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OST-97-2885

Pan American World Airways Inc. and Carnival Air Lines, Inc. (slot restrictions at New York JFK Airport)

OST-97-2885 | September 5, 1997

Joint Application for Exemption

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Pan American World Airways, Inc ("Pan Am") and Carnival Air Lines, Inc ("Carnival") (collectively, the "Joint Applicants") respectfully request that the Department grant an exemption from the requirements under Subparts K and S of part 93 of Title 14, Code of Federal Regulations (the "High Density Rule" or "HDR") so as to permit either Pan Am or Carnival to operate certain air transportation to and from New York's John F Kennedy International Airport ("JFK") during slot constrained hours.

Exhibit 1: Proposed Service Pattern | Exhibit 2: BOS-JFK Comparative Schedules | Exhibit 3: BOS-JFK Projections

Service List

Counsel: Boros Garofalo, Aaron Goerlich for Carnival, 202 822 9070; Verner Liipfert, John Mietus, Jr. for Pan Am, 202 371 6000

Spirit Airlines, Inc. / AirTran Airways, Inc. / Pan American World Airways, Inc. and Carnival Air Lines, Inc. (Exemption, LaGuardia and JFK Slots)

OST-97-2870 | OST-97-2873 | OST-97-2885

Consolidated Answer of Delta Air Lines

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The flood of new entrant slot exemption requests over the past several months fully validates the concern raised by a number of parties that if the exceptional circumstances criterion are relaxed, the flood gates will be open for any carrier claiming an interest in serving a high-density airport-pair. The resulting exemptions would quickly swallow the rule.

With the prospect of free slots for the asking, it appears that the applicant carriers have largely disregarded the Department's buy-sell rule. Any carrier seeking to add service at one of the high density airports including existing carriers must anticipate and assume the cost of acquiring slots. The Department should not embark on a policy of slot subsidies for new entrants, simply because they are unwilling to pay the cost of acquiring slots.

Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060

Answer of Trans World Airlines

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Three more undercapitalized new entrant carriers have jumped on the free slot bandwagon. One applicant proposes to operate in a major short haul market that already has almost 100 daily round trips; another proposes service to a secondary airport only one hour's drive from one of the busiest airports in the country; and the third would fly in a market already well served by commuter carrier flights of major airline affiliates. However, none have come close to meeting the public interest requirements of 49 U.S.C. §41714, which governs these proposed exemptions from the slot regulations. They do not make even a passing attempt to comply with the requirements of the statute, and one fails entirely to mention the statutory provisions. TWA hereby answers and respectfully requests that the applications be denied.

Counsel: TWA and Richard Fahy, 202-457-4764, rfahy@ibm.net

Pan American World Airways, Inc. and Carnival Air Lines, Inc. (Exemption, Slot Restrictions at JFK)

OST-97-2885 | September 24, 1997

Motion for Leave to File and Joint Reply of Pan American and Carnival

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TWA and Delta seek to preserve the competitive advantage attending their incumbency during slot-controlled hours at JFK, but this desire must be subordinated to the needs of the traveling public. The Joint Applicants propose to use the limited slot exemption they request to significantly benefit travelers between Boston and JFK, as well as points south, which is an appropriate circumstance for the exercise of the pro-competitive slot authority Congress has granted the Department.

Counsel: Verner Liipfert, William Evans, 202-371-6030

Pan Am Corporation and Carnival Air Lines, Inc. (Transfer of Route Authority, Exemptions, Slot Restrictions at JFK)

OST-97-2787 | OST-97-2786 | OST-97-2885 | October 7, 1997

Motion for Filing of "Unauthorized Documents" / Opposition of Richard C. Bartel

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We oppose the exemptions because the granting of such exemptions and allowance of route transfers would put the DOT in a position of facilitating the stripping of assets from Carnival Air Lines, Inc., which is explicitly anticipating a bankruptcy filing, without valuation or arm's length consideration, leaving creditors of Carnival Air Lines, Inc. without a viable estate from which to recover, thus in violation of 11 U.S.C. 547-548 (and 18 U.S.C. 151, et seq., and 1961(1)(D), et seq), and applicable State laws protecting creditors (28 U.S.C. 959(b), Florida, Delaware statutes).

