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OST-04-19161 - Delta Air Lines - US-Brazil Combination Frequencies - Atlanta-Rio de Janeiro
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US-Brazil Combination Frequencies OST-04-19161 - US-Brazil Combination Frequencies September 17, 2004 Application of Delta Air Lines for a Frequency Allocation Hereby applies for an allocation of seven (7) U.S.-Brazil frequencies for Atlanta-Rio de Janeiro service. Delta proposes to commence daily nonstop service on or about June 1, 2005, using Boeing 767-300ER aircraft configured with 204 seats. Delta requires a minimum of 180 days lead time to implement the new service. Accordingly, Delta urges the Department to promptly institute any necessary proceedings, so that a Final Order can be issued prior to December 31, 2004. There are currently two (2) frequencies in unallocated pool; thus, five (5) additional frequencies must be reassigned from another carrier in order to fund Delta's daily service proposal. The Department has stated unequivocally that U.S.-Brazil frequencies are valuable bilateral rights that should be used and not wasted. See, e.g. Order 98-12-33 at 11 ("the frequencies available for U.S.-Brazil services constitute valuable rights that we do not intend to be wasted."). The fact that United's frequencies were awarded prior to the imposition of the Department's now-standard 90 day dormancy condition is irrelevant. The public interest requires full utilization of all limited entry frequencies without regard to the arbitrary and irrelevant fact of when the frequencies happed to be acquired. Any policy that would shield such dormant frequencies from reallocation would be adverse to the public interest, unfair and discriminatory to the more recent U.S. carrier entrants to Brazil, as well as arbitrary and capricious. Accordingly, the Department can and should reallocate to Delta at least five of the dormant and unused frequencies previously allocated to United. OST-96-1065 - American Airlines - New York-Rio de Janeiro Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060 OST-04-19161 - US-Brazil Combination Frequencies October 4, 2004 Delta's application has two elements: 1) a request for allocation of two (2) U.S.-Brazil weekly frequencies that are not currently allocated to any U.S. carrier; and 2) a request that the Department confiscate from United five (5) U.S.-Brazil weekly frequencies that have been awarded to United on a permanent basis. United objects to the latter request, which is premature and without merit. As explained below, Delta simply has failed to demonstrate that there is any public interest justification for: Stripping from United five (5) Brazil frequencies that Delta does not propose using for another nine months; Awarding additional frequencies to Delta when seven (7) of its currently allocated frequencies are still dormant; and making decisions that will influence the long-term structure of competition in the U.S.-Brazil market nine months before Delta proposes to initiate service using the frequencies it is now seeking, especially given the fact that Delta proposes using these frequencies to resume a service it described as not "feasible" as recently as May 2004 Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19161 - US-Brazil Combination Frequencies (Atlanta-Rio de Janeiro) October 8, 2004 United's Answer amounts to nine pages of empty rhetoric. United has failed to offer a single valid reason, let alone any DOT precedent, as to why United should continue to hold dormant and unused frequencies at the expense of Delta's Atlanta‑Rio de Janeiro proposal. The mere fact that United happened to acquire its frequencies before the Department adopted the now– standard 90 day dormancy language does not shield United from the obligation to use them. Such a result would clearly fail the public interest test, and would be arbitrary and capricious. The Department has a public interest obligation to reallocate the necessary frequencies for Delta's Atlanta-Rio de Janeiro service. See, e.g. Order 95-3-52: "it is not the Department's policy to permit valuable operating rights to remain unused for an extended period, particularly when another carrier has plans to use them." Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060 October 20, 2004 United does not oppose a temporary reassignment of five of its grandfathered frequencies to enable Delta to operate its proposed service from June 2005 until the end of the Winter 2005/2006 traffic season. The record in this proceeding, however, simply cannot justify the permanent reallocation of any of United's frequencies to Delta at this time. Permanent reallocation would be a drastic measure, with significant implications for the long‑term structure of the U.S.‑Brazil air service market. