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OST-2006-24984 - ASA and Delta - Los Angeles-Mexico Routes
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Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. OST-2006-24984 - ASA and Delta - Los Angeles-Mexico Routes June 1, 2006 Delta Air Lines, Inc. has announced a major expansion of its services between Los Angeles and Mexico that will dramatically improve the quality and convenience of air transportation for U.S.-Mexico travelers on the West Coast. Delta plans to provide "Delta Connection" service on multiple nonstop Los Angeles-Mexico routes in conjunction with its regional airline partner Atlantic Southeast Airlines, Inc. In order to introduce these important new services, ASA and Delta hereby apply, pursuant to 49 U.S.C. § 40109 and Subpart C of the Department's Rules of Practice in Proceedings, for an exemption authorizing each carrier to engage in scheduled foreign air transportation of persons, property, and mail between Los Angeles, California (LAX), on the one hand, and each of the following points in Mexico, on the other hand:
ASA further requests authority to combine its exemption with all of ASA's existing certificate and exemption authority, consistent with applicable international agreements.' The Applicants urge the Department to grant the requested exemption authority as soon as possible to ensure the timely introduction of the proposed new services and to enable Delta to engage in essential advance marketing activities. The Applicants request that the exemptions remain in effect for at least two years, or until 90 days after the Department's final determination on each carrier's applications for U.S.-Mexico certificate authority covering these routes, whichever occurs earlier. In addition, ASA requests that it be designated and Delta requests that it be issued codeshare-only authorizations for these Los Angeles-Mexico routes under the U.S.-Mexico Air Transport Agreement, as amended. The Applicants plan to provide year-round nonstop service on the subject Los Angeles-Mexico routes using either 50-seat CRJ-200 aircraft or 70-seat CRJ-700 aircraft operated by ASA, and desire the flexibility to switch between these aircraft based on seasonal, time-of-week, and time-of-day demands. The Applicants intend to introduce nonstop service to La Paz and Loreto on or about December 1, 2006; to Hermosillo and Mazatlan on or about February 1, 2007; to Torreon on or about March 6, 2007; to Los Mochis on or about March 8, 2007; to Manzanillo and Zacatecas on or about March 13, 2007; and to Culiacan on or about March 15, 2007. All flights will be operated as "Delta Connection" service displaying Delta's "DL" designator code. Counsel: Delta and Hogan & Hartson, Robert Cohn, 202-637-4999
June 16, 2006 Alaska Airlines, Inc. hereby answers the application of Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. seeking exemptions to serve various U.S.-Mexico routes, including Los Angeles-La Paz. Alaska is today filing with the Department its own application for an exemption to operate scheduled foreign air transportation between Los Angeles and La Paz. Alaska has no objection to approval of the application submitted by ASA and Delta provided Alaska's application for Los Angeles-La Paz is approved contemporaneously. In the event the Department determines that insufficient designations are available to approve the applications of ASA/Delta and Alaska to serve Los Angeles-La Paz, the Department would then be required under the principles of Ashbacker Radio Corp. v. FCC to hold a comparative selection proceeding in which Alaska will demonstrate the superiority of its proposal. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
June 19, 2006 Reply of ASA and Delta to Alaska (Los Angeles-La Paz) On June 1, 2006, Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. applied for several exemption authorities and designations to operate service between Los Angeles, California, and nine points in Mexico. No carrier objected to this application by ASA and Delta. Only Alaska Airlines, Inc. filed an answer, which did not oppose the applications but merely stated that (i) Alaska was submitting an application for authority to serve the Los Angeles - La Paz route and (ii) it would not object if Alaska's LAX-LAP authority was issued contemporaneously with granting that authority to Delta and ASA. Delta and ASA respectfully request that the Department grant their requested authority in this docket immediately, including the requested LAX-LAP authority, particularly given that the answer period has expired without any substantive objections and Delta/ASA wish to commence marketing this new service as promptly as possible. The Department should not wait until the answer period for the Alaska application expires or until it grants Alaska's authority to award Delta and ASA the non-controversial authorities for which Delta and ASA applied more than two weeks ago. There are sufficient designations available for both ASA and Alaska's proposed service. Furthermore, Alaska should not be able to delay an award to Delta and ASA by tying the grant of LAX-LAP exemption authority to ASA and Delta to the Department's consideration, and approval, of the later-filed Alaska application. To countenance Alaska's request in this case would unfairly penalize Delta and ASA for Alaska's delay in filing for similar authority. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
