OST-97-2548
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OST-97-2548
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Approval of a Transfer of Frequency Allocations, US-Argentina All-Cargo Frequencies)
OST-97-2548 | May 21, 1997
Federal Express, as Buyer, and Arrow and FWIA, as Sellers, have entered into two separate Route Purchase And Transfer Agreements, dated as of May 14, 1997 and May 16, 1997 (the "Transfer Agreements"; Exhibits JA-1 and JA-2), for the purpose of contracting for the sale of two (2) U.S.-Argentina all-cargo operating frequencies, currently issued to Arrow, and one (1) U.S.-Argentina all-cargo operating frequency, currently issued to FWIA, to Federal Express, in exchange for a purchase price of $1.5 million and $500,000, respectively, subject to Department approval. The Joint Applicants desire to consummate the foregoing transactions on July 15, 1997, or as soon thereafter as all necessary governmental approvals have been received.
Exhibit List | JA-1 - Route Purchase and Transfer Agreement between Federal Express and Arrow 5/14/97 | JA-2 - Route Purchase and Transfer Agreement between Federal Express and FWIA 5/16/97 | JA-3 - Proposed Expanded US-Argentina Service to be Operated by Federal Express | JA-4 - Federal Express B-727-200 Load Factors between Sao Paulo and Buenos Aires (March and April 1997 Southbound Flights) | JA-5 - Excerpts from Federal Express Annual Report for 3/31/96 | JA-6 - US and Foreign Flag Competitng Services and Capacity in the US-Argentina Air Cargo Market | JA-7 - Pre-Transfer HHI Index Calculation for the US-Argentina Air Cargo Market | JA-8 - Post-Transfer HHI Index Calculation for the US-Argentina Air Cargo Market | Service List
Counsel: FedEx and Shaw Pittman, Nathaniel Breed, 202-663-8078 | Allan Markham, 202-337-2149 for Arrow | Squire Sanders, Marshall Sinick, 202-626-6651 for FWIA
Editor's Note: Exhibit JA-5 is a link to FedEx's Web Site for the Annual Report
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Approval of a Transfer of Frequency Allocations)
OST-97-2548 | June 2, 1997
Preliminary
Answer of Fine Airlines
Fine Air is prepared to participate actively in this proceeding. Absent a procedural order from the Department to the contrary, Fine Air, complying with the clear provisions of the Department's Procedural Rules, will file its answer in opposition 28 days after the completion of the Joint Application.
Counsel: Wilmer Cutler, Jeffrey Shane, 202-663-6000
Federal Express does not intend to use the three new frequencies to add any flights. Rather, it would convert existing narrow-body operations to wide-body. No doubt this would be helpful to the Fed Ex operation, but the load factor data it supplied does not demonstrate that the situation is critical or that it justifies the Department taking action that would place competition at risk. Polar Air has no interest in frustrating the business development plans of Federal Express but it cannot acquiesce in them if it means foregoing the expansion Polar Air Cargo needs to remain in Argentina. That is the position in which Polar Air finds itself today. As Polar Air stated, it would not object to the proposed Fed Ex purchase so long as it had an opportunity to add the second weekly flight it needs to be competitive.
Counsel: Ginsburg Feldman, Alfred Eichenlaub, 202-637-9034
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Approval of a Transfer of Frequency Allocation, US-Argentina All-Cargo)
OST-97-2548 | June 9, 1997
Consolidated
Joint Reply of Federal Express, Arrow and FWIA and Motion for Leave to
File
The gravamen of Polar's Answer to the Joint Application is Polar's concern that, if Federal Express is allocated eight of the twelve Argentina cargo frequencies and is thereby enabled to operate five weekly DC-10 flights, and if Polar continues to be limited to only a single weekly B-747 roundtrip in the U.S.-Argentina market, Polar "could well be forced to abandon the route" (Polar Answer, p. 3). Polar provides the solution to its own concern, however, by pointing out that Challenge Air Cargo holds an allocation of the two Argentina frequencies which it is not utilizing and has now forfeited under the 90-day dormancy condition applicable to that allocation (Polar Answer, p. 5).
