ost984517

OST-98-4517

Canadian Airlines International, Ltd.

OST-98-4517	September 29, 1998	Application for Exemption Slots at Chicago O'Hare International Airport	U.S. - O'Hare
		Exibits - Slot Denial Schedules
		Attachment A - ORD Summer '98
		Service List

Counsel: Condon & Forsyth, Evelyn Sahr, 202.289.0500

Canadian Airlines International, Ltd.

OST-98-4517

October 15, 1998

Motion for Leave to File and Answer of Air Canada

High Density Rule, Chicago O'Hare

Both Air Canada and CAI will use Stage 3 jet aircraft to provide the proposed foreign air transportation. Both applicants have complied with the FM's slot allocation procedures and applied for slots pursuant to the Federal Aviation Regulations. Both applicants have been unable to secure slots through commercial means under the "Buy/Sell" Rule. There would be no justification for the Department to treat differently the applications of CAI and Air Canada. CAI has also requested slots under an alternative provision, section 41714(c)(1), which authorizes the Secretary to grant exemptions to "new entrant air carriers." Air Canada notes that United has mounted a persuasive challenge to CAI's application for relief under this provision.

Counsel: Canadian and Galland Kharasch, Anita Mosner, 202-342-5200

Canadian Airlines

OST-98-4517

October 14, 1998

Answer of United Air Lines, Inc.

High Density Rule, Chicago O'Hare

Moreover, continuation of CAI's service between Chicago and Toronto, Vancouver and Calgary would not foster any additional service or price competition. American also serves each of the city pairs for which CAI seeks an exemption. Because CAI is in an immunized alliance with American, its reduction of services in U.S.-Canada markets American also services will not reduce the number of competitors in those city pairs. Nor should CAI's reducing capacity in those city pairs have any effect on the prices being charged in any of the three markets where it seeks an exemption. This results from CAI's ability to coordinate its prices in those city pairs with American. In Chicago-Calgary, moreover, there is no price competition for nonstop service today, since CAI and American are the only nonstop competitors. and CAI's reduction in service will not change that result. In Chicago-Toronto and Chicago-Vancouver, on the other hand, the American/ CAI alliance competes with the United/Air Canada alliance on a nonstop basis and will continue to do so even if CAI must reduce its service.

Counsel: Kirkland Ellis, Jeffrey Manley, 202.879.5161

Air Canada

OST-98-4536
OST-98-4517

October 19, 1998

Motion for Leave to File and Consolidated Answer of The City of Chicago

As it should, the Department traditionally has granted foreign air carriers slot applications in an expeditious manner. Such service is among the highest and best uses of O'Hare's available capacity, and brings in significant jobs, trade, and tourism. In 1998 alone, the Department has granted similar exemption requests to Lufthansa and Iberia for the summer 1998 season, and to SAS and Iberia for the winter 1998/99 season. In so doing, the Department recognizes its bilateral obligations, and demonstrates the tangible benefits of its liberalization and open skies efforts.

Counsel: Winthrop Stimson, Kenneth Quinn, 202-75-9898

OST-98-4536

October 19, 1998

Re: Answer of United Air Lines

High Density Rule, Chicago O'Hare

United Air Lines hereby adopts by reference its answer dated October 14, 1998, to the application of Canadian Airlines International, in Docket OST-98-4517 as its answer to the above referenced application of Air Canada

Counsel: United and Kirkland Ellis, Jeffrey Manley, 202-879-5161, jeffrey_manley@kirkland.com

Canadian Airlines International Ltd.

OST-98-4517

October 23, 1998

Motion for Leave to File and Reply of Canadian Airlines

High Density Rule, O'Hare

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United Air Lines contends that since Canadian Airlines is not seeking to enter a market where no service exists and is not known in the U.S. as a discount airline, it does not meet the exceptional circumstances criteria required for new entrant carriers. Contrary to United Airlines' position, the Department has stated that it will not apply such a narrow standard to new entrant applicants. In expanding the range of exceptional circumstances, the Department has recognized a need for competitive service at high density airports.

Counsel: Condon Forsyth, Thomas Whalen, 202-289-0500