TACA International Airlines, S.A. / Lineas Aereas Costarricenses S.A. / AVIATECA S.A. / Nicaraguense de Aviacion, S.A. / TACA de Honduras S.A. de C.V. / Trans American Airlines, S.A.

OST-2004-17355 - Registration of Trade Name

March 17, 2004

Joint Application for Registration of Trade Name

The TACA Carriers plan to use the trade name "TACA" and the "TA" designator code in marketing and selling all of their services to and from the United States effective April 1, 2004. The TACA Carriers are requesting registration and approval of a single trade name and common code as part of their effort to market and sell their services more efficiently to consumers and to build awareness of, and consumer familiarity with, a single brand name rather than the six brand names of the TACA Carriers. Use of a single trade name and common code will permit the TACA Carriers to compete more effectively with much larger carriers, many of which are members of worldwide alliances through which they derive benefits similar to those the TACA Carriers expect to realize through their use of a single trade name and common code. The TACA Carriers anticipate also that the use of a single trade name and common code in their schedules and marketing and advertising materials will generate considerable cost savings. The TACA Carriers believe that what they are seeking is fully consistent with the letter and spirit of the open skies agreements that the homelands of the TACA Carriers have entered with the United States, and will enable them to obtain a more equitable share of the reciprocal benefits that had been the expected results of such agreements.

Counsel: Squire Sanders, Charles Donley, 202-626-6600, cdonley@ssd.com

March 23, 2004

Opposition of Continental Airlines

In the guise of registration of a trade name, six airlines have proposed to conduct all their operations under a single name using the code of what appears to be their controlling member, TACA. This consortium of all but one of the large airlines based in Central America seeks to evade well‑established codesharing principles and jointly brand six different airlines of six different countries.

Approval of such a radical proposal would have far-reaching effects, particularly since comparable alliance branding would have to be permitted reciprocally for U.S. carriers serving Central America, including Continental's partnership with COPA, and similar applications would soon follow from South America, where Lan-Chile is building a multi-national empire similar to TACA's, and Europe, where the U.S. is negotiating with the European Union regarding the rights of transborder mergers and alliances.

The six codesharing airlines already offer 70.8% of the weekly departures in Costa Rica, 75.3% of the weekly departures in El Salvador and more weekly departures in Panama than Continental and COPA combined. With their marketing strength in each of the Central American countries, 25% of the Central America‑U.S. departures and their ability to codeshare with one another and American, the "real" TACA and its partners are already formidable competitors in Central America.

Counsel: Crowell & Moring, Bruce Keiner, Jr., 202-624-2615, rbkeiner@crowell.com

April 1, 2004

Motion for Leave to File and Answer of Delta Air Lines

This is an important case of first impression involving single branding by multiple carriers from multiple countries. As such, there are significant policy and precedential effects than would be associated with an approval of a new common brand and single designator code by multiple airlines. In that regard, if the Department determines to approve this application, it must also be prepared to approve future single-branding and use of a single designator codes by other airline alliances, such as the SkyTeam alliance, of which Delta is a member.

Reciprocity is critical, considering that there is no clear basis in the existent bilateral agreements between the United States and the homeland countries of the carriers to be involved in the proposed new single branded alliance. Therefore, if the Department determines to approve single branding among the carriers associated with this alliance, it should obtain governmental assurances (and appropriately condition any approval order it may issue) to ensure that single-branded U.S. carrier alliances will be able to hold out in the homeland countries of each of the applicant carriers.

The Department does not allow U. S. carriers to hold out the services of IASA Category 2 country carries under a codeshare arrangement, even with disclosure of the operating carrier as proposed by the TACA application. In these circumstances, the Department should consider carefully whether approving codesharing by Category 2 country airlines under a Category 1 carrier code is consistent with the DOT's consumer protection and public interest mandates.

Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060

April 16, 2004

Consolidated Reply of TACA Carriers and Motion for Leave to File

Continental argues that the TACA Carriers want to compete with alliances but are unwilling to observe the rules applicable to them. Continental's statement ignores the overwhelming advantages enjoyed by many alliances, including those to which Continental belong, namely extensive codeshare services and antitrust immunity. Unlike Continental, not one of the TACA Carriers is part of an immunized alliance despite the fact that all of their homelands were early signatories to open skies agreements. Nor do the TACA Carriers operate meaningful codeshare services with a U.S. carrier.