June 23, 2006 Surreply and Motion for Leave to File of Alaska Airlines Alaska Airlines, Inc. hereby files this Surreply to the June 19, 2006, Reply of Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. seeking exemptions to serve various U.S.-Mexico routes, including Los Angeles-La Paz. In their Reply, Delta and ASA request that the Department of Transportation immediately approve their pending application in its entirety, including their request to serve Los Angeles-La Paz. Alaska has also applied for an exemption to serve Los Angeles-La Paz. With the exception of the Los Angeles-La Paz route, Alaska has no objection to approval of Delta/ASA’s pending application in this docket. However, the Department should not approve their request for Los Angeles-La Paz until the answer period for Alaska’s pending Los Angeles-La Paz application expires or Alaska completes its telephone poll of carriers served with its application and confirms that no other U.S. carrier is intends to file a competing application to serve Los Angeles-La Paz. Based on its poll, Alaska understands at least one U.S. carrier, and perhaps more, is actively considering whether to apply to serve Los Angeles-La Paz. Interested carriers have until July 3, 2006, to submit an answer to Alaska’s pending Los Angeles-La Paz application. Until that date passes, or until each carrier served with Alaska’s application advises Alaska it does not intend to file a competing application, it will be impossible to determine whether sufficient designations are available to approve the applications of both Alaska and Delta/ASA to serve Los Angeles-La Paz. In the event a third carrier submits an application for this route, the Department will be required under the principles established in Ashbacker Radio Corp. v. FCC to hold a comparative selection proceeding in which it can consider the competing applications. Under these circumstances, it would be premature to approve Delta/ASA’s request to serve Los Angeles-La Paz. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651, msinick@ssd.com
Filed June 16, 2006 | Issued July 5, 2006 Scheduled foreign air transportation of persons, property, and mail between Los Angeles, California, on the one hand, and the following Mexico points, on the other hand: Culiacan, Hermosillo, La Paz, Loreto, Los Mochis, Manzanillo, Mazatlan, Torreon, and Zacatecas. The carriers state that they will use the authority by placing Delta’s “DL” code on the flights of ASA, which will operate the year-round service as a “Delta Connection” carrier. The applicants further request that ASA be granted authority to combine this exemption authority with ASA’s existing certificate and exemption authority, consistent with applicable agreements. Granted with respect to the Los Angeles-Culiacan, Los Angeles-Hermosillo, Los Angeles-Loreto, Los Angeles-Manzanillo, Los Angeles-Mazatlan, Los Angeles-La Paz, Los Angeles-Torreon, and Los Angeles-Zacatecas exemption authority, including corresponding route integration authority for ASA. Deferred with respect to the Los Angeles-Los Mochis request, including corresponding route integration authority for ASA. We are deferring action on the carriers’ request to serve the Los Angeles-Los Mochis market pending the necessary security clearances. By: Paul Gretch
July 14, 2006 Petition of Atlantic Southeast Airlines and Delta Air Lines for Limited Review of Staff Action Hereby petition the Department for limited review of the Notice of Action Taken, issued July 5, 2006, in this Docket with respect to certain of the dormancy/start-up conditions therein. ASA and Delta appreciate the Department's timely issuance of the July 5 NOAT so that petitioners can expand their services between Los Angeles and Mexico, and dramatically improve the quality and convenience of air transportation for the traveling public. However, the July 5 NOAT reflects a significant and unannounced change in long-standing Department precedent regarding the dormancy/start-up conditions routinely used by the Department in awards of U.S.-Mexico authority. Instead of the standard 90-day dormancy calculated from the proposed start date, for flights scheduled to commence six months or later after the application was filed, the new condition requires service to begin on the proposed start date for some of the routes included in the July 5 NOAT. As discussed below, this change could have unintended, anomalous, and adverse impacts on the petitioners and the Department. ASA and Delta request that the Department reconsider its July 5 NOAT in this respect and apply its standard 90‑day dormancy provision to all city-pairs encompassed by this notice. To the extent DOT desires to change its long-standing policy, it should do so only after it solicits comments from the industry. Counsel: Delta and Hogan & Hartson, Robert Cohn, 202-637-4999
