OST-99-4994 / Undocketed / American Airlines and Japan Airlines / US-Japan Codesharing / Joint Reply of American and JAL / January 29, 1999

 

Application of :

AMERICAN AIRLINES, INC. / OST-99-4994

under 49 USC 40109 for an exemption

(U.S.-Japan and beyond; codesharing with Japan Airlines Co., Ltd.)

 

Joint Application of:

AMERICAN AIRLINES, INC. and JAPAN AIRLINES CO., LTD. / Undocketed

for statements of authorization under 14 CFR Part 212

(reciprocal codesharing services)

 

JOINT REPLY OF AMERICAN AIRLINES, INC.

AND JAPAN AIRLINES CO., LTD.

 

American Airlines, Inc. and Japan Airlines Co., Ltd. hereby jointly reply to the answer submitted on January 26, 1999 by United Air Lines, Inc. /1 United is the only party to file an answer to the American/JAL applications to engage in reciprocal codesharing services. The proposed services are consistent with the Civil Air Transport Agreement between

1/ Under 14 CFR 302.407, American has a procedural right of reply in the captioned exemption docket. To the extent required, American and JAL request leave to reply to United's answer to their undocketed application.

 

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the United States and Japan, as amended by the Memorandum of Understanding which entered into force, pursuant to an exchange of notes, on April 20, 1998, and are consistent with the public interest The Department should grant immediate approval.

United does not object to the proposed American/JAL arrangement, nor does United raise any issues of substance. Instead, United has merely offered a gratuitous and totally unnecessary commentary on several procedural matters that the Department, in the course of granting the American/JAL applications, is surely capable of handling without United's intrusion. Indeed, United itself enjoys an approved codesharing relationship with All Nippon Airways, which the Department approved on August 7, 1998 under the same bilateral provisions applicable to the American/JAL arrangement, and which no one saw any need to answer.

In reply to United's comments, American and JAL state as follows.

1. United cites its own codesharing arrangement with ANA, acknowledges that "[t]he proposed American/JAL codeshare will offer similar benefits," and says that United supports a grant of such authority to American and JAL, provided it is subject to the same conditions and limitations imposed on United/ANA (p. 2). United's proviso is unexceptionable. American and JAL, in filing their applications, anticipated

 

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that the Department would impose standard conditions that have been applied not only to United/ANA, but to many other similar codesharing arrangements.

2. United says that the Department should impose a condition requiring American and JAL to notify the Department no later than 30 days before beginning new codesharing services (p. 2). This matter is explicitly addressed in our joint application, which states that "American and JAL agree to accept the Department's standard condition...that they will notify the Office of International Aviation...no later than 30 days before they begin any codesharing service pursuant to the blanket authority granted herein" (p. 2). As for United's aside that such notices should be docketed under the Department's recent amendment to 14 CFR Part 212 (64 Fed. Reg. 3212, January 21, 1999), American and JAL (and every other affected carrier) will of course comply with whatever procedural directive the Department may issue in that regard.

3. United asks that the American/JAL statements of authorization should be explicitly conditioned on certain fifth freedom limitations; should not be construed as conferring upon American any rights to serve markets where U.S. carrier entry is limited unless American first gives notice; and should not be construed as providing American any preference in a carrier selection proceeding (pp. 2-3). These are all standard provi

 

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sions that the Department, as a matter of routine, inserts in blanket statements of authorization, or has established through precedent, and we are surprised that United sees the need to submit an answer to rehash well-known Department policy.

4. United claims that American's exemption request is "overly broad," and should be conditioned with the same language used in the United/ANA approval on August 7, 1998 (pp. 3-4). For its part, American's response is that the language United has cited did not originate with United/ANA, but is a standard condition that the Department generally uses in blanket exemptions. See, e.g., Federal Express Corporation, Notice of Action Taken, OST-98-3436, March 5, 1998. In American's view, United is once again merely providing an officious commentary on what has become boilerplate language in the Department's orders.

5. Finally, United remarks that the American/JAL agreement does not contain an exclusivity provision. United is correct, and is no doubt disappointed that it cannot make its usual arguments on this issue. In these circumstances, United is reduced to stating that if the parties "later adopt such a provision," they should be required to submit it to the Department for review (p. 5). Surely all parties that seek approval of codesharing arrangements understand that material changes in

 

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their agreements should be submitted to the Department. Once again, United's remarks are entirely gratuitous.

No party has objected to the American/JAL applications. United's meddlesome comments raise no issues of substance. The Department should immediately grant the requested authority, which is consistent with the codesharing provisions of the U.S.-Japan Civil Air Transport Agreement, and with the public interest.

 

Respectfully submitted,

William Karas of Steptoe Johnson for JAL / Carl Nelson of American

January 29, 1999