Tampa Cargo, S.A.

OST-2004-18910 - Exemption - Miami-Colombia via Peru and Ecuador

August 16, 2004

Application for an Exemption

TAMPA has been serving the Ecuadorian and Peruvian markets for several years and has strong commercial and economic ties with local shippers. The authority requested herein is necessary to effectively serve shippers in these markets and will complement TAMPA’s existing all-cargo service to the United States. TAMPA’s proposed service will, for example, bring local perishables and goods to the U.S. market (asparagus, flowers, and textiles from Peru and flowers from Ecuador).

The majority of TAMPA's scheduled and charter flights in recent years have been third and fourth freedom flights between the United States and Colombia, with limited fifth freedom operations. TAMPA's primary focus remains the Colombia ‑ United States market. The addition of Ecuador and Peru as intermediate points will strengthen TAMPA' s overall Colombia ‑ United States operations and enable it to better compete with other carriers serving these markets.

Counsel: Pillsbury Winthrop, John Gillick, 202-7750-09800, jgillick@pillsburywinthrop.com

August 18, 2004

Answer of Atlas Air to Application for an Exemption | Word

By application dated August 16, 2004, TAMPA CARGO seeks exemption authority to provide all-cargo service between Miami and Colombia via Ecuador and/or Peru, permitting flights in both directions or on triangulated routings.  For the reasons stated below, Atlas Air, Inc. has an interest in this matter.  So long as the Government of Colombia  is now permitting U.S. airlines to operate triangulated flights, as TAMPA suggests is the case, Atlas does not object to the requested exemption.  We hope that the Department will use its order or notice granting TAMPA’s application as an opportunity to express support for the apparent liberalization of Colombia’s “no triangulation” policy and to make clear that it expects Colombia to waive application of that policy to the South American operations of all U.S. airlines.

Counsel: Atlas, Russell Pommer, 202-822-9121, rpommer@atlasair.com

August 26, 2004

Reply of TAMPA Cargo to Answer of Atlas Air

TAMPA has been urging the Government of Colombia to relax the triangulation policy for some time, and has previously mentioned its efforts to do so (see, e.g., TAMPA Reply to Arrow Air, Inc., Docket OST-03-15126, May 20, 2004, at 4).

As TAMPA noted in its application, Florida West has already been granted authority to operate on a Miami - Guyaquil/Quito - Bogotá/Medellin - Miami routing (OST-00-7141). TAMPA understands that both Arrow Air and Atlas have recently filed applications to triangulate on routes to Colombia' and that a hearing was held on both applications on August 20, 2004. TAMPA did not oppose either application.

Atlas has applied for Miami ‑ Guayaquil/Quito ‑ Bogotá/Medellin ‑ Miami and Miami ‑Bogotá/Medellin Guayaquil/Quito ‑ Miami. Atlas has applied for Miami ‑ Quito/Guayaquil ‑Bogota.

Counsel: Pillsbury Winthrop, John Gillick, 202-775-9800, jgillick@pillsburywinthrop.com

August 31, 2004

Answer of American Airlines

Through a series of resolutions, the aeronautical authorities of Colombia have mandated the payment of minimum and uniform commissions to travel agencies in Colombia for international flights. In addition, the Colombian authorities have improperly rejected American's internet fare filing, and have even sought to penalize American for its 0% base commission policy on U.S. point‑of‑origin itineraries.

American has consistently and strenuously challenged, at the highest levels of the Colombian government, such extraordinary governmental interference with the prices that American establishes for its services, and the direct or third party distribution channels through which American chooses to sell its products.

Such interference is a clear violation of Annex 1, Article 8 of the U.S.‑Colombia Aviation Transport Services Agreement, which guarantees to U.S. carriers a "fair and equal opportunity to operate" in the U.S. ‑Colombia market. Moreover, Colombia's actions are anticompetitive under the International Air Transportation Fair Competitive Practices Act, 49 USC 41310 (c) (1) (A).

In these circumstances, where Colombia is acting in violation of the rights of U.S. carriers, the Department should deny TAMPA's request for authority until Colombia comes into compliance with its obligations under the U.S. ‑Colombia bilateral agreement.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

August 31, 2004

Answer of Arrow Air

The Ecuador-U.S. market is subject to frequency limitations under the terms of the bilateral agreement between the two countries. Arrow has been an active applicant for allocation of additional frequencies between Ecuador and the U.S. for over two years. The Peru-U.S. market is not so restricted by frequency limitation.

