OST-00-6725

American Airlines, Inc.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com

Aer Lingus Limited

Delta strongly opposes the grant of any extrabilateral authority to Aer Lingus. The Government of Ireland's steadfast refusal to lift the Shannon stop requirement for U.S. carrier service to Ireland is one of the most significant bilateral restrictions existing in Europe today. The Shannon stop requirement exacts a large financial penalty on U.S. carriers seeking to serve Dublin by forcing them to provide uneconomical Shannon service, which is not supported by demand. Unless and until the Government of Ireland is willing to negotiate a lifting of this restriction, no extrabilateral authority of any sort should be granted to Irish carriers.

Counsel:  Shaw Pittman, Alexander Cohn, 202.663.8060

Counsel:  MASSPORT, Wesley Harper, 617.478.4152

Aer Lingus Limited and American Airlines, Inc.

Pursuant to discussions among United Air Lines, Inc. and the above referenced applicants, the applicants have agreed to an extension of the date for an answer by United in these proceedings. Under the Department's rules, an answer to Aer Lingus' application in Docket OST-00-6728 would be due today, January 14, 2000 and to the American and Aer Lingus applications in Dockets OST-00-6725/26 on January 19 and 20, 2000, respectively. By agreement of the applicants, the date for a United answer to all pleadings may be extended to February 2, 2000. This extension is intended to allow all interested parties to seek an accommodation on certain issues raised by these applications

Counsel:  Kirkland Ellis, Jeffery Manley, 202.879.5000

American Airlines, Inc. and Aer Lingus Limited

Please be advised that counsel for applicants American Airlines, Inc. and Aer Lingus Limited have agreed with counsel for Northwest Airlines, Inc. that the date by which Northwest may file an answer to the three above-referenced applications is extended to February 2, 2000. Under the Department's procedural rules, answers to Aer Lingus' application in Docket OST-006728, to American's application in Docket OST-00-6725 and to Aer Lingus' application in Docket OST-00-6726 were due on January 14, 19 and 20, 2000, respectively.

Counsel:  Zuckert Scoutt, Charles Simpson, 202.298.8660

Aer Lingus Limited and American Airlines, Inc.

Northwest Airlines has a serious interest in providing service to Ireland on a codeshare basis. In particular, Northwest wishes to offer codeshare service to Dublin without being required also to offer service to Shannon. Earlier this year, Northwest submitted a request to the Government of Ireland for authority to offer codeshare services to Dublin with a same-country carrier and with a third-country carrier or carriers (via points in third countries) on flights operated by such other carriers. The Government has not yet acted on that request, but Northwest is hopeful that the request will be favorably resolved in the near future and that Northwest will be able to offer such codeshare services. If the Irish Government does act favorably and satisfactorily on this request, Northwest does not expect that it will have a continuing basis to oppose the American and Aer Lingus applications.

For the very reasons that American and Aer Lingus consider codeshare operations to be a superior and efficient means of offering U.S.-Ireland service, so too does Northwest believe that it can best offer its own service - and new and attractive service options to consumers - in the U.S.-Ireland market on a codeshare basis. In the case of Northwest, this means codesharing with a carrier of a third country or with another U.S. carrier.

Counsel: Northwest, Megan Rae Rosia, 202.842.3193

Both the Aer Lingus/American code-share application and Aer Lingus' Cities Program application, are extra-bilateral, as the applicants concede, Grant of these applications would require an affirmative finding of comity and reciprocity and, in the case of the Cities Program application, a determination that a procompetitive agreement is in place between the U.S. and Ireland, among other things. So long as the Government of Ireland declines to authorize United to code share on flights operated by British Midland between London and Dublin unless United complies with the Shannon stop requirement, which requires United to offer the same level of service to Shannon as to Dublin, the Department has no basis for a finding of adequate comity and reciprocity or the existence of a procompetitive regime necessary to approve the applications at issue

Counsel: Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com

Aer Lingus Limited and American Airlines, Inc.

Counsel:  Continental, Hershel Kamen, 713.324.6697

Aer Lingus Limited and American Airlines

At the outset, it should be noted that the arguments presented by Delta in its Consolidated Answer are inconsistent with arguments that Delta presented to the Department of Transportation merely one year ago. For example, in March 1999, Delta sought an extension for Department approval of the code-share arrangement Delta had at that time with Aer Lingus. Specifically, in its March 1999 submission, Delta claimed that renewal of the Delta/Aer Lingus code-share authority would be in the public interest since, under the agreement, Delta was able to initiate daily, non-stop service between New York and Shannon as well as between New York and Dublin. (Delta Joint Application for Renewal at 2-3. Further, Delta claimed that the traveling public benefits from competitive service "on these important U.S.-Ireland routes." Therefore, not long ago, Delta claimed that service to Ireland pursuant to a code-share arrangement with a U.S. air carrier, including service to Shannon, was a valuable service that benefitted the public. This is completely inconsistent with its present position with regard to Aer Lingus's proposed code-share arrangement with American Airlines, Inc.

Counsel:  Robins Kaplan, Harold Mesirow, 202.736.2700

American wishes to address certain extraneous comments made by United and Continental. These comments are without merit, and provide no basis for the Department to reject the proposed Aer Lingus/American codeshare.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com

Aer Lingus Limited and American Airlines, Inc.

Counsel: Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Aer Lingus Limited and American Airlines, Inc.

Order 2000-5-19 tentatively finding that the public interest warrants granting, for a one-year term(1) American Airlines, Inc., exemption authority to conduct scheduled operations in the New York-Shannon/Dublin market; (2) Aer Lingus Limited, a statement of authorization to display American's designator code in a number of U.S.-Shannon/Dublin markets; and (3) Aer Lingus, exemption authority to conduct scheduled operations in the Baltimore-Shannon/Dublin market. Objections due May 26, 2000 and Answers due May 31, 2000.

