Order 2002-5-8

Order 2002-5-8

http://www.airfrance.com/

Societe Air France

Order 2002-5-8 OST-1999-6076	Issued March 8, 2002 Served May 9, 2002	Order Issuing Amended Foreign Air Carrier Permit	U.S.- France
		Attachment: Permit to Foreign Air Carrier

By application filed August 5, 1999, as supplemented, Air France requests that we renew its existing foreign air carver permit issued by Order 1976-2-25, and amend that permit to enable Air France to conduct services between France and the United States consistent with the provisions of the open-skies aviation agreement between the United States and France.

The foreign air carrier permit issued Air France by Order 1976-2-25 authorizes Air France to engage in scheduled foreign air transportation of persons. property and mail between France and specified points in the United States, via named intermediate points: and authority to perform charters subject to 14 CFR Part 212. Air France also holds another foreign air carrier permit, issued by Order 81-8-135. which awarded fir France, as well as other named foreign air carriers, conditional Alaskan stopover authority on its transpolar route between Europe and Japan, and emergency authority to transfer or receive passengers from one foreign carrier to certain eligible foreign or U.S. air carriers in Alaska in defined emergency situations.

Answers in response to Air France's permit amendment application were filed by American Airlines, Inc. and United Airlines, Inc. While neither carrier opposed Air France's request, both state that their pending requests for U.S.-France certificate authority should be granted along with Air France's amended foreign air carrier permit. Air France tiled a reply stating that all three applications should be processed expeditiously. With respect to the issues raised by United and American concerning issuance of their certificate authority in the U.S.-France market, we agree with the parties that the certificates of United and American and the permit amendment of Air France should be issued expeditiously. In addition to the permit amendment order here, we are actively processing the certificate requests of American and United. We have already awarded United exemption authority consistent with the rights available under the new open-skies agreement with France. See Notice of Action Taken, dated March 1, 2002. American has not sought broad U.S.-France exemption authority, but does hold exemptions to serve a number of US - France city-pair markets.

Air France has provided financial information which indicates that it can conduct the proposed services without jeopardizing passenger or shipper funds. Specifically, during the year ending March 31, 2000, Air France reported total assets of $9.9 billion, total liabilities of $6.9 billion and owners' equity of $3 billion. For the year ending March 31, 2000, Air France reported an operating profit of approximately $36 million. For the year ending March 31, 2001, Air France reported total assets of $10.8 billion, total liabilities of $7.5 billion, owners' equity of $ 3.3 billion. For the year ending March 31, 2001, Air France reported an operating profit of $38 million. The majority of Air France's stock is held by the Government of France. Those shares of Air France stock not held by the government are traded on public stock exchanges.

By: Read Van de Water