OST-98-4577
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OST-98-4577
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-98-4577 | October 14, 1998 |  Joint Application for Exemption and Statement of Authorization |
Houston, TX - Cancun, Mexico |
| Service List |
Delta plans to begin offering service between Houston and Cancun on or about December 1, 1998, by listing its "DL" designator code on Aeromexico's nonstop services on this route
Counsels: Verner Liipfert, William Evans, 202.371.6030, Shaw Pittman, Robert Cohn, 202.663.8060
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-98-4577 Undocketed |
October 29, 1998 | Joint Answer of American
Airlines and Aero California |
Houston, TX - Cancun, Mexico |
U.S. and Mexican negotiators met in January 1998 to resolve this matter, and Mexico promised to respond to U.S. liberalization proposals within 60 days. We understand that even now, some nine months later, Mexico has made no response, nor has it engaged the outside consultant whose report was to provide the basis for a response. Such a delay is intolerable to provide the basis for a response. Such a delay is intolerable in a setting where American and Aero California remain at a competitive disadvantage relative to the Mexican government owned Cintra airlines.
Counsel: Aero California and Steptoe & Johnson LLP, David Coburn, 202.429.8063, American Airlines and Carl Nelson, Jr., 202.496.5647, carl_nelson@amrcorp.com
Delta Air Lines, Inc. / Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-98-4577 Undocketed |
November 3, 1998 | Corrected Joint Answer of American
and Aero California |
Houston-Cancun Codeshare |
Counsel: American, Carl Nelson, 202-496-5647 / Steptoe Johnson, David Coburn, 202-429-8063
Delta Air Lines, Inc. / Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-98-4577 Undocketed |
November 4, 1998 | Joint Reply of Delta
and Aeromexico |
Houston-Cancun Codeshare |
The joint answer provides no basis for denial of the Joint Application. The planned code-share arrangement will allow Delta to offer service between Houston and Cancun and will provide important service and competitive benefits to the traveling public. Currently, Continental Airlines, Inc. is the only U.S. carrier providing nonstop Houston-Cancun service. The Department's approval of the Joint Application would install Delta as the only U.S. flag competitor to Continental on the Houston-Cancun route, an important U.S.-Mexico leisure market.
Counsel: Verner Liipfert, William Evans, 202-371-6030 for Aermexico / Delta and Shaw Pittman, Robert Cohn, 202-216-0700
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V. / Delta Air Lines, Inc.
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 17, 1999 |  Joint Motion for Leave to
Amend and Amendment to Applications |
US-Mexico Codesharing / US-Mexico-Beyond/Behind Gateway Service / US-Mexico Transborder Codeshare Routes |
| Service List |
Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060 / Verner Liipfert, William Evans, 202-371-6030 for Aeromexico
Delta Airlines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-99-5593 OST-99-5573 OST-98-4577 OST-97-3289 OST-97-2161 49623 Undocketed |
May 24, 1999 | Re: Letter of Delta and Aeromexico in
Response to Staff's Request to Supplement Applications |
US-Mexico Codesharing |  HTML |
| Attachment: Codeshare Exclusivity Provisions Excerpted from Marketing Agreement between Aeromexico and Delta Air Lines |
Before turning to the specifics of the Delta/Aeromexico arrangement, Delta would like to reiterate its serious reservations regarding the Department's new policy of redrafting commercial agreements to eliminate exclusivity clauses. Proposed codeshare arrangements either benefit competition and the public interest and should be approved, or they are detrimental and should be denied. The Delta/Aeromexico codeshare arrangement has injected substantial new competition in the U.S.-Mexico marketplace since its approval in 1994, and there is no reason the Department's public interest evaluation of the relationship should be affected by the subsequent addition of an exclusivity clause. Placing limits on carriers' freedom of contract choices is undesirable because it diminishes the level of commitment that can be achieved between the parties, which is an important component in forming a comprehensive long term commercial relationship. Moreover, while striking exclusivity clauses unnecessarily limits the benefits that can be achieved through an alliance or codeshare agreement, this remedy has proved to be an ineffective means to addressing the Department's competitive concerns.
Counsel: Verner Liipfert, William Evans for Aeromexico / Shaw Pittman, Robert Cohn for Delta
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
Posted May 25, 1999 Served May 25, 1999 |
Notice to All Parties |
US-Mexico Codesharing |
On May 17, 1999, and supplemented on May 24, 1999, Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V. (Aeromexico) filed applications for new and amended regulatory authorities to engage in codesharing operations in the U.S. -Mexico market. The applicants request the immediate grant of these authorities to permit them to exercise valuable new U.S.-Mexico code-share rights without delay. Under the Department's regulations, 14 C.F.R. Part 302, answers to the captioned applications would normally be due June 1, 1999, and replies to answers filed would be due June 10, 1999. So that we may be in a position expeditiously to complete our processing of the Delta/Aeromexico applications, we have decided to shorten the period for filing answers to the these applications to 2 p.m. EDT on May 28, 1999, and to shorten the period for replies to June 1, 1999.
By: Paul Gretch
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V. / Delta Air Lines, Inc.
