OST-98-3595 / British Airways / London Gatwick-Denver / Opposition of US Airways / March 11, 1998

 

Application of

BRITISH AIRWAYS PLC / OST-98-3595

for an Exemption from 49 USC § 41301

(London Gatwick-Denver)

 

OPPOSITION OF US AIRWAYS, INC. TO

BRITISH AIRWAYS' APPLICATION FOR AN EXEMPTION

 

US Airways acknowledges that British Airways has been authorized by the U.K. Government to serve London (Gatwick)-Denver under the U.S.-U.K. bilateral agreement.

Similarly, US Airways has been authorized by the U.S. Government to serve London (Gatwick)-Charlotte under the bilateral agreement. See DOT Order 98-2-20.)

BA seeks approval by the U.S. Government of its exemption application for London (Gatwick)-Denver service commencing on June 1, 1998.

US Airways has diligently been seeking timely slots at Gatwick Airport to operate its London (Gatwick)-Charlotte service. Since US Airways has been denied the two daily Gatwick slots it requires to begin this service on May 7, the U.K. has denied de facto US Airways the ability to implement London (Gatwick)-Charlotte service. As a result, US Airways has been unable to plan, promote, or sell its London (Gatwick)Charlotte service (scheduled to commence within 2 months). /1

Under these circumstances, the U.S. Government must hold in abeyance British Airways' exemption application for Denver service until US Airways obtains conveniently timed slots at Gatwick Airport to support its Charlotte service. If the U.S. Government does not hold British Airways' exemption application in abeyance, the U.S. Government would effectively permit British Airways to implement monopoly service to Denver, to perpetuate its current monopoly service between London and Charlotte, and to continue receiving its extraordinary benefits under Bermuda II (while new U.S. entrants like US Airways are being frozen out of London service despite their designation by the U.S. Government). /2

1/ Notably, British Airways seeks expedited consideration of its exemption application in order "to begin sales activities and to enable it to complete the other preparatory activities required to enable it to inaugurate service on June 1, 1998." (BA Appl., at 3.) Of course, US Airways is being denied slots at Gatwick, thereby preventing similar sales and preparatory activities for its Charlotte service, even though it seeks to commence London (Gatwick)-Charlotte service on May 7, 1998 -- in seven weeks, almost a month before British Airways' proposed Denver service. Indeed, US Airways' case for expedited redress is more compelling because US Airways is a new entrant with minimum market presence in the United Kingdom requiring sufficient lead-time to plan and market its new service, whereas British Airways is an entrenched incumbent with years of market presence and service in both the United States and the United Kingdom.

2/ The comparison between the two proposals could not be more stark. The U.K. Government is effectively denying a new entrant carrier (US Airways) its rights under the bilateral agreement to provide seven weekly flights between London and Charlotte. (US Airways will commence daily Gatwick-Philadelphia service in April.) Meanwhile, British Airways seeks to add to its already impressive arsenal of U.S.-U.K. service, having a projected summer schedule of approximately 333 U.S.-U.K. flights per week.

 

For the reasons set forth above, it is incumbent upon the U.S. Government to hold British Airways' exemption application for London (Gatwick)-Denver service in abeyance unless and until US Airways obtains the requisite, conveniently timed slots at Gatwick Airport to support its Charlotte service. /3

 

Respectfully submitted,

Donald T. Bliss

David T. Beddow

Patrick R. Rizzi

O'Melveny & Myers LLP

555 13th Street, N.W.

Suite 500 West

Washington, D.C. 20004

(202) 383-5300

March 11, 1998

Counsel for US Airways, Inc.

3/ This case is clearly distinguishable from DOT Order 93-3-34, in which the Department approved exemption applications for British Airways over objections by American Airlines based on American's inability to obtain slots at London Heathrow. First, in that case, American was an incumbent, designated carrier in the market, whereas US Airways is a new entrant with no established presence in the market. Second, in that case, while the Department emphasized its concern over the Heathrow slot issue, it remarked that it was working closely with the U.K. Government on the slot issue. In the instant case, US Airways cannot await such formal negotiations because, to do so, would effectively freeze US Airways, a new entrant, out of the high summer season to England. Consequently, immediate action is required here.