OST-96-1381
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OST-96-1381
Korean Air Lines Co., Ltd. (Exemption Renewal, Seoul-Boston/Denver)
OST-96-1380 and OST-96-1381 | June 25, 1997
Application
for Renewal of Exemption
Requests renewal of exemption authority granted to KAL in Dockets OST-96-1380 and OST-96-1381, in order to provide scheduled single-plane, one-stop foreign air transportation of persons, property, and mail between Seoul, Korea, and Boston, Massachusetts, via New York, New York, and between Seoul and Denver, Colorado, via Los Angeles, California. KAL submits this Application in accordance with the Department's Program for Expanding International Air Service Opportunities to More U.S. Cities (the "Cities Program"). KAL requests that the Department renew the requested authority for one year.
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
Korean Air Lines Co., Ltd. (Exemption Seoul-Denver)
OST-96-1381 | September 3, 1997
Application for Amendment of Exemption
Korean Air Lines Co., Ltd. ("Korean Air" or "KAL") hereby requests amendment of its exemption from 49 U.S.C. § 41301 authorizing KAL to engage in scheduled foreign air transportation of persons, property and mail between Seoul, Korea and Denver, Colorado via Los Angeles, to permit KAL to operate the service via San Francisco in lieu of Los Angeles.
Answers must be filed no later than September 18, 1997
Counsel: Zuckert Scoutt, William Callaway, Jr., 202 298 8660
Korean Air Lines Co., Ltd. (Exemption, Seoul-Denver / Intermodal Cargo Service)
OST-96-1381 | OST-97-2877 | September 18, 1997
Answer of The City and County of Denver in
Support of the Application
Counsel: Denver and Reid Priest, 202-508-4000
Consolidated Answer of United Air Lines
It is United's understanding that the primary reason the Koreans broke off talks with the U.S. on open skies is their belief that their carriers already had all the U.S. authority they needed. If the Department were to act favorably on the instant applications, such action would merely re-enforce the Korean belief that Korea has little to gain from an open skies agreement when the U.S. will give their carriers whatever they want whenever they want it. On the other hand, United believes it extremely unlikely that the government of Korea would act in a similar fashion to grant a U.S. carrier extrabilateral authority, for example, to implement a code share to, from or via Korea with a third-country carrier.
Counsel: United and Ginsburg Feldman, 202-637-9130
The Department and KAL are fully informed regarding the failure and refusal of the Government of Korea to abide by its bilateral obligations and permit World to provide service it is authorized and designated to provide. The status of this matter was last described by World in an answer it filed in opposition to renewal of two KAL extra-bilateral exemptions, one of which KAL seeks to amend in this proceeding. Unfortunately, while some of the times, places and details have changed, the larger problem remains unresolved, and there is no visible sign of significant movement by the Government of Korea -- despite the ongoing efforts of World and the U.S. Government.2/ With few exceptions, the Department has consistently supported U.S. carriers in their disputes with foreign governments at least by refusing to grant applications for extrabilateral authority to designated carriers of the foreign government when those applications have been opposed by the U.S. carrier denied bilateral rights by the foreign government involved. KAL has offered no reason why the Department should deviate from that policy in this case, and there is no such reason. Accordingly, the Department should continue to adhere to its established policy, support World in this forum as it has in direct communications with the Government of Korea, and refuse to approve either of the KAL applications pending in these dockets.
Answer of July 10, 1997 | HTML
Counsel: Seeger Potter, John Richardson, 202-496-1234
Korean Air Lines Co., Ltd. / Asiana Airlines, Inc. (Intermodal Cargo)
OST-96-1381 | OST-97-2877 | OST-95-768
Federal Express is diligently and persistently attempting to work with Korean government officials and agencies responsible for the planning and development of the new airport, with the assistance of the U.S. Embassy in Seoul, to resolve the foregoing uncertainties and concerns. Federal Express believes that a deferral of action by the Department on the pending intermodal exemption authority amendment applications by KAL and Asiana will serve to underscore the seriousness of the self-handling issues to Federal Express, and will facilitate an early resolution of those issues.
Federal Express requests the Department to defer action on the instant applications by KAL and Asiana for amended intermodal exemption authority until after the Government of Korea has provided assurances that adequate space and facilities will be made available to Federal Express at the new Inchon airport to enable Federal Express to perform self-handling operations with respect to its own air express and air freight shipments on an efficient basis
Counsel: Federal Express and Shaw Pittman, Nathaniel Breed, 202-663-8078
Consolidated Answer of United Air Lines, Inc.
