OST-98-3543 / US-Colombia All-Cargo / Answer of Polar Air Cargo / March 16, 1998

ANSWER OF POLAR AIR CARGO, INC.

1. Both Polar and Fine object to the Order to Show Cause granting the dormant U.S.-Colombia all-cargo route to Atlas Air ("Atlas") and the procedure followed by the Department in reaching its tentative decision. Polar cites the lack of the standard evidence request normally used in all-cargo carrier selection cases and the consequent lack of any substantial evidence in the record on which to base an informed decision in the public interest. Fine notes the failure of the Department to set out in advance the selection criteria on which it would base its decision.

If the Department decides to issue an order directing the applicants to submit exhibits responding to a uniform evidence request and establishing procedural dates for the exchange of exhibits and pleadings, the same order could also state the selection criteria on which the Department intends to rely in reaching

Answer of Polar

Page 2

a decision. In this fashion, the Department would address the procedural issues raised by Polar as well as Fine.

2. Fine, however, compounds and highlights simultaneously the problems created by the lack of a uniform evidence request by changing its service proposal. It is to avoid this type of gamesmanship that the Department has adopted the policy of requiring the submission of evidence in carrier selection cases on a uniform basis. This includes a requirement that all competing service proposals be submitted on the same date.

For these reasons, Polar objects to any consideration being given to Fine's belated change in its service proposal. Instead, Polar urges the Department to issue a procedural order containing a standard evidence request and establishing an expedited procedural schedule. The order should also state the Department's selection criteria to the extent they are not already reflected in Order 98-2-24. Until this is done, there should be no further consideration of Fine's revised service proposal if the Department is to grant each applicant equal consideration.

3. Even if Fine's revised service proposal were timely, it would not provide a basis for Fine's selection in this proceeding. The Bogota-Miami DC8 "shuttle" proposed by Fine would involve a relatively high cost operation in

Answer of Polar

Page 3

comparison with the efficient B747 service and pricing that are favored by shippers in the Miami-Bogota market. /1

4. Finally, Polar, unlike Fine, has requested the award of the September 1, 1998, U.S.-Colombia all-cargo designation in the event the Department decides, contrary to both carriers' objections, to proceed with a final decision on the basis of the present record. The Department has already reached a tentative conclusion that Polar's proposed schedule of three weekly B747 round trips is superior to the services proposed by Fine. The amended proposal of Fine, submitted after the Department noted the defects of its original proposal, should not be considered by the Department for purposes of adjudicating between Polar and Fine for the reasons already discussed. In any event, Fine seeks only the immediate

1/ Fine also claims that its proposal is superior to that of Atlas because of Fine's connections at Miami. In this regard, it should be noted that Fine's Miami connections involve interline transfers. Polar, on the other hand, operates its own network of B747 freighters connecting at Miami to points throughout the U.S. and the rest of the world. Polar can, therefore, offer shippers in Colombia the security and convenience of online service-to points on its entire network.

Answer of Polar

Page 4

designation available as a result of the replacement of Millon Air and has expressed no interest in the September 1, 1998, designation.

Respectfully submitted,

JEFFREY A. MANLEY

GINSBURG, FELDMAN and BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9057

Attorney for POLAR AIR CARGO, INC.

DATED: March 16, 1998