Counsel: Federal Express and Shaw Pittman, Nathaniel Breed, 202-663-8078 / Allan Markham, 202-337-2149 for Arrow Air / Squire Sanders, Marshall Sinick, 202-626-6651 for FWIA
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Transfer of Frequency Allocations, US-Argentina All-Cargo)
OST-97-2548 | June 16, 1997
Response of Polar
Air Cargo and Motion for Leave to File
The Joint Applicants attempt to shade the consequences of their proposal by pointing to the four weekly scheduled all-cargo frequency allocations that would not be controlled by Fed Ex after the transaction. If those four allocations were available to a carrier such as Polar Air that would use them to mount multiple weekly 747-F operations, the contentions of the Joint Applicants regarding potential competition might be credible. Here, however, two of those four frequencies are not being used for scheduled service but rather have been long pocketed by the carrier to which they were awarded. That carrier has contended that it has met the conditions for retaining those allocations by operating an extension of its Sao Paulo service over to Buenos Aires, Argentina once within a 90-day time frame. If the Department accepts that tactic as legitimate and grants the request of the Joint Applicants, there is no opportunity for Polar Air to secure the second flight that it needs to operate viably in the market, increasing the chance that Federal limpness will soon achieve a U.S. flag monopoly in U.S.-Argentina air freight service.
Counsel: Ginsburg Feldman, Alfred Eichenlaub, 202-637-9034
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Approval of Transfer of Frequency, US-Argentina All-Cargo Frequencies)
OST-97-2548 | June 18, 1997
Answer of Fine
Airlines, Motion to Compel and Contingent Motion for Leave to File
If approved, the transfer of frequencies would result in the effective monopolization of the severely frequency- and capacity-controlled, highly concentrated U.S.-Argentina market. FedEx would control eight of the twelve available U.S. carrier frequencies in the market. The remaining four frequencies would be divided among two smaller carriers; neither would be able effectively to challenge or restrain FedEx's dominance of the market. Contrary to the Joint Applicants' assertion that transfer of the frequencies will have a ''relatively small impact on the degree of concentration in the U.S.-Argentina market."
Simply stated, incumbent FedEx now seeks to utilize its massive wealth to purchase what the incumbents were expressly denied in the 1995 proceeding: additional U.S.-Argentina frequencies. Approving the transaction would establish several precedents unfair to small carriers of relatively modest means, such as Fine Air, and antithetical to the public interest.
Counsel: Wilmer Cutler, Jeffrey Shane, 202-663-6000
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Transfer of Frequency Allocations, US-Argentina All-Cargo)
OST-97-2548 | June 25, 1997
Consolidated
Joint Surreply and Motion for Leave to File
Polar's competition arguments rest heavily on an unwarranted assumption that the current 12-weekly-frequency ceiling on U.S.-flag all-cargo operations between the U.S. and Argentina is necessarily static and immutable. Contrary to that assumption, however, the Joint Applicants believe that there are substantial reasons to anticipate that a significant relaxation of frequency limitations on U.S.-Argentina cargo operations may occur in the near future. Among other factors presaging such a shift in Argentina Government policy are the dramatic growth in trade between the U.S. and Argentina, the express desire of the primary Argentinean carrier, Aerolineas Argentinas, for expanded access to the U.S. market, and the growing proliferation -- and success -- of more liberal aviation bilateral agreements between the U.S. and other countries throughout Europe, the Asia/Pacific region, Cariada, Mexico and Latin America.
Counsel: Allan Markham for Arrow, 202-337-2149 / Squire Sanders, Marshall Sinick, 202-626-6651 / Shaw Pittman, Nathaniel Breed, 202-663-8078
Federal Express Corporation and Arrow Air, Inc. and Florida West International Airways, Inc. (Transfer of Frequency Allocations, US-Argentina All-Cargo)
OST-97-2548 | June 27, 1997
Consolidated
Joint Further Reply of Joint Applicants and Motion for Leave to File
In subsequent discussions between Federal Express and Argentina civil aviation officials, it became evident that the statement in Order 95-3-30 reflected an apparent misunderstanding which arose in the course of certain communications between officials of the U.S. and Argentina governments on the subject of the A-310 issue. It was made clear to Federal Express by the Argentina officials that it would be futile and possibly counterproductive for Federal Express to attempt to force the issue by filing a formal application for grant of a special authorization to operate the A-310 on the basis of one narrow-body frequency per flight, in defiance of the clearly expressed unwillingness of the Argentina Government to grant such authority.
Counsel: Federal Express and Shaw Pittman, Nathaniel Breed, 202-663-8078
U.S.-Argentina All-Cargo Services / Federal Express Corporation, Arrow Air, Inc. and Florida West International Airways, Inc. (Approval of Transfer of Frequency Allocations)
Undocketed | OST-97-2548 | August 21, 1997
Joint Petition for Review of Staff Action by Federal
Express and Arrow Air
The Joint Applicants urge the Department to modify or clarify the Argentina Notice so as to confirm that the application procedures contemplated by the Argentina Notice do not affect or involve any of the three Argentina all-cargo frequencies at issue in the pending Joint Frequency Transfer Application in Docket OST-97-2548.
