2007/2008/2009 US-China Proceeding

Order 2007-7-11
OST-2007-28567

Issued and Served July 13, 2007

Order on Reconsideration

We have decided to grant the petitions of Delta, Evergreen and United requesting reconsideration of Order 2007-6-15, and on reconsideration, to affirm the procedures established in Order 2007-6-15, for awarding the various combination service rights available through 2009. We find this approach reasonable in the circumstances presented, and that it will allow the selected carriers the maximum time possible to prepare for and implement these important new rights. We find no persuasive basis in the petitions for following a different approach.

Delta and United essentially assert that an omnibus case will be so complicated as to delay a final decision, and will require applicants to formulate proposals for a forecast year too far into the future. As to their first concern, we have established, and fully intend to proceed under, an expedited procedural schedule and significantly reduced evidentiary requirements. In these circumstances, we are not persuaded that an omnibus proceeding would lead to a delayed final result. As to the ability of applicants to submit meaningful proposals for the latest forecast year, we note that in the case where we awarded China authority for 2005 and 2006, we similarly called upon applicants to present proposals for a future year. Interested applicants in that case were all able to submit the materials for that year, and we gathered a meaningful decisional record. We have seen no persuasive reason why such would not also prove the case here where the timeframes are fundamentally similar. Given the advantages of giving carriers as much time as possible to plan for and introduce new service into a market with established competitors, we conclude that the public interest calls for maintaining our announced approach in the circumstances of this case.

With regard to Evergreen's comments, we explained in the Instituting Order our strong inclination to use the 2007 designation for combination rather than all-cargo services. We said that, in light of the critical need to add combination services in the market, and the under-utilization of available all-cargo frequencies, we now have an opportunity to mitigate the effects of the shortage of combination services and benefit the traveling public by awarding the 2007 designation opportunity to a combination carrier. Evergreen has presented no persuasive argument or factual evidence to persuade us to change our view on the rebuttable presumption. Instead it has asserted denial of due process. We disagree. Our inclination towards a combination award is expressly a rebuttable presumption. Evergreen is free to participate and present its case and have its evidence and arguments weighed and comparatively considered on the record. In these circumstances, we see no violation of fairness, due process or Ashbacker.

We will grant United's request that we waive the confidentiality limitations and allow applicants to reference DOT O&D Survey data, on a non-confidential basis, in their pleadings in this proceeding to the extent that such reference is relevant and the data presented by applicants are not carrier-specific and cannot be identified to their original source. We find that such use will not prejudice or cause commercial harm to any party and that these data are one source of information that carriers may present to help us in making our decision. Applicants may use other sources of non-confidential data, with sufficient attribution to identify the source, in their submissions.

By: Andrew Steinberg