OST Docket Filings for February 22, 2005

There is no compelling reason to limit broad exemption relief to codeshare arrangements with carriers of open-skies countries. Contrary to Continental's assertion of "unfair advantage," the issue at hand is purely procedural. In the interest of reducing unnecessary administrative burdens on the Department and on the carriers, broad exemption authority subject to applicable bilateral agreements - should be automatically conferred with all codeshare authorizations that are granted subject to 30-day notice. That avoids the opening and processing of separate dockets for parallel exemptions, which are granted as a matter of routine, and is consistent with the Department's current regulatory review to "improve its rules to make them more effective and less costly or burdensome," 70 Fed. Reg. 3761, January 26, 2005 (OST-2005-20112).

The Department has already authorized broad exemption authority for codesharing to American/British Airways and United/British Midland (Order 2003-5-33, May 30, 2003); United/Lufthansa (OST-2004-19148, January 24, 2005) ; Northwest/KLM (OST-2003-15191, January 11, 2005); and US Airways/Lufthansa (OST-2003-15496, January 11, 2005). And as noted above, Continental, Delta, and United are each seeking broad exemption authority for other codeshare partners.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelsom@aa.com

http://www.aa.com

February 22, 2005

Reply of United Air Lines

If Continental had any valid basis for its position that such exemptions should be limited to code shares involving carriers from open skies countries, it should have sought reconsideration of the American/BA order where such authority was originally sought and granted. Indeed, rather than seeking denial of that authority on reconsideration, Continental filed a "me too" application for comparable authority in connection with its code share with Virgin Atlantic. The Department granted that authority. (Notice of Action Taken, dated August 22, 2003, in Docket OST-97-2880).

Continental's attempt to have the Department selectively reconsider and reverse the actions it took with respect to American/BA and United/bmi is out of time and should be dismissed. The Department has already considered and reconsidered the propriety of granting such blanket exemption authority for code sharing involving non- open-skies countries and their carriers. In any event, Continental is in a very poor position to claim that broad discretionary DOT authority should not be granted with respect to code sharing relationships between carriers of the U.S. and the U.K.

Counsel: Wilmer Cutler, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com

http://www.united.com

Index

American Airlines, Inc. and United Air Lines, Inc. against Alitalia-Linee Aeree Italiane S.p.A. and the Government of Italy

Order 2005-02-13
OST-04-19790 - Joint Complaint of American and United Under Section 2(b) of the International Air Transportation Fair Competitive Practices Act

Issued an Served February 22, 2005

Order

We extend through March 24,2005, the period for taking action on the Joint Complaint of American Airlines, Inc. and United Air Lines, Inc.

Since the filing by the Joint Complainants, there have been intergovernmental contacts concerning the issues raised, including consultations on February 17, 2005, in Washington, D.C., between representatives of the governments of the United States and Italy. As a consequence of these consultations, both sides are considering next steps toward achieving a satisfactory resolution of the matters raised. In these circumstances, we believe that the public interest is best served by extending for 30 days the deadline for action on the joint complaint.

By: Karan Bhatia

Index

Continental Airlines, Inc.

OST-05-20150 - Colombia Combination Frequency - Houston-Cali

Filed January 21, 2005 | Issued February 22, 2005

Notice of Action Taken | Word

Continental seeks seven additional U.S.-Colombia frequencies to institute daily nonstop round-trip Houston-Cali service on June 9, 2005. Continental further requests the flexibility to use the frequencies awarded here to serve Houston-Medellin. Finally, Continental requests the flexibility to operate four of the requested seven frequencies on a seasonal basis. If Continental does not begin service with all of the allocated frequencies by June 23, 2005, each unused frequency will automatically revert to the Department for reallocation

Continental holds underlying Houston-Cali route authority by virtue of the certificate we awarded it in Order 2001-12-8. For the underlying Houston-Medellin route authority, Continental relies on the route integration authority that we awarded it by Order 2001-5-26.

