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OST-2008-0181 - Alaska, American, Continental, Delta, Northwest, United and US Airways - Temporary Blanket Dormancy Waiver
Order 2001-11-15 - Blanket Waiver Following Catastrophic Events of September 11, 2001
Order 2003-4-18 - One-Year Blanket Waiver (Iraq War)FAA-2008-0656 - Request for Waiver of Minimum Slot Usage Requirement - AirTran, American, Delta, Northwest, United and US Airways
U.S. Airlines Seek Help to Defer China and Other Services - Reuters, June 15, 2008
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Alaska Airlines, Inc., American Airlines, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Northwest Airlines, Inc., United Air Lines, Inc. and US Airways, Inc. OST-2008-0181 - Temporary Blanket Dormancy Waiver June 3, 2008 Joint Application for Temporary Blanket Dormancy Waiver and Motion to Shorten Answer Period As a result of an unprecedented 82.5% increase in fuel costs over the last 12 months and increasingly difficult economic conditions, analysts are predicting that "airline industry losses could top $7.2 billion this year." The U.S. airline industry already suffered losses of over $1.7 billion in the first quarter of 2008 (excluding special items), seven thousand airline industry employees have lost their jobs, at least seven airlines have filed for bankruptcy, six of them are being liquidated, business travel is declining, deliveries of the new, fuel-efficient B-787 aircraft slated to replace less fuel-efficient aircraft on international routes have been delayed, and all U.S. airlines are being forced to re-evaluate the flights they offer to avert financial catastrophe. Airlines are eliminating routes, reducing and simplifying their fleets, and testing the limits of fare increases and other fees required to recoup crushing fuel costs. Like most network carriers, the Joint Applicants will be reducing the number of flights they operate significantly, particularly during periods of low demand. As a result of the extraordinarily difficult circumstances currently affecting airlines, the Joint Applicants request a waiver of all applicable dormancy conditions in their frequency allocations and limited entry authority for a period of two years from the Department's decision waiving the dormancy requirements and urge the Department to act on this request as quickly as possible but no later than June 30. The Joint Applicants agree to notify the Department by February 15, 2010, if service will be suspended on routes subject to dormancy conditions after June 30, 2010, and they will not object to temporary re-allocation of unused frequencies or dormant limited-entry route rights to other airlines during the waiver period. Waivers granted on these terms will strike an appropriate balance between the urgent need of the airlines for flexibility and the importance of permitting utilization of valuable limited-entry frequencies and routes. Granting the waivers requested by the Joint Applicants will relieve all parties of the burden of submitting individual waiver requests and processing them during this critical period. Similar relief was granted to the airlines when the carriers faced equally difficult circumstances after September 11, 2001. (See Order 2001-11-15) In these perilous times, airlines should not be required to operate flights that are uneconomic during periods of low demand to preserve their long-term investments in operating rights in limited-entry markets, and neither the carriers nor the Department should be burdened with processing numerous applications for specific waivers when they have far more important tasks before them. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651 for Alaska / Carl Nelson, 202-496-5647 for American / Crowell & Moring, Bruce Keiner, 202-624-2615 for Continental / Scott McClain, 404-773-6514 for Delta / Sascha Van der Bellen, 202-842-3193 for Northwest / Wilmer Hale, Bruce Rabinovitz, 202-663-6000 for United / Howard Kass, 703-872-5230 for US Airways
June 3, 2008 Re: Revised Certificate of Service On behalf of the Joint Applicants in OST-2008-0181, attached is a revised certificate of service. The revised service list includes all certificated US air carriers identified by the Department at http://ostpxweb.ost.dot.gov/aviation/certific/certlist.pdf, last updated May 18, 2008. Counsel: American, Carl Nelson, 202-496-5647
June 4, 2008 Answer of Frontier Airlines to Joint Application The seven airlines listed above filed a joint application with the Department of Transportation for a temporary blanket dormancy waiver applicable to their frequency allocations and other limited entry international authority for a period of two years beginning as soon as possible subject to the conditions set forth in the Joint Application. Frontier Airlines does not oppose this Application. If the Department grants the Joint Application, the authority approved should be provided to all carriers. As the Joint Applicants stated in their application, "the Joint Applicants urge the Department to grant comparable international dormancy waiver relief to all air carriers." Therefore, Frontier Airlines hereby asks the Department to grant to it the identical temporary waivers or exemptions from dormancy conditions on their frequency allocations and limited entry authorities for the same time period as those granted to the Joint Applicants. Counsel: Wiley Rein, Edward Faberman, 202-719-7000