TAMPA asserts that the government of Colombia has granted authority to United States carriers similar to the authority it seeks in its application, citing as an example the authorization of one carrier, Florida West International Airlines, Inc., to operate over a routing: Miami-Guayaquil/Quito (Ecuador)-Bogota/Medellin (Colombia) - Miami, conditioned on the grant of reciprocal authority by the Government of the United States. In fact, all that Colombia did in making its award to Florida West was to grant rights contained in the bilateral agreement. Florida West gained no new traffic rights. It was authorized only to carry Ecuador third and fourth freedom traffic from a point beyond Colombia, via Colombia, to/from the U.S. No fifth freedom traffic rights were involved in the authority granted by the Colombian government. There are differences between the routing of a flight and the traffic carried on that flight.

Finally, TAMPA noted in its Reply filed on August 26, 2004, that it did not oppose Arrow’s application to triangulate on routes to Colombia. The hearing on Arrow’s application was held in Bogota on August 20, 2004. No decision on Arrow’s application has yet been rendered by the Colombian Government.

Counsel: Lawrence Wasko and Jacquelyn Gluck, 202-331-0599, ldwasko@erols.com and jngluck@erols.com

September 2, 2004

Reply of TAMPA Cargo to Answers of Arrow Air and American Airlines

TAMPA understands that American has encountered difficulties resolving its disagreements with the Colombian Government over travel agent commissions for international flights and other related issues. Although TAMPA is sympathetic to American’s claims and appreciates American’s frustrations, TAMPA respectfully submits that this is not the proper forum for airing its grievances. As discussed in the Atlas and Arrow answers, both Arrow and Atlas have pending applications for all-cargo authority in Colombia (neither of which TAMPA has opposed) that include the right to triangulate – a right that has been, until the present, at issue between the United States and Colombia. As has been its previous practice, any Colombian Government approval of the authority sought by Arrow and Atlas will include as a condition that Colombian carriers be granted substantially similar rights in the United States.

The only outcome of denying TAMPA’s application based upon American’s concerns will be to impair the liberalization of Colombian cargo markets and lead to reciprocal denials by the Colombian and U.S. governments of requests for expanded cargo authority – the worst possible outcome, and one in which every carrier involved – U.S. and Colombian - loses.

Although respecting American’s right to object, TAMPA reiterates that other forums are better suited to airing grievances over an issue related to the transportation of passengers, not, as here, transportation of cargo in all-cargo aircraft – to do so here would be to mix the proverbial apples with oranges, and would result in the denial of valuable rights to two U.S. carriers.

Counsel: Pillsbury Winthrop, John Gillick, 202-775-9870, jgillick@pillsburywinthrop.com

September 10, 2004

Motion for Leave to File and Supplemental Response

Neither Arrow nor Atlas opposed TAMPA’s application, and each noted that the Colombian Government was considering their respective applications for service in the U.S.-Ecuador-Colombia market. American’s opposition related solely to an ongoing dispute with the Colombian government regarding mandatory and uniform commission payments to travel agents and related issues.

Attached as Exhibit 1 is the Colombian Government’s announcement of approval of the recent applications of Arrow and Atlas (see pages 16-18). TAMPA understands that both carriers were awarded the routings and authority they requested, including triangulation rights to Ecuador. These approvals are both contingent on TAMPA obtaining approval for comparable opportunities from the U.S. Government.

With respect to the issues raised by American in its answer, TAMPA understands that representatives of IATA have recently held talks with Colombian officials concerning the uniform travel agent commissions the Colombian Government has imposed on all airlines operating in Colombia, both domestic and foreign, and explained why it would be difficult to include such charges on airline ticket stock. IATA’s representatives agreed to further review the case and to submit written comments to the Colombian Government. Moreover, the Government has suspended implementation of the commission charges until October 5, 2004.

