Home | OST Filings by Number | OST Orders and Notices | OST Filings by Carrier
OST Filings by Proceeding | OST Filings by Day | Office of Intl Aviation Filings by Carrier | Office of Intl Filings by Day

OST-00-7537

American Airlines, Inc. 

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

American Airlines, Inc. 

Delta presently holds the underlying authority to serve India, and has already been awarded by Order 97-2-26 the necessary third-country codeshare designation to provide U.S.-India service under a cooperative service arrangement. An important facet of U.S.-India third-country codeshare designations is that there are no limitations on the number of frequencies or third-country airlines with which a designated U.S. carrier may operate. Thus, no limited-entry issues are implicated by the expansion of codeshare services by an existing designated carrier, such as Delta.

Counsel: Shaw Pittman, Robert Cohn, 202.663.8000; Silverberg Goldman, Michael Goldman, 202.944.3305

American Airlines, Inc. 

Delta Air Lines, Inc. hereby answers the application of American Airlines, Inc. filed on June 16, 2000, for an exemption and codeshare designation to provide U.S.-India third-country codeshare service. Delta opposes American's application to the extent it contemplates the reallocation or reconsideration of Delta's duly-awarded India codeshare designation, pursuant to which Delta will be offering third-country codeshare service in conjunction with Air France. Should the Department find that TWA's codeshare designation is dormant,' Delta would have no objection to American using that available designation.

Counsel: Shaw Pittman, Alexander Van der Bellen, 202.663.8000

American Airlines, Inc.

Delta asserts that because it was granted a third-country codesharing designation to serve India with Swissair via Zurich by order 97-2-26, February 25, 1997, and there are no limitations on the number of frequencies or foreign airlines with which a designated U.S. carrier may operate, it is entitled to engage in an arrangement with Air France simply by filing a 30-day notice. Delta's position is without merit. Delta is not proposing a mere "expansion" of its codeshare services to India (Notice, p. 1), but is instead attempting to replace Swissair with Air France.' Because the authority granted to Delta by Order 97-2-26, in a contested proceeding, was specific to Swissair, Delta cannot later select a substitute partner and proceed to implementation without specific authorization to do SO. See 1999 U.S.-Brazil Combination Service Case, Order 99-923, September 30, 1999, p. 3.

Equally important, Delta's codesharing service to India with Swissair has been unused and dormant since mid-1998. Delta and Swissair operated codesharing flights to India via Zurich only from June 1997 to June 1998 (OAG data base). moreover, Delta's codesharing service to India with Austrian ended in June 1999 (id.) In these circumstances, Delta's attempt to parlay its designation with Swissair, which has been unused for more than two years, into an entitlement for limited-entry codesharing with Air France, should be rejected out-of-hand.

If the Department revokes the TWA/Royal Jordanian designation as dormant and reassigns that opportunity to American/Swissair/Sabena, American would have no objection to reassignment of the Delta/Swissair opportunity to Delta/Air France without further procedures. Otherwise, a carrier-selection proceeding would be required between American and Delta. American would show that its proposal to codeshare to three points in India -- Mumbai, Delhi, and Chennai -- is far superior to Delta's proposal to serve only Mumbai and Delhi. In addition, since Delta already serves India with its own aircraft and crews, American's codesharing service will provide a new on-line option, while Delta's would not.

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

TWA wishes to correct the inaccurate characterization of the third-country codeshare authority attributed to TWA by both American and Delta. Both indicate that TWA is not utilizing third-country code share authority with Royal Jordanian. American further asserts that TWA would attempt to justify the lack of implementation on the grounds that the Indian Government has not approved TWA's operations.

In fact, TWA did have great difficulty obtaining the Indian Government's assent to its ability to codeshare with Royal Jordanian. After an extended effort, TWA did secure the Indian Government's approval for the third-country code sharing approximately six months ago. TWA's efforts involved both intergovernmental communications and local counsel support in dealing with the Indian Government. Hence, TWA submits that American's characterization of TWA's past efforts as an effort to "excuse its failure to use the designations" is misleading.