The fact is that the TACA Carriers have never realized the benefits of the open skies agreements negotiated by their homelands, and today operate much in the way they did before those agreements were signed. Although the Department approved several years ago their request to codeshare with American Airlines, for a variety of reasons, including the conditions imposed as part of the approval, the TACA Carriers TACA de Honduras S.A. de C.V. and Trans American Airlines, S.A. have been prevented from developing a robust codeshare relationship with American. Today, the six TACA Carriers and American codeshare on only four transborder routes: San Salvador-Dallas/Ft. Worth, San Jose-Dallas/Ft. Worth, Belize City-Dallas/Ft. Worth and San Jose-Los Angeles.

Counsel: Squire Sanders, Charles Donley, 202-626-6600, cdonley@ssd.com

April 23, 2004

Surreply of Continental Airlines and Motion for Leave to File

Both Continental and Delta have demonstrated that the precedent set by allowing a group of airlines from different countries to hold their services out under a code used historically by only one of those carriers raises significant issues, including reciprocal treatment by foreign governments and the requirement that other carrier groups, including alliances among U.S. airlines and immunized alliances between U.S. and foreign airlines, be permitted to use their own "common branding" if the "real" TACA and its partners are permitted to do so. If common branding truly reduces costs, increases recognition among consumers and creates more effective competition, as the applicants claim, the Department must be prepared to permit common branding by all airline alliances. Moreover, both U.S. carriers have raised significant IASA safety and consumer disclosure issues which the surreply has not addressed adequately. Continental's objection is indeed serious, despite the surreply's claim to the contrary, and the same concerns about common branding have been raised in the context of bilateral air transport negotiations, where these issues should be addressed with each of the countries involved to ensure reciprocal treatment and evaluate consumer and safety issues.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615

April 23, 2004

Response and Motion for Leave to File (TACA Carriers)

Continental Airlines, Inc. has today submitted to the Department of Transportation nothing more than a recycled and rehashed version of its March 23, 2004, comments on the TACA Carriers' proposal. Continental's surreply contains no new facts, arguments or reasons why the TACA Carriers' application should not be approved immediately, in full and without extraordinary conditions.

The TACA Carriers have already responded comprehensively and accurately to the points raised by Continental in its comments and surreply, and do not intend to engage Continental in its transparent effort to delay approval of their application. Since further responses from the TACA Carriers would only assist Continental in its deliberate effort to slow approval of their application, the TACA Carriers do not plan to respond again to Continental's unsupported and untrue assertions regarding their proposal or operations.

The TACA Carriers' have demonstrated their proposal will improve their ability to compete by heightening their recognition among consumers through improved brand awareness while providing passengers with safe and secure air transportation operated at all times in full compliance with applicable laws and regulations. The TACA Carriers' application should be approved immediately.

Counsel: Squire Sanders, Charles Donley, 202-626-6840, cdonley@ssd.com

Order 2004-10-5
OST-2004-17355 - Registration of Trade Name

Issued and Served October 13, 2004

Order to Show Cause

On March 17, 2004, the six Central American carriers captioned above, filed a joint application in this Docket asking approval to register for their collective use the trade name "TACA" and use the designator code "TA" for all of their services to/from the United States. By this order, we have tentatively decided to grant the TACA Group an exemption, to the extent necessary and subject to conditions, for them to proceed as proposed, for a period of one year.

While the TACA Group request may appear to be one of first impression, the issue of common branding is something that we have long recognized might be of interest to certain associated carriers. Indeed, we have expressly referred to the common branding possibility in a number of our orders, (Order 2002-1-6 at page 7) specifically signaling carriers wishing to take advantage of this approach that they would need to seek our authority to do so. This is in fact what the TACA Group has done.

We note that the TACA Group states its intention to comply with the consumer-disclosure provisions of Part 257. We tentatively find, however, that the nature of the TACA Group proposal requires a still higher degree of consumer notice and protection. In that connection, we tentatively have decided to condition the authority with the notice and disclosure provisions that the Group delineated in its application.

