OST-98-4824 / Air France / High Density Rule - Chicago O'Hare / Response of US Airways / December 21, 1998

Application of

for exemption from the slot limitation regulations (FAR, Part 93, Subparts K and S at O'Hare International Airport

RESPONSE OF US AIRWAYS TO ANSWER OF AMERICAN AIRLINES

AND MOTION FOR LEAVE TO FILE

In response to the answer filed by American Airlines, Inc. in opposition to the application submitted on December 1, 1998 by Air France for exemption slots at Chicago O'Hare International, Airport to serve Paris, France, US Airways submits this reply and moves 'for leave to file. /1 US Airways is not a formal participant in this proceeding. However, US Airways files this response and moves

1/ Pursuant to 14 C.F.R. § 302.4(f), US Airways hereby files this response to the answer of American Airlines in opposition to the application of Air France for exemption slots at Chicago O'Hare International Airport and moves for leave to file on the ground that although US Airways is not a formal participant in this docket, its response will provide the Department with a more complete record on which to determine whether a foreign air carrier should be denied slots because of the inability of a U.S.-flag carrier to obtain slots to operate authorized service to the home country of the foreign carrier.

the Department to file in order to state its strong support for the position advocated by American. US Airways believes that when access is denied to U.S. carriers to operate service which the Department has awarded and which is authorized under an existing air services agreement, the Department should deny, on a proportional basis, U.S. access to foreign carriers who otherwise receive landing rights free of charge and ground facilities on reasonable terms and conditions.

It is fundamental U.S. aviation policy that an award of route rights to a U.S.-flag carrier must be accompanied by commercially viable access. Any Department action that would even suggest an erosion of this principle would have immediate, serious, and detrimental effects on U.S.-flag carriers. American has made its case for swift and proportional relief and the Department should act accordingly. By acting as American suggests, the Department will send a strong and unequivocal message to all foreign aviation trading partners that the U.S. Government will not countenance the abridgement of U.S.-flag carrier rights.

American's predicament is not an isolated matter. Pursuant to Order 98-2-20, US Airways was selected and designated by the U.S. Government as the U.S.-flag carrier to serve Charlotte-London (Gatwick) in the exercise of a U.S. "rover" gateway right under Bermuda II. As the Department, the Administration, and Congress are aware, however, US Airways has been unsuccessful in obtaining on a year-round basis commercially viable landing and take off slots at Gatwick. For each of the last three traffic seasons (including the initial allocation of slots for the summer 1999 season), US Airways was offered slots that were not commercially viable because they missed connections to Charlotte's transatlantic banks and in some cases were staggered at various times during different days of the week. As a result, US Airways has been forced to defer its Charlotte-London (Gatwick) service, leaving the people of Charlotte and the surrounding region without competitive air service. In the meantime, British Airways continues to operate its monopoly Charlotte-Gatwick service not only with optimal slot times, but with slots which are at the same time each day of the week, as are all of British Airways' daily services to the U.S. US Airways is now awaiting a January slot meeting where it will attempt once again to obtain viable Gatwick access. US Airways anticipates strong support from the Department, the Administration, and Congress to assist it in securing commercially viable access to Gatwick so that it can commerce its Charlotte-Gatwick service this summer.

In the present case, although American was awarded seven additional frequencies for service between Los Angeles and Paris, see Order 98-11-19, it has been denied the necessary slots to operate its planned Los Angeles- Paris service. Accordingly, American argues that unless it receives the slots it has "requested at Orly for Los Angeles-Paris service, the Department should deny Air France's application in this docket for exemption slots at O'Hare for Chicago-Paris service." (see Answer, p. 3.)

US Airways fully supports American's position. There is a fundamental policy issue at stake in both US Airways' situation at Charlotte and American's inability to acquire slots for its Los Angeles-Paris service. In both cases, the Department has granted U.S. carriers route rights which the carriers are unable to utilize because of their inability to obtain viable access. It is incumbent upon the Department to ensure that U.S carriers gain access to serve routes for which they have received the necessary operating authority and frequencies. When access is not granted to U.S. carriers, thus denying them the opportunity to compete with foreign carriers in these restricted markets, the Department should deny U.S. access, on a proportional basis, to foreign carriers. This is the only way to ensure that U.S. carriers which are entitled to operate service are not placed at a competitive disadvantage vis-a-vis the dominant positions of foreign carriers. Under these circumstances, the Department should speak boldly and act swiftly.

WHEREFORE, US Airways respectfully submits this response in support of the answer of American Airlines, Inc.

Respectfully submitted,

Joel Stephen Burton

Donald T. Bliss

O'Melveny & Myers LLP

555 13th Street, N.W.

Washington, D.C. 20004

(202) 383-5300

Counsel for US Airways, Inc.

December 21, 1998