ost995049

OST-99-5049

Continental Airlines, Inc.

OST-99-5049	January 26, 1999	Application for an Exemption and Frequency Allocation	US-Russia Codesharing with Air France
		Service List

Scheduled foreign air transportation of persons, property and mail under a code-share arrangement with Air France between Houston and Newark. on the one hand. and Moscow and St. Petersburg, Russia, on the other hand, via Paris. Continental also applies for allocation of seven weekly U.S.-Russia code-share frequencies from among those now unused by American, Baltia. Delta and United and available for reallocation.

Continental asks for allocation of seven weekly U.S.-Russia frequencies to enable it to place its code on seven weekly Air France flights between Paris and Moscow and seven weekly Air France flights between Paris and St. Petersburg. Awarding seven of the unused weekly U.S.-Russia frequencies to Continental will enable the Department to promote code-sharing between the U.S. and Russia under the new U.S.-Russia bilateral aviation agreement. Continental will be able to compete for the first time with U.S. and Russian carrier services and with U.S.-Russia code-share arrangements involving other carriers.

Counsel: Continental and Crowell Moring, Bruce Keiner, 202.624.2500

American Airlines, Inc. / Continental Airlines, Inc.

OST-98-4328
OST-99-5049

Febraury 10, 1999

Consolidated Answer of Delta Air Lines

Chicago-Moscow
US-Russia Codesharing w/ Air France

Delta currently operates third-country code-share service to Russia, and, as the Department is well aware, Delta has been seeking to expand its third-country codeshare offerings to Russia. Those expansion efforts have been blocked, until recently, by the Federal Aviation Authority of Russia's refusal to authorize additional third-country code-share operations. Delta's existing and planned future services that will be announced in accordance with the Department's scheduling notice for the new U.S.-Russia third-country code-share opportunities are entitled to contemporaneous consideration with other applications. Delta will demonstrate that its U.S.-Russia third-country code-share service proposal will maximize service and competitive benefits and should be granted in favor of other carrier applications. Accordingly, Delta opposes the applications of Continental and American to the extent that an award to either or both carriers would foreclose the full grant of Delta's application.

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

Continental Airlines, Inc.

OST-99-5049	February 10, 1999	Joint Answer of American and Finnair	Application for Exemption and Frequency Allocation Third-Country Codesharing w/Air France between U.S.-Russia	HTML
		Attachment 1: American and American Eagle Provide Nonstop Service to 21 U.S. Cities at New York Kennedy

On February 2, 1999, in light of the new U.S.-Russia bilateral agreement on third-country codesharing, American and Finnair sought immediate action on the deferred portion of their proposal, which they amended to included Moscow in addition to St. Petersburg. Since the U.S.-Russia bilateral agreement limits the number of third-country codesharing combinations, the Department is required to conduct a carrier selection proceeding to determine which ones should be authorized under the new agreement. American and Finnair urge the Department to institute such a proceeding promptly, and to reach its decision through expedited show-cause procedures. In that proceeding, American and Finnair will show why their proposed arrangement should be chosen in the public interest.

Counsels: Carl Nelson, Jr. for American, 202.496.5647, carl_nelson@amrcorp.com and Seeger Potter, John Richardson for Finnair, 202.496.1234

OST-99-5049	February 10, 1999	Answer of United Air Lines	US-Russia Codesharing	HTML
		Exhibit: Northwest Airlines Systems Timetable

Under the new U. S./Russia agreement on code sharing concluded last month, the U.S. will be limited to five third-country code-share arrangements involving services to Russia. Only three such arrangements may begin services immediately, with the remaining two to be operated as of January 22, 2000. In addition to United's code-share service with Lufthansa, which as noted) above is already fully authorized and was operated for so long as the Russian Federation permitted, there are two other third-country code-share arrangements already in place - Northwest/KLM via Amsterdam with 8.5 frequencies and Delta/Swissair via Zurich with 8.5 frequencies. Orders 96-10-1 and 97-7-33. In this regard, it should be noted that United was authorized to offer 14 weekly code-share frequencies between Frankfurt and Moscow under the previous U.S./Russia code share agreement. Northwest is currently operating 10 weekly Amsterdam-Moscow code-share frequencies and Delta, 14 weekly Zurich-Moscow code-share frequencies. All of these Moscow services exceed the maximum of seven weekly code-share frequencies per city pair allowed under the new U.S./Russia agreement. The Department must address the issue of whether such Moscow city-pair frequencies in excess of the bilateral limit are to be allowed to continue notwithstanding the terms of the new agreement. There is no provision in the new U. S./Russia agreement for "grandfathering" historic operations at levels in excess of the agreed city-pair limits. If the Russian Federation, however, is to allow Northwest/KLM and Delta/Swissair to exceed the weekly city-pair limit based on their historic operations, then United/Lufthansa should be entitled to the same flexibility based on their own historic operations of 14 weekly code-share frequencies between Frankfurt and Moscow.

Counsel: United and Kirkland Ellis, Jeffrey Manley, 202-879-5161

Continental Airlines, Inc.

OST-99-5049

February 17, 1999

Supplemental Answer of United Air Lines and Motion for Leave to File

US-Russia Codesharing with Air France

In its application, United referred to the current code-share services to Moscow operated by Northwest and KLM and attached a schedule showing 10 weekly flights. United has been advised by Northwest that, in light of the provisions of the new U. S./Russia MOU which limit such code-share services to no more than 7 flights per week in any city pair, Northwest has amended its code-share schedule accordingly. Thus, United now understands that in Northwest's current schedule that carrier is holding out only 7 weekly code-share flights between Amsterdam and Moscow. In these circumstances, given the schedule changes implemented by both Northwest and Delta (see footnote 4 of United's Answer), it appears that neither carrier intends to seek the right to continue operations in excess of those allowed under the new U.S./Russia MOU. There may be no need, therefore, to address the issue raised in section 4 of United's Answer since that issue has apparently already been addressed and resolved by Northwest and Delta.

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

Continental Airlines, Inc.

OST-99-5049

February 22, 1999

Consolidated Reply of Continental

U.S. - Russia

HTML

Continental's proposal to introduce a new network between the U.S. and Russia as Air France's code-share partner via Paris (CDG) should be approved over Delta's code-share with Swissair, American's code-share with Finnair and United's code-share with Lufthansa. Continental responds as follows to the Delta, American and United answers to Continental's application: Delta would be the least deserving applicant for U.S.-Russia third country code-share authority. Delta operates its own flights between JFK and Moscow, and Delta offers online U.S.-Russia connecting service for its Atlanta, Cincinnati and Salt Lake City hubs via JFK. Delta's U.S.-Russia code-shares with Swissair duplicate service Delta offers via JFK on its own flights. Delta, already the largest U.S.-flag carrier between the U.S. and Europe, also offers numerous code-share flights between the U.S. and Eastern Europe with Swissair, Sabena and Austrian. Limited code-share opportunities available between the U.S. and Russia should not be squandered to duplicate existing online services when new networks could be added to the U.S.-Russia service pattern instead. Delta does not dispute Continental's statement that Delta has U.S.-Russia frequencies that are unused and should be returned immediately to the Department for reallocation.

Counsel: Crowell and Moring, Bruce Keiner, 202. 624.2615