Counsel: Pillsbury Winthrop, John Gillick, 202-775-9800, jgillick@pillsburywinthrop.com

September 21, 2004

Motion of Arrow Air for Leave to File and Supplement to Its Answer

By letter dated September 8, 2004 addressed to Arrow's Colombian counsel, a special unit of the Colombian Civil Aviation Authority advised Arrow that it was approved to provide exclusive "regular services" on the routes specified by the Civil Aviation Authority as follows: Miami‑Quito, Ecuador and/or Guayaquil, Ecuador‑Bogota‑Miami and Miami‑Quito, Ecuador-Bogata and Miami‑Guayaquil, Ecuador‑Bogota‑Miami. Arrow notes that the authority granted to it for operations between Ecuador and Colombia and traffic to be carried appears to be restricted to the extent that such flights are described as "ferry" flights only.

Arrow also notes that the authority granted by the Colombian Civil Aviation Authority is expressly limited to the use of DC‑8‑62 and DC‑8‑63 aircraft by Arrow. Arrow currently uses DC‑10 aircraft in its service to both Ecuador and Colombia. The letter from the Colombian Civil Aviation Authority explains that the approval to Arrow is conditioned and "not regular" because Colombian carriers are limited in the exercise of fifth freedom rights from points in the "Andean Community Countries" to third countries. The letter further indicates that the grant of traffic rights to Arrow is conditional on "reciprocal" and "flexible" treatment of Colombian carrier applications to the Department.

Counsel: Lawrence Wasko and Jacquelyn Gluck, 202-331-0599, ldwasko@erols.com and jngluck@erols.com

September 22, 2004

Motion for Leave to File and Response of TAMPA Cargo to Supplement of Arrow Air

Turning initially to the grant of "ferry" authority to Arrow, the short answer is that Arrow only requested "ferry" authority between Ecuador and Colombia, and the Colombian Government granted Arrow the authority it requested.

Arrow only provided the Colombian CAA with information concerning operations with DC-8-62 and DC-8-63 aircraft (see pages 3 and 4 of the Arrow request), not authority to operate DC-10 aircraft. Once again, the Colombian Government granted Arrow authority consistent with the information provided by Arrow to the Colombian CAA. If Arrow wants authority to operate DC-10 aircraft, it should ask for it and provide the information required by the Colombian regulations. Indeed, the Arrow application indicates (at page 3) that the DC-10 aircraft were not in the Arrow fleet when the application was filed.

This is a critically important moment for U.S.-Colombian all-cargo service bilateral relations. The Colombia Government has agreed, in a bold step, to increase the authority granted to these two U.S. carriers for operations provided in conjunction with their U.S.-Colombian all-cargo services. The time has now come for the U.S. Government, acting through the Department, to reciprocate by granting TAMPA CARGO S.A. the cargo authority it has requested in this proceeding forthwith.

Counsel: Pillsbury Winthrop, John Gillick, 202-775-9800, jgillick@pillsburywinthrop.com

September 27, 2004

Re: Response of Atlas Air | Word

On September 22, 2004, TAMPA CARGO S.A. filed a response to the supplement of Arrow Air, Inc. in the referenced proceeding. In that response, TAMPA asserts, among other things, that the Government of Colombia has granted Atlas Air, Inc. 5th freedom rights between Colombia and Ecuador as part of its recent approval of Atlas’ flight schedules. Atlas wishes to confirm the accuracy of TAMPA’s statement. The 5th freedom authority is reflected in a September 8, 2004 communication from Colombia’s Aeronáutica Civil Unidad Administrativa Especial to Atlas approving Atlas’ triangulated routings.

Atlas earnestly appreciates Colombia’s decision to ease its "no triangulation" policy and looks forward to further liberalization of the U.S.-Colombia aviation relationship.

Counsel: Atlas, Russell Pommer, 202-822-9121, rpommer@atlasair.com

Order 2004-12-09
OST-04-18910 - Exemption - Miami-Colombia via Ecuador and Peru
Undocketed

Issued and Served December 13, 2004

Order | Word

In this order, we (1) grant an exemption request by TAMPA CARGO S.A. and (2) affirm a staff action under assigned authority approving a statement of authorization for Aerovias Nacionales de Colombia S.A. TAMPA and Avianca are foreign air carriers of Colombia.