Counsel: Allan Markham, 202-337-2149 for Arrow / Federal Express and Shaw Pittman, Nathaniel Breed, 202-663-8078
OST-97-2548 | OST-97-2852 | OST-97-2594 | OST-97-2578 | OST-97-2855 | OST-97-2848 | September 2, 1997
Answer of Fine Air Services, Inc.
As the Department has repeatedly noted, authority to operate air transportation services in a limited entry international market is a public asset of considerable value. See. e.g., Order 97-7-14 (U.S.-Ecuador), 97-7-8 (U.S.-Czech Republic); 97-4-13 (U.S.-Brazil). Carriers which do not possess such authority (including, in those markets where foreign governments limit the total number of weekly flights that U.S. carriers may operate, an allocation of frequencies) are thus excluded from the market.
Contingent
Motion for Leave to File and Answer of Fine Air Services, Inc.
With extensive on-airport warehouse and aircraft-support facilities at MIA and unsurpassed connections among local freight forwarders, Fine Air has become an established competitor in numerous Miami - Latin American markets. Fine Air believes that its resources, experience and presence in these markets would give it a significant edge in establishing itself as a viable competitor in the Miami - Buenos Aires market.
Exhibit FN-1 - Pre-Transfer HHI Index for Published Scheduled Freighter Services from the US to Argentina
Counsel: Wilmer Cutler, Jeffrey Shane, 202 663 6000
Consolidated Answer of Southern Air Transport, Inc.
By a Notice served August 18, 1997, the Department requested applications by any U.S. carrier interested in operating those U.S.-Argentina scheduled all-cargo frequencies currently allocated to certain U.S. carriers by DOT Orders 95-1-9 and 95-3-30 which are dormant. In response to that Notice, Applications were filed by Southern Air Transport, Inc. ("Southern") and by Fine Air Services ("Fine") for four (4) weekly narrow-body frequencies each.
Counsel: Pierre Murphy, 202 872 1679
OST-97-2548 | Undocketed | September 10, 1997
Joint Reply and Motion of Leave to File
Federal Express Corporation and Arrow Air, Inc., also referred to collectively hereafter as the "Joint Applicants", hereby jointly submit this Joint Reply and Motion For Leave To File in response to the Answer of Fine Air Services, Inc. (Fine Air), filed on September 2, 1997 in response to the Joint Applicants' August 21, 1997 Petition for Review of Staff Action contained in the undocketed Notice issued by the Director of the Department's Office of International Aviation on August 14, 1997.
Counsel: A. Doyle Cloud, Jr.; Shaw Pittman, Nathaniel Breed, Jr. for Federal Express, 202 663 8078; Allan Markham for Arrow Air, 202 337 2149
U.S.-Argentina All-Cargo Frequency Proceeding / Federal Express Corp., Arrow Air, Inc. and Florida West International Airways, Inc. (Transfer of Frequency Allocations) / Arrow Air, Inc., Federal Express Corp., Fine Airlines, Inc., Polar Air Cargo, Inc. and Southern Air Transport, Inc. (Allocation of Frequencies and/or Exemption Authority)
Order 97-11-35 | OST-97-3139 | OST-97-2548 | OST-97-2848 | OST-97-2594 | OST-97-2852 | OST-97-2578 | OST-97-2855 | Issued and Served November 20, 1997
HTML
(With Appendix)
By this order, we institute the 1997 U.S.-Argentina All-Cargo Frequency Proceeding to determine whether U.S.-Argentina all-cargo frequencies currently held by Florida West, Arrow Air, and Challenge should be reallocated, including the issue of whether frequencies should be transferred jurors Florida West and Arrow Air to Federal -Express. We will consolidate all of the captioned applications into this new proceeding.
In order to facilitate a prompt decision in the case, we intend to conduct the proceeding according to the following schedule:
By: Charles Hunnicutt
US-Argentina All-Cargo / Joint Application of Federal Express, Arrow Air, Inc., and Florida West International Airways, Inc.
OST-97-3139 | OST-97-2548 | November 25, 1997
Federal Express strongly supports the Challenge Petition for Reconsideration to the extent that it urges the Department to address and resolve the asserted dormancy issue affecting the Argentina cargo frequency allocations held by Challenge, and, by implication, those held by Arrow Air, Inc. (Arrow) and Florida West International Airways, Inc. (FWIA), before proceeding with a time-consuming, expensive and potentially wasteful proceeding to consider the reallocation of the existing Argentina cargo frequency reallocations issued to those three carriers.