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com October 27, 2004 Motion for Leave to File and Supplemental Reply of Delta Air Lines The Department has a clear and unambiguous public interest policy of requiring all carriers to use allocated limited-entry authority, or face reallocation of those rights to another carrier. For all recent awards, there has been an express 90 day dormancy condition designed to prevent the very abuse of limited entry authority that United is engaged in here. It is only due to a quirk of history that the same automatic dormancy provision has not already resulted in the return of these frequencies to the unallocated DOT pool. United cannot escape the fact that the Department warned United that these Brazil frequencies would be permanently reallocated if United failed to use them. Order 95-3-52 Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060 OST-04-19161 - US-Brazil Combination Frequencies January 7, 2004 Motion of Delta Air Lines for Immediate Action Hereby moves for immediate action on its application for seven (7) U.S.-Brazil frequencies for Atlanta-Rio de Janeiro service. Delta filed its application on September 17, 2004, and had requested final action by no later than December 31, 2004 to permit adequate planning and lead time for the new service. All of the legal and policy issues have been fully briefed, and the matter is now ripe for decision. Delta stands ready, willing and able to implement service, as proposed, on June 1, 2005. However, Delta will soon be forced to allocate the aircraft it had planned to use for Atlanta-Rio de Janeiro service to other routes for the peak 2005 summer traffic season. Delta strongly desires to begin Atlanta-Rio de Janeiro service this summer, but requires immediate action and a decision by January 14, 2005 in order to do so. Delta requests that the Department establish a shortened answer date to this motion of noon, January 11, to permit final action by January 14. If the Department is unable to act immediately on Delta's motion and authorize service to begin on June 1, the next feasible start date for Atlanta‑Rio de Janeiro will be October 1, 2005. Due to heavy demand in the peak summer travel season and slot constraints on potential alternative routes that Delta would serve with the aircraft it has earmarked for the Atlanta‑Rio service, Delta must finalize its Summer 2005 schedules during the month of January, and therefore must reallocate the aircraft if there is no final decision by January 14. Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060 OST-04-19161 - Atlanta Rio de Janeiro January 10, 2005 Delta Air Lines, Inc., has completed a poll of all carriers on the attached service list. No carrier has any objection to a shortened answer date of 5 pm, Tuesday, January 11, 2005. Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8382, sascha.vanderbellen@shawpittman.com OST-04-19161 - US-Brazil Combination Frequencies
Served January 10, 2004 Notice Shortening Answer Period | Word On January 7, 2005, Delta Air Lines, Inc. filed a motion in the above captioned docket requesting that the Department (1) act immediately on its application filed September 1, 2004, for allocation of seven U.S.-Brazil frequencies for Atlanta-Rio de Janeiro service and (2) shorten the answer period to the motion and require answers to be filed no later than noon, January 11, 2005, to permit final action by January 14, 2005. On January 10, Delta advised the Department that there were no objections to a shortened answer date of 5:00 p.m. January 11. Under these circumstances we will shorten the answer period to 5:00 p.m. January 11. Acting under authority assigned in 14 CFR 385.13, answers to Delta’s January 7 motion will now be due no later than 5:00 p.m. January 11. By: Paul Gretch
January 11, 2005 Answer of United Air Lines to Motion of Delta Air Lines for Immediate Action The Department should be wary of rushing to reallocate United's frequencies to Delta on a permanent basis in light of Delta's checkered history of attempting to serve the Atlanta-Rio de Janeiro route. Nothing in Delta's latest Motion overcomes the various public interest justifications against confiscating any of United's Brazil frequencies and reallocating those frequencies permanently to Delta. If the Department, nonetheless, is persuaded to act on Delta's Motion, any award of United frequencies to Delta should be on a temporary basis only, from June 2005 until the end of the Winter 2005/2006 traffic season, when the frequencies should automatically revert to United. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19161 - US-Brazil Combination Frequencies (Atlanta-Rio de Janeiro) January 13, 2005 Re: Letter Against Delta's Atlanta-Rio de Janeiro Application I urge DOT to reject Delta's application for Atlanta-Rio de Janeiro service. The frequency allocations for which Delta is asking, while unused, belong solely to United Airlines, and the Delta is in no position to "steal" them away. Delta has had a shaky history providing service to Rio de Janeiro in the past, with incosistent schedules, and often changing between non-stop service and service via Sao Paulo. There is no signs that things will change, especially now that the long-haul market from Rio de Janeiro has gotten weaker. Delta has 14 US-Brazil frequencies, and could very easily switch one of their two daily Atlanta-Sao Paulo flights to an Atlanta-Rio de Janeiro service if they see fit. They could also extend one of their two daily flights with a continuation to Rio de Janeiro to meet market demand, as the US-Brazil bilateral agreement allows. By: Steven Herzberg Delta Air Lines, Inc. Order 2005-2-10 Issued and Served February 16, 2005 We have tentatively decided to grant Delta's application for allocation of seven weekly frequencies to provide combination service in the Atlanta‑Rio de Janeiro market (two from the unallocated pool and five of United's unused frequencies). It is the Department's oft-stated and longstanding policy not to permit valuable operating rights to remain unused for an extended period, particularly when another carrier has firm plans to use them and the carrier holding the authority does not. By its own statements on the record before us, it is clear that United has had unused Brazil frequencies at least from March 2003 forward. United has not stated firm plans to use them. Delta has firm plans for Brazil service that would make use of some of those unused frequencies. Delta does not have unused Brazil frequencies of its own. While United opposes Delta's request for allocation of the frequencies on other than a temporary basis, we tentatively do not find, in the absence of evidence in the record of firm plans on United's part to resume service, that Delta should receive a time-limited allocation. 4 In these circumstances, we tentatively find that the public interest requires our reallocating five of United's unused Brazil frequencies to Delta. We also tentatively find that it is consistent with the public interest to award Delta two currently unallocated Brazil frequencies. By: Karan Bhatia February 22, 2005 Delta is anxious to begin Atlanta-Rio de Janeiro service as soon as possible, consistent with Delta's current schedules and aircraft commitments. Delta urges that the Final Order provide for a 125 day startup dormancy condition to run from June 1, 2005. The proposed startup condition is well within the period the Department has used in prior Brazil awards. See, e.g. Order 99-3-26 (8 month startup condition). Considering that the Brazil frequencies at issue have been dormant for nearly two years, the modest startup flexibility requested by Delta is both reasonable and consistent with the public interest. Conversely, it would not be in the public interest to require Delta to cancel or disrupt services that have been offered to sale for the traveling public. By its Motion for Immediate Action, Delta had requested final action on its Atlanta-Rio de Janeiro application by January 14, 2005. When approval was not forthcoming, Delta sought frequencies for Atlanta-Moscow service, which was approved by the Department and has been offered for sale to the public. See, Docket OST-2005-20116. Atlanta-Moscow service begins on June 1, and utilizes the available aircraft that Delta had hoped to use for Rio de Janeiro. Absent cancellations, alterative aircraft are not available until October 1, 2005. Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060
February 22, 2005 Objection of United Air Lines to Order 2005-2-10 Delta has already told the Department that it cannot initiate daily nonstop Atlanta-Rio de Janeiro service until October of this year at the earliest (and has provided no assurance that it would do so even then). It makes no sense, therefore, for the. Department to transfer United's frequencies to Delta on the unsupportable assumption that Delta intends to use the frequencies starting on June 1. In these circumstances, the Department should terminate this proceeding without prejudice to Delta's right to re-apply for an assignment of unused Brazil frequencies at a later date if it continues to be interested in serving the Atlanta-Rio nonstop market during a future traffic season. United also has plans for the future use of its Brazil frequencies, but it has chosen to take a more responsible approach than Delta by refraining from making specific promises about Brazil service until it solidifies its service plans. United should not be penalized for this cautious approach, especially since the record shows that Delta will be unable to comply with the conditions imposed by the Order to Show Cause. The Department, however, is proposing just such a penalty, by either forcing United to start using these frequencies before it has completed an orderly reorganization under the bankruptcy laws or seeing the frequencies forfeited to Delta based on a facially erroneous finding that "Delta has firm plans for Brazil service that would make use of some of those unused frequencies." Although United has not reached a final determination on when it will add services to Brazil, it now has the advantage of operating experience on the new Washington Dulles‑Sao Paulo route, which it started just over two years ago in October 2002. That service is performing well and has proved even more successful than United had anticipated. Moreover, United's more established service in the Chicago‑Sao Paulo market has recovered and is also performing well. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960 February 25, 2005 Contrary to United's assertions, Delta does indeed have firm service plans for the five frequencies at issue, and Delta intends to offer Atlanta-Rio de Janeiro service for sale as soon as a Final Order is issued in this case. Delta had initially proposed to commence service on June 1. However, due to United's repeated unauthorized pleadings and delay tactics, the Department was prevented from issuing a final decision by January 14. As a result, as Delta previously advised the Department, Delta was forced to reallocate aircraft it had reserved for Atlanta-Rio de Janeiro service to other routes for the peak summer travel season, and specified a new proposed start date of October 1. Neither Delta nor the traveling public should be forced to pay the price for United's delay tactics by now having to cancel and disrupt international services that have already been published and sold. When Delta did not receive authority for Atlanta-Rio de Janeiro service, Delta sought and the Department approved Atlanta-Moscow authority -- which utilized Delta's available aircraft. Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060
February 25, 2005 Reply of Metropolitan Washington Airports Authority to the Objection of United Air Lines to Order 05-02-10 | Word The Authority understands and respects the Department's policy to promote utilization of unused frequencies in restricted markets. Yet, it is our observation that this case calls for a more measured or nuanced approach than immediate and permanent reallocation of the United Brazil frequencies. It is evident that Delta itself is uncertain as to its practical ability, given aircraft commitments, to actually commence using these frequencies, even more than half a year from now. While Delta maintains that it is "anxious" to begin Brazil service, it has said only that it would not be able to do so until after October 1, 2005, absent cancellation of other services. Otherwise, Delta does not appear to have affirmatively stated that it will commence the Brazil service, nor has it given any particular time for that commencement. It is not clear that this action by the Department will actually result, or is even more likely to result, in the utilization of the unused frequencies. By: Edward Faggen, edward.faggen@mwaa.com
February 25, 2005 Reply of United Air Lines to Comments of Delta Air Lines to Order 05-02-10 In light of Delta's failure to submit any "firm plan" for commencing nonstop Atlanta-Rio de Janeiro service by June 1, 2005, October 1, 2005, or any other specific date, neither the record in this proceeding nor the Department's policies and precedents can justify the Department taking the extraordinary action of confiscating United's frequencies and permanently reallocating them to Delta subject to an extraordinarily lenient dormancy condition that would enable Delta to warehouse the frequencies for, at a minimum, the next seven months. Instead, the Department should grant United's request and terminate this proceeding without prejudice to Delta's right to re-apply for an assignment of unused Brazil frequencies at a later date if Delta develops "firm plans" to serve the Atlanta-Rio de Janeiro nonstop market. Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-04-19161 - US-Brazil Combination Frequencies February 27, 2005 Re: Letter in Objection to Delta Air Lines' Request - Blogger Mark A. Herzberg, 580 Sabal Palm Road, Miami FL 33137 March 1, 2005 Reply of The City of Chicago and Motion for Leave to File Chicago concurs with United's position that the record in this proceeding does not support a permanent reallocation of five of United's Brazil frequencies to Delta Air Lines, Inc. As United has noted, Delta no longer has firm plans to use those frequencies for services to begin on June 1, 2005, as it had originally proposed. United's frequencies are not subject to dormancy conditions, and United has developed a reasonable plan to use them to add services to Brazil, some of which would benefit Chicago. If five of these 14 frequencies were allocated permanently to Delta, United may be unable to add a daily service at both Chicago and Washington when traffic at those gateways justifies an increase in service. Counsel: Chicago and Pillsbury Winthrop, Kenneth Quinn, 202-775-9898, kquinn@pillsburywinthrop.com