By:  Bradley Mims

Aer Lingus Limited and American Airlines, Inc.

Apparently, the Government of Ireland is willing to eliminate the Shannon stop requirement for a handful of U.S. passenger carriers, provided they, in turn, are willing to serve Dublin indirectly through a third-country code-share. While this is certainly a positive development, it is an unacceptable alternative to elimination of the Shannon stop requirement for all U.S. carriers. Not only does it place U.S. combination carriers wishing to serve Dublin directly with their own aircraft at a competitive disadvantage, it does little to further the interests of integrated cargo carriers, like FedEx. Because FedEx is encouraged by the positive developments embodied in Order 2000-5-19, it has chosen not to file a statement of objections. If, however, substantial progress is not made toward elimination of the Shannon stop requirement and general liberalization of the aviation relations between the United States and Government of Ireland over the course of the next year, FedEx will strenuously object to any renewal of the exemptions and statement of authority sought by American and Aer Lingus.

Counsel: FedEx, M. Rush O'Keefe, 901.395.4093

United has no objection to the Department's finalizing its tentative decision to award extrabilateral. authority to American and Aer Lingus so long as the Department at the same time grants the pending application of British Midland to code share for United on British Midland's flights between London Heathrow and Dublin., This United/British Midland code share is also extrabilateral under the U.S./Ireland agreement, but the Irish government has indicated as part of the April 27 understanding its intention to allow the United/British Midland code share to operate. United's code share with British Midland will offer competition with the new extrabilateral services of American and Aer Lingus. It is important that all of these extrabilateral services should be permitted to start at the same time so that none is allowed to gain a competitive advantage over the other. The Irish government concurs with this position and, as United understands it, is prepared to allow both the United/British Midland and American/Aer Lingus code-share services to begin at the same time.

Counsel: Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com

Aer Lingus Limited and American Airlines, Inc.

In its comments, United states that it has no objection to the Department's finalizing its tentative decision to award extra-bilateral authority to Aer Lingus and American Airlines Inc. ("American") as long as the Department at the same time grants British Midland's pending application to code share for United on British Midland's flights between London Heathrow and Dublin. In response, Aer Lingus asserts that the Aer Lingus and American applications should not be delayed pending the finalization of an order in the British Midland matter. Order 2000-5-19 should be finalized as soon as possible. Aer Lingus has no objection to the British Midland request, and the finalization of Order 2000-5-19 would not have any impact on United's efforts to continue working with the parties involved in the British Midland proceedings in order to obtain expeditiously any U. S. authority it requires. The fact that the British Midland request is still pending before the Department does not warrant withholding authority from Aer Lingus and American in the instant proceedings. As to the comments submitted by FedEx in this matter, it is important to note that FedEx has not raised any objection to finalizing Order 2000-5-19 at this time. Instead, FedEx states that it might object in the future when renewal of the authority granted in such order is under review, but only if aviation relations between the United States and Ireland are not further liberalized. FedEx's comments are more in the nature of negotiating advice to the Department. Extra-bilateral authorities, such as those at issue in these proceedings, are, by their nature, reviewable in the normal administrative process. Therefore, there is no need for any specific provisions for review in this instance. None of the issues raised in United's and FedEx's comments warrant delay in finalizing Order 2000-5-19. Accordingly, Aer Lingus respectfully requests that the . Department finalize such order as soon as possible.

Counsel: Robins Kaplan, Harold Mesirow, 202.775.0725

While FedEx is, of course, free to file whatever protest it wishes next year, there cannot be the implication that the Department concurs in the conditioning of the renewal of the exemption approved in this Order on events to which the Government of Ireland has not agreed. Maryland concurs that the removal of the Shannon stop requirement is an important goal and should be pursued in government negotiations, but it should not be used in an exemption proceeding to initially condition or subsequently withdraw the Department's authorization of significant new U.S.-Ireland services. Although Maryland believes that the Department's Order is clear, and that the interpretation FedEx would put on it is without foundation, Maryland submits that the Final Order should definitively reject any threat that the exemptions would be withdrawn after a year unless the Shannon stop requirement is lifted. Aer Lingus and the Government of Ireland, as well as the Maryland Aviation Administration, should be reassured that their investment in the new service, now encouraged, will not be aborted.

Counsel: Preston Gates, Jonathan Blank, 202.662.8450

Aer Lingus Limited and American Airlines, Inc.

We have decided to finalize our tentative findings and conclusions in Order 2000-5-19. In taking this action, we note that significant public benefits will flow from the approval of the American/Aer Lingus requests. These new services, and the services by U.S. carriers that the Irish Government has undertaken to approve, will substantially enhance competition in the U. S -Ireland market and will provide important, valuable benefits to the traveling public and to all of the U.S. cities which will be affected by these new services. In light of these benefits. and the April 27 undertaking referred to above, we find that finalization of our tentative decision in Order 2001-5-19 is in the public interest.

We also note that United and Federal Express do not oppose our finalization of that order.3 At the same time we share the Federal Express concerns about the Shannon stop requirement. In this regard, we emphasize that, as we said in Order 2000-5-19, our decision here does not lessen our desire to reach agreement to eliminate the Shannon stop requirement as it applies to U.S. carriers, and we will continue to urge the Government of Ireland to work with us to achieve that end.

By:  Bradley Mims

American Airlines, Inc.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

Home | Search | Help
OST by Number | OST by Order | OST by Carrier | OST by Subject | OST by Day
OIA by Carrier/Subject | OIA by Day | FAA by Number | FAA by Subject | FAA by Day
Carrier Financials | Charter Office | Answer/Reply Calendar