Transmile Air Services Sdn Bhd

Order 2008-1-3
OST-2004-19971 - Exemption - Malaysia-US All-Cargo

issued and Served January 8, 2008

Order Denying Motion

We imposed the condition prohibiting Transmile from conducting any operations in foreign air transportation between the United States and Subang Airport because of the Government of Malaysia's failure to meet its obligations under the Agreement; specifically, to allow UPS to conduct operations at Subang Airport. We delayed the effectiveness of this prohibition for 60 days in part to allow Transmile adequate time to make an orderly transition of its U.S. services to other airports in Malaysia.

Transmile has not demonstrated that an extension of the effective date of the Subang Airport prohibition is warranted in the public interest. Nor has the Government of Malaysia given us any indication that it is willing to reconsider its position and grant UPS the access to Subang Airport to which it is entitled under the Agreement. While we recognize that the January 15, 2008, effectiveness of this prohibition may be disruptive to Transmile and its customers, we also note that the situation has caused ongoing harm to UPS. We agree with UPS that any extension of the effectiveness of this prohibition beyond January 15, 2008 would only expose UPS to continued harm from the discriminatory competitive benefits Transmile enjoys from its operations at Subang Airport, and find that this harm outweighs any potential hardship that Transmile and its customers may face in terminating U.S.-Subang Airport services on January 15, 2008.

As a final matter, we note, as we did in Order 2007-11-11, that should the Government of Malaysia alter its position and allow UPS the access to Subang Airport to which it is entitled under the Agreement, we would promptly remove this prohibition on U.S.-Subang Airport operations from Transmile' s authority.

By: Andrew Steinberg