Delta Air Lines, Inc.

OST-2007-28770 - Exemption - US-Israel Third-Country Codesharing with Air France

July 17, 2007

Application of Delta

Delta would like to place its DL* designator code on Air France's flights between Paris (CDG) and Tel Aviv, Israel, as soon as the carriers have obtained the necessary approvals from the Governments of each country involved.

Delta holds underlying authority to provide the U.S.-Israel services proposed herein. Route 810 authorizes Delta to engage in foreign air transportation of persons, property, and mail between the United States and France and beyond to points it is authorized to serve by other certificates/exemptions and for which it holds route integration. Route 616 authorizes Delta to engage in foreign air transportation of persons, property, and mail between the United States and Tel Aviv, Israel. Delta is further authorized to combine services under these certificates by its blanket route integration authority. See DOT Order 2006-1-1.

The proposed codesharing will also offer additional routings and schedules to its passengers traveling between these two countries. Given its array of services to Paris from the United States, the benefits of this codesharing will inure beyond the U.S. gateways themselves to interior U.S. points. In addition, the proposed service will make use of Air France's hub at Paris (CDG), a convenient connecting point for passengers traveling tolfrom Israel.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

July 26, 2007

Answer of United Air Lines

United intends to offer additional code-share service to Tel Aviv with Swiss International via Zurich and intends to rely on its interpretation of the very provision of the U.S.-Israel Agreement at issue here, since Swiss International also code shares with El Al on the Zurich-Tel Aviv route. United is answering in opposition to Delta’s application on a contingent basis because the Department has not yet resolved the status of the pending requests for additional code sharing to Tel Aviv (i.e. those of American and United), which could be operated without using one of the code-share designations made available under Article 1, Section 2 of the U.S.-Israel Agreement. In addition, Continental has also proposed code share service with KLM which would require one such opportunity. United opposes Delta’s request to the extent the grant of Delta’s application would preclude United’s planned code-share service to Tel Aviv with Swiss International via Zurich.

United urges the Department to resolve the issues relating to third-country code-share services pending in Docket OST-2002-12192 so that United and other U.S. carriers may proceed with their plans to offer additional code-share services to Israel. Should the Department determine that a carrier selection proceeding is required, then United supports Delta’s suggestion that the Department should begin one as quickly as possible.

Counsel: United, Julie Oettinger, 202-296-2370, julie.oettinger@united.com

August 1, 2007

Answer of American Airlines

The Department should either declare that American/Brussels Airlines, United/Swiss and Delta/Air France do not require a third-country codeshare designation or should institute a carrier-selection proceeding to award the one available designation formerly held by American/Swiss. In such a proceeding, American will demonstrate the superiority of its proposal to codeshare to Israel with Brussels Airlines via Brussels.

American applied more than a year ago for authority to engage in third-country codesharing to Israel with Brussels Airlines via Brussels (OST-2002-12192, June 7, 2006). That application remains pending.

Counsel: American, Carl Nelson, 202-496-5647, carl.nelson@aa.com

September 20, 2007

Motion for Leave to File and Reply of Delta Air Lines

In its Answer, American states that since "Delta (Air France's partner) ... conduct[s] codeshare services with El Al, none of these third-country arrangements would need a designation under United's interpretation." The factual basis for American's statement is no longer accurate because Delta and El Al have announced that they are discontinuing their codeshare relationship later this year.

That said, Delta requests that the Department move expeditiously so that carrier(s) desiring to serve the U.S.-Israel market on a TCCS basis may do so. To the extent that there are sufficient designations to fulfill the U.S. carrier demand, Delta urges the Department to approve Delta's Application herein on an expedited basis. To the extent that there are insufficient U.S.-Israel TCCS designations available to meet the corresponding demand from U.S. carriers, Delta urges the Department to institute a carrier selection proceeding promptly to award the available designation(s) and TCCS opportunity.

In either case, swift and prompt action by the Department is needed here. Dormant and unused U.S.-Israel TCCS designations (as well as unresolved interpretive issues involving the relevant bilateral) do not benefit the traveling public.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

September 26, 2007

Response of United Air Lines and Motion for Leave to File

In its Reply, Delta announces that it will terminate its code-share arrangement with El Al Israel Airlines later this year. The termination of the Delta-El Al code-share arrangement does not change United’s position that U.S. and third-country carrier code–share arrangements that also involve a carrier from Israel are exempt from the third-country code-share designation provision (Article 1, Section 2) of the U.S.-Israel Air Service Agreement. Under United’s pro-competitive interpretation, these arrangements can be approved without the need for a third country code-share designation under the U.S.-Israel Agreement. While Delta might now need such a designation, it clearly did not prior to terminating its code share with El Al.

While the termination of the Delta-El Al code share might require a carrier selection case between Delta and Continental Airlines for the remaining designation, it should not affect the Department’s ability to authorize both United and American Airlines to code share to Israel with their partners who also code share with El Al. As United has noted previously, should the Department not agree with the interpretation advanced by United (to which no U.S. carrier has taken exception), then a carrier selection case will need to include all present applicants—United, American, Delta and Continental. In such a proceeding, United would be prepared to demonstrate the superiority of its planned code-share service to Tel Aviv with Swiss International via Zurich.

Counsel: United, Julie Oettinger, 202-296-2370, julie-oettinger@united.com