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OST-97-2848

Arrow Air, Inc. (Allocation of US-Argentina All-Cargo Frequecies)

OST-97-2848 | August 25, 1997

Contingent Application for Allocation of US-Argentina All-Cargo Frequencies

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While Arrow vigorously argues that its U.S.-Argentina frequencies are not dormant - and thus have not automatically reverted to the Department - it believes that to adequately protect its rights it must submit this contingent application in the event that the Department may subsequently rule that the frequencies have indeed become dormant and reverted to the Department. In the event that the Department (1) does not determine that Arrow's frequency allocation is dormant, or (2) permits the transfer of Arrow's two frequencies to FedEx, this application will be withdrawn.

Exhibit 1 sets forth Arrow's service proposal, which it intends to initiate within thirty days. Arrow will operate south bound via Panama City, Panama and Santiago, Chile and north bound via Santiago. Exhibit 2 contains yearly traffic and revenue forecasts of Arrow's Miami-Buenos Aires all-cargo service. Arrow forecasts net annual revenue of more than $4 million from the U.S.-Argentina service. This service will be provided by DC-8-62, -63, and L-1011 aircraft, as appropriate.

Exhibit 1 – Proposed Schedule | Exhibit 2 – Projected Revenue

Service List

Counsel; Allan Markham, 202-337-2149

US-Argentina All-Cargo Services / Federal Express Corporation, Arrow Air, Inc., and Florida West International Airways, Inc.

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.

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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.

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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.

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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

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

Order Instituting Proceeding

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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:

• Date for Incumbent Responses: December 2, 1997
• DOT IRs: December 2, 1997
• Supplemented applications: December 23, 1997
• Answers to supplemented applications: January 21, 1998
• Replies to Answers: February 4, 1998

Appendix

By: Charles Hunnicutt

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.

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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

Notice of Action Dismissing Applications- Various Dockets; Arrow Air, Inc., Federal Express Corporation, Southern Air Transport, Inc., Challenge Air Cargo, Inc., Fine Airlines, Inc. and Polar Air Cargo, Inc.

By:  Paul Gretch

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