OST-2002-13366 - South African and Delta Air Lines - Exemption and a Statement of Authorization adding Dakar, Senegal as an Intermediate Point

OST-2002-13366

SAA seeks an exemption to add Dakar as an intermediate point on its route between New York and South Africa. The service via Dakar will begin on January 7, 2003. SAA initially will provide two weekly round trips between New York and Johannesburg via Dakar. Flights from New York will operate Mondays and Wednesdays, and flights from Johannesburg will operate Tuesdays and Sundays.

SAA will continue to carry Delta's code on a blind-sector basis on SAA's through services between New York and South Africa. However, commencing on or about April 1, 2002, Delta also intends to exercise local traffic rights between New York and Dakar, as authorized by the terms of the U.S.-South Africa and U.S.-Senegal bilateral air service agreements. See U.S.-South Africa U.S. Route Annex § 1.A.A.2. Delta has requested that Dakar be designated as one of the U.S. authorized intermediate points on routes to South Africa. The third-country codeshare frequency restrictions of the U.S.-Senegal transitional Open Skies Agreement expire on March 31, 2003, and accordingly Delta will not require a frequency allocation to exercise traffic rights between the U.S. and Senegal.

There currently is no single plane service between Senegal and the U.S. Official Airline Guide, September 2002.

Counsel: Zuckert, Scoutt & Rasenberger LLP, Frank Costello, 202 298-8660 / Delta and Shaw Pittman, Robert Cohn

(1) Exemption from 49 U.S.C. 41301 to permit South African Airways (SAA) to conduct foreign air transportation of persons, property and mail between SAA's U.S. gateways and Dakar, Senegal, as an intermediate point on SAA's authorized U.S.-South Africa services;' and

The Department of Transportation has authorized SAA in this docket to operate services between the United States and Dakar, Senegal as an intermediate point on its authorized services between the U.S. and South Africa, and to display the "DL" designator code of Delta Air Lines, Inc. on such flights. SAA requests route integration authority to permit it to combine services authorized by its authority in this docket with all other SAA services authorized by the Department, to the extent permitted by applicable international agreements.

SAA is the only carrier that operates nonstop services between the United States and the Republic of South Africa. SAA's services provide travelers and shippers with increased options and fulfill needs that would not otherwise be met. Further, the code‑share agreement between SAA and Delta Air Lines, Inc. (and the latter's wholly‑owned Delta Connection subsidiaries Atlantic Southeast Airlines, Inc. and Comair, Inc.) makes Delta more competitive by expanding the cities that Delta serves.

Docket OST-2002-13366: Renew exemption from 49 U.S.C. § 41301 to permit South African Airways (SAA) to conduct scheduled foreign air transportation of persons, property and mail between SAA’s U.S. gateways and Dakar, Senegal, as an intermediate point on SAA’s authorized U.S.-South Africa services.

Dockets OST-1999-6555 and OST-2000-6756: Renew exemption from 49 U.S.C. § 41301 to permit South African Airways to (1) engage in scheduled foreign air transportation of persons, property and mail between (a) Johannesburg, South Africa, and New York, New York, via Ilha do Sal, Cape Verde; (b) Johannesburg/Cape Town, South Africa, and Miami, Florida; (c) Johannesburg and Los Angeles, California (and, on this Los Angeles route, to commingle blind sector traffic not moving in foreign air transportation between Johannesburg and Rio de Janiero, Brazil); (d) Johannesburg/Cape Town, South Africa, via Ilha do Sal, Cape Verde, and Atlanta, Georgia; (e) Johannesburg/Cape Town and Ft. Lauderdale, Florida, on a coterminal basis with New York/Miami/Los Angeles/Atlanta services; (f) Johannesburg/Cape Town, and Washington, D.C., via Ilha do Sal, Cape Verde; (g) serve 25 named U.S. points beyond Atlanta, Georgia, on a codeshare basis with Delta Air Lines, Inc. (Delta) [1]; (h) serve Los Angeles/New York/Miami/Atlanta/Washington, D.C. on a coterminal basis; and (3) conduct charters in accordance with Part 212 of the Department’s regulations.

The 25 cities are: Baltimore, Boston, Chicago, Cincinnati, Cleveland, Dallas/Ft. Worth, Denver, Detroit, Houston, Las Vegas, Minneapolis-St. Paul, New Orleans, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh/Durham, St. Louis, Salt Lake City, San Diego, San Francisco, Seattle, Tampa, and West Palm Beach.

OST-1999-6555 - Exemption - US-South Africa
OST-2000-6756 - Exemption - US-South Africa Codesharing with Delta
OST-2002-13366 - Exemption - South Africa-US Codesharing with Delta (Adding Dakar, Senegal as an Intermediate Point)

South African Airways (Pty) Limited hereby applies for renewal of several of its existing exemptions from 49 U.S.C. § 41301, which permit SAA to operate scheduled and charter foreign air transportation services between the United States and South Africa. SAA requests that the Department renew these exemptions for at least two years.

SAA's current exemption authority permits it to engage in scheduled foreign air transportation of persons, property, and mail between:

SAA previously held authority to provide scheduled service between South Africa and Ft. Lauderdale. SAA since has obtained authority to hold out service between South Africa and Chicago, Illinois, substituting Chicago for Ft. Lauderdale as one of SAA's U.S. gateway picks. The Department also has authorized SAA to (i) serve Los Angeles, New York, Miami, Atlanta, and Washington, D.C. on a co-terminal basis; (ii) serve 25 named U.S. points beyond its U.S. gateways on a code-share basis in conjunction with a U.S. partner; and (iii) conduct foreign charter air transportation in accordance with Part 212 of the Department's regulations.

