Aerolane, Lineas Aereas Nacionales del Ecuador S.A. d/b/a Lan Ecuador

OST-2005-23236 - Exemption - Ecuador-US All-Cargo

December 2, 2005

Application for an Exemption - Bookmarked

By this application, Lan Ecuador requests an exemption to engage in charter foreign air transportation of property and mail between a point or points Ecuador and a point or points in the United States and between points in the United States and third countries, in accordance with the provisions of the U.S.-Ecuador Agreement, as amended, and pursuant to Part 212 of the Department’s regulations. Initially, Lan Ecuador intends to provide all-cargo charter service between Guayaquil and Quito, Ecuador, on the one hand, and Miami, New York and Los Angeles, on the other hand, via Cali and/or Bogota, Colombia, and/or Panama City, Panama, and to carry local Fifth Freedom traffic between the U.S points and the third-country points. Lan Ecuador intends to commence the charter services contemplated by this application promptly upon receipt of authority.

Lan Ecuador’s services will be provided with Boeing 767 aircraft wet-leased from Lan Airlines, S.A.

Simultaneously with the filing of this application, Lan Airlines is filing an application to amend its statement of authorization to wet-lease aircraft to Lan Ecuador, consistent with Lan Ecuador’s request for exemption authority contained herein

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660

December 13, 2005

Re: Continental Airlines Intends to Answer Application

On December 2, 2005, Lan Ecuador submitted an application in Docket OST-2005-23236 for an exemption, and Lan submitted an application for amendment of a statement of authorization to wet lease to Lan Ecuador. Continental plans to answer both the statement of authorization and exemption applications within the time period for answering Lan Ecuador's exemption application since both applications raise the same issues.

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

December 13, 2005

Re: Delta Air Lines Intends to Answer Application

As the Department is well aware, Delta Air Lines, Inc. has been unable to secure permission from the Government of Ecuador to serve Ecuador on a codeshare basis with its alliance partners. Delta intends to file a consolidated answer to the above-captioned requests of LAN ECUADOR and LAN AIRLINES to expand LAN alliance services in the U.S.-Ecuador market through additional wet leasing activities. Delta will file its consolidated answer on the due date for answers to exemptions, i.e. December 19, 2005.

Counsel: Hogan & Hartson, Alexander Van der Bellen, 202-637-5600

OST-2005-23236 - Exemption - US-Ecuador
Undocketed - Lan Airlines

December 19, 2005

Answer of Continental Airlines

Although the Department has previously granted extra-bilateral cooperative marketing authority to Lan (formerly Lan-Chile) and its affiliate, Lan Ecuador, no progress whatever has been made in securing cooperative marketing authority for U.S.-carrier codesharing service between the U.S. and Ecuador. Lan Ecuador is now applying for extra-bilateral Fifth Freedom cargo charter authority and Lan is requesting an extra-bilateral statement of authorization to operate the Fifth Freedom cargo charter flights for Lan Ecuador. Continental objects to Lan Ecuador's application for authority to offer cargo charter service between the United States and Ecuador and between the United States and third countries using Lan's aircraft and crews. Continental urges the Department to deny the Lan and Lan Ecuador applications or to grant Lan Ecuador's application and the companion Lan application only to the extent they seek Ecuador-U.S. cargo charter authority for a period of less than 180 days pending successful negotiations with Ecuador on cooperative marketing arrangements for U.S. carriers.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2500, rbkeiner@crowell.com

December 19, 2005

Answer of Delta Air Lines

Delta strongly objects to these applications - especially granting Lan Ecuador fifth freedom traffic rights involving third countries -- because the Government of Ecuador continues to prevent Delta from serving Ecuador on a third-country codeshare basis with Avianca via Colombia.

The Department should deny the Lan Ecuador/Lan Airlines exemption and statement of authorization requests until the long-standing codeshare requests of Delta and other US carriers for access to Ecuador are addressed.

In light of the refusal of the Government of Ecuador to approve US carrier requests to serve Ecuador on a third-country codeshare basis, the Department should not grant Lan Ecuador new charter authority, nor any extrabilateral 5th freedom traffic rights to and from the United States.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999

OST-2005-23236 - Exemption - Ecuador-US All-Cargo
Undocketed - Statement of Authorization - Ecuador-US Wet-Lease

December 29, 2005

Consolidated Reply of Lan Ecuador

The primary objection raised by Continental and Delta is a familiar one, which each has raised in prior proceedings in which Lan Ecuador has requested authority to provide bilaterally- based U.S.-Ecuador service. As in past proceedings, Continental and Delta seek to prevent Lan Ecuador from introducing services that are expressly contemplated by the U.S.-Ecuador bilateral agreement on the grounds that they have been unable to commence services that clearly are outside the agreement. Specifically, each carrier argues that, because the Government of Ecuador thus far has not permitted extra-bilateral code-share services, the Department should deny Lan Ecuador's request for charter authority and Lan Airlines' related request for an amended statement of authorization.