The exemption authority requested by TAMPA is provided for in our bilateral aviation agreement with Colombia, and TAMPA is properly licensed and designated by its government to conduct the proposed services. With respect to the issues raised by Atlas and Arrow, the record indicates that Colombia has recently approved or has announced approval of the requests of Florida West, Atlas and Arrow to U.S-Colombia all-cargo services on a "triangular routing" basis, authority similar to that requested by TAMPA.

It is our view that Colombia's practice of setting a uniform commission rate serves only to increase prices to the traveling public and deprive consumers of choices and competition among airlines serving that country, and that such commissions should properly be negotiated between air carriers and their travel agents, without government interference. Notwithstanding Colombia's actions, it nevertheless appears that the practices reported by American are being applied by the Colombian authorities on a non‑discriminatory basis and apply equally to all carriers in Colombia conducting international services, including Colombian and U.S. carriers.

As to American's petition, for the reasons set forth above, we have decided to affirm the staff's action approving Avianca's request to operate the roundtrip charter flight between Colombia and San Juan. We find that the staff acted properly and in accordance with established practices and policies in reaching its decision. The staff correctly concluded that the matters raised by American could not be resolved in the context of Avianca's request to operate the subject charter flight, and were more appropriately pursued through ongoing U.S. efforts at resolution with the Government of Colombia, through diplomatic channels.

By: Karan Bhatia

December 1, 2005

Application for Renewal of an Exemption

Tampa Cargo, S.A. hereby applies for renewal of an exemption, previously granted by the Department on December 13, 2004, authorizing it to engage in scheduled foreign air transportation of property and mail between a point or points in Colombia, on the one hand, and Miami, Florida, on the other hand, via Peru and Ecuador, as more fully described herein. Tampa requests renewal of this exemption authority for a period of at least one year.

The majority of Tampa’s scheduled and charter flights in recent years have been third and fourth freedom flights between the United States and Colombia, with limited fifth freedom operations. Tampa’s primary focus remains the Colombia - United States market. The addition of Ecuador and Peru as intermediate points has strengthened Tampa’s overall Colombia-United States operations and has enabled it to better compete with other carriers serving these markets.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939

Filed December 1, 2005 | Issued April 10, 2006

Notice of Action Taken

Renewal of exemption from 49 U.S.C. 41301 to conduct scheduled foreign air transportation of property and mail between a point or points in Colombia, on the one hand, and Miami, Florida, on the other hand, via Peru and Ecuador.

By: Paul Gretch

April 17, 2007

Application for an Exemption

Tampa Cargo, S.A. hereby applies for an exemption and such other authority as may be necessary to authorize it to engage in scheduled foreign air transportation of property and mail on the following routes: between Miami, on the one hand, and Colombia, on the other, via Peru and Ecuador, in both directions. Tampa requests that this exemption authority be granted for a period of at least one year.

No objections were made to Tampa's December 1, 2005 application for renewal of this authority, which the Department approved on April 10, 2006. Notice of Action Taken, April 10, 2006. This authority expired on April 10, 2007. Through an oversight a renewal application was not made prior to that time.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939

April 23, 2007

Re: Polling Results

This letter will notify you that we have polled all the carriers served with the application of Tampa Cargo referenced above, and none have expressed any objection to the Department's grant of this authority.

Counsel: Zuckert Scoutt, David Endersbee, 202-973-7935, dmendersbee@zsrlaw.com

Filed April 17, 2007 | Issued April 26, 2007

Notice of Action Taken

Exemption under 49 USC 40109 to permit the applicant to conduct scheduled foreign air transportation of property and mail between Miami, Florida, on the one hand, and a point or points in Colombia, on the other hand, via Peru and Ecuador.

The Department is acting on Tampa's application prior to the expiration of the 15-day answer period with the consent of all parties served.

By: Paul Gretch

April 25, 2008

Application for Renewal of Exemption

Tampa seeks renewal of its exemption authority to engage in scheduled foreign air transportation of property and mail between a point or points in Colombia, on the one hand, and Miami, Florida, on the other hand, via Peru and Ecuador. This authority was last renewed by Notice of Action Taken on April 26, 2007, and expires on April 26, 2008.

Tampa transports a variety of cargo over these routes, and besides general cargo, Tampa transports large quantities of textiles, flowers, asparagus, and other perishables for the U.S. market.

Counsel: Zuckert Scoutt, John Gillick, 202-973-7939, jegillick@zsrlaw.com