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OST-00-6982

American Airlines, Inc.

Under the arrangement proposed here, the "AA" designator code will be displayed on Swissair's flights between Zurich and Cairo, connecting with flights operated by American or Swissair between Zurich and the United States. American and Swissair separately hold blanket statements of authorization to engage in codesharing operations.  Under the U.S.-Egypt Air Transport Agreement, three U.S. carriers may operate codesharing services with third-country foreign airline partners. The authorized partnerships presently consist of United/Lufthansa via Frankfurt, Northwest/KLM via Amsterdam, and Delta/Swissair via Zurich. See Order 97-9-16, September 16, 1997.

On August 5, 2000, the Delta/Swissair codeshare arrangement will end. As set forth in the attached letter to Paul L. Gretch, filed today, Delta and Air France have submitted an undocketed notice of codesharing services to Egypt via Paris, effective August 5, 2000, but Delta does not hold any authority to engage in such services. Accordingly, absent a competing application by Delta, the Department should grant American's application forthwith. In the event Delta chooses to submit a competing application, the Department will be required to conduct a carrier-selection proceeding, as the American and Delta requests would be mutually exclusive.

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

Delta Air Lines and Air France

Delta Air Lines, Inc. hereby replies to American’s February 24, 2000 letter in opposition to the above-referenced codeshare notice.  To the extent relevant, Delta is also requesting that a copy of this letter be included in dockets OST-00-6903 and OST-00-6982 by which American purports to apply for “available” designation opportunities in limited-entry codeshare markets resulting from Delta’s decision to switch codeshare partners from Swissair to Air France.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8007

Delta Air Lines and Air France

Counsel: American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

American Airlines, Inc.

Counsel:  American, Carl Nelson, 202.296.5647, carl_nelson@amrcorp.com

Delta Air Lines, Inc. and Air France

American attempts to draw a completely inapposite comparison between Delta’s advanced and proper notification of its intent to amend the intermediate service point and operating partner for its duly-awarded codeshare designations, and American’s unauthorized and unlawful unilateral transfer of city-pair specific frequencies operated by American to an entirely different U.S.-Brazil route, without seeking Department approval. 

American’s protestations provide no legitimate basis for the Department to delay the issuance of the requested notice. Accordingly, the Department should immediately issue a notice allowing Delta to continue these existing services consistent with the request that has been submitted by Delta and Air France.

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

U.S.- Egypt Third Country Codeshare Opportunities Delta Air Lines, Inc. and Air France

We have tentatively decided that Delta's proposed service via Paris with Air France is subject to our review before implementation and to competitive consideration with the application of American. We have further tentatively decided, upon such review and consideration, that Delta should be selected for Egypt third-country code-share services with Air France.

Only one U.S. and one Egyptian carrier offer direct service between the United States and Egypt. On the other hand, under our agreement with Egypt, three U.S. carriers can offer thirdcountry code-share service. Thus, code-share opportunities under the agreement represent a valuable benefit for travelers in this market, providing the public with a variety of service options and the benefits that derive from competitive opportunities. In these circumstances, we tentatively conclude that the public interest requires that we act here to maximize the use of the bilateral code-share rights. Since one of the three Egypt opportunities is currently unused, this means acting to authorize another third-country code-share operation.

While both Delta and American have presented proposals that would offer benefits to the public, we tentatively find that Delta's proposal offers the greater overall benefits, and we thus tentatively conclude that Delta should be authorized to use the designation available for third-country code-share services to Egypt.

First, Delta would offer an additional weekly frequency. Delta and Air France would provide seven weekly services as opposed to six for American and Swissair. Furthermore, the Delta/Air France operation would be provided with somewhat larger-capacity aircraft. Air France serves the Paris-Cairo market with either B777or Airbus 343 aircraft while Swissair serves the Zurich-Cairo market with Airbus 332 aircraft. While American would provide nonstop connecting service to an additional U.S. city (ten versus Delta's nine), seven of those cities are the same as those to be served by Delta. We tentatively believe that overall the benefits offered by American are outweighed by the service benefits offered by Delta.

By:  Susan McDermott

American Airlines, Inc.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com

U.S.- Egypt Third Country Codeshare Opportunities

We have decided to make final our tentative decision to authorize Delta to serve Egypt via Pan's under its code-share arrangement with Air France. As we stated in our show-cause order, the code-share opportunities under the U.S.-Egypt agreement represent a valuable benefit for travelers in this market, providing the public with a variety of service options and the benefits that derive from competitive opportunities. We find that the public interest requires our acting to maximize the use of these code-share rights by selecting a carrier to take advantage of a currently unused code-share opportunity, and we further find that of the two proposals before us, Delta's offers the greater overall benefits. In these circumstances and taking into account the record before us, we conclude that the public interest calls for making final our tentative result.

By:  Susan McDermott

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