Served June 4, 2008 Notice Shortening Answer Period On June 3, 2008, seven certificated U.S. air carriers submitted a joint application for a temporary two-year blanket waiver of all dormancy conditions applicable to their frequency allocations and other limited entry international authority. They also requested that we establish a six-calendar-day answer period for responses to the joint application. In the interest of reaching an expedited decision, we have decided to make answers to the joint application due June 10. Replies are due June 13. By: Paul Gretch
June 6, 2008 jetBlue Airways answers in support of the application filed in the above-captioned proceeding. Given the current conditions facing jetBlue and the industry, granting it and others the flexibility to tailor its operations to the conditions it faces without the need for filing of pleadings at DOT is good administrative policy and will provide efficiency both air carriers and the Department. Like the Joint Applicants, the exponential increase in fuel costs and increasingly difficult economic conditions have impacted jetBlue. As a result, jetBlue respectfully requests that the Department grant it the same relief requested by the Joint Applicants. jetBlue agrees to abide by the condition set forth in the Joint Application, requiring the notification of the Department by February 15, 2010, if service will be suspended on routes subject to dormancy conditions after Juen 30, 2010. Given that jetBlue plans to serve all routes for which it has been granted authority by the Department, it does not support the temporary use by others of routes or frequencies during a period when jetBlue is not using the restricted route or frequency. Counsel: Dow Lohnes, Jonathan Hill, 202-776-2000
June 10, 2008 SkyWest Airlines strongly supports the Joint Applicants' request for an immediate two-year blanket dormancy waiver for all airlines holding international route authority. In addition to the reasons presented by the Joint Applicants, the dramatic cut-backs in operations, employees and fleets announced last week by United and Continental, and last month by American, underscore the urgent need for such blanket temporary waiver relief. The Department should grant Sky West, the Joint Applicants and all other airlines a two-year waiver of, or exemption from, dormancy conditions on their frequency allocations and limited entry authority without delay. Counsel: Crowell & Moring, Lorraine Halloway, 202-624-2538
June 10, 2008 Joint Answer of FedEx, Polar Air Cargo and UPS The Joint Cargo Airline Parties have no objection to the grant of the application provided that the Department of Transportation grant all U.S. carriers, including all-cargo carriers, the relief requested. In addition, the Joint Cargo Airline Parties request that the Department adopt expedited procedures for approving applications of carriers that wish to utilize the authority covered by any temporary dormancy waivers. While the Joint Cargo Airline Parties have no current plans to temporarily cease using any frequencies or limited entry route rights, the Joint Cargo Airline Parties believe that granting a blanket dormancy waiver to all U.S. carriers would reduce the time and resources spent by the Department and US. carriers on individual dormancy waiver applications. While the Joint Cargo Airline Parties do not object to the Joint Application if the Department provides the temporary blanket dormancy waiver to all U.S. carriers, the Joint Cargo Airline Parties believe that the unused authority should be available for use by another air carrier for the duration of the entire waiver period and request that the Department adopt an expedited procedure for reviewing and granting applications of U.S. carriers that wish to use the authority covered by any blanket waiver. Counsel: James Davis, 901-434-8488 for FedEx / Kevin Montgomery, 202-828-1002 for Polar Air Cargo / Michael Francesconi, 502-329-6541 for UPS
June 10, 2008 Answer of Spirit Airlines in Opposition to Joint Application for a Temporary Dormancy Waiver Spirit believes this is a purely anticompetitive effort by these legacy carriers to essentially put in deep freeze valuable and highly contested limited international route authority to the detriment of the traveling public. For these reasons, and as set forth below, Spirit answers to strongly oppose the Application’s unprecedented request to suspend market place competition for a period of two years, in what are already the most restricted U.S. aviation markets. Significantly, the requested relief is contrary to law including the governing statute and important established Department policies. Spirit does not believe the conditions of the market justify or would benefit from the blanket suspension of the important and “longstanding policy not to permit valuable operating rights to remain unused for an extended