The authorities listed above are scheduled to expire on March 21, 2007. By this Renewal Application, SAA requests that the Department renew these exemptions for at least two years.

Delta is constrained to file this Answer objecting to the renewal application unless and until the Government of South Africa grants Delta's six-month old request to use its entire fleet of B-767-300ER aircraft for its bilaterally authorized service between the United States and South Africa.

When Delta originally applied to operate service between Atlanta and Johannesburg, it proposed to utilize a B-777 aircraft. Delta revised its service plan and three months before the start date of its service, in September 2006, Delta filed a request with the Government of South Africa to use any of its 59 B-767 aircraft on the route.

Delta must have the flexibility to use its entire B-767 fleet to serve the South Africa route because Delta does not dedicate particular aircraft to particular international routes. Therefore, Delta requested that its entire B-767 fleet be authorized to serve the South Africa route.

Delta received provisional approval to use only 20 B-767 aircraft for the South Africa route, which enabled Delta to inaugurate its service in December. However, as the busy peak season approaches, Delta's inability to use its entire 59 aircraft B-767 fleet to fund its South Africa service is imposing unnecessary hardship on Delta and causing onerous aircraft scheduling difficulties and complexities.

The failure of the South African Government to take timely action on Delta's request at a minimum constitutes a failure of reciprocity, if not an outright violation of the U.S.-South Africa Air Transport Services Agreement.

The Department should not countenance continued delay and should send a clear message to the South African Government that no approvals shall be granted for South African Airways unless and until Delta's long pending request is approved.

Delta asserts that the CAA has either delayed or withheld approval of Delta's ability to use all aircraft in its B-767 fleet when flying to/from South Africa, and instead has certified only a limited number of aircraft for such operations. See, Answer of Delta dated March 13, 2007, at 2. Delta asserts that its request has been pending since September 2006. Although SAA does not believe that renewal of its bilaterally-authorized rights should be in any way linked with Delta's compliance with CAA rules, SAA in recent weeks has urged its CAA and Department of Transport to work cooperatively with Delta to resolve Delta's concerns.

In response to SAA's inquiry, the South African DOT indicated that Delta's application to add additional aircraft to its fleet was filed in December 2006, and was not complete. The South African DOT has indicated its willingness to approve a completed Delta application on an expedited basis.

Counsel for SAA has conferred with counsel for Delta. There apparently is some controversy about when Delta did (or did not) file the needed paperwork with the CAA, and whether that paperwork was complete as filed. Regardless of whether Delta's application was filed in September 2006 (as it claims), or in December 2006 (as the DOT believes), SAA believes that the key issue is that the Government of South Africa is aware of this issue, and does not in any way object to certifying Delta's full B-767 fleet for service to South Africa provided that all of the underlying requirements are met. SAA understands that the CAA has been in contact with Delta's local counsel, and is attempting to resolve Delta's issues.

Renewal of SAA's right to serve the United States should not be affected by the issue here. The CAA does not object to Delta's efforts to add additional aircraft to its operating certificate as a matter of principle or law. The CAA has stated that it would have no difficulty in granting Delta's request once the appropriate documentation has been filed. In SAA's view, this statement should hopefully resolve this matter.

Delta Air Lines appreciates the desire of South African Airways to obtain expedited action on its renewal application. However, SAA's reply does not correctly characterize the facts relating to Delta's unsuccessful efforts to obtain approval from the South African Government to operate its fleet of B‑767‑300 aircraft as it is authorized to do under the bilateral Air Transport Agreement. Although SAA claims that "the Government of South Africa is aware of this issue, and does not object to certifying Delta's full B‑767‑300 fleet for service to South Africa", the continued delay in doing so‑now extending to 6 months is inexcusable.

Delta continues to assert that the CAA has either delayed or withheld approval of Delta's ability to use all aircraft in its B-767 fleet when flying to/from South Africa, and urges DOT to delay or withhold renewal of SAA's US licenses until its own situation is resolved. SAA respectfully requests leave to file this brief additional comment in order to refute some of the claims that Delta has raised, and again, to remind the Department that Delta's compliance with local South African CAA regulations and SAA's bilaterally authorized route authorities are unrelated to each other, and should in no way be linked.

As SAA previously has stated, the renewal of SAA's licenses to serve the United States should not be affected by the issue here. SAA and the CAA do not object to Delta's efforts to add additional aircraft to its operating certificate as a matter of principle or law. The CAA has stated that it would have no difficulty in granting Delta's request once the appropriate documentation has been filed. Just as the US Federal Aviation Administration would require certain documentation from foreign air carriers before adding aircraft to their operations specifications, the South African CAA has required Delta to do the same.

SAA urges the Department to resist Delta's demand that it take any sort of punitive action against SAA. SAA is merely a bystander here. Moreover, from SAA's perspective, it would be prudent for DOT not to link issues relating to economic rights to those relating to compliance with technical or safety rules. Accordingly, DOT should grant the requested renewal of exemption authority without delay.

OST-2002-13366 - Exemption - South Africa-US Codesharing with Delta (Adding Dakar, Senegal as an Intermediate Point)	September 13, 2002	Joint Application for an Exemption and a Statement of Authorization	Exemption and a Statement of Authorization adding Dakar, Senegal as an Intermediate Point
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