OST-98-3477 / UPS / Certificate, US-Japan / February 12, 1998

NOTICE: Any person who wishes to support or oppose this Application must file an answer with the Department's Documentary Services Division by March 12, 1998, and must serve that answer upon UPS and all persons served with this Application.

Application of

UNITED PARCEL SERVICE CO.

Docket OST-98-3477

for a Certificate of Public Convenience and Necessity Pursuant to 49 U.S.C. 41102 and 41108)

(U.S. -Japan)

United Parcel Service Co. ("UPS") submits this Application pursuant to Sections 41102 and 41108 of the Federal Aviation Act, requesting a Certificate of Public Convenience and Necessity authorizing it to engage in the foreign air transportation of cargo (property and mail) between a point or points in the United States and two points in Japan and beyond each of those two points to two points with full traffic rights between all points on the route. In support of this Application, UPS submits the following:

2. UPS is a Delaware corporation whose mailing address is 1400 North Hurstborne Parkway, Louisville, KY 40223. UPS holds various certificates of public convenience and necessity issued by the Department of Transportation (the "DOT" or the "Department") authorizing UPS to engage in both passenger and all-cargo air transportation, (See, e.g., Orders 86-9-39, September 16, 1986; 87-12-61, December 24, 1987, 88-1-20, January 7, 1988; 88-9-44, September 22, 1988; 89-5-38, May 16, 1989; 89-9-36, September 15, 1989; 90-8-57, August 27, 1990; Order 91-1-44, January 1991; 96-8-4, August 2, 1996 and 96-8-37, August 30, 1996).

3. UPS is a citizen of the United States as that term is defined in the Federal Aviation Act. All officers, directors, shareholders of UPS, or persons who have the power to influence the management of the applicant or persons holding any voting interest in the applicant are U.S. citizens. An affidavit of citizenship is attached hereto as Exhibit 1.

4. UPS currently operates six scheduled all-cargo flights weekly between the United States and Tokyo and six scheduled weekly flights between the United States and Osaka and beyond to Taiwan. These flights are operated with B-747 freighter aircraft. UPS will, as a result of the new 1998 MOU, be making changes to its service pattern and increase its service to and beyond Japan. UPS soon will be requesting the Department to provide the Japanese Government the required 60 days notice of the points selected. Because of the noncontroversial nature of the requested authority, and the extensive information concerning UPS, which may be officially noticed, already on file at the Department, UPS requests the Department to waive compliance with the evidentiary requirements of Sections 201.4(e) and 201.4(f) of its Economic Regulations and Sections 302.1704(a) and (b) and Sections 302.1706 of its procedural regulations. UPS stands ready to give the Department any specific information the Department might request with respect to UPS's new or existing operations.

5. UPS is fit, willing and able to provide the proposed service and to conform with the provisions of the Federal Aviation Act and the rules, regulations and requirements of the Department thereunder.

6. UPS currently owns or leases 479 aircraft. They include 199 large jet aircraft, 51 B-727-100's, 8 B-727-200's, 23 DC-8-71's, 26 DC-8-73's, 61 B-757's, 16 B767's, 12 B-747 aircraft, and 2 747-200's. Fourteen additional B-757 aircraft and 14 additional B-767 aircraft are on firm order. The UPS family of companies has a total of over 338,000 employees worldwide and over 157,000 surface vehicles. With this large transportation infrastructure, UPS operates an extensive domestic U.S. and worldwide transportation system. This transportation network will be immediately integrated into the new Japan service pattern upon the grant of this Application. UPS also has the financial strength to guarantee its fitness and insure its ability to compete effectively in the market. In 1996, UPS and its affiliated companies had gross operating revenues from consolidated operations of $22.4 billion and a net income in excess of $1.14 billion. As of December 31, 1996, UPS had assets of $15 billion, and shareholders' equity of $6 billion.

7. The grant of this Application will not constitute a "major" regulatory action under the Energy, Policy and Conservation Act of 1975, as defined by Section 313.4(a)(1) of the Department's regulations. UPS has adequate fuel available for the service.

8. UPS requests that its Application be processed under the expedited procedures set forth in Subpart Q (14 C.F.R. 302.1701 et. seq.) of the Department's regulations, The public interest does not require an oral evidentiary hearing or a show cause proceeding on this Application because there are no material, determinative issues of fact requiring such procedures for their resolution.

WHEREFORE, UPS respectfully requests the Department of Transportation to grant UPS's Application for a Certificate of Public Convenience and Necessity for the route set forth above and to grant such additional or other relief as the Department of Transportation may deem necessary or appropriate.

Respectfully submitted,

David L. Vaughan

Kelley Drye & Warren, LLP

1200 19th Street, N.W., Suite 500

Washington, D.C. 200036

(202) 955-9864

Counsel for UNITED PARCEL SERVICE CO.

Date: February 12, 1998