Order 00-2-29

U.S.-China Air Services (2001)

By this order, we grant the petition for reconsideration of Order 2000-1-21 filed by American Airlines, and, on reconsideration, we will defer a decision on American's request with respect to the scope of authority to be awarded in this proceeding until we issue our tentative decision, and we will deny American's request with respect to requiring applicants to file additional historical cargo data.

As the parties have correctly noted, the Department's standard practice in carrier selection cases is to require the selected carrier to serve the city-pair market(s) that it proposed to serve. This is because that specific service pattern is often critical to the Department's decision to select one carrier over another for the available route rights. Nevertheless, we recognize that in a given situation there may be circumstances where the standard condition may not be appropriate. Given the particular facts and circumstances of the U.S.-China market, we believe that such a decision is better made in this case after the record has been fully developed and, specifically, after we are in a position to make a tentative decision as to which carrier, if any, to authorize for new service to China and how to allocate the available frequencies. By deferring a decision on the issue raised by American until we issue our tentative carrier selection decision, we will afford all parties and the Department the opportunity, based on a complete evidentiary record, to determine whether the Department's standard condition should be applied in this case. Parties that have not commented on the issue, but wish to do so, and parties that have commented and wish to supplement their comments will be free to do so at the various evidentiary stages of the case.

We have decided to deny American's petition to the extent that it requests that all applicants be required to provide additional evidence on their historical cargo traffic, with the data broken down into express cargo traffic and total cargo traffic.

We conclude that the evidence request attached to Order 2000-1-21 will result in sufficient historical cargo data to provide an adequate record for decision in this proceeding, including a decision on the precise issues raised by American. We have already released to the parties to this case the historical traffic data (cargo and passenger) collected by the Department for U.S. and foreign carriers serving the U.S.-China market. Furthermore, the evidence request attached to Order 2000-1-21 requires applicants to provide specific details on their traffic forecasts. As such, the applicants can be expected to provide considerable additional information regarding the cargo needs of the market in their direct and rebuttal exhibits, thereby further enhancing the record in this proceeding. Our evidentiary approach is consistent with that we have followed in other selection cases where we found the record adequate for decision. Against this background, we are not persuaded that the additional information requested by American, or as revised by Federal Express, would be of sufficient use in this case to justify the additional burden on the applicants required to produce it.

We also will not require applicants to provide historical data on code-share traffic. The evidence request already requires carriers to provide a full description of the code-share services provided in the U.S.-China market. In addition, as discussed above, applicants are required to provide specific details to support their forecasts of any code-share traffic and we are confident that the information supplied together with that already available will provide an adequate record on this matter.

By:  Bradley Mims

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