OST Docket Filings for February 1, 2005

OST-05-20097 - Exemption - Abu Dhabi/Bahrain/Oman/Qatar-US Codeshare with American

Gulf Air Company hereby supplements its Application for an Exemption in the above docket such that the Application seeks exemption authority only with respect to Gulf Air operations conducted pursuant to a codeshare agreement between Gulf Air and American Airlines. This Supplement does not affect any other aspect of the initial Application.

Therefore, for the reasons previously set forth, it is in the public interest for the Department to grant the Application of Gulf Air Company, as hereby supplemented, for an exemption to provide scheduled foreign air transportation of persons, property, and mail between Abu Dhabi, Bahrain, Oman, and Qatar, on the one hand, via intermediate points, and a point or points in the United States, on the other, pursuant to a codeshare agreement with American Airlines.

Order 05-02-01
OST-04-18586 - Petition of Air Carrier Association to Block Transfer

The first two of ACAA’s requests are properly before the FAA. That agency has the authority and primary responsibility under 49 U.S.C. §40103(b) to ensure the efficient use of the navigable airspace and to assign its use by rule or order. The HDR was promulgated in 1969 under this authority. The Buy/Sell Rule is part of Subpart S of 14 CFR Part 93, which is the regulatory scheme governing the allocation of IFR operations at HDR airports such as DCA and LGA. The FAA and the Office of the Secretary will give the same careful, thorough consideration to the competitive issues ACAA raises here that they gave to competitive issues when considering whether to allow slots to be bought, sold, and leased, as documented in the regulatory history of the Buy/Sell Rule. See 50 FR 52180 at 52182- 52186 (December 20, 1985).

As for ACAA’s third and fourth requests, we must decline to grant them. The petition, read as a whole, primarily challenges the Buy/Sell Rule and only tangentially invokes 49 U.S.C. 41712, the Department’s authority to investigate and prohibit unfair or deceptive practices and unfair methods of competition. The Buy/Sell Rule allows carriers that hold slots to sell or lease them without first informing the government, the public, or all air carriers of their intent to dispose of the slots and without making the details of sale or lease agreements public. As noted, the FAA and OST adopted this rule after giving due consideration to all competitive issues raised, and it is the FAA, again in conjunction with OST, that will now be considering whether the rule should be amended along the lines ACAA proposes. The pleadings here do not provide sufficient grounds for the Enforcement Office to institute an investigation into whether slot-holding carriers at DCA and LGA have been engaging in unfair methods of competition within the meaning of 49 U.S.C. 41712. Moreover, even if we were to institute such an investigation, we would not have the authority to suspend slot transactions pending its completion. Section 41712 empowers the Department to order carriers to stop offensive practices only after finding the practices to be violations, which in turn it can only do after providing the carriers with notice and an opportunity for a hearing.

For all of these reasons, we dismiss ACAA’s petition insofar as it asks the Department to investigate whether slot-holding carriers at DCA have been engaging in unfair methods of competition within the meaning of 49 U.S.C. 41712 and to suspend slot trades while this investigation is in process. We take no action on the remainder of ACAA’s petition, as it is properly before the FAA.

Erratum to Order 2005-1-18, ordering paragraph 3 is amended to read: 3. We extend the Part 135 rate as determined in Order 2004-10-2 of $12.1962, as final until further Department action; and Ordering paragraph 4 is amended to read: 4. We terminate the Amphibious rate determined in Order 2004-10-2, and make final the rate of $22.4926 per RTM, as determined in Appendix D, effective on the first Saturday after the service date of this order, until further Department action; and Ordering paragraph 5 is amended to read: 5. We terminate the terminal rate determined in Order 2004-7-11, and make final the rate of $625.85 per ton enplaned, as determined in Appendix C, effective on the first Saturday after the service date of this order, until further Department action.

On January 18, 2005, Tradewinds Airlines, Inc., a certificated air carrier, submitted an application under Part 215 of our rules to register the trade name Tradewinds Cargo.

Part 215 of the Department’s regulations provides that any carrier wishing to use an alternative trade name must first register that name with the Department. The rule further states that the Department may register such trade name after the carrier gives notification to similarly named carriers of the proposed use of the trade name. There are no other similarly named air carriers.

Since Tradewinds has complied with the requirements of Part 215, we acknowledge the registration of the trade name Tradewinds Cargo by Tradewinds Airlines for use in its operations.

TradeWinds intends to initially operate three (3) weekly round-trip U.S.-Colombia scheduled all-cargo flights using B-747-200F all-cargo aircraft on a Miami (MIA) - Bogota (BOG) - Miami (MIA) routing. TradeWinds intends to initiate these Colombia flights on or about March 1, 2005.

Although TradeWinds intends to initiate U.S.-Colombia service on the MIA-BOG-MIA routing, in this application TradeWinds is requesting blanket U.S-Colombia all-cargo authority, including intermediate and beyond points, to permit Trade Winds the commercial flexibility to change or add any point or points on its proposed initial routing to respond to market demands.

Scheduled foreign air transportation of persons, property, and mail between (1) the terminal point Chicago, Illinois, and the terminal point Zihuatanejo, Mexico[1], (2) the terminal point Detroit, Michigan, and the terminal point Cozumel, Mexico, and (3) the terminal point Detroit, Michigan, and the terminal point Puerto Vallarta, Mexico. USA 3000 intends to begin service on these routes on or about January 27, 2005. USA 3000 proposes to serve the Chicago-Zihuatanejo/Ixtapa and Detroit-Cozumel markets on a seasonal basis.

On January 6, 2005, United Air Lines, Inc. filed an answer in partial objection to USA 3000’s application. United states that it has no objection to USA 3000’s application for Detroit-Puerto Vallarta and Detroit-Cozumel authority. United states, however, that it does object to USA 3000’s application to the extent that it is requesting two-year exemption authority to serve the Chicago-Zihuatanejo market. In this regard, United maintains that it has recently begun service to Zihuatanejo from Los Angeles and Denver and that, after the end of the winter 2004-2005 season, it will have completed its analysis of that service, along with an assessment of the feasibility of introducing additional service to Zihuatanejo from Chicago. United states that, under these circumstances, the Department should grant to USA 3000 a temporary exemption to permit USA 3000 to operate the Chicago-Zihuatanejo service during the Winter 2005 season, and invite applications for longer-term authority after the winter season has concluded.

Only one U.S. carrier, USA 3000, has filed an application for Chicago-Zihuatanejo services with firm plans to initiate service in the near future. Neither United nor any other carrier has filed a competing request for this authority. The Chicago-Zihuatanejo route rights involved here constitute a valuable resource obtained in exchange for granting Mexico route opportunities for its airlines to serve the United States, and the public interest calls for use of these rights. In light of the fact that USA 3000 has presented an application to use these valuable limited-route rights, along with a firm service proposal, and no other U.S. carrier has filed a competing request, we find that grant of the application for the full term requested (which is in fact the standard duration of the exemption awards we issue to U.S. carriers for service to Mexico) is in the public interest. United has not provided any evidence to persuade us to take a different approach here.