OST-97-2822
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OST-97-2822
Continental Airlines, Inc. (US-Egypt Third Country Code Share Opportunities)
OST-97-2822 | August 14, 1997
Application
of Continental Airlines
Continental proposes U.S.-Egypt code-share service in cooperation with Air France between Newark and Houston, on the one hand, and Cairo, on the other hand, via Paris (CDG), France. Continental will operate the transatlantic flights and place its "CO" designator code on seven weekly Paris-Cairo flights operated by Air France with A-310 aircraft. The authority requested by Continental is fully consistent with the U.S.-Egypt bilateral agreement.
Answers are due by August 21, 1997
Counsel: Continental and Crowell Moring, Bruce Keiner, 202-624-2500
U.S.-Egypt Third-Country Codesharing Opportunites
OST-97-2822 | OST-97-2803 | August 21, 1997
American opposes Continental's application for authority to serve Egypt, via Paris, by way of a codesharing arrangement with Air France. Given the lack of any air transport agreement with France (much less one that permits third country codesharing), the persistent refusal of the French Government to allow U.S. carriers to codeshare to France via third countries, and the fact that Continental and Air France have not even submitted their codesharing application to the Department for approval, Continental's application here should be rejected.
Counsel: American, Carl Nelson
Answer
of Continental Airlines
Two U.S. carriers -- Continental' and Delta -- are seeking the one available U.S.-Egypt third-country code-share opportunity. Continental opposes Delta's application to the extent it precludes designation of Continental. If the Department's goal is to expand competition in U.S. and international markets and among global partnerships while providing new U.S. access to Egypt, Continental, which does not participate in a huge global mega-alliance and has no transatlantic third-country code-sharing authority, should be selected.
Counsel: Continental and Crowell Moring, 202-624-2500
Answer
of Delta Air Lines, Inc.
Delta remains hopeful that a new liberal agreement with France that will permit code-sharing will eventually be reached. Delta also has code-share aspirations with Air France that are currently frustrated due to the lack of a supporting agreement between the United States and France.
Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060
OST-97-2803 | OST-97-2822 | August 26, 1997
Consolidated
Reply of Continental Airlines
With only one designation available, the Department must, as Delta correctly suggests, give comparative consideration to both pending applications. Doing so is consistent with well-settled practice and will promote the public interest in expanding competition in the U.S.-Egypt market and among global alliances. Delta does not deny that Continental proposes more third-country service to/from Egypt than Delta does and that all of Continental's transatlantic service will be operated by Continental, while most of Delta's transatlantic service will be operated by Swissair. Another round of U.S.-France bilateral talks is scheduled for mid-October 1997. To the extent the Department is concerned that negotiation of a U.S.-France bilateral agreement will delay use of the code-share opportunity, moreover, the Department could award Delta a temporary designation on a short-term basis pending completion of negotiations with France and approval of the Continental Air France code-share arrangement.
American's opposition is clearly a red herring. The true beneficiary of a U.S.-Egypt code-share designation is Continental, since Air France already provides its own direct Egypt services. Continental will gain the right to sell U.S.-Egypt through services, and Continental will be operating the transatlantic flights involved. Moreover, as American knows, the French bilateral proposal provides for third-country codesharing by carriers of both sides, and Continental's application is contingent on successful negotiation of a new U.S.-France bilateral agreement.
Counsel: Crowell Moring, Lorraine Halloway, 202 624 2500
Continental as much as concedes that it would offer inferior service and competitive benefits than Delta. With nothing else to rely on, Continental tries to advance the novel argument that because it is not a major alliance carrier and offers only limited transatlantic service, it should receive priority for an award. This false logic would deny consumers the benefit of new alliance competition between the U.S. and Egypt as well as the substantially greater service options to be offered by Delta. Once a bilateral is in place that would support such services, Continental remains free to grow its transatlantic alliance aspirations with Air France or other transatlantic operators.
Counsel: Shaw Pittman, Robert Cohn, 202 663 8060
International Air Transportation Association
Notice
of Approval of IATA Agreement(s):
By: Paul Gretch
U.S.-Egypt Codeshare Services / Continental Airlines, Inc. / Delta Air Lines, Inc.
Order 97-9-16 | OST-97-2822 | OST-97-2803 | Issued September 16, 1997 | Served September 19, 1997
Order
on Third-Country Code-Share Services
We have decided to grant Delta's application to provide U.S.-Egypt third-country code-share services. Of the two applications before us. only Delta proposes services that currently can be exercised. The service proposed by Delta is fully consistent with the aviation agreements between the United States and Egypt and between the United States and Switzerland, the homeland of its code-share partner. Moreover, the arrangement between Delta and Swissair has been approved and, thus, their operations can be implemented as proposed.4 Furthermore, approval of Delta's application will expand the service options available to the traveling and shipping public, and numerous U.S. cities will receive new or improved service providing them greater access to Egypt.
The services proposed by Continental/Air France, on the other hand, cannot now be operated. There is currently no bilateral aviation agreement with France. Moreover, there is insufficient reciprocity with France to warrant approval of joint operations by Continental and Air France. Indeed, France has followed a consistent policy not to authorize new code-share operations pending conclusion of a new agreement between the two countries. Thus, as Continental is currently not in a position to implement its proposed code-share services, we conclude that it is not eligible at this time for award of the third-country code-share authority at issue. In view of these circumstances, we will dismiss its application without prejudiced
By: Patrick Murphy
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