March 1, 2005 Response of United Air Lines and Motion for Leave to File United seeks leave to file this response based on a press report in today's Wall Street Journal of details regarding the aircraft availability for Delta's proposed Atlanta‑Rio de Janeiro service that are inconsistent with its position in this proceeding. Receipt of United's response will provide the Department with additional information on this issue which is of critical decisional importance in this proceeding. The Atlanta-Rio de Janeiro service which Delta now proposes to start on October 1, 2005, will require at least two aircraft. The Atlanta-Moscow schedule that Delta has announced will also require more than one aircraft. It is not at all clear how Delta will make the necessary aircraft available from its seasonal reduction of its Atlanta-Moscow service to operate the daily Atlanta-Rio de Janeiro service it has proposed to start on October 1, 2005. Moreover, without new equipment or reduction of service on another route, it is not clear how Delta will maintain daily service on both its Atlanta-Moscow and Atlanta-Rio de Janeiro routes after next April when its Moscow services return to a daily pattern. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-2004-19161 - Delta Air Lines - Atlanta-Rio de Janeiro March 3, 2005 Delta does, in fact, plan to operate an overnight service, which is preferred by U.S.-Brazil passengers. However, contrary to United's assertions, Delta will have the two aircraft that are necessary for this proposal available on October 1. Without a shred of evidence to back its claims, United accuses Delta of playing "musical airplanes" and pontificates that it is "not at all clear" to United how Delta will fund Atlanta-Rio service on October 1. United claims that because Delta's scheduled reduction of Atlanta-Moscow service on September 30 will not be sufficient to provide two aircraft, that somehow Delta would not be able to provide the service it promised to begin on October 1. United is wrong. It should come as no surprise to United that Atlanta–Moscow is not the only international service operated by Delta. As Delta's published schedules reflect, on September 30 Delta will reduce the peak season schedules it will operate this summer on the Atlanta-London and Atlanta-Rome routes. Counsel: Hogan & Hartson, Alexander Van der Bellen, 202-637-4999, sascha.vanderbellen@hhlaw.com OST-2004-19161 - Allocation of Seven Weekly US-Brazil Combination Frequencies April 4, 2005 Supplemental Comments of United Air Lines and Motion for Leave to File Consistent with United's assurances that it would reuse these frequencies, it has today announced that it will start a second daily Washington Dulles-Sao Paulo service beginning on October 31, 2005. That service will put to use seven of the 14 frequencies United has not been using. As noted above, United is still also actively reviewing its Brazil service with an eye to resuming use of its remaining Brazil frequencies by next year. American has applied separately for a temporary reallocation of five of United's U.S.-Brazil frequencies. Docket OST-05-20747. American erroneously assumed both that United would not be using those frequencies and that the Department would finalize its tentative decision to reallocate them to Delta on a permanent basis. United has consistently indicated its willingness to accede to a temporary allocation of five frequencies to Delta premised on their return to United following the winter 2005/06 peak season. United takes no position on the relative merits of the Delta and American requests except as noted above regarding American's willingness to accept a temporary seasonal reallocation and Delta's refusal to do so. In deciding whether to finalize its tentative findings and conclusions in Order 05-2-10, however, the Department must consider both United's recent announcement of its new Washington Dulles-Sao Paulo service as additional evidence of its U.S.-Brazil service plans and American's application for a temporary reallocation of five of United's frequencies as an alternative to Delta's demand for a permanent reallocation. Either of these actions standing alone would require the Department to reconsider and reverse its tentative decision and the confluence of both actions compel such reversal. Counsel: United and Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com OST-2004-19161 - Delta Air Lines - Allocation of Seven Weekly US-Brazil Frequencies April 6, 2005 As discussed more fully in the Authority's February 25, 2005 reply to Order 2005-2-10 in Docket OST-2004-19161, there is a clear demand for new South American service from the Washington region, with recent load factors in excess of 80% on Brazil flights. At the same time, the Washington community's diverse Latino population has grown more than 90% in the last decade alone, and includes significant South American populations. Burgeoning tourism and trade activity continues to add to demand. In supporting United's new service, the Authority necessarily opposes any permanent reallocation of the United frequencies needed for that service. Withdrawal of the needed frequencies from United would deprive Washington of a concrete