While Continental states that it will begin service June 9, 2005, we will extend the startup date slightly beyond that date to provide a reasonable opportunity for full introduction of the new service proposed without the risk of losing frequencies. Should Continental need an extension beyond June 23, it will need to request such extension formally.

By: Paul Gretch

http://www.continental.com/

Index

Essential Air Service at Jackson, Tennessee

OST-00-7857 - EAS at Jackson, TN

February 22, 2005

Re: Comments of James Hart

By: James Hart

Index

Essential Air Service at Pendleton, Oregon

OST-04-19934 - EAS at Pendleton, OR

February 3, 2005

Response of Horizon Air Industries d/b/a Horizon Air to Order Requesting Proposals

Horizon's proposal uses the 37-seat Q200. The Q200 carries a flight attendant and has a lavatory. Horizon's entire fleet of Q200s is equipped with the "fog buster" HGS head up guidance system, allowing Horizon flights to land at Portland with the lowest landing minimums (Category III). With this system, Horizon also has lower landing minimums at Pendleton. Meaning that Horizon has the ability to complete more flights into Pendleton. This system enables Horizon to maintain schedule reliability and on‑time performance even on poor visibility days. Horizon's fleet is one of the youngest fleets in the nation, which also enhances schedule reliability. On-time performance in 2004 was 85.5 percent'. If compared to the carriers that report their on- time performance to the DOT, this number would be second in the nation for on‑time performance. System-wide schedule completion for 2004 topped 97.5 percent.

By: Pat Zachwieja, 206-431-4519, pat.zachwieja@horizonair.com

February 3, 2005

Response of Great Lakes Aviation to Order Requesting Proposals

Great Lakes's proposals to provide service at Pendleton all contemplate non‑stop, conveniently timed service to and from either the Portland International Airport or the Seattle Sea‑Tac International Airport. As we operate our service with our code‑share partner United Airlines in Denver, Great Lakes will provide service at this Oregon point as Great Lakes Airlines to PDX, and with code sharing partner United Airlines beyond Portland or Seattle to the extent of their route structure. In addition, Great Lakes maintains interline ticket and baggage agreements with the majority of the other carriers serving PDX and SEA, which allows for maximum utility of our air service to the airline customers flying in and out of Pendleton.

By: Dave Thomas, 307-432-7000

February 18, 2005

Re: North East Area Commission on Transportation Letter in Support of EAS at Pendleton, OR | Word

By: Steve McClure

http://www.pendleton.or.us/airport.htm

Index

International Air Transport Association

OST-2005-20362

Filed February 8, 2005 | Approved February 16, 2005

Notice of Approval of IATA Agreements

By: Paul Gretch

OST-2005-20456

February 22, 2005

Application for Approval of Agreements

Mail Vote 437 - Resolution 010L TC3 South Asian Subcontinent-South East Asia, South West Pacific, Japan/Korea Special Passenger Amending Resolution from India to South East Asia, South West Pacific, Japan/Korea

Air-India requests this Mail Vote to replace current fares from India with government approved levels per Attachment 1 for an intended effective date of 1 March 2005. Further changes are then made to reflect previously agreed conference action for intended effectiveness 1 April 2005.

Counsel: IATA, David O'Connor, 202-293-9292

Index

Longtail Aviation Ltd.

OST-2004-19978 - Exemption - Bermuda-US Charters

Filed December 27, 2004 | Issued February 18, 2005

Notice of Action Taken

Exemption from 49 U.S.C. § 40109 to permit the applicant to conduct on-demand passenger charter operations between Bermuda and the United States, and other passenger charters in accordance with 14 C.F.R. Part 212, using small equipment.

By: Paul Gretch

http://www.longtailaviation.bm/

Index

Nondiscrimination on Basis of Disability in Air Travel

OST-04-19482 - Notice of Proposed Rulemaking

February 14, 2005

Re: Comments of Monarch Airlines

We are therefore concerned with the proposed rulemaking for two reasons; firstly that the apparent intent is to impose the proposals contained within the NPRM extraterritorially and secondly that a number of the practices considered suitable by our own regulating and advisory bodies will conflict with the requirements of the proposals put forward in the NPRM.