• Attachment: Special Meeting Proxy Statement of September 5, 1997
• Attachment: Pan Am Annual Report for 1996 - Will Not be Available, email or call for copy

Counsel: Richard Bartel, 202-728-3841

Pan Am Corporation and Carnival Air Lines (Route Transfer, Exemptions, Slot Restrictions at JFK)

OST-97-2787 | OST-97-2786 | OST-97-2885 | October 8, 1997

Amended Motion for Filing of an Otherwise Unauthorized Document and Pleading, and Amended Opposition of Richard Bartel

I oppose the exemptions and transfers because they would put the DOT in a position of facilitating the apparent stripping of assets from Carnival Air Lines, Inc., which is explicitly anticipating a bankruptcy filings, without valuation or arm's length consideration, leaving creditors of Carnival Air Lines, Inc. without a viable estate from which to recovers, thus in violation of the Bankruptcy Code 11 U.S.C. 547-548 (and 18 U.S.C. 151, et seq., and 1961(1)(D), et seq), and applicable State laws protecting creditors (28 U.S.C. 959(b), Florida, Delaware statutes).

By: Richard Bartel, 202-728-3841

Pan Am Corp/Pan American World Airways, Inc. and Carnival Air Lines, Inc.

OST-97-2787 | OST-97-2786 | OST-97-2885 | October 17, 1997

Contingent Motion for Leave to File of Pan Am and Carnival and Reply to Amended Opposition of Richard Bartel

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Bartel's financial information is not news to the Department. Moreover, the Department already has begun to consider the fitness of both carriers without Bartel's preferred assistance. Pan Am and Carnival will be addressing issues relating to their financial fitness in response to standard, post-transaction inquiries the Department already has made.

Counsel: Verner Liipfert, William Evans, 202-371-6030

Pan Am Corporation and Carnival Air Lines, Inc.

OST-97-2787 | OST-97-2786 | OST-97-2885 | October 24, 1997

Preacipe and Contingent Intial Reply to Pan Am and Carnival's "Contingent Motion and Reply"

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By: Richard Bartel, 202-728-3841

Pan American World Airways, Inc. and Carnival Air Lines, Inc.

OST-97-2787 | OST-97-2786 | OST-97-2885 | November 18, 1997

Supplement to Initial Reply - Richard Bartel

This Supplemental filing is made to update the Department on information released by Pan Am on Friday, November 14, 1997 regarding its $21,100,000 net loss for the third Quarter, 1997. The Press Release speaks for itself, confirming the previous rate of financial deterioration of the Pan Am entities alone, without reference to that of the "merged" Carnival entity, which had an equivalent loss rate.

By: Richard Bartel, 202-728-3841

Applications of ACCESSAIR HOLDINGS, INC. / AMERICAN TRANS AIR, INC. / AMERICA WEST AIRLINES, INC. / COLGAN AIR, INC. / SPIRIT AIRLINES, INC. / PAN AMERICAN WORLD AIRWAYS, INC. and CARNIVAL AIRLINES, INC. / THE PEOPLE AND BUSINESSES OF BLOOMINGTON-NORMAL, IL; MOLINE-QUAD CITIES, IL; TOLEDO, OH; AND AKRON/CANTON, OH

ORDER GRANTING AND DENYING APPLICATIONS FOR SLOT EXEMPTIONS AT NEW YORK'S LAGUARDIA AND JOHN F. KENNEDY INTERNATIONAL AIRPORTS

After considering applications for exemptions from 14 CFR Part 93, Subparts K and S, for slots at New York's LaGuardia and John F. Kennedy (JFK) Airports, the Department has decided to grant five slot exemptions to American Trans Air, Inc. (ATA) for nonstop service in the Chicago (Midway)-LaGuardia market; and four slot exemptions to Spirit Airlines, Inc. (Spirit) for nonstop service in the Melbourne, Florida-LaGuardia market. We find that granting these exemptions is in the public interest and meets the statutory "exceptional circumstances" test. Grant of these exemptions is conditioned on their being used solely for nonstop service in the city-pair markets designated in the carriers' applications. The Department has also decided to deny the remainder of ATA’s and Spirit's applications as well as the applications of AccessAir Holdings, Inc., America West Airlines, Inc., Colgan Air, Inc., and the joint application of Pan American World Airways, Inc. and Carnival Air Lines, Inc. Further, we deny the petition for reconsideration of AirTran Airways' application filed by the People and Businesses of Bloomington-Normal, IL; Moline-Quad Cities, IL; Toledo, OH; and Akron-Canton, OH. In reaching our decision on all of these requests we were committed, among other guidelines, to avoiding significant congestion and environmental problems. Primarily for these reasons, we are granting only a limited number of exemptions.

By: Charles Hunnicutt

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