ost983552

OST-98-3552

Lufthansa German Airlines (Exemption, Frankfurt-Chicago)

OST-98-3552 | February 24, 1998

Application for an Exemption

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Lufthansa wishes to introduce a new daily roundtrip combination service between Chicago and Frankfurt using Stage 3 Airbus A340 aircraft on May 1, 1998.

Lufthansa's proposed service will also establish for the first time attractive two-segment online connecting services to O'Hare from points in important developing markets. Lufthansa's 5:30 p.m. Frankfurt departure is scheduled so that it connects with a bank of 36 incoming Lufthansa flights, many of which serve points in Eastern Europe and Central Asia that currently do not enjoy convenient, two-segment online connecting service to Chicago. Approval of Lufthansa's exemption application will therefore mean that Chicago and Chicago connecting passengers will be able to travel for the first time to/from cities such as Kiev, Minsk or Katowice without having to change carriers or make multiple changes of plane between Chicago and their European/Central Asian destination.

Service List

Counsel: Wilmer Cutler, James Campbell, 202-663-6000

Lufthansa German Airlines (Exemption, Frankfurt-Chicago)

OST-98-3552 | March 11, 1998

Answer of American Airlines

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At the same time that American's service has been reduced, United and Lufthansa have increased their share of nonstop seats in the U.S.-Germany market from 42.3% in May 1996 to 55.66% in May 1998. This represents a 31% increase in capacity share by the United/Lufthansa alliance in just two years.

Attachment 1: Chicago-Frankfurt Flights

Counsel: American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

Lufthansa German Airlines (Frankfurt-Chicago O'Hare)

OST-98-3552 | March 20, 1998

Reply of Lufthansa

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Failure to approve Lufthansa's application will necessarily result in fewer seats being made available to Chicago-Frankfurt local passengers, inevitably leading to higher fares for these passengers than would be the case if infrastructure constraints at O'Hare did not prevent one competitor from introducing additional capacity into the market. Moreover, and most importantly in terms of numbers of passengers affected, failure to approve the application will result in fewer seats being made available for behind- and beyond-gateway connecting passengers, resulting in fewer service alternatives for these passengers and less competition between United/ Lufthansa and other alliances and carriers offering connecting service in U.S.-Europe markets

Attachment 1: February 20, 1998 Apollo Dispaly Screens
Attachment 2: February 24, 1998 Apollo Display Screen

Counsel: Wilmer Cutler, Jeffrey Shane, 202-663-6000

Reply of United Air Lines and Motion for Leave to File

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American's opposition to Lufthansa's application appears, moreover, to be a belated and hollow objection to United's relationship with Lufthansa and a continuation of American's complaint about the size of its own operations at Chicago. American also threatens to leave the Chicago-Frankfurt market if slots for Lufthansa's flight are granted. As discussed below, most of this rhetoric is simply a repetition of old complaints that had no merit when they were originally made and certainly do not now offer any basis for denying Lufthansa's request.

Counsel: Untied and Ginsburg Feldman, Joel Burton, 202-637-9130

Lufthansa German Airlines (Frankfurt-Chicago O'Hare)

OST-98-3552 | March 24, 1998

Motion for Leave to File and Response of American Airlines

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American Airlines, Inc. moves for leave to file the following response to the replies submitted by United Air Lines, Inc. and Lufthansa German Airlines on March 20, 1998 with respect to Lufthansa's application for Chicago O'Hare exemption slots to operate a fourth daily United/Lufthansa nonstop frequency between Chicago and Frankfurt. American's response should be received in the interest of a complete record for the Department's consideration.

Counsel: American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

Lufthansa German Airlines (Exemption, Frankfurt-Chicago)

Order 98-4-28 | OST-98-3552 | Issued and Served April 27, 1998

Order Granting Exemption

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The Department grants a temporary exemption from 14 C.F.R. Part 93, Subparts K and S under 49 U.S.C. 41714(b)(1) to Lufthansa German Airlines to the extent necessary to enable it to operate a daily scheduled arrival at Chicago's O'Hare International Airport in a pattern to be determined in consultation between Lufthansa German Airlines and the Slot Administration Office' Fend between 7:45 P.M. and 8:14 P.M. (local time)

By: Charles Hunnicutt