opportunity for enhanced service to a key South American marketplace, undermine the emerging role of Dulles as an anchor for a comprehensive network of competing, convenient United and Star Alliance services to Latin and South America, as well as diminish the consumer and business benefits offered by the new service. In this regard, the Authority continues to urge in Docket OST-2004-19161 that Delta be permitted to utilize United's Brazil frequencies on a temporary basis only. Counsel: MWAA, Edward Faggen, 703-417-8615, Edward.Faggen@mwaa.com OST-2004-19161 - Delta Air Lines - US-Brazil April 5, 2005 Re: Corrected Service List to United Air Lines' April 4, 2005 Pleadings Counsel: Wilmer Cutler, Jeffrey Manley, 202-663-6670 Delta Air Lines, Inc. Order 2005-4-13 Issued and Served April 12, 2005 By this order we make final our tentative decision to award Delta Air Lines, Inc., an allocation of seven weekly frequencies of indefinite duration for combination air transportation services between Atlanta, Georgia, and Rio de Janeiro, Brazil. By Order 2005-2-10, we stated that it is the Department's longstanding policy not to permit valuable operating rights to remain unused for an extended period, particularly when another carrier has firm plans to use them and the carrier holding the authority does not. United has had unused Brazil frequencies at least from March 2003 forward. While it asserts that it is actively planning the addition of service between Brazil and the United States in an upcoming peak traffic season, its time frame for the introduction of this additional service is not later than the Fall 2006 peak traffic season. We do not see this as constituting the "firm plans" we contemplated for use of the five frequencies at issue here. In any event, United will retain nine weekly frequencies with which to conduct a new Brazil service. By: Karan Bhatia OST-2004-19161 - US-Brazil Combination Frequencies (Atlanta-Rio de Janeiro) May 2, 2005 Petition of United Air Lines, Inc. for Reconsideration of Order 2005-4-13 United Air Lines, Inc. requests reconsideration of Order 2005‑4‑13 in which the Department reallocated to Delta Air Lines, Inc. for an indefinite period five weekly U.S.‑Brazil frequencies from United to provide nonstop service in the Atlanta‑Rio de Janeiro market. Specifically, United requests reconsideration of the Department's decision that in the event Delta fails to commence its proposed service by October 1, 2005, or fails to use the frequencies for a period of 90 days thereafter, the allocation will expire and the frequencies will revert to the Department for reallocation rather than reverting to United. The fact that United participated in this proceeding by filing pleadings in response to Delta's application and the show cause order does not constitute adequate due process for the Department's unprecedented decision that frequencies grandfathered from dormancy conditions should revert to the Department instead of United. As previously noted, United purchased these frequencies for valuable consideration in a transaction approved by the Department. The frequencies were considered permanent and not subject to dormancy conditions back then and recognized again as such later on by the Department. To decide now that the frequencies are subject to reversion and, if unused by Delta, would revert back to the Department, constitutes a permanent reallocation of the frequencies. Before taking such a drastic and unprecedented step, with significant implications for the long-term structure of the U.S.Brazil air service market, the Department must conduct a thorough review of all potential implications. Such a review has not occurred in this truncated proceeding, raising due process concerns not resolved simply because United participated in this proceeding. Counsel: Wilmer Cutler, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com May 12, 2005 United's petition should be denied. Given United's long history of hoarding unused frequencies in the U.S.-Brazil and other markets, the frequencies awarded to Delta in this proceeding should not be returned to United in the event of Delta's non-use, but should be placed in the unallocated pool for other interested carriers to seek when market conditions warrant. Reversion to the unallocated pool is particularly appropriate given United's protracted campaign in this docket to block another carrier's service plans. Delta submitted its application on September 17, 2004, and some eight months later United is still seeking reversionary rights to authority it has not used for years and as to which it has no service plans. American also reiterates its pending request in OST-2005-20747 that two of United's other dormant Brazil frequen- cies be placed in the unallocated pool, and that the remaining seven of United's now-dormant Brazil frequencies - which United has claimed it will use in the Washington-Sao Paulo market starting on October 31, 2005 - be made subject to the standard 90-day dormancy condition and automatically revert to the pool if United fails to keep its promise. United has sat on dormant Brazil frequencies for far too many years for the Department to allow United to continue to block other carriers' service initiatives. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