July 18, 2006 Answer of Northwest Airlines to Petition of ASA and Delta for Limited Review of Staff Action Northwest Airlines, Inc. hereby answers in support the Delta/ASA Petition for Limited Review of Staff Action. Northwest is concurrently filing its own similar petition in Docket OST-2006-25251, requesting resolution of the same Mexico dormancy issue. Northwest urges the Department to apply a standard 90 day dormancy startup condition to all U.S.-Mexico transborder awards for initial operating authority. Indeed, the 90 day Mexico dormancy/startup condition has been the Department’s long-standing policy for nearly twenty years. It is reasonable and prudent for carriers to plan services well in advance. Those efforts should be facilitated by the Department – not frustrated by the imposition of a rigid and inflexible startup condition. It is not uncommon for service dates be adjusted, and there is always the possibility of mechanical or weather delay, which, under the strict date certain policy, would trigger a default. In short, the Department should allow all initial U.S.-Mexico service requests reasonable 90 day startup flexibility -- including services that are planned more than six months in advance. Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com
July 19, 2006 American Airlines, Inc. hereby answers in support of the petition filed on July 14, 2006 by Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. seeking reinstatement of the Department's long-standing policy of providing a 90-day start-up period in awarding U.S.-Mexico transborder routes. For all of the reasons stated in the petition, and in the supporting answer submitted on July 18, 2006 by Northwest Airlines, Inc., the relief sought by ASA/Delta should be granted and applied on an equal basis to all similarly-situated carriers. Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com
OST-2006-24984 - ASA and Delta - Los Angeles-Mexico Routes July 21, 2006 Consolidated Answer of United Air Lines United Air Lines, Inc. hereby answers in support of the petitions filed on July 14, 2006 by Atlantic Southeast Airlines, Inc. and Delta Air Lines, Inc. and on July 18, 2006, by Northwest Airlines, Inc. seeking reinstatement of the Department's long-standing policy of applying the 90-day dormancy period from the proposed start-up date in awarding uncontested US-Mexico transborder routes. For all of the reasons stated in the petitions, the relief sought by Delta and Northwest should be granted and applied on an equal basis to all similarly-situated carriers. United would, however, take this occasion to clarify one matter. Delta's request for relief from dormancy conditions in the context of carrier selection cases raises issues different from those in the case of an uncontested route award. For example, in the case of the pending Los Angeles-Puerto Vallarta Combination Service Proceeding, Docket OST-2005-23497. the start-up dates proposed by both applicants (United and Delta) have passed. The Department in Order 2006-6-25 instead notes that both carriers have said that they would start within 90 days of an award once their proposed dates had passed. United understands this to mean that there will be a start-up condition that would require it to start within 90 days of the service date of a final order awarding the route to United, as has been the Department standard in contested Mexico route cases. The dormancy condition would apply only to services that were started within that 90-day period. Delta, on the other hand, seems to be seeking some additional but undefined "reasonable leeway" in meeting the start-up date. It appears that Delta may be suggesting that it wants a dormancy condition to allow it to start within 90 days of the required start-up date. If that is Delta's position, then this offers the Department yet another reason for reversing its tentative award of Los Angeles-Puerto Vallarta authority to Delta and selecting United instead in circumstances where United will accept a commitment to start its service between Los Angela and Puerto Vallarta within 90 days of the service date of a final order. United, unlike Delta, seeks no additional "leeway" in the form of a more flexible start-up/dormancy condition. Counsel: Wilmer Hale, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com
Order 2006-10-13 Issued October 26, 2006 | Served October 31, 2006 By this order, we grant the joint petition filed by Atlantic Southeast Airlines, Inc., and Delta Air Lines, Inc., in Docket OST-2006-24984, and the petition filed by Northwest Airlines, Inc., in Docket OST-2006-25251, for limited review of staff action with respect to certain startup conditions imposed on certain of the carriers' U.S.-Mexico route authority; and, on review, we grant in substantial part the relief requested.