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 27, 1999 | Joint Answer of United Air Lines and Mexicana |
US-Mexico Codesharing / US-Mexico Beyond/Behing Gateway Service / US-Mexico Transborder Codeshare Routes |
On May 24, 1999, at the request of Department staff, Delta and Aeromexico supplemented their joint applications by providing a copy of the exclusivity clause relating to their marketing relationship, which was executed last year in conjunction with Delta's investment in Aeroperu. It is now clear that every major U.S. carrier-Mexican carrier code-share alliance operates within the purview of a contractual exclusivity clause, most of them in place for a number of years. These contractual provisions have provided the commitment and security needed for carriers to undertake the substantial investments involved in fully developing these relationships. And these investments have paid off in terms of public interest benefits. As anticipated when the code sharing was first authorized, these cooperative arrangements have greatly expanded competition in scores of U.S.-Mexico city-pairs. Consumers enjoy much greater service choice and convenience than existed a few short years ago. Moreover, with the support of code-share alliance members, including United/Mexicana and Delta/Aeromexico, the Department was able successfully to negotiate a substantially liberalized code-share agreement with Mexico in January 1999 to further expand code-share service in the U.S. -Mexico market. In view of these benefits, and consistent with the understandings between the parties and the U.S. and Mexican Governments, the Department should immediately approve the pending applications for expanded U.S. -Mexico code-share authority without interfering with the exclusivity arrangements agreed among the parties.
Counsel: United and Kirkland Ellis, Jeffrey Manley, 202-879-5161, jeffrey_manley@kirkland.com
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 28, 1999 | Joint Answer of American Airlines and Aero California | U.S. - Mexico (Codesharing) |
We understand that the Department's delay is due to policy concerns over exclusivity provisions that are present in each of the three U.S.-Mexico codesharing alliances. American and Aero California urge the Department to resolve this matter promptly, and to act favorably on all pending U.S.-Mexico codesharing applications, at the same time and with the same condition, if any, on exclusivity. Until the Department is prepared to act on all such applications, it should not grant piecemeal authorizations to Delta and Aeromexico.
Counsels: Steptoe & Johnson, LLP, David Coburn for Aero California, 202.429.8063, and Carl Nelson, Jr. for American, 202.496.5647, carl_nelson@amrcorp.com
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 28, 1999 | Answer of Continental
Airlines |
U.S. - Mexico (Codesharing) |
Continental urges the Department to grant immediately the long-standing applications of Continental and other carriers for authority to offer code-share service on U.S. -Mexico routes. The late-filed Delta/Aeromexico request for the Department to add new city pairs, grant blanket authority beyond the gateways and delay other requests while Delta and Aeromexico argue about code-share exclusivity raises controversial issues which should not delay the approval of other applications.
Counsels: Crowell & Moring, LLP for Continental, R. Bruce Keiner, Jr., rbkeiner@cromor.com, and Thomas Newton Bolling, tbolling@cromor.com, 202.624.2500
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 28, 1999 | Joint Answer of Delta
and Aeromexico |
U.S. - Mexico (Codesharing) |
Although Northwest asserts that the Department should defer action on the applications of Delta and Aeromexico, Northwest has provided no basis for the Department to delay approval of the Delta/Aeromexico requests, while acting immediately to approve the similar requests of other carriers. For these reasons, and the reasons; set forth in Delta and Aeromexico's supplement dated May 24, 1999, the Department should promptly approve all pending U.S.-Mexico codeshare applications, and should do so without imposing any exclusivity conditions.
Counsels: Verner Liipfert, William Evans for Aeromexico, 202.371.6030, and Shaw Pittman, Robert Cohn for Delta, 202.663.8060
| OST-99-5593 OST-97-3289 OST-98-4577 OST-97-2161 |
May 28, 1999 | Answer of Northwest Airlines | U.S. - Mexico (Codesharing) |
The Department should not allow Delta and Aeromexico to hinder Northwest's ability to begin its proposed U.S.-Mexico code-share services with Alaska and Continental expeditiously. Delta and Aeromexico have opted at the eleventh hour to request new authority from the Department for code-share exclusivity, blanket beyond-gateway authority and additional city pairs even though the Department stands ready now to allocate U.S.-Mexico code-share authority to all applicants. The Department will likely require considerable time and devote much attention to the complex and controversial issues associated with code-share exclusivity for Delta and Aeromexico. Northwest's applications for code-share authority with Alaska and Continental have been pending since February, and their alliance agreements have been filed with. the Department and reviewed. other applications for U.S.-Mexico code-share authority have been pending for lengthy periods of time.
Counsel: Megan Rae Poldy for Northwest, 202.842.3193
Delta Air Lines, Inc. and Aerovias de Mexico, S.A. de C.V.
| OST-99-5593 OST-99-5573 OST-98-4577 OST-97-3289 OST-97-2161 |
June 22, 1999 | Petition for Reconsideration of Delta Air Lines | Exemptions and Statements of Authorization for Reciprocal US-Mexico Codesharing Services (Exclusivity Provision) |
By failing to articulate a rational explanation for the imposition of an anti-exclusivity condition, and by retroactively nullifying the Delta-Aeromexico exclusive marketing agreement, the Department’s decision violates the arbitrary and capricious standard of the Administrative Procedure Act and constitutes an abuse of discretion.
Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060
| Order 99-8-14 Undocketed OST-99-5593 OST-99-5573 OST-98-4577 OST-97-3289 OST-97-2161 OST-97-3237 OST-99-5582 |
Issued and Served August 18, 1999 | Order | US-Japan Code Sharing US-France Code Sharing US-Mexico Code Sharing |
We reject arguments that we should adopt a
laissez-faire approach to exclusive dealings between and among airlines in international air transportation. It is not in the public interest to ignore any feature of a code-share agreement that could interfere with competition or otherwise undermine the ability of consumers to benefit from the opportunities created by our aviation relationships. For that reason, we will continue to assess the merits of code-share exclusivity provisions on a case-by-case basis in light of the terms of the overall arrangement and of the special facts and circumstances affecting each market, such as its structure, the positions of the parties in those markets, and the nature of the bilateral aviation relationship governing it.By: Brad Mims
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