Annex II of the U.S.-Ecuador agreement expressly provides that cargo charter flights will be authorized on the basis of reciprocity and that sympathetic consideration will be extended to Fifth Freedom cargo charter flights. The agreement does not address code-sharing. While the Department has discretion to grant Lan Ecuador's request, such discretion is guided by several factors, the most important of which is reciprocity. See Order 2001-12-10 at 3 (Application of Air 2000 Limited).

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660

OST-2005-23236 - Exemption - Ecuador-US All-Cargo
Undocketed - Statement of Authorization - Ecuador-US Wet-Lease

Filed December 2, 2005 | Amended December 29, 2005 | Issued April 13, 2006

Notice of Action Taken | Word

Exemption from 49 U.S.C. § 41301 to engage in charter foreign air transportation of property and mail between a point or points in Ecuador and a point or points in the United States and between points in the United States and third countries, in accordance with the provisions of the U.S.-Ecuador Air Transport Agreement, as amended, and pursuant to 14 CFR Part 212 of the Department’s regulations/

Amended statement of authorization under 14 CFR Part 212 for Lan Airlines, and initial statement of authorization for Lan Cargo, to permit them to wet lease aircraft to Lan Ecuador for the conduct of the operations described above.

In reaching our decision here, we note that the cargo charter authority which Lan Ecuador seeks is provided for in Annex II of the U.S.-Ecuador Agreement, which states that both sides will authorize cargo charters between Ecuador and the United States on the basis of reciprocity, and will sympathetically consider requests to operate such charters to points outside Ecuador and the United States.  Although the Annex has expired by its terms, the United States and Ecuador are both continuing to apply its terms as if it were still in place.  Thus, in our view, the terms of Annex II form a basis for approval of this authority to Lan Ecuador.  Moreover, as noted above, we are conditioning this authority, as we have other grants of charter authority to carriers of Ecuador, on the requirement that the carrier seek prior Department approval before operating any charter flight to or from the United States.

With respect to the request of Lan Airlines and Lan Cargo for authority to wet lease, we note, as we have in previous grants of authority to Lan Ecuador, including grants of authority for Lan Airlines to wet lease to Lan Ecuador, that the IASA Category 2 status of Ecuador leaves Lan Ecuador no recourse but to conduct its operations by wet lease, and that the U.S. carrier opponents have not shown any recent cases where Chile, the homeland of Lan Airlines and Lan Cargo, has withheld wet-lease authority from a U.S. carrier.

It is true, as Continental and Delta note, that we have not, to date, been successful in our efforts to persuade the Government of Ecuador to permit the kinds of cooperative marketing arrangements, most specifically codesharing, that they seek.  Nevertheless, we find that, in the circumstances presented, including in particular the above cited provisions of Annex II (and the absence of comparable provisions on codeshare), grant of the cargo charter authority Lan Ecuador requests, as conditioned, is warranted in the public interest, as is the grant to Lan Airlines and Lan Cargo of the statements of authorization to wet lease to Lan Ecuador for these services.

By: Paul Gretch

April 4, 2007

Application for Renewal of Exemption

Hereby requests renewal of its exemption from 49 U.S.C. § 41301 authorizing Lan Ecuador to engage in charter foreign air transportation of property and mail between and point or points in Ecuador and a point or points in the United States and between points in the United States and third countries.

The Department granted statements of authorization (undocketed) to Lan Airlines, S.A. and Lan Cargo, S.A. to wet lease aircraft to Lan Ecuador for these services, for a period of one year. Those carriers are separately filing an application to renew those authorizations.

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660

August 15, 2007

Application for an Amended Exemption

LAN Ecuador hereby requests amendment its exemption in the above-captioned docket permitting it to engage in charter foreign air transportation of property and mail between a point or points in Ecuador and a point or points in the United States and between points in the United States and third countries. As a consequence of the operational limitations imposed on LAN Ecuador's authority due to
Ecuador's former Category 2 status, LAN Ecuador currently operates to the U.S. only with aircraft leased from LAN Airlines S.A. LAN Ecuador requests that its exemption be amended to include the ability to use LAN Ecuador's own aircraft and crews as well as aircraft wet leased from an authorized carrier.

In view of Ecuador's Category 1 status, LAN Ecuador requests that the Department amend LAN Ecuador's exemption to remove the condition that "Lan Ecuador may conduct the operations authorized herein only by using aircraft wet-leased from a duly authorized and properly supervised U.S. or foreign air carrier. Lan Ecuador may not conduct U.S. operations with its own aircraft and crews without further action by the Department." LAN Ecuador intends to commence scheduled U.S. operations with its own aircraft on October 10, 2007 (see Application for Amendment and Renewal of Exemption, filed concurrently in Docket OST-2003-14291) and wishes the have flexibility to commence charters (subject to the requirements of 14 C.F.R. 212.9(d)) on the same date.

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660, cjsimpson@zsrlaw.com