There are further concerns stemming from the historical fact that US carriers have enjoyed significant state aid by way of support from central government to whilst European competitors have not. Any extra-territorial imposition of the proposed act financially supported by one but not both sets of governments will further skew the question of competition to the dissatisfaction of many carriers.

By: Mike Smith, 44-1582-398320, mike.smith@monarch-airlines.com

Individual Comments:

Index

Northwest Airlines, Inc,

OST-00-6836 - US-Ukraine Certificate of Public Convenience and Necessity

February 22, 2005

Application for Renewal of Certificate

Northwest seeks renewal of its Route 668 Experimental Certificate of Public Convenience and Necessity, authorizing Northwest to engage in scheduled foreign air transportation of persons, property and mail between a point or points in the United States and the terminal point Kiev, Ukraine, via the intermediate point Amsterdam, the Netherlands. Northwest’s authority is scheduled to expire on August 22, 2005. By this application, Northwest asks that this certificate be renewed indefinitely, or at a minimum for a five-year period.

Northwest currently conducts daily service over this route under its codeshare arrangement with KLM Royal Dutch Airlines and plans to continue operating these services.

Counsel: NWA, Megan Rosia, megan.rosia@nwa.com

http://www.nwa.com

Index

Polynesian Limited

OST-2005-20451 - Emergency Exemption - Pago Pago-Manu'a Islands

Filed and Issued February 18, 2005

Notice of Action Taken | Word

Exemption from 49 U.S.C. § 40109(g) to permit the applicant to carry persons, property and mail, between Pago Pago, American Samoa, and the Manu'a Islands, American Samoa, for a period of 10 days beginning February 18, 2005. The applicant asserts that the Government of American Samoa has, in the wake of Cyclone Olaf, asked to charter the applicant’s aircraft in order to deliver emergency relief supplies and conduct any necessary medical evacuations. The applicant further asserts that, in light of the critical need for service, the U.S. carrier currently serving American Samoa (Inter Island Airways) may lack the capacity to relieve the immediate need for relief and medical evacuations. Polynesian accompanied its application with a letter of support from the Governor of American Samoa.

By: Karan Bhatia

February 18, 2005

Re: Letter Confirming Inter Island Airways does not Object

By: Alex Sene, Jr.

http://www.polynesianairlines.com/

Index

Servicios Ejecutivos Continental, S.A.

OST-02-11365 - Mexico-Us Charter Air Transportation

February 21, 2005

Application for a Renewal of an Exemption

By: Eugene Smith, 210-590-1630

Index

SkyWest Airlines

OST-2005-20454 - 90-Day Notices of Intent to Terminate EAS at Abilene, Waco, Beaumont, College Station Killeen, San Angelo, Texarkana, and Tyler, Texas, and Monroe, Louisiana

February 18, 2005

Re: 90-Day Notice of Skywest Airlines of Intent to Terminate EAS at Texas and Louisiana Communities

SkyWest Airlines currently serves the ten communities listed above as the Continental Connection. All service is to/from Houston, Texas utilizing 30-seat Embraer Brasilia aircraft. Working closely with Continental Airlines, we have cooperated in the transition of these routes to Colgan Air which intends to serve them with Saab 340s. All markets should have seamless service with Colgan picking up the trips the same day that SkyWest vacates. Both services will be flown as Continental Connection. Service will be substantially identical including the schedule and the class of aircraft.

By: Skywest, Eric Christensen

February 10, 2005

Re: Proposal of Colgan Air - Abilene, Waco, Beaumont, College Station, Killeen, San Angelo, Texarkana and Tyler, Texas and Monroe, Louisiana

Colgan is working closely with Continental Airlines and Sky West in the transitioning of these routes to Colgan. All communities should experience a gradual and seamless transition between the two carriers without an interruption in air service. All service will be flown as Continental Connection, and will be substantially identical including the schedule and the class of aircraft.

