ost983746

OST-98-3746

Brazil Cargo Charter Authorizations - (1998/1999)

Order 98-4-19 | OST-98-3746 | Issued April 16, 1998 | Served April 21, 1998

Order to Show Cause

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We have tentatively decided to use simplified procedures rather than conducting a competitive allocation proceeding to distribute flights for the upcoming 1998/99 charter year. Based on experience over the past few years, and changes in the Brazil cargo market, including the large number of available charters and reduced use in the past few charter years by U.S. carriers, we believe that more simplified procedures are appropriate and that such procedures will continue to ensure maximum opportunities for all competing interests. Specifically, we propose to reinstitute the simplified procedures previously used to distribute the available flights. Under those procedures, a portion of the 750 available Brazil all-cargo charters would be allocated in advance to incumbent carriers, on a use-or-lose basis based on their most recent two years' experience in the market; the balance would be maintained in a charter pool for distribution on a firstcome, first-served basis under procedures similar to those currently in effect for Brazil all-cargo charters. In circumstances comparable to those before us here, such simplified procedures have shown themselves to be a fair, equitable, and efficient means of allocating the available flights and of ensuring that the interests of all parties are met.

By: Charles Hunnicutt

Brazil Cargo Charter Authorization (1998/1999)

OST-98-3746 | May 1, 1998

Objection of Atlas Air to Order to Show Cause

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First, Atlas suggests that the Department's allocation formula, while simple to administer, results in inequities, and should be revised. By basing the allocation on an airline's charter use for the last two calendar years, the Department unjustly penalizes new entrant airlines, such as Atlas, which do not have a two year history in the market. Although Atlas operated 80 charters in calendar year 1997, the Department's formula only allocates 44 charters for the next charter year. Thus, the formula ignores the strong and proven demand for Atlas' service. On the other hand, although Air Transport International and Arrow Air did not utilize any of their charter allocation for the 1997/98 charter year, each still receives an allocation for the 1998/99 charter year under the formula since they operated charters in calendar year 1996. Atlas simply does not understand why the Department would waste charter allocations on airlines that have clearly demonstrated by their actions, a lack of interest in serving the market. Such a result clearly is inconsistent with the Department's general view that valuable bilateral traffic rights should not be squandered. Moreover, an additional allocation to Atlas will enable it to provide a pattern of service that is predictable and sustainable and one which shippers can rely on.

Counsel: Verner Liipfert, William Evans, 202-371-6000

Brazil Cargo Charter Authorizations (1998/1999)

Order 98-6-14 | OST-98-3746 | Issued and Served June 17, 1998

Final Order

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By this order we finalize, with one exception, our tentative findings and conclusions in Order 98-4-19 to use simplified procedures to distribute the 750 charter flights available for all-cargo services between the United States and Brazil for the 1998/99 charter year, beginning July 1, 1998, and to allocate all-cargo charter flights as follows: 154 all-cargo charters to Florida West International Airways, Inc.; 146 to Southern Air Transport, Inc. (SAT); 28 to Arrow Air, Inc.; 26 to Air Transport International L.L.C. (ATI); and 24 to Tower Air, Inc.

Atlas objected to the Department's tentative decision only to the extent that the proposed decision limits Atlas allocation to a total of 44 charters. We have modified our tentative decision to award 80 all-cargo charters to Atlas Air, Inc. and to retain 292 charters in a charter pool for distribution on a first-come, first-served basis.

By: Charles Hunnicutt

Brazil Cargo Charter Authorizations 1998/1999

Order 98-4-19
OST-98-3746

February 5, 1999

Notice

US-Brazil Cargo Charter Authorizations

By Order 98-9-14, the Department issued its final order for distribution of the 750 available U. S.-Brazil all-cargo charters for the 1998/1999 charter year. Specifically, we allocated the 750 all-cargo charter flights as follows: Florida West International Airways, Inc. - 154; Southern Air Transport, Inc. - 146; Atlas Air, Inc. - 80; Arrow Air, Inc. - 28; Air Transport International L.L.C. - 26; Tower Air, Inc. - 24; and 292 charters retained in a charter pool for distribution on a first-come, first-served basis.

The advance allotments are subject to the condition that where fewer than 40 percent of a carrier's allocated charters have been used or been committed for use by firm contracts during the six-month period ending December 31, l 99X, the remaining charter allotments exceeding the number equal to the number of those already operated or committed in the preceding six months would be forfeited and placed in the charter pool. After reviewing the monthly reports on their flight operations, we have determined that Southern Air Transport and Air Transport International have not used 40 percent of their allotments; therefore a total of 137 charters will be returned to the charter pool at this time. (Southern Air Transport forfeits 131 and Air Transport International forfeits 6.) (See attached Appendix.) Tower and Air Transport International informed the Department earlier in the charter year that they were returning 24 and 20 charters, respectively. As of January :31, 1999, 302 flights are available in the charter pool. Flights issued from the charter pool are subject to the conditions and procedures established for such flights in ordering paragraph 5(a) through (e) of Order 98-614.

By: Paul Gretch