center.

2. It is not surprising that Delta would try to delay proposed Aeroflot/Continental code-sharing at Newark, since Delta today operates the only nonstop U.S.-flag Moscow service in the huge Newark/New York gateway. The

 

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Regional Business Partnership disagrees with Delta and United that approval of the beneficial Aeroflot/Continental code-share should await further negotiations between the U.S. and Russia or Russian approval of third-country code sharing by Delta/Austrian/Sabena and United/Lufthansa. Russia has already approved other U.S. carrier third-country code-shares, including Delta/Swissair code-sharing. If the Department's objective is resolving bilateral issues, however, it should defer action on the Aeroflot/Continental/Continental Express applications, as both Delta and United recommend. The Department has followed a similar course in deferring action on requests for code-share authority filed by American and Transaero, which have been pending for over a year. (See Docket OST-96-1485)

3. If the Department's objective is resolving current bilateral issues and securing approval for United/Lufthansa and Delta/Austrian/Sabena code-sharing, then dismissing the Aeroflot/Continental/Continental Express applications, as United alternatively suggests, makes no sense. The Aeroflot/Continental/Continental Express code-share application provides incentive for both sides to continue negotiating with the U.S. on code-share issues. Dismissing the application would remove that incentive.

4. To the extent necessary, the Regional Business Partnership asks for leave to file this reply. The Department's Rules of Practice permit only "applicants" to file replies in exemption proceedings. (Rule 407) Acceptance of this reply will provide a more complete record on which the Department can base

 

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its decision in this proceeding without prejudicing any party or delaying the proceeding.

For the foregoing reasons, the Regional Business Partnership (Newark) urges the Department to grant the Joint Applicants' request for limited code-share authority immediately. Alternatively, the Department should defer action on the code-share requests pending further negotiation on bilateral issues.

 

Respectfully submitted,

 

Samuel Crane

December 3, 1997