Counsel: Shaw Pittman, Nathaniel Breed Jr. for FedEx, 202.663.8078
U.S.-Argentina
All-Cargo Frequency Proceeding
Joint Application of Federal Express Corporation, Arrow Air, Inc., and Florida West
International Airways, Inc. (Transfer of Frequency Allocations in US-Argentina
All-Cargo Frequencies)
Applications of Arrow Air, Inc., Federal Express Corporation, Fine Airlines, Inc., Polar
Air Cargo, Inc., and Southern Air Transport, Inc. (Allocation of Frequencies
and/or Exemption Authority in US-Argentina All-Cargo Frequencies)
Application of Florida West International Airways, Inc. (Renewal of Frequency
Allocation)
Motion and Request of Challenge Air Cargo, Inc. (For Clarification of
Department's August 14, 1997 Notice Regarding US-Argentina All-Cargo Services)
Application of Challenge Air Cargo (Renewal of Exemption)
Joint Petition for Review of Staff Action of Federal Express Corporation and Arrow
Air, Inc. (Regarding August 14, 1997 Notice on US-Argentina All-Cargo Services)
OST-97-3139 | OST-97-2548 | OST-97-2848 | OST-97-2594 | OST-97-2852 | OST-97-2578 OST-97-2855 | OST-97-2648 | Undocketed | OST-96-1042 | Undocketed | November 28, 1997
Motion for Leave to File and Reply of Challenge Air
Cargo, Inc. to Answer of Polar Air Cargo, Inc.
Polar has fundamentally misconstrued and mischarachterized the issues raised in Challenge's Petition for Reconsideration of Order 97-11-35. In the interest of a complete and accurate record for the Department's consideration, and given the importance of the issues at stake, Challenge should be given an opportunity to respond. Good cause, therefore, exists for acceptance of this Reply.
Polar contends that because Challenge has the opportunity to participate in this proceeding, its procedural rights have been protected. Polar is flat wrong. Challenge cannot lawfully be placed in a position where it has to recompete for frequencies that it has already been awarded based on an unarticulated use standard. In exercising its frequency allocation, Challenge has justifiably relied on the Department's 90-day dormancy condition and its prior statements of policy.
Counsel: Zuckert Scoutt, William Calloway, 202.298.8660
Order 97-12-19 | OST-97-3139 | OST-97-2548 | OST-97-2594 | Issued and Served December 12, 1997
By this order, we grant the petition of Challenge Air Cargo, Inc., for reconsideration of Order 97-l1-35 which instituted the 1997 U. S. -Argentina All-Cargo Frequency Proceeding, and, upon reconsideration, deny its request that we rescind the order or modify the scope of the instituted proceeding. We also grant Federal Express' request that we confirm that it is an applicant for no fewer than three additional frequencies in this proceeding.
As to the issues Challenge raises regarding notice, we believe that the notices and orders issued, combined with the procedures established in Order 97-11-35, will provide Challenge, as well as any other interested carriers, ample opportunity to argue its position and present any evidence it may wish to present. Nor are we persuaded that the public interest warrants expanding the scope of this proceeding to include the frequency allocations of other incumbent carriers. Federal Express and Polar Air are using their frequencies fully, and no party has presented any evidence that would question the use by these carriers of their frequency allocations or otherwise warrant our placing those allocations in issue.
By: Charles Hunnicutt
Federal Express Corporation, Arrow Air, Inc. and Florida West International Airways, Inc. (US-Argentina All-Cargo)
OST-97-2548 | June 11, 1998
Joint Motion to Dismiss Frequency Transfer Application
Pursuant to Rule 18 of the Rules of Practice of the Department of Transportation (the "Department"), Federal Express Corporation ("Federal Express"), Arrow Air, Inc. ("Arrow") and Florida West International Airways, Inc. ("FWIA") hereby move to dismiss their Joint Application, filed on May 21, 1997, for approval of the transfer of three (3) U.S.-Argentina all-cargo operating frequencies from Arrow and FWIA to Federal Express in the captioned proceeding, based on recent developments and anticipated future developments bearing on the U.S.-Argentina bilateral regime governing scheduled all-cargo air services between the two countries.
Counsel: Allan Markham, 202-337-2149 for Arrow / Squire Sanders, Marshall Sinick, 202-626-6651 for FWIA / Federal Express and Shaw Pittman, Nathaniel Breed, 202-663-9078
Order
Dismissing Applications / Midway Airlines, Inc. / Tower Air, Inc. / Federal Express
Corporation
Arrow / FWIA / Northwest / United and Air Canada
| Order 99-6-11 OST-95-331 OST-95-559 OST-95-779 OST-96-1237 OST-97-2548 |
Issued June 10, 1999 |  Order Dismissing Applications and Confirming Grant of Waiver |
Foreign Air Carrier Certificates |
Order 99-6-11 dismisses the applications and petitions shown in the Appendix to this order and it also confirms the Department's oral action of April 21, 1999, granting Northwest's request in Docket OST-99-5191 for waiver of the advance filing requirements of Part 377. Petitions for review are due June 24, 1999
By: Paul Gretch
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