By: Karan Bhatia

October 20, 2004

Objections of Continental Airlines

The extraordinary extrabilateral authority the Department proposes to give the TACA and its five partners to market their services as if they were a single carrier would create risks to competition, confuse consumers and create concerns about related safety and consumer disclosure issues. As Continental explained in its previous pleadings in this proceeding, the six airlines apparently controlled by TACA are not seeking to use a common alliance brand but rather to market their services as if they were TACA services. Moreover, the Department's recognition of the prospects for common alliance branding applied to airlines holding antitrust immunity permitting them to implement such alliances. TACA and its six partners hold no such immunity, but they will perforce be agreeing on fares and schedules as part of their common branding as TACA. Although lawsuits and enforcement action are possible since TACA and its partners will not hold antitrust immunity, the Department should not be facilitating violations of the antitrust laws by approving common branding of six airlines from six different countries as TACA.

Counsel: Crowell & Moring, Bruce Keiner, Jr., 202-624-2615, rbkeiner@crowell.com

October 25, 2004

Answer of the TACA Carriers

Continental, the only objector to the show cause order and the TACA Carriers' application, has failed to raise a single new reason why the Department should not finalize its show cause order. Every one of the objections interposed by Continental has been raised previously, considered thoroughly by the Department and rejected. The TACA Carriers urge the Department to again reject Continental's specious arguments and immediately issue a final order approving their application.

Whether the issue is compliance with IASA requirements, competition, reciprocity on the part of the TACA Carriers' homelands, consumer notice or U.S.-Ecuador bilateral relations, the Department's show cause order rightly found that the TACA Carriers' proposal not only satisfies any possible concern but will lead to increased competition, greater consumer benefits and improved relationships with the TACA Carriers' homeland governments. Continental has offered no persuasive reason why the Department should now abandon its explicit findings. The Department should therefore immediately issue a final order adopting the findings and conclusions set forth in its October 13, 2004, show cause order.

Counsel: Squire Sanders, Charles Donley II, 202-626-6840, cdonley@ssd.com

Order 2005-1-22
OST-2004-17355 - Registration of Trade Name

Issued and Served January 25, 2005

Final Order

We have decided to finalize our tentative decision in Order 2004-10-5 and grant the TACA Group carriers an exemption under 49 U.S.C. § 40109, to the extent necessary to permit them to register under 14 C.F.R. Part 215 for their collective use the trade name "TACA" and use the designator code "TA" for all of their services to/from the United States, for a period of one year, and subject to the consumer-related disclosure and other conditions, set forth in that order. In taking this action, we affirm our tentative finding that the grant of this authority, as conditioned, would be in the public interest, providing important public benefits by increasing consumer awareness of TACA Group services and by advancing our aviation relationships with TACA Group carriers' homelands. The TACA Group's plan would increase consumer awareness of the Group's services, and this could benefit the traveling public by promoting competition in the affected markets.

By: Karan Bhatia

January 25, 2006

Application for Renewal and Amendment of Exemption

TACA International Airlines, S.A., Lineas Aereas Costarricenses S.A., AVIATECA S.A., Nicaraguense de Aviacion, S.A., TACA de Honduras S.A. de C.V. and Trans American Airlines, S.A. hereby request renewal of the exemption granted to them by the Department of Transportation in the above-captioned docket permitting them to use the trade name "TACA" and the designator code "TA" in their services to and from the United States. With one modification explained more fully herein, the TACA Carriers request renewal of their exemption for a two-year period on its existing terms and conditions.

In addition to renewal of their exemption authority, the TACA Carriers request amendment of Condition 3(f) of their authority to permit them to disclose the operating carrier's identity either on the paper ticket or on the boarding pass issued to the passenger at the airport or printed by the passenger through the online check-in process. Due to the increasing use of electronic tickets and the TACA Carriers' change in their host GDS, the TACA Carriers need the flexibility to print disclosures either on boarding passes or online check-in documents, or on paper tickets. This is the only modification sought by the TACA Carriers.

Counsel: Squire Sanders, Charles Donley, 202-626-6840, cdonley@ssd.com

February 9, 2006

Answer of Continental Airlines

Continental opposes both renewal and amendment of the extra-bilateral grant of "common branding" authority to TACA, LACSA, NICA, TACA de Honduras and Trans American allowing them to pass themselves off as a single airline in marketing their services. Grupo TACA has not been complying fully with the conditions imposed upon the grant of common branding authority, and the Department should not eliminate a condition it imposed last year requiring the names of the marketing and operating carriers on Grupo TACA tickets.

