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Order 99-1-5

1998 US-South Africa Third-Country Codeshare Opportunities

Order 99-1-5
OST-98-4755
Issued December 18, 1998
Served January 15, 1999
pdficon1.gif (224 bytes)Final Order Delta to Codeshare with Air France Serving Johannesburg

As stated above, Continental has concentrated on two principal areas in opposing our tentative decision. First, Continental argues that we failed to give sufficient decisional weight to its proposed service from its Newark hub. In fact, we fully recognized the public benefits of Continental’s proposed service at Newark in our show-cause order. However, we tentativelymconcluded that this factor did not afford Continental a decisional advantage in the context of this proceeding and Continental has not now persuaded us otherwise. The fact is, both Continental and Delta proposed service from New York, with Continental serving from Newark and Delta from JFK. Both of these airports currently receive South Africa service from two other U.S. carriers. Although Newark is a hub for Continental, Delta also proposed service from two of its hubs, in addition to its service at JFK, as well as service to five other cities, including one community that does not now receive U.S. carrier on-line service. In these circumstances, while Continental’s service from its Newark hub is certainly a positive feature of its proposal, we do not find that it outweighs the combined attributes of Delta’s overall proposal. Second, Continental argues that its selection in this case would stimulate competition by facilitating service by two new hub networks and, thus, would produce greater public benefits than would the selection of Delta. We agree with Continental that maximizing the number of network services competing in the U.S.-South Africa market is an important public interest consideration. Indeed, we included that factor along with the important service factors noted above in tentatively determining that Delta was the better choice in this case. Like Continental, Delta would provide a competing network service to the existing services of Northwest and United, and its proposal presents the additional benefit of offering competing service at a number of communities that would not receive service under Continental’s proposal. Thus, we maintain our view that Delta’s proposal offers the best combination of service and competitive benefits and warrants its selection in this case.


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