To the extent not granted, we deny all other requests for relief in Dockets OST-2006-24984 and OST-2006-26251. By: Andrew Steinberg
Filed June 1, 2006 | Issued November 22, 2006 Exemption authority for both ASA and Delta for two years under 49 U.S.C. 40109 to provide the following service: Scheduled foreign air transportation of persons, property, and mail between Los Angeles, California, and Los Mochis, Mexico. The carriers state that they will use the authority by placing Delta's "DL" code on the flights of ASA, which will operate the year-round service as a "Delta Connection" carrier. The applicants further request that ASA be granted authority to combine this exemption authority with ASA's existing certificate and exemption authority, consistent with applicable agreements. See Notice of Action Taken dated July 5, 2006, in the present docket, where the Department granted the carriers' requests to provide code-share service in the Los Angeles-Culiacan/Hermosillo/La Paz/Loreto/Manzanillo/Mazatlan/Torreon/Zacatecas markets. In that notice we deferred on the carriers' request to serve the Los Angeles-Los Mochis market. We are now prepared to act on that request. By: Paul Gretch
OST-2006-24984 - ASA and Delta - Los Angeles-Mexico Routes April 17, 2007 Delta Air Lines, Inc. hereby notifies the Department of the dormancy of Delta's mainline service over the following route effective June 1, 2007: Los Angeles-Ixtapa/Zihuatanejo. In addition, Delta, on behalf of Atlantic Southeast Airlines, Inc., hereby notifies the Department of the dormancy of ASA on the following route effective June 1, 2007: Los Angeles-La Paz. Beginning on June 1, 2007, ExpressJet Airlines, Inc. will operate flights on those two routes in lieu of Delta and ASA, respectively, and Delta will list its DL* designator code on ExpressJet's flights. This notice will not affect Delta's underlying economic authority, e.g., its authority to codeshare on ExpressJet's flights over these routes. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
OST-2003-14290 - Exemption - San Jose del Cabo-Ontario / Monterrey-Las Vegas March 25, 2008 Application for Renewal of Exemptions Pursuant to these exemptions, Delta provides nonstop U.S.‑Mexico service, in some cases with its own aircraft, in some cases on a codeshare basis with Aeromexico or Delta Connection carriers, and in some cases both with its own aircraft and on a codeshare basis. Delta's exemption authority in Docket OST-2003-14290 also includes the Ontario-San Jose del Cabo route, but Delta is not seeking renewal of the exemption as it pertains to that route because the Aeromexico flights on which Delta had previously placed its code have been discontinued. In that regard, by letter dated February 20, 2007, filed in this Docket, Aeromexico notified the Department that it would not seek renewal of its Ontario-San Jose del Cabo exemption authority. Delta currently offers service on the Los Angeles-Mexico routes specified in Docket OST-2006-24984 by displaying its code on "small aircraft" regional jet services operated by ExpressJet Airlines, Inc. Although Delta would remain authorized to offer such services pursuant to 14 C.F.R. § 206.5, Delta is seeking renewal of its exemption authority to provide it with the flexibility to offer large aircraft service in the future. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com
OST-2005-22243 - Exemption - Cincinnati-San Jose del Cabo June 30, 2008 Motion for Approval of Conversion to Seasonal US-Mexico Services Unfortunately, the market conditions for air transportation have radically deteriorated in recent months, in particular due to the unprecedented increase in jet fuel costs during that period. The fuel cost increases have had disastrous financial consequences for U.S. carriers, forcing all of them to reevaluate and restructure their route networks. Several carriers have already been forced into bankruptcy and/or liquidation in recent months. Permitting Delta the flexibility to adjust its service offerings in these markets so as to more accurately match capacity to demand on a seasonal basis will allow it to maintain transborder services in these markets, which enhances competition and expands price and service options for U.S.-Mexico travelers and shippers. Puerto Vallarta, Mazatlan, San Jose del Cabo, Acapulco, and Cancun are all triple-designation markets under the U.S.-Mexico Air Transport Services Agreement, as amended. There are at least one and in several cases two unallocated designations for U.S. carrier-operated service available in each of these markets except Los Angeles - La Paz. Up to ten carriers from each country may be designated to serve each city pair market on a codeshare basis. As such, there are abundant unused service opportunities for other carriers on each of these routes. La Paz is not a triple‑designation market under the U.S.‑Mexico Air Transport Services Agreement as amended, and competitive service is currently operated in this market by Alaska Airlines. Counsel: Delta, Scott McClain, 404-773-6514 |
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