May 12, 2005 Answer of Delta Air Lines in Opposition to Petition for Reconsideration of United Air Lines United's Petition does not challenge Delta's frequency award, which was granted for a period of "indefinite duration," so long as Delta continues to use the frequencies. Instead, United's Petition seeks modification of the Department's now standard 90 day dormancy condition ‑ so that the frequencies at issue would revert back to United, rather than the Department's unallocated pool, should they ever become dormant. Since Delta intends to fully utilize the allocated frequencies for Atlanta‑Rio de Janeiro service, United's objections are of a purely "academic" nature. However, as a matter of sound public interest policy, Delta believes that any such dormant limited entry frequencies should be placed in the unallocated pool, thus ensuring prompt and beneficial use by any carrier willing to use them. Counsel: Hogan & Hartson, Alexander Van der Bellen, 202-637-4999 OST-2004-19161 - Allocation of Seven Weekly US-Brazil Combination Frequencies - Atlanta-Rio de Janeiro May 23, 2005 Consolidated Reply of United Air Lines and Motion for Leave to File Delta and American simply argue that the Department can avoid any "delay" in future reallocations of the frequencies by having the frequencies revert to the Department. In support, they argue that because United opposed the permanent reallocation of these frequencies to Delta, this proceeding has taken "nearly eight months," a delay they claim could have been avoided if the frequencies had been in the unassigned pool. But what Delta and American wrongly characterize as "delay" is United's exercise of its legitimate due process rights to avoid a sudden and unexplained change in the treatment of some of its valuable assets resulting in a permanent reallocation of those assets. It was the need for the Department to resolve these issues, as a matter of first impression, as well as Delta's last-minute decision to postpone the start of its new Brazil service, that caused the so-called "delay," not the fact that United opposed the permanent reallocation of the frequencies. Thus, as United stated in its Petition, if Delta stops using the frequencies they should revert automatically to United. Counsel: United and Wilmer Cutler, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com Delta Air Lines, Inc. Order 2005-7-16 Issued and Served July 22, 2005 Order on Reconsideration | Word We see no persuasive basis to deviate from our standard practice of, having once decided to reallocate frequencies on an indefinite rather than temporary basis, subjecting those frequencies to our standard start-up/dormancy condition whereby any uninaugurated or dormant frequencies revert to the Department where they are available for expeditious reallocation to interested carriers that would use them for the public interest of consumers and U.S.-flag competition. As we have made clear throughout this proceeding, it is our established policy not to permit valuable operating rights to remain unused for an extended period, particularly when another carrier has firm plans to use them and the carrier holding the authority does not. It is further our established policy, when considering frequency awards or reallocations in frequency‑limited markets, to impose a start‑up condition, along with our standard dormancy condition, whereby unused allocated frequencies automatically revert to the Department. We do this to maximize our ability to ensure that unused limited rights will be readily available for us to award in the public interest to interested carriers prepared to use them. In this regard, we have imposed our standard dormancy condition even where the frequencies when originally allocated were not subject to such a condition. Where a bilateral agreement limits U.S.‑flag service to a set number of flights, the public interest favors that such service be used to the maximum to provide the most consumer options and to ensure full U.S.‑flag competition. While it is true, as United asserts, that we have sometimes decided that reallocated frequencies would revert to the prior holder, we have done so ‑ as the precedents United cites indicate ‑ where the holder, at the time of our reallocation, had shown on the record that it had firm plans to use the frequencies at a later date. Given that United had not demonstrated that it had firm plans to utilize the five frequencies that we subsequently reallocated to Delta subject to our standard dormancy condition, nothing in these precedents calls for altering our result here. By: Karan Bhatia |
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