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OST-00-7343

Evergreen International Airlines, Inc.

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000

Evergreen International Airlines, Inc.

Evergreen's application seeks an exemption to provide all-cargo service to Ecuador and reallocation to Evergreen of two of the three U.S.-Ecuador narrow-body all-cargo frequencies currently held by Kitty Hawk International, Inc. On May 1, Kitty Hawk ceased all of its international operations and announced that it had filed for Chapter 11 bankruptcy protection.

We write with a clarification to advise that, based on the latest information available to Evergreen, Kitty Hawk's last flight to Ecuador occurred on or about January 10, 2000 and not September 1999, as was stated in Evergreen's application. While Evergreen regrets that the information available to it at the time it filed its application was not complete in this respect, the difference is not material. Under the applicable dormancy condition, Kitty Hawk's frequency allocation expired after 90 days of non-use (i.e., on March 10, 2000) and the unused frequencies reverted to the Department. See Order 97-8-20. Of course, even if the dormancy condition had not been triggered, Kitty Hawk's cessation of all of its international services would be cause for the Department to reallocate the company's U.S.-Ecuador frequencies.

Counsel:  Steptoe Johnson, David Coburn, 202-429-8063, dcoburn@steptoe.com

Evergreen International Airlines, Inc.

While no final decision has yet been made, and will not be made until the future of Kitty Hawk International's air transport activities is determined, Amerijet is keenly interested in the U.S.-Ecuador market. If and when operating authority and frequency allocations previously held by Kitty Hawk International revert to the Department and become available for utilization by other U.S. carriers, Amerijet will consider whether it should file an application similar to the one Evergreen has filed in this docket. Until Kitty Hawk International's plan is clearer and the Department's preferred strategy has been determined, Amerijet believes consideration of such applications is premature.

Counsel:  Crispin Brenner, John Richardson, 202.371.2258

Atlas has contemporaneously filed an application for an exemption to serve the Miami-Bogota-Quito/Guayaquil market and has asked that Kitty Hawk's three U.S.-Ecuador frequencies be reallocated to Atlas. It proposes to operate one weekly B-747200/400 round trip and a second round trip every other week. Atlas is a superior choice to Evergreen for this valuable route for a myriad of reasons:

• Atlas proposes more service in the U.S.-Ecuador market.
• Atlas proposes to use superior equipment with greater capacity.
• Atlas currently operates 4-5 cargo charters per week in the U.S.-Ecuador market and is very familiar with the needs of that market.
• Atlas is the largest cargo airline serving Miami International Airport.
• Atlas' South American operations are far more extensive than Evergreen's.
• Atlas has far more experience in serving the U.S.-South America cargo market.

Counsel:  Atlas and Verner Liipfert, 202-371-6030

KHI has recently ceased active operations and has filed for protection pursuant to Chapter 11 of the United States Bankruptcy Code. KHI has no intention to reenter the Ecuador market. Accordingly, KHI does not object to reallocation of the aforementioned frequencies to Evergreen or any other air carrier as the Department may see fit.

Counsel:  Silverberg Goldman, Robert Silverberg, 202.944.3300, rsilverberg@sgbdc.com

Evergreen International Airlines, Inc.

It does not appear that the U.S.-Ecuador Air Transport Agreement permits accumulation of frequencies in the manner proposed by Atlas to enable it to operate a second B-747 frequency in alternate weeks. In fact, the only reference to accumulation of frequencies in the Agreement is found in Annex I (section 3(5)), which addresses accumulation of frequencies over seasons. There is no reference in the Agreement to accumulation or carry-over of frequencies from one week to another. Atlas' contention that it is thereby utilizing all of the three available frequencies is questionable, at best. On the other hand, as pointed out in Evergreen's application (at p. 6), the bilateral agreement plainly permits operation of extra section flights. Evergreen contemplates operating such extra sections as needed to more flexibly accommodate any additional demand not satisfied by its regular weekly schedule. In short, Atlas, claim that it is using additional frequencies is illusory.

As noted above, Atlas has a consistent record of wet leasing its aircraft to foreign airlines. To the extent it were to do so here, a grant of Atlas, application over Evergreen's would in effect be turning over hard-won frequencies reserved for U.S. carriers to the benefit of an unidentified foreign carrier. Evergreen, by contrast, would operate this service in its own right, fully dedicated to the needs of U.S. and other shippers. It is quite clear from this that Evergreen's proposal would maximize use of these limited entry rights to the benefit of U.S. shippers and consumers, while assuring additional and competitive U.S. carrier presence in the market. Grant of Atlas, application, however, would not advance these objectives.

Counsel:  Evergreen and Steptoe Johnson, Richard Taylor, 202-429-3000

U.S.- Ecuador All Cargo Frequency Allocations

By:  Paul Gretch

U.S.- Ecuador All Cargo Frequency Allocations

Counsel:  Steptoe Johnson, David Coburn, 202.429.3000

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