OST-95-234
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OST-95-234
Korean Air Lines Co., Ltd. (Exemption Renewal, Seoul-Washington, DC)
OST-95-234 | June 25, 1997
Application
for Renewal of Exemption
Requests that the Department renew for one year the exemption authority granted to KAL by the Notice of Action Taken dated July 9, 1996 and confirmed in Order 96-8-46 authorizing KAL to engage in scheduled foreign air transportation of persons, property, and mail between Seoul, Korea, and Washington, D.C., via New York, New York, and grant KAL such further and additional relief as the Department may deem appropriate under the circumstances.
Answers are due by July 10, 1997
Counsel: Zuckert Scoutt, James Devall, 202-298-8660
Korean Air Lines Co., Ltd. (Exemption and Renewal, Seoul-Washington / Seoul-Boston/Denver)
OST-95-234 | OST-96-1380 and OST-96-1381 | July 10, 1997
Answer of
the City and County of Denver in Support
Without KAL's service, Denver passengers would have to travel to West Coast cities and change planes for connecting flights in order to reach Korea. This highly unsatisfactory situation would place Denver area businesses at a serious competitive disadvantage in shipping and receiving cargo and would impose burdens and inconvenience on business and tourist travelers.
Counsel: Denver and Reid Priest, Stephen Minikes, 202-508-4000
Consolidated
Answer of United Air Lines
United has stated elsewhere its concern with granting or renewing extrabilateral authority for Korean air carriers. The U.S. and Korean governments are scheduled to meet again next week to discuss terms of an open skies agreement It would be a mistake for the Department to renew valuable, extrabilateral U.S.-Korea authority, such as that covered by the instant applications, until the issues raised by these negotiations have been resolved. Until then, the Department should defer action on these applications.
Counsel: United and Ginsburg Feldman, Joel Burton, 202-637-9130
Answer of
the Washington Parties
KAL inaugurated its first single-plane direct service between Washington and Seoul on July 26, 1995. The KAL service successfully expanded from three to four frequencies per week within the first year of operation. KAL's passenger activity has increased from a total of 32,068 passengers in its first twelve months of operation (July, 1995 to June, 1996) to 44,783 passengers in the most recent, corresponding twelve months - almost a 40 percent increase (See Exhibit 1). During the same period, the average monthly passenger count has grown from 2,672 per month to 3,732 passengers per month. Freight has shown even more impressive growth, more than doubling in tonnage from a total of 291.28 tons to 761.07 tons in the most recent twelve month period. The KAL service has, therefore, become integral to the economy of the region, and it is critical that it continue without interruption.
Exhibit 1 – Korean Air Operations at Washington Dulles Airport since 7/26/95
By: James Wilding, General Manager, 703-417-8766
The Department and all parties are well aware of the long and tortured history of World's effort to institute basic, straight-forward, single plane service in the U.S.-Korea-Malaysia market. That effort began in April of 1996, almost fifteen months ago, with the publication of a new schedule by World. Shortly thereafter, without any stated reason or justification, World was informed by the Korean authorities that it would not be permitted to institute its proposed service in this market. It is apparent that, to date, the U.S. Government has determined that it is better to use the carrot rather than the -stick, and World has no quarrel with that policy decision. At the same time, all must now acknowledge that that policy has not been successful. It might have been suggested that it was unwise for the U.S. Government to continue to discuss the possibility of a new, more generous bilateral with Korea while the Korean Government remained in open violation of the existing bilateral. And one could wonder whether it was reasonable to award Korean carriers new, expanded authority they did not need while their government refused to accord even less comity and reciprocity to a U.S. carrier. But the carrot approach may have worked, and it was reasonable to rely on it while the U.S. Government was, at the same time, pursuing its "open skies" initiative with the Korean Government. But it was not a productive approach. World is still not permitted by the Government of Korea to provide scheduled service in the U.S.-Korea-Malaysia market.
Counsel: World and Seeger Potter, John Richardson, 202-496-1234
Korean Air Lines Co., Ltd. (Exemption Renewal, Seoul-Boston/Denver)
OST-95-234 | OST-96-1380 and OST-96-1381 | July 18, 1997
Consolidated
Reply of Korean Air Lines to Answer of World Airways
World's basis for its objections to KAL's applications is World's claim that the Government of the Republic of Korea has not allowed World to institute new scheduled all-cargo service in the U.S.-Korea market and beyond Korea to Malaysia. The "Background" section of World's current answer goes into great detail. While KAL has not been involved in any of the discussions between World and the civil aviation authorities of the Republic of Korea, KAL understands that the service to which World refers in its answer was in some manner a substitution for a service previously provided by a non-U.S. carrier pursuant to a wet lease agreement with World which service included a technical stop at Seoul.
World's latest filing presents no new information that should alter the Department's determination that these issues can more appropriately be dealt with through other means and without taking action that potentially could affect services which have brought clear and substantial benefits to the tavelling public. Although World notes that it recently re-filed its proposed schedules for U.S. -Korea - Malaysia service, World does not explain how the simple re-filing of schedules necessarily reflects the resolution of the underlying dispute concerning the nature of World's service. Consequently, the Department's previous finding that World's dispute should be addressed through other means applies with equal force here.
Counsel: Herbert Rosenthal, 202-785-9773
Korean Air Lines Co., Ltd. (Exemption Renewal, Seoul-Boston/Denver/Washington)
OST-96-1380 and OST-96-1381 | OST-95-234 | July 21, 1997
Consolidated
Reply of Korean Air Lines
In contrast to the civic parties, United filed an Answer arguing that renewal of KAL's authorities should be deferred pending the outcome of the current bilateral negotiations between the U.S. and the Republic of Korea. United's position is based on the speculation that its desire for third country code-sharing may not be accommodated when a new bilateral agreement is concluded. United's speculation serves no useful purpose and is clearly no basis for deferring action on KAL's renewal applications.
Counsel: Zuckert Scoutt, James Devall, 202-298-8660
OST-95-234 | OST-95-911 | OST-96-1235 | OST-96-1380 | OST-96-1381 | OST-96-2020 | OST-97-2877 | Undocketed | May 5, 1998
Re: Withdrawal of World Airways'
Opposition
Counsel: Seeger Potter, John Richardson, 202-496-1200
Order 98-8-20 | 45922 | OST-96-2020 | OST-96-1381 | OST-96-1380 | OST-96-1235 | OST-95-911 | OST-95-234 49288 | 46979 | 44068 | OST-96-1279 | OST-97-2167 | OST-95-624 | OST-97-2528 | 50146 | 46770 | OST-97-2071 OST-96-1041 | Issued August 19, 1998 | Served August 25, 1998
Each application has either been withdrawn by the applicant or otherwise become moot.
Appendix: Description of Applications
By: Paul Gretch
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