Shortly after obtaining the Indian approval, TWA's codeshare partner, Royal Jordanian, faced similar intransigence by the Indian government. TWA has elected to work through its codeshare partner to address these difficulties. At this time, the Jordanian Civil Aviation Authorities and Ministry of Transport are in contact with their counterparts at the Indian Civil Aviation Authorities and Ministry of Transport. The Jordanian government has requested a meeting to review the applicable terms of the Jordan-India Air Transport Agreement. TWA has received confirmation that the Jordanian government is diligently pursuing the matter with the Indian authorities. Hence, TWA's designation should not be revoked on the grounds that it is the subject of current intergovernmental communications between the Jordanian and Indian governments. Hence, the Department should not penalize TWA for its efforts to obtain the Indian third-country codeshare approval. Indeed, TWA is surprised that American would make such an argument in light of the fact that American has faced similar issues when dealing with third-country codeshare arrangements -- for example with its thirdcountry codeshare with Finnair in Russia.

Counsel:  Glenn Wicks, 202.457.7790

American Airlines, Inc.

As we show below, the Department should promptly revoke TWA's designation as dormant and reassign it to American. Otherwise, the Department should conduct a carrier selection proceeding to choose between American and Delta to hold the fourth designation. These matters are discussed in further detail below.  Clearly, TWA has been dilatory in pursuing implementation of its codesharing arrangement with Royal Jordanian. Given the explicit terms of the MOC in this matter, TWA should not be heard to blame the Indian Government for the dormancy of its designation.

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

American Airlines, Inc.

Delta's India codeshare designation was not made on a tentative conditional basis, nor was Delta's designation award made subject to recall in a further proceeding, as was expressly the case with American's New York-Rio de Janeiro frequency award. Just as American has been allowed to move other of its 42 non-conditional Brazil frequencies between other U.S.-Brazil markets without specific authorization by the Department, so too has the Department allowed Delta to use its existing India designation to codeshare with carriers other than Swissair. And, unlike the U.S.-Brazil bilateral which strictly limits the number of available frequencies, the U.S.-India codeshare article permits and encourages designated U.S. carriers to offer as many codeshare services as possible.

Delta's continued use of its codeshare designation to provide online service to India with Air France this July will preserve and enhance the public interest benefits attainable from this opportunity. By virtue of the larger Delta/Air France network, Delta will be offering more nonstop-to-nonstop India connections to and from more U.S. cities than ever before. The fact that Swissair will no longer be participating as a Delta codeshare partner in no way impacts Delta's ability to make full and effective use of its designation by implementing its previously-approved India codeshare services with Air France.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

American Airlines, Inc.

American Airlines has reasserted that TWA should be striped of its current authority to codeshare with Royal Jordanian to India. TWA has not been dilatory in pursuing implementation of its codesharing authority. On the contrary, TWA has actively pushed for all the governmental approvals necessary to begin the codeshare with Royal Jordanian. First, American is correct that TWA received an approval from the Indian Government for codesharing authority in November of 1999. This was accomplished in the course of a bilateral negotiation with Indian which the U.S. delegation insisted that India's approval of the TW/RJ code share was a sine qua non before other issues could be addressed. However, American's other factual assertions are not accurate.

Specifically, the Governments of India and Jordan are currently negotiating whether India will permit TWA and Royal Jordanian to implement their codesharing agreement pursuant to the Jordan-India bilateral. The issues here relate to the basic question of access under the bilateral agreement as well as the terms under which such access will be permitted. Indeed, on February 29, 2000 TWA was informed that Royal Jordanian was not being permitted to implement the codesharing agreement on fair and equal terms. In addition to India's refusal to accept the TW/RJ codeshare without an amendment to the India-Jordan Air Services Agreement, Royal Jordanian was being obligated to pay certain fees for passengers flown under the TWA code. In light of this obviously unacceptable situation, Royal Jordanian has worked diligently to bring the matter to closure. In April, TWA was informed that a meeting was requested by the Jordanian authorities to address the matter. Just last week, Royal Jordanian has confirmed that the intergovernmental meeting is scheduled to occur in the first week of August.

