Docket OST-95-550 / March 24, 1997

Application of

to extend the existing authority to operate flights between Romania and United States during period March 13, 1997 - March 12, 1998 )

United Air Lines, Inc. ("United") submits the following answer to the above captioned application of Compania de Transporturi Aeriene ("TAROM"):

1. By its application, TAROM seeks renewal of exemption authority to serve New York and Chicago. TAROM's authority to serve Chicago is not provided for in the bilateral air services agreement between the U.S. and Romania.

2. United has no objection to the renewal of TAROM's exemption authority, including that carrier's extrabilateral authority to serve Chicago. In this regard, the Department should take note that United is seeking authority to serve Bucharest, Romania, under its code-share arrangement with Lufthansa German Airlines. See Joint Application of United and Lufthansa dated March 12, 1997, requesting issuance of a

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statement of authorization allowing Lufthansa to code share for United on flights between Germany and Bucharest. /1

3. Because there is no code-share term in the U.S./Romania bilateral agreement, United's authority to serve Bucharest under its code share with Lufthansa would be extrabilateral. Approval by Romania of United's code share as well as U.S. approval by TAROM's authority to serve Chicago should be granted on the basis of comity and reciprocity.

4. Based on an informal inquiry by Lufthansa to the government of Romania, preliminary indications are that Romania may not be prepared to approve the United/Lufthansa code share. This position was taken notwithstanding that government's recent approval of code shares involving Delta Air Lines and both Swissair and Austrian Air Lines. Because the Department had not yet approved the United/Lufthansa code share when this informal inquiry was made, Romania's position may have been based on a misunderstanding of the Department's code-share policy.

5. In these circumstances, United urges the Department to defer action on TAROM's request to renew its extrabilateral authority to serve Chicago pending clarification by the U.S. of

1/ That application was unopposed and DOT approval is anticipated shortly.

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Romania's intentions toward approval of United's code share on Lufthansa's services between Germany and Bucharest.

Respectfully submitted,

JOEL STEPHEN BURTON

GINSBURG, FELDMAN AND BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9130

Counsel for UNITED AIR LINES, INC.