OST-00-6726 / OST-00-6728 / OST-00-6725 / Aer Lingus and American Airlines / Answer of Northwest Airlines / March 15, 2000

Application of

for extra-bilateral authority under the Department's "Cities Program"

Application of

for a Statement of Authorization under 14 C.F.R. Part 212

Application of

under 49 U.S.C. § 40109 for an exemption

CONSOLIDATED ANSWER OF NORTHWEST AIRLINES, INC.

Northwest Airlines, Inc. ("Northwest") hereby answers the above-captioned applications of American Airlines and Aer Lingus. Northwest submits that no action should be taken on the applications until such time as the United States and Ireland have amended the U.S.-Ireland bilateral agreement (a) to include a codesharing provision that allows U.S. carriers to offer service to Dublin on a codeshare basis, including codesharing with same-country carriers,

Answer of Northwest Airlines

Page 2

third-country carriers via points in third countries and/or carriers of Ireland, and (b) to the extent necessary, to remove the "Shannon stop" requirement as an obstacle to any and all such codesharing operations. Alternatively, the Department should take no action on the applications until the Government of Ireland authorizes Northwest, on an extra-bilateral basis, to provide same-country carrier codeshare services and third-country carrier codeshare services to Dublin, as Northwest has requested.

In its application, American requests exemption authority to provide New York-Shannon/Dublin service on an extra-bilateral codeshare basis on flights operated by Aer Lingus. In its related application, Aer Lingus seeks an extra-bilateral statement of authorization under Part 212 in order to display American's AA designator code on flights operated by Aer Lingus between New York, Boston, Chicago and Los Angeles, on the one hand, and Shannon/Dublin, on the other. Finally, Aer Lingus also seeks extra-bilateral authority under the Department's 1990 "Cities Program" to operate service between Baltimore and Shannon/Dublin. Although Aer Lingus states that this Baltimore service is not involved in the proposed codeshare arrangement with American, Aer Lingus does say that it will operate the Baltimore service "only if its proposed code-sharing arrangement with American Airlines is also approved by the Department." Application of Aer Lingus, Docket OST-00-6726, at 2.

As recognized by American and Aer Lingus, their proposed code-share operations are extra-bilateral. The U.S.-Ireland Air Transport Agreement, which was signed in 1945, lacks a codesharing provision and, thus, does not expressly allow U.S. or Irish carriers to offer codeshare services between the United States and Ireland. Iri addition, the Agreement's "Shannon stop" requirement, as amended in 1993, arguably precludes a U.S. carrier from codesharing to Dublin unless it also operates service to Shannon.

Answer of Northwest Airlines

Page 3

Northwest Airlines has a serious interest in providing service to Ireland on a codeshare basis. In particular, Northwest wishes to offer codeshare service to Dublin without being required also to offer service to Shannon. Earlier this year, Northwest submitted a request to the Government of Ireland for authority to offer codeshare services to Dublin with a same-country carrier and with a third-country carrier or carriers (via points in third countries) on flights operated by such other carriers. The Government has not yet acted on that request, but Northwest is hopeful that the request will be favorably resolved in the near future and that Northwest will be able to offer such codeshare services. If the Irish Government does act favorably and satisfactorily on this request, Northwest does not expect that it will have a continuing basis to oppose the American and Aer Lingus applications.

For the very reasons that American and Aer Lingus consider codeshare operations to be a superior and efficient means of offering U.S.-Ireland service, so too does Northwest believe that it can best offer its own service - and new and attractive service options to consumers - in the U.S.-Ireland market on a codeshare basis. In the case of Northwest, this means codesharing with a carrier of a third country or with another U.S. carrier. The United States should attempt to secure the agreement of the Government of Ireland to the addition of a codesharing provision (including same-country and third-country codesharing) to the bilateral agreement and to the amendment of the Shannon stop requirement, as necessary, to permit such codeshare operations by U.S. carriers.

Granting the applications at this time would not be in the public interest. If the Department were to authorize American and Aer Lingus to codeshare on an extra-bilateral basis, as they request, the Government of Ireland would have little or no incentive either to amend the bilateral agreement -or to grant U.S. carriers extra-bilateral authority to provide service to Dublin

Answer of Northwest Airlines

Page 4

on a codeshare basis. By the same token, the United States would have little or no leverage in any effort to gain such pro-competitive concessions from the Government of Ireland. In that event, new entry on a codeshare basis by other U.S. carriers would effectively be foreclosed; American and Aer Lingus would have a virtual lock on the U.S.-Ireland market, competition and consumers would suffer, and the public interest would not be served.

With respect to Aer Lingus' request for authority to serve Baltimore under the 1990 "Cities Program," that program requires as a precondition that "there is a pro-competitive agreement in place with the homeland country and thus a basis does not exist for a traditional aviation trade to obtain benefits for U.S. airlines." Order 90-1-62 at 1. Northwest submits that, by current standards, a bilateral agreement lacking a standard codesharing provision and containing a provision as restrictive as the "Shannon stop" requirement cannot reasonably be considered to be "pro-competitive." Furthermore, as should be clear from this pleading, there does exist a basis for a "trade to obtain benefits for U.S. airlines," namely, an exchange that would produce a bilateral codesharing provision.

WHEREFORE, Northwest respectfully urges the Department to take no action on the applications of American and Aer Lingus until either the U.S.-Ireland bilateral agreement is amended, as discussed above, or the Government of Ireland grants Northwest's request to provide codeshare services to Dublin, without also being required to offer service to Shannon,

Answer of Northwest Airlines

Page 5

under codeshare arrangements with another U.S. carrier and with a carrier or carriers of third countries via points in third countries.

Respectfully submitted,

Megan Rae Rosia

Managing Director, Government Affairs & Associate General Counsel

NORTHWEST AIRLINES, INC.

901 15th Street, N.W.

Suite 3 10

Washington, D.C. 20005

(202) 842-3193

Charles J. Simpson, Jr.

ZUCKERT, SCOUTT & RASENBERGER, L.L.P.

888 Seventeenth Street, N.W.

Suite 600

Washington, D.C. 20006

202-298-8660