Continental urges the Department to deny the Grupo TACA application for renewal and amendment of its common branding authority. If the Department does not deny the application, it should deny the request for amendment, secure the additional information described above, and investigate Grupo TACA's compliance with the Department's requirements.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com

February 21, 2006

Reply of the TACA Carriers

For the fourth time in this proceeding Continental Airlines is attempting to thwart the efforts of the TACA Carriers to provide services between Central America and the United States under a common brand. Like its predecessors, Continental's latest Answer ignores the compelling public interest factors that support the TACA Carriers' application. Service under a common brand has enabled them to offer a much more consistent identity to the traveling public and to compete more effectively with the major carriers that operate in the Central American markets, including Continental and its affiliate COPA. Compliance by the TACA Carriers with conditions imposed by the Department has prevented any possibility of consumer deception in this operation, and safety has never been compromised.

Continental also ignores the strong justification for the minor revision in the existing authority that the TACA Carriers are seeking. The revised format of disclosure of operating carrier identity will provide complete and timely information to passengers. It will also enable the TACA Carriers to move smoothly to electronic ticketing by late 2007.

Continental's answer is a mixture of factual inaccuracies, misstatements of the Department's orders, and misapplication of established international aviation policy. It should be summarily rejected, and the Department should grant the relief requested by the TACA Carriers at the earliest possible time.

Counsel: Squire Sanders, Edward Sauer, 202-626-6641, esauer@ssd.com

Order 2006-11-10
OST-2004-17355 - Registration of Trade Name

Issued and Served November 14, 2006

Order Renewing and Amending Exemption

By this order we renew exemption authority we previously granted to the six carriers captioned above (the TACA Group) to permit them to register for their collective use the trade name "TACA" and use the designator code "TA" for all of their services to and from the United States; and amend that exemption authority to the extent that it provides the TACA Group carriers flexibility in the methods used for disclosure of the operating carrier's identity. We grant these authorities for a one-year term.

The TACA Group sought its renewed and amended exemption authority for a two-year period. The one-year duration of the authority here is consistent with our usual policy of granting exemption authority in the circumstances presented.

With respect to Continental's assertion that LACSA has not been using the "TA" designator, the TACA Group carriers have, in our view, adequately explained LACSA's delay in adopting the "TA" code, and we see nothing in the operations of LACSA that would be contrary to the conditions we imposed on the TACA Group carriers in Order 2005-1-22, which requires each TACA Group carrier to cease use of its individual code upon implementation of the authority granted in that order. Furthermore, we note that the TACA Group asserted that it will relinquish use its "ER" code and begin use of the "TA" code as soon as it begins participation in the common branding. As to Continental's concern ovcr operations by TACA Peru, we note, as the TACA Group carriers state, that Peru is a Category 1 country under the FAA's IASA Program.

we take note of Continental's concerns with the Government of El Salvador preventing the Panamanian earner COPA from operating flights between San Salvador and Panama City, thereby precluding Continental from code sharing on such COPA flights. While we support aviation liberalization worldwide and encourage other countries to support it as well, the issue of the El Salvador-Panama rights for COPA is one that involves the governments of El Salvador and Panama, and is thus beyond the scope of this proceeding.

By: Andrew Steinberg

November 14, 2007

Application for Renewal of Exemption

The TACA Carriers hereby request renewal of the exemption granted to them by the Department of Transportation in the above-captioned docket permitting them to use the trade name TACA" and the designator code "TA" in their services to and from the United States. The TACA Carriers request renewal of their exemption for at least a one-year period.

The common code continues to allow the TACA Carriers to improve brand awareness among the traveling public.

Counsel: Squire Sanders, Charles Donley, 202-626-6840, cdonley@ssd.com

Filed November 14, 2007 | Issued January 4, 2008

Notice of Action Taken

Renewal of exemption under 49 USC § 40109 to permit the joint applicants to use the trade name “TACA” and to use the designator code “TA” for all of their services to/from the United States.

The homelands of the Joint Applicants are as follows: TACA International Airlines, S.A. – El Salvador; Lineas Aereas Costarricenses S.A. – Costa Rica; AVIATECA S.A. – Guatemala; Nicaraguense de Aviacion, S.A. – Nicaragua; TACA de Honduras S.A. de C.V. – Honduras; and Trans American Airlines S.A. – Peru.

By: Paul Gretch