period.” Order 2005-4-13 (April 12, 2005). This policy is incorporated in the use-or-lose condition established by the dormancy requirements. it was almost the precisely same mix of rapidly escalating fuel prices and a slowing economy that served as the catalyst for airline deregulation. As chronicled by the Air Transport Association, in the early 1970s the Civil Aeronautics Board imposed a moratorium on new route awards. Then, in the aftermath of the 1973 Arab oil embargo, which led to inflation and falling demand, the CAB permitted the U.S. airlines to raise fares and enter into agreements to reduce capacity on major routes. As the ATA reports, “none of these moves, which made flying more costly, was popular with the public,” and quickly advanced the movement to deregulation, where the policies referenced above were established. Counsel: Kirstein & Young, Joanne Young, 202-331-3348
June 13, 2008 Joint Reply of The Joint Applicants Every certificated U.S. carrier (over 130 airlines) was served with the application, which received the strong support or concurrence of multiple carriers including FedEx Express, Frontier, JetBlue, Polar, SkyWest and UPS. Only a single airline, Spirit, opposed the joint application. Spirit operates limited international services, and has no intercontinental range aircraft. In the current environment, all carriers with significant international operations need to be able to respond rationally and appropriately to the immediate fuel price crisis without jeopardizing routes that are of long term importance to their networks, their customers, and the communities they serve. Accordingly, the joint application should be granted without delay. Given Spirit's limited international interests, its motive in opposing the joint request appears to stem from "sour grapes" over not receiving multiple awards in the recent U.S.-Colombia (OST-2007-0006) service proceeding. Such parochial motives are no basis for denying the joint request. Counsel: Squire Sanders, Marshall Sinick, 202-626-6651 for Alaska / Carl Nelson, 202-496-5647 for American / Crowell & Moring, Bruce Keiner, 202-624-2615 for Continental / Scott McClain, 404-773-6514 for Delta / Sascha Van der Bellen, 202-842-3193 for Northwest / Wilmer Hale, Bruce Rabinovitz, 202-663-6000 for United / Howard Kass, 703-872-5230 for US Airways
June 20, 2008 Response of Spirit Airlines to Joint Reply Spirit opposed the Joint Applicants because the carriers are requesting the Department to endorse a request that is anticompetitive, and ignores established law and Department policy by effectively and collectively freezing route authority in restricted international markets. Spirit’s objection has nothing to do with “sour grapes.” However, Spirit does strongly believe carriers that within the last several months, and as fuel prices continued to rise, confirmed their intentions to institute new service, should not be given a two year pass on instituting this authority if other carriers are prepared to use those frequencies. While currently there may be no U.S. carriers other than the Joint Applicants that are able to operate to China or Japan, markets that might raise unique operating issues in the current environment given the very long distances involved, such limitations do not apply to shorter haul restricted markets in South America that are easily reached with narrow bodied aircraft. There are a number of carriers, including low fare carriers, who could operate these services to these destinations and would now be prepared to serve if frequencies were available. If, as the Joint Applicants contend, these relatively short haul markets are important to their networks and their customers, they should continue to operate them. Otherwise, consumers should have access to new service that other carriers are prepared to offer. The alternative proposed by the Joint Applicants is less service, higher fares and unused frequencies that are the product of difficult negotiations conducted by the United States. Again, with the possible exception of the awards for service to China, it is impossible to support the proposition that consumers should be punished by reduced service and higher fares, because the incumbent claims that the route will benefit it in the long term. This applies with particular force to service that has only recently been awarded and which the incumbent carrier has never operated. Counsel: Kirstein & Young, Joanne Young, 202-331-3348
Order 2008-7-6 Served July 3, 2008 By this Order, we deny the requests of various certificated U.S. air carriers for a temporary blanket waiver of dormancy conditions applicable to frequency allocations and other limited-entry route authority. We will continue to act upon all such requests on an individual basis, consistent with the public interest. While we recognize the concerns cited by the carriers, we also recognize that the market characteristics of each limited entry route are different and that the impact of market forces on individual carriers is different. Taking these factors into account, we have decided that in the circumstances presented in this proceeding, the public interest would