By: Michael Colgan

February 10, 2005

Re: Proposal of Colgan Air - Victoria, TX

Colgan Air, a Continental Connection carrier, plans, pending DOT approval, to replace SkyWest on or before June 30, 2005. Colgan Air will utilize a 34-passenger Saab 340 aircraft for this service. Colgan agrees to continue this service under the same rate, terms, and conditions as SkyWest has agreed to as set forth in DOT Order 2003-6-34 dated July 1, 2003.

By: Michael Colgan

Index

US-Brazil Combination Frequencies - Atlanta-Rio de Janeiro

OST-2004-19161

February 22, 2005

Comments of Delta Air Lines

Delta is anxious to begin Atlanta-Rio de Janeiro service as soon as possible, consistent with Delta's current schedules and aircraft commitments. Delta urges that the Final Order provide for a 125 day startup dormancy condition to run from June 1, 2005. The proposed startup condition is well within the period the Department has used in prior Brazil awards. See, e.g. Order 99-3-26 (8 month startup condition).

Considering that the Brazil frequencies at issue have been dormant for nearly two years, the modest startup flexibility requested by Delta is both reasonable and consistent with the public interest. Conversely, it would not be in the public interest to require Delta to cancel or disrupt services that have been offered to sale for the traveling public.

By its Motion for Immediate Action, Delta had requested final action on its Atlanta-Rio de Janeiro application by January 14, 2005. When approval was not forthcoming, Delta sought frequencies for Atlanta-Moscow service, which was approved by the Department and has been offered for sale to the public. See, Docket OST-2005-20116. Atlanta-Moscow service begins on June 1, and utilizes the available aircraft that Delta had hoped to use for Rio de Janeiro. Absent cancellations, alterative aircraft are not available until October 1, 2005.

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

February 22, 2005

Objection of United Air Lines to Order 2005-2-10

Delta has already told the Department that it cannot initiate daily nonstop Atlanta-Rio de Janeiro service until October of this year at the earliest (and has provided no assurance that it would do so even then). It makes no sense, therefore, for the. Department to transfer United's frequencies to Delta on the unsupportable assumption that Delta intends to use the frequencies starting on June 1. In these circumstances, the Department should terminate this proceeding without prejudice to Delta's right to re-apply for an assignment of unused Brazil frequencies at a later date if it continues to be interested in serving the Atlanta-Rio nonstop market during a future traffic season.

United also has plans for the future use of its Brazil frequencies, but it has chosen to take a more responsible approach than Delta by refraining from making specific promises about Brazil service until it solidifies its service plans. United should not be penalized for this cautious approach, especially since the record shows that Delta will be unable to comply with the conditions imposed by the Order to Show Cause. The Department, however, is proposing just such a penalty, by either forcing United to start using these frequencies before it has completed an orderly reorganization under the bankruptcy laws or seeing the frequencies forfeited to Delta based on a facially erroneous finding that "Delta has firm plans for Brazil service that would make use of some of those unused frequencies."

Although United has not reached a final determination on when it will add services to Brazil, it now has the advantage of operating experience on the new Washington Dulles‑Sao Paulo route, which it started just over two years ago in October 2002. That service is performing well and has proved even more successful than United had anticipated. Moreover, United's more established service in the Chicago‑Sao Paulo market has recovered and is also performing well.

Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960

Order 2005-2-10

Index

2005/2006 US-China Air Services Case and Designations

Order 2005-02-14
OST-04-19077

Issued and Served February 22, 2005

Order to Show Cause - Bookmarked

By this Order, we tentatively decide to award Continental Airlines, Inc. and American Airlines, Inc. certificate authority to provide combination services in the U.S.-China market and to allocate Continental and American seven weekly combination frequencies, respectively, for their proposed services. The rights would become available to Continental on March 25, 2005, and to American on March 25, 2006. We also tentatively decide to select American as a backup to Continental’s primary award for 2005 and Delta Air Lines, Inc. as a backup to American’s primary award for 2006. Further, we tentatively decide to allocate the 12 weekly all-cargo frequencies available on March 25, 2006, as follows: three weekly frequencies each to Federal Express Corporation, Northwest Airlines, Inc., Polar Air Cargo, Inc., and United Parcel Service, Co.

