OST-98-3515 and Undocketed / Kenya Airways and Northwest / Answer of United Air Lines / March 5, 1998

Joint Application of

KENYA AIRWAYS LIMITED and NORTHWEST AIRLINES, INC.

for exemptions pursuant to 49 U.S.C. 40109(c) and statements of authorization pursuant to 14 C.F.R. Parts 212 and 207 to engage in code-sharing

(U.S.-Amsterdam-Nairobi-beyond)

ANSWER OF UNITED AIR LINES, INC.

United Air Lines, Inc. ("United") submits the following answer to the above-captioned joint application of Kenya Airways Limited and Northwest Airlines, Inc. ("Northwest"):

1. By their application, Kenya Airways and Northwest seek authority, inter alia, to code share on certain of each other's services which they operate between the U.S. and Kenya via Amsterdam, the Netherlands. They also seek authority to code share on certain flights operated by Kenya Airways beyond Nairobi to third countries.

2. United urges the Department to grant Kenya Airways and Northwest the authority they seek with respect to the specific services on which they propose to code share immediately. The government of Kenya has approved code sharing by United and

Answer of United

Page 2

Lufthansa German Airlines ("Lufthansa") on services operated by Lufthansa between Germany and Kenya. In these circumstances, approval of the Kenya Airways/Northwest services in markets where immediate implementation is proposed (Amsterdam-U.S. and Amsterdam-Nairobi-Lilongwe) are supported under principles of comity and reciprocity. To the extent that these carriers seek blanket authority at this time to support future expansion into other markets, approval would be inconsistent with Department policy, and those portions of their joint application should be deferred or dismissed without prejudice.

3. The precise scope of the code-share services that are proposed to be implemented immediately by Kenya Airways and Northwest is not entirely clear from the text of their application. While this might be clarified by a review of their cooperation agreement, that document has not, so far as United is aware, been filed with the Department.

Northwest proposes to display Kenya Airways' designator code on "Northwest's Amsterdam-U.S. flights connecting with Kenya Airways' Nairobi-Amsterdam flights." Joint Application at 3. The precise U.S.-Amsterdam city pairs where Northwest will code share are not further identified.

Answer of United

Page 3

Kenya Airways proposes to display Northwest's designator code on Kenya Airways' "Amsterdam-Nairobi and beyond flights." Joint Application at 3. Kenya Airways then identifies what are apparently all of the cities it serves beyond Nairobi, including Dar es Salaam and Zanzibar, Tanzania; Addis Ababa, Ethiopia; and Harare, Zimbabwe, as well as points in several other countries. The Joint Applicants also indicate that they "initially intend to code share on Northwest's flights connecting to Kenya Airways' Nairobi-Amsterdam-Lilongwe [sic] flights." Joint Application at 4. /1 Aside from Lilongwe, Malawi, there is apparently no immediate intention of Kenya Airways to code share for Northwest on flights beyond Nairobi. United has no objection to approval of code sharing on the Nairobi-Lilongwe segment.

4. United urges the Department to defer action or dismiss the Joint Application, however, to the extent it seeks blanket authority to implement services to other third-country points at some unspecified time in the future. Deferral or dismissal is consistent with the Department's policy with respect to requests for such blanket authority in the absence of an open skies agreement:

1/ This is apparently a typographical error as Kenya Airways serves Lilongwe, a point in Malawi, beyond Nairobi, not as a point beyond Amsterdam. The correct code-share routing is likely Amsterdam-Nairobi-Lilongwe.

Answer of United

Page 4

It is the Department's policy to grant codesharing authority only for the services actually proposed by the carriers (see, e.g., United/Lufthansa code share, Order 94-4-43 and Delta/Aeromexico code share, Order 97-1-15). The carriers are free to seek authority for additional markets as their plans develop.

Order 97-7-33 (United/Varig Code-Share, Docket OST-97-2358, and American/TAM Code-Share, Dockets OST-97-2419/221). /2 To the extent Kenya Airways and Northwest are seeking blanket authority to operate its points in Tanzania, Ethiopia and Zimbabwe, such authority should not be granted in present circumstances. United and Lufthansa have been denied code-share authority by the government of Tanzania and Ethiopia. Their application to code share to Harare, Zimbabwe, has been pending since December 16, 1997 with no response. Until these

2/ DOT dismissed without prejudice the United/Varig and American/TAM code-share applications to the extent they sought U.S.-Brazil code-share authority in "future city pairs not specifically identified, and to the extent [they] requested authority between any U.S. point and any Brazilian point listed in their joint application[s] without specifically indicating how such code-share service would be conducted." Id. Where open skies agreements are applicable, on the other hand, the Department has granted blanket code-share authority subject to notification requirements with respect to implementation of services to new points pursuant to such authority. (E.g., United/SAS, Delta/Swissair, Delta/SABENA, American/Canadian, etc.) There is, however, no bilateral air services agreement in effect between the U.S. and Kenya, and the rationale underlying the issuance of blanket code-share authority is not applicable in this case.

Answer of United

Page 5

governments are prepared to approve the operations of all U.S. code-share partnerships already holding U.S. authority, the Department should withhold authority for additional such partnerships until an agreement or informal accommodation is reached with these countries with respect to code-share services. For example, when the government of South Africa turned down the request of the Northwest/KLM alliance to code share, the Department deferred action on the subsequent application of United/Lufthansa for authority until the U.S. and South Africa reach an agreement that enabled both alliances to operate. (See Application of United, dated July 15, 1994, in Docket OST-95-505 (formerly 48306), and Application of Lufthansa for a Statement of Authorization, dated July 25, 1994; see also Orders 94-4-25 at 3 and 97-10-14).

5. In conclusion, United urges the Department to grant the requests of Kenya Airways and Northwest for the appropriate authority to code share between the U.S. and Kenya via Amsterdam and between Nairobi and Lilongwe. To the extent the carriers are seeking blanket authority to code share at some future time or to code share to countries which have barred or delayed approval of

Answer of United

Page 6

similar services of other U.S. carriers, their application should be deferred or dismissed without prejudice.

Respectfully submitted,

JOEL STEPHEN BURTON

GINSBURG, FELDMAN and BRESS CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9130

Counsel for UNITED AIR LINES, INC.

DATED: March 5, 1998