OST-2006-26579 - EVA Airways and Air-India - Los Angeles/San Francisco-Mumbai via Taipei Codeshare

OST-2006-26579 - Exemption and Statement of Authorization - Los Angeles/San Francisco-Mumbai via Taipei Codeshare

EVA and Air-India have entered into a code share agreement pursuant to which Air-India will place its airline designator code on certain flights operated by EVA. The codeshare services will be conducted on the following routings: (1) Los Angeles-Taipei-Mumbai and (2) San Francisco-Taipei-Mumbai. These flights will operate three times weekly in both directions using EVA's B747 or B777 aircraft.

Air-India requests an exemption to engage in scheduled foreign air transportation of persons, property and mail between Mumbai, India, on the one hand, and Los Angeles, California and San Francisco, California on the other hand, via Taipei, Taiwan, pursuant to a codeshare agreement with EVA. Under the codeshare arrangement, Air-India will purchase and sell in its own name a limited number of seats on s flights operating between Los Angeles-Taipei and San Francisco-Taipei, with connecting service on EVA flights to Mumbai. Air-India will not use its own aircraft or crews to operate any portion of the codeshare flights. Air-India does not plan to offer Fifth Freedom Los Angeles-Taipei or San Francisco-Taipei services. Rather, Air-India's codeshare service will be limited to selling tickets between Los Angeles and San Francisco, on the one hand, and Mumbai, on the other hand, via Taipei. Codeshare service is scheduled to begin on December 9, 2006. Air-India will comply with all the Department's codeshare disclosure requirements in connection with the services which are the subject of this application. Air-India requests that the exemption authority requested herein be granted for an initial two-year period.

After approximately one and one-half years of requests, the Government of India has still failed to permit Delta to codeshare with Alitalia between Milan, Italy and Delhi, India - both countries with which the United States has Open Skies Agreements. Delta submits that it would be unfair for the Department to approve this expedited application for codesharing by EVA and Air India when the Government of India continues to preclude Delta from codesharing on Alitalia between Milan and Delhi. Accordingly, Delta urges the Department to withhold approval on this Joint Application unless and until the Government of India grants Delta's longstanding request for authority to codeshare with Alitalia between Milan and Delhi, which is explicitly permitted under the U.S. lndia Opens Skies Agreement.

OST-2006-26579 - Exemption and Statement of Authorization - Los Angeles/San Francisco-Mumbai via Taipei Codeshare

As the sole basis for its objection, Delta complains that it is currently unable to codeshare with Alitalia between Milan, Italy and Delhi, India. According to Delta, it would be unfair for the Department to approve the request of the Joint Applicants while Delta is denied codesharing privileges "explicitly permitted under the U.S.-India Open Skies Agreement." Delta's objection is neither accurate in its specifics nor novel in its approach. Other U.S. carriers have made more or less the same allegations without convincing the Department that adequate grounds exist for penalizing Air-India.

Following the request of Delta and Alitalia in October 2002 for codeshare authority on the Milan‑Delhi route, Indian authorities proposed to their Italian counterparts that the two countries add a third‑country codeshare provision to their bilateral aviation agreement. Italy never responded to India's offer. In negotiations held in February 2003, the Italian government refused to even discuss the subject of third‑country codeshare rights. Subsequent meetings between the parties earlier this year did produce discussion of third‑country codeshare privileges but did not yield an agreement on the text of a bilateral provision. Although there is still no clause in the India‑Italy air transport agreement that would permit Delta to code share with Alitalia, it's not for lack of trying on the part of the Indian government.

The Indian government remains fully prepared to approve the third‑country codeshare requests of U.S. carriers and their alliance partners provided that such arrangements meet the requirements set forth in the U.S.‑India aviation bilateral. The Joint Applicants understand that the sole basis for the decision of Indian authorities to deny the Delta-Alitalia codeshare was the lack of a third‑country codeshare provision in the agreement with Italy. The decision was not taken to disadvantage Delta or any other U.S. carrier. Under these circumstances, penalizing Air‑India by withholding the requested exemption would be misguided and unfair.

OST-2006-26579 - Exemption and Statements of Authorization - Los Angeles/San Francisco-Mumbai via Taipei Codeshare

Even if the Italy‑India bilateral agreement has implications for Delta's ability to list its code on authorized flights of Alitalia (which it does not), the claim that the Government of India would somehow "be acting contrary to international law" or "violate its aviation bilateral with Italy" by granting Delta's request is frankly absurd. Accepting Air India/EVA's position on this point would mean that every time the United States has granted, or grants, extra‑bilateral authority it has been, or is, in violation of international law.

The Department should also not credit the claim that "[e]ven if India were to do so, the Italian government would not be so obliging and Delta would be in exactly the same position it is in today.") There is no substantiation for this claim by two carriers (neither of which is from Italy) as to what the Italian Government would or would not do.

Simply put, Delta submits that it would be unfair for the Department to approve this expedited application for codesharing by EVA and Air India when the Government of India continues to preclude Delta from codesharing on Alitalia between Milan and Delhi.

OST-2006-26579 - Exemption and Statement of Authorization to Engage in Codesharing Services

Although the record as it stands amply supports approval of the Joint Applicants' request, it appears that a further rebuttal of Delta's position is required in order to persuade the Department to approve the pending application. There are three undisputed facts in this proceeding, and they are all the Department needs to know in order to grant the request of the Joint Applicants.

Time and again, India has made good on its bilateral commitment to approve third country codeshare rights to U.S. carriers in any market where the legal basis for such rights exist. Only the lack of a third‑country codeshare provision in India's agreement with Italy prevents the Indian government from conferring the same rights on Delta. If those rights become available in the future ‑ a matter that is not within India's exclusive control ‑ there is no reason to doubt that Delta will receive them.