By: Karan Bhatia

Issued and Served February 22, 2005

Erratum

The third sentence on page 2 of the Order should read:

Further, the restrictions on entry and competition ill-serve the economies, consumers, carriers, and communities of both China and the United States.

By: Paul Gretch

Index

2005 Los Angeles-Mexico City Combination Service Proceeding

OST-2005-20406

February 22, 2005

Supplement of Alaska Airlines - Bookmarked

Selection of Alaska will not only increase intragateway competition at Los Angeles, but will also enhance intergateway competition‑a claim no other applicant in this proceeding can seriously make. Every other applicant serves Mexico City from its principal hub and, in some cases, from multiple hubs, and every other applicant will have the incentive, and the ability, to divert traffic from Los Angeles to support its operations at other U.S. gateway points. Unlike each of the other applicants, Alaska will have absolutely no incentive to divert traffic from Los Angeles to support other U.S. gateway cities. Injection of a new proven competitive force into the U.S.‑Mexico City markets is especially important in view of the limited number of designations available under existing bilateral restrictions. The Department has an opportunity in this proceeding to provide not only Los Angeles passengers, but also U.S. consumers on the West Coast, with a new travel alternative to Mexico City.

Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com

February 22, 2005

Exhibits of American Airlines in Response to Order 2005-2-8 - Bookmarked

In the forecast year ended March 31, 2006, American expects to carry 186,946 passengers between Los Angeles and Mexico City, including 140,337 passengers in the local market, 18,566 passengers from on-line U.S. connecting cities, and 28,042 passengers to cities in Mexico beyond Mexico City (AA* on Mexicana-operated codeshare flights).

American presently offers codeshare service between Los Angeles and Mexico City on flights operated by Mexicana If American is awarded authority in this proceeding, its codeshare service with Mexicana will continue, and American will propose that Mexicana display the MX* code on American's Los Angeles‑Mexico City operations.

Los Angeles‑Mexico City is the largest U.S.‑Mexico city‑pair market. With the exit of Delta Air Lines as of January 30, 2005, the remaining U.S. carrier is long‑term incumbent United Air Lines.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

February 22, 2005

Supplemental Application of America West Airlines for an Exemption

Direct Exhibits of America West Airlines - Bookmarked

In 2004, America West committed to expanding its competitive position at LAX, and our goal is to continue growing our LAX service. As discussed in its Application, since September 2003 America West has rapidly expanded its presence at LAX, beginning transcontinental service from Boston and New York, increasing the number of cities it serves from two to nine and increasing daily LAX departures 40 percent. No other carrier offering at least ten daily departures at LAX can claim this level of growth over this period. Currently, American and Alaska are by far the dominant carriers in the LAX-Mexico market.

Counsel: Baker Hostetler, David Kirstein, 202-861-1532

February 22, 2005

Supplement to Application of Continental Airlines

Exhibits - Bookmarked

Continental forecasts that it will carry over 65,000 Los Angeles‑Mexico City passengers annually. Continental will offer a wide range of fares between Los Angeles and Mexico City, from low discount fares to first class fares geared to business travelers. Continental did not codeshare with Delta on its Los Angeles‑Mexico City flights, and Continental has no current plans to offer codeshare service on its proposed Los Angeles‑Mexico City flights with Delta or Aeromexico. Continental will offer interline connections with other airlines, including Aeromexico in Mexico City, and in Los Angeles. Continental may in the future implement code sharing on Aeromexico or Aerolitoral flights beyond Mexico City to offer additional on‑line connecting services.

Counsel: Continental and Crowell & Moring, Bruce Keiner, 202-624-2615

Index