As a separate matter, TWA notes that the Department first issued TWA and Royal Jordanian the authority to provide the subject code sharing services by Notice of Action Taken. TWA and Royal Jordanian's application for renewal was filed with the Department on March 9, 1999. To date, the Department has taken no action on the joint request of TWA and Royal Jordanian, thus permitting this arrangement to continue pursuant to the Administrative Procedures Act. With this in mind, American's attempt to cast itself as making a particular effort to advise the Department of its inability to use third-country codeshare rights in the quite similar circumstances of Finnair in Russia is out of context. In that instance, American was merely complying with the express terms of Ordering Paragraph 3 of Department Order 2000-1-9. For this reason, TWA sees no reason, contrary to American's reply, to distinguish between the third-country codesharing implementation issues of the kind faced by American and Finnair in Russia and those faced by TWA and Royal Jordanian in India.

Counsel:  TWA and Glenn Wicks, 202-457-7790

American Airlines, Inc.

Consistent with the Department's ruling that American could not transfer its specific Brazil frequencies from one city-pair to another (Order 99-9-23, September 30, 1999), the Department should find that Delta cannot transfer its specific codeshare designation, awarded in a contested proceeding, from one foreign partner to another. The Department should immediately advise Delta and Air France that until this matter is resolved, they cannot engage in codesharing services between the United States and India.

While American does not seek in this proceeding to revisit the merits of the Department's 1998 decision to grant an India designation to TWA, we believe that TWA's lack of diligence in pursuing this opportunity results from the commercial shortcomings of its service proposal, which would provide few public benefits. TWA operates no service to Jordan. Royal Jordanian operates a scant 11 weekly flights between the U.S. and Amman, all on a one-stop basis via intermediate points in Europe (seven from New York via-Amsterdam, three from Chicago via Shannon, and one from Detroit via Shannon). From Amman, Royal Jordanian serves Delhi just three days a week, Mumbai twice a week, and Calcutta once a week. American/Swissair/Sabena, by contrast, will provide service between the U.S. and three points in India -- Delhi, Mumbai, and Chennai -- with nonstop to nonstop routings from abroad array of U.S. gateways to Zurich and Brussels. Beyond Zurich and Brussels to India, American will offer codeshare service on a far greater number of connecting flights than TWA could offer beyond Amman.  In short, TWA should no longer be allowed to sit on an unused designation for U.S.-India third-country codesharing services to the exclusion of the far superior proposal by American/Swissair/Sabena to make immediate use of these important limited-entry bilateral rights.

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

American Airlines, Inc. / Delta Air Lines, Inc. and Societe Air France

We have decided to dismiss American's application, We find that no designations are currently available to authorize the proposed code-share operations. Under the 1995 MOC with India, the United States can designate four U.S. carriers to operate third-country code-share services in the U.S.-India market. Those designations have been awarded to United, Northwest, Delta, and TWA. We disagree with American that any of the four designations are available for authorization of American's proposed services. While we authorized TWA's code share in February 1998, TWA has been unable to implement that authorization because the requisite Indian government approval has not yet been forthcoming owing to differences between India and the government of TWA's third-country carrier Royal Jordanian. TWA has made clear on the record that the interested parties are working to resolve the issues affecting implementation of these code-share operations, and TWA has reiterated its intent to begin the approved code-share services once all the necessary government approvals have been obtained. In these circumstances, we do not believe that a withdrawal of TWA's code-share approval is warranted.

Similarly, contrary to American's contention, we do not find that Delta's designation should be withdrawn or that additional regulatory procedures are necessary for the carrier to implement its previously approved code-share services with Air France. Delta has stated that, since the unique FAA restriction on its operations has been removed, it will now resume India code-share service in the immediate future.6 We see no basis for withdrawal of the designation in these circumstances. Furthermore, as Delta holds Department approval for code-share services with all three airlines, and as such multiple third-country carrier relationships are permissible under the U.S.-India agreement, we do not view the termination of its relationship with Swissair as a basis for challenging the continuation of Delta's designation or otherwise triggering carrier selection procedures in this case.

We appreciate American's interest in serving India with its code-share partners. Should additional designations become available, American would be free at that time to refile an application for approval of third-country code-share services in the U.S.-India market.

By:  Bradley Mims

Home | OST Filings by Number | OST Orders and Notices | OST Filings by Carrier
OST Filings by Proceeding | OST Filings by Day | Office of Intl Aviation Filings by Carrier | Office of Intl Filings by Day