2007/2008/2009 US-China Air Services and Combination Frequency Allocation Proceeding

Order 2007-6-15
OST-2007-28567

Issued and Served June 21, 2007

Order Instituting Proceeding and Inviting Applications - Bookmarked

Having considered the various comments received and options presented, we have decided to institute a streamlined proceeding for the combination service opportunities available through 2009. Accordingly, we will adopt an approach designed to ensure that all of the valuable rights available now through 2009 can be promptly awarded, and we invite interested U.S. carriers to apply for the authority at issue.

We will be proceeding under several rebuttable presumptions. First, we are strongly inclined to use the August 1, 2007 award for combination rather than all-cargo services. We note that the all-cargo frequencies available to U.S. carriers for China service are currently undersubscribed. Meanwhile, there remains a critical need to add combination services in the U.S.-China market. Against this background, and in light of the opportunities immediately available under the amended agreement, we find that we now have an opportunity to mitigate the impact of the shortage of combination services on the traveling public and to utilize fully valuable rights in the U.S.-China market by awarding the 2007 designation opportunity to a combination carrier.

Should we follow through on our presumption and select a combination carrier, we would allocate the carrier the seven available combination frequencies. Experience in past China eases has shown that new combination services are typically introduced at the level of daily service, and we see no reason to presume a different result would better serve the public interest here.

Finally, we presume that we would take advantage of the opportunities to introduce new entrant combination carriers in 2007 and 2009, rather than forgo either or both opportunities and instead simply award available combination service frequencies to an incumbent. Given that the U.S. Government negotiated for these valuable designation rights, it is our strong sense that the public interest favors that they be fully used to secure the benefits ofexpanded service options and enhanced competition that a new entrant would provide.

Petitions for Reconsideration: June 28, 2007
Answers to Petitions: July 3, 2007
New Applications: July 2, 2007 if No Petitions Filed / July 16, 2007 If Petitions Filed
Answers: July 12, 2007 or July 26, 2007
Replies: July 19, 2007 or August 2, 2007

By: Andrew Steinberg