It is United's understanding that the primary reason the Koreans broke off talks with the U.S. on open skies is their belief that their carriers already had all the U.S. authority they needed. If the Department were to act favorably on the instant applications, such action would merely re-enforce the Korean belief that Korea has little to gain from an open skies agreement when the U.S. will give their carriers whatever they want whenever they want it. On the other hand, United believes it extremely unlikely that the government of Korea would act in a similar fashion to grant a U.S. carrier extrabilateral authority, for example, to implement a code share to, from or via Korea with a third-country carrier.
Counsel: United and Ginsburg Feldman, 202-637-9130
Korean Air Lines Co., Ltd. (Exemption, Seoul-Denver / Intermodal Cargo)
OST-96-1381 | OST-97-2877 | September 26, 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. 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. (KAL has addressed these arguments to the Department in response to similar World pleadings in, inter alia, Dockets OST 95-234; 96-1235; 96-1380; 96-1381; 96-2021; 96-2020; and 95-911 filed since January 1997.) KAL does not agree with World that the Government of Korea (which does not own KAL) has failed to live up to its bilateral agreements with the United States
Counsel: Herbert Rosenthal, 202-785-9773
Korean Air Lines Co., Ltd. (Exemption, Seoul-Denver / Intermodal Cargo Service)
OST-96-1381 | OST-97-2877 | September 29, 1997
Consolidated Reply of Korean Air Lines
The issues before the Department are very straightforward in considering Korean Air's applications in the above-referenced dockets. First, Korean Air does not request any additional authority in these applications, but merely amendment of KAL's current authority for substitutions -- the substitution of an intermediate point for the current intermediate point in the case of Denver, and the substitution of three city-pair markets for the current three city-pair markets in the case of the intermodal services. Second, the services operated under the amended exemption authorities would continue to be in the public interest. The travelling and shipping public would continue to benefit from KAL's service and, in the case of the Denver services, the Denver civic and business community would continue to benefit as a result of the services. Finally, the requests of United and Federal Express for deferral of action on the amendment applications are not based on any claims of adverse harm to those carriers under the current U.S.-Korea aviation agreement. Rather, those carriers speculate on various matter" which are simply irrelevant to Korean Air's pending applications.
Counsel: Zuckert Scoutt, James Devall, 202-298-8660
Korean Air Lines Co., Ltd. (Exemption, Seoul-Denver / Intermodal Cargo)
OST-96-1381 | OST-97-2877 | October 8, 1997
Motion for Leave to File and Response of World Airways
World believes that the Department should be reluctant to accept KAL's characterization regarding the importance of the authority at issue in these proceedings. Obviously, if that authority were not important, KAL would not be asking for it. If that authority were not significant, it would not be necessary for KAL to request it and to be required to demonstrate that approval of its request is consistent with the public interest.
Counsel: World and Seeger Potter, John Richardson, 202-496-1234
Korean Air Lines Co., Ltd (Exemption, Seoul-Denver / Intermodal Cargo)
OST-96-1381 | OST-97-2877 | October 20, 1997
Whether KAL exercises that authority by operating its own flights Denver-Seoul nonstop, Denver-Seoul one-stop via Los Angeles, Denver-Seoul one-stop via San Francisco, or Denver-Seoul one-stop via any other U.S. point at which KAL has authority does not alter KAL's existing underlying Denver-Seoul authority. The substitution of one intermediate point for another intermediate point is not a substantive change to KAL's current authority.
Counsel: Herbert Rosenthal, 202-785-9773
Asiana Airlines, Inc. / Korean Air Lines Co., Ltd.
OST-95-768 | OST-96-1381 | OST-97-2877 | November 5, 1997
Motion and Further Response of World Airways
For reasons that are not altogether clear, KAL and the Georgia parties now seem to believe it would be productive for them to reargue matters which have been the subject of prior briefing. Both KAL and the Georgia parties sing a similar song but use slightly different words. They do not even contend with World's principal contention, repeated above. Rather, they try to avoid it. Both suggest that although KAL and Asiana presently lack the authority they seek in these proceedings, neither carrier is really seeking new authorizations which should be evaluated as such. Both parties assert that since the carriers have authority similar to the authority at issue here, the new authority being requested is not really new authority at all. Not surprising, these strange contentions are not supported by precedent or even extended discussion.
It is almost as if the parties believe that if they say something often enough, it will become a reality. They even seem to think they benefit by disparaging World's contrary position. Indeed, the Georgia parties even contend that World's contention "is cute, but factually inaccurate and inappropriate." World is not certain as to how the Georgia parties justify the use of any of these three adjectives -- and the Georgia parties do not even try. obviously, if the Georgia parties were correct, they would be able to offer something more than the conclusory recitations they have offered in their unauthorized document.
Counsel: World and Seeger Potter, John Richardson, 202-496-1234
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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