Aeroflot Russian International Airlines and Continental Airlines, Inc.

Aeroflot Russian International Airlines and Continental Airlines, Inc. (Exemptions and Statements of Authorization, Codesharing / Miami-Moscow)

OST-97-3092 | Undocketed | November 6, 1997

Joint Application for Exemptions and Statements of Authorization

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(1)an exemption from 49 U.S.C. § 41301 permitting Aeroflot to engage in scheduled foreign air transportation between Moscow and Boston, Cincinnati, Dallas/Ft. Worth, Houston, Kansas City, and Minneapolis/St. Paul via Newark/New York, and between Moscow and Dallas/Ft. Worth and Houston via Miami under a code-sharing agreement with Continental;

(2) a statement of authorization permitting Continental to display Aeroflot's "SU" designator code on Continental flights between Newark/New York and Moscow;3 (3) a statement of authorization permitting Continental and Continental Express to display the "SU" code on the domestic flight segments operated by Continental and Continental Express between Newark/New York and Boston, Cincinnati, Dallas/Ft. Worth, Houston, Kansas City, Minneapolis/St. Paul, and Orlando and between Miami and Dallas/Ft. Worth, Houston and Orlando; (4) a statement of authorization permitting Aeroflot to display the "CO" designator code on Aeroflot's flights between Miami and Moscow via Shannon; and (5) an exemption from 49 U.S.C. § 40109 permitting Continental to engage in scheduled, foreign air transportation between Miami and Moscow via Shannon.

Alliance Agreement
Exhibit A - Shared Code Segments
Exhibit B - Schedules
Exhibit C - Block Space Accounting and Settlement Procedures
Exhibit D - Block Space Price
Exhibit E - OnePass Services Agreement (Redacted)
Exhibit F - General Terms and Conditions
Amendment to Alliance Agreement, November 6, 1997
Exhibit A to Amendment 1 - Shared Code Segments

Answers are due by November 21, 1997

Service List

Counsel: Boros Garofalo, Don Hainbach, 202-822-9070 for Aeroflot / Continental and Crowell Moring, Lorraine Halloway, 202-624-2500

Aeroflot Russian Internaitonal Airlines and Continental Airlines, Inc. (Exemptions and Statement of Authorizations, US-Russia Codesharing)

OST-97-3092 | Undocketed | November 21, 1997

Answer of Delta Air Lines

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Russia has failed to allow U.S. carriers to exercise rights contained in the bilateral Annexes to perform third-country code-share service. At the same time, Aeroflot seeks a major expansion its route rights, together with code-share privileges, to serve U.S. cities including Boston, Cincinnati, Kansas City, and Minneapolis/St. Paul. which are not included in the route description for Russian carriers. The substantial new rights sought by Aeroflot should be addressed in a new bilateral agreement. The grant of any additional authority to Aeroflot before such an agreement is concluded must be avoided, or the United States would seriously compromise its bargaining position.

Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060

Answer of The City of Houston and The Greater Houston Partnership

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Houston has long-standing economic ties with Moscow and the former Soviet Bloc countries. Since before the break-up of the Soviet Union and the emergence of the successor states, leaders of this region have recognized Houston as the center of the international oil industry. There is a high concentration of Houston oil and gas industry equipment, technical services, exploration and production companies in this region, making Houston one of the focal points of the region's economy. The interdependence of the Houston and Soviet Bloc economies reach beyond the energy sector. There are 177 subsidiaries of Houston-based companies at the forefront of the engineering, computer, telecommunications transportation and medical sectors of the region. Since the demise of the Soviet Union, seaborne and air cargo trade levels have indicated growing economic ties. This network has blossomed as the new states open their markets to the West. All of these states are currently served by Aeroflot, and under the proposed code-share agreement, would be more accessible to Houston via Continental.

Counsel: Zuckert Scoutt, Raymond Rasenberger, 202-298-8660

Consolidated Answer of Regional Business Partnership (Newark)

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Newark eagerly awaits the first-ever Newark-Moscow service, which Continental plans to begin in April 1998. Today the only U.S.-flag nonstop Moscow service for travelers in the huge Newark/New York gateway is provided by Delta via John F. Kennedy International Airport, and all nonstop and one-stop Newark/New York-Moscow service is via JFK. Continental's Newark-Moscow service will provide a welcome alternative for the many Newark/New York travelers who prefer Newark and will improve Newark's ability to compete with JFK for international travelers. Allowing Continental to code-share on its Moscow service will stimulate more traffic for this new service.

By: Samuel Crane, 201-242-6237

Answer of United Air Lines

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The U.S. has wisely adopted a policy of insisting upon the ability of carrier alliances to compete with each other. This policy is reflected in the terms of the 1993 U.S./Russia agreement on code sharing as well as the actions of the U.S. government in situations where there is no agreement and principles of comity and reciprocity apply. In the instant case, Russia has intervened, contrary to the terms of the bilateral agreement, to deprive other alliances of the ability to compete with Aeroflot and its partner. Under clear U.S. policy, the request of Aeroflot and Continental to code share to and from the U.S. cannot be granted.

The Aeroflot/Continental application also raises other issues. Aeroflot seeks to gain access to seven new U.S. points beyond its gateways as a result of its code share with Continental: Boston, Cincinnati, Dallas/Ft. Worth, Houston, Kansas City, Minneapolis/ St. Paul and Orlando. Under the bilaterally-agreed Russian carrier route, Aeroflot is limited to serving Dallas/Ft. Worth, Houston, and Orlando from among those named in its application, plus "two points to be mutually agreed by the Parties."

Counsel: United and Ginsburg Feldman, Joel Burton, 202-637-9130

Aeroflot Russian International Airlines and Continental Airlines, Inc, Continental Express, Inc.

OST-97-3092 | Undocketed | December 3, 1997

Joint Consolidated Reply of Continental Airlines, Continental Express and Aeroflot

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Aeroflot, Continental and Continental Express believe Russia's approval of Delta/Swissair, Northwest/KLM and Northwest/Alaska code-sharing provide ample reciprocity for approval of the proposed Continental/Continental Express/Aeroflot code-share. Delta errs in suggesting that Russia's refusal to permit third-country code shares by United/Lufthansa or Delta/Austrian and Russia's position during the November round of talks preclude immediate approval of the U.S.-Russia code-sharing proposed by the Joint Applicants. If the Department agrees with Delta (and United) that Russian comity and reciprocity do not support immediate approval of the code share, however, the Department should defer consideration of the Joint Application while U.S. and Russian negotiators pursue a new bilateral agreement and resolution of outstanding issues.

Counsel: Boros Garofalo, Gary Garofalo, 202-822-9070 for Aeroflot / Continental and Crowell Moring, Bruce Keiner, 202-624-2500

Reply of The City of Houston and The Greater Houston Partnership

In the opinion of the Houston Parties, the substantial public benefits which will be generated by the proposed code-share substantially outweigh any perceived bilateral difficulties (and it is our understanding that third country code-shares are not totally prohibited by the Russians). As the center of the international oil and gas industry, Houston has significant ties to Russia and the other CIS nations. These ties have blossomed as the new nations -- currently served by Aeroflot -- have opened their markets to the West. The proposed code-share will make these markets more accessible to Houston. The code-share arrangement also will promote competition with alternate transportation options to Moscow. This will enhance Continental's existing international network and allow Houston to better compete with other international gateways.

Counsel: Zuckert Scoutt, Ramond Rasenberger

Consolidated Reply of Regional Business Partnership (Newark) and Motion for Leave to File

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It is not surprising that Delta would try to delay proposed Aeroflot/Continental code-sharing at Newark, since Delta today operates the only nonstop U.S.-flag Moscow service in the huge Newark/New York gateway. The Regional Business Partnership disagrees with Delta and United that approval of the beneficial Aeroflot/Continental code-share should await further negotiations between the U.S. and Russia or Russian approval of third-country code sharing by Delta/Austrian/Sabena and United/Lufthansa. Russia has already approved other U.S. carrier third-country code-shares, including Delta/Swissair code-sharing. If the Department's objective is resolving bilateral issues, however, it should defer action on the Aeroflot/Continental/Continental Express applications, as both Delta and United recommend. The Department has followed a similar course in deferring action on requests for code-share authority filed by American and Transaero, which have been pending for over a year.

By: Samuel Crane, 201-242-6237

Continental Airlines, Inc.

OST-97-3092
Undocketed

January 26, 1999

Re: Application for Exemption (Miami-Moscow), Joint Application of Aeroflot Russian Intl Airlines, Continental, and Continental Express for Statements of Authorization to Code-Share (U.S.-Russia)

Withdrawl of Application

Continental Airlines, Inc. withdraws the Application of Continental Airlines, Inc. for an Exemption from 49 U.S.C. § 40109 (Miami-Moscow) filed in Docket OST-97-3092 on Nc,vember 6, 1997. Continental Airlines. Inc. and Continental Express, Inc. withdraw their applications made in the undocketed Joint Application of Aeroflot Russian International Airlines, Continental Airlines, Inc. and Continental Express. Inc. for Statements of Authorization under Parts 207 and Part 212 of the Departmentts Regulations to Engage in Code-Sharing (U.S.-Russia).

Counsel: Continental and Crowell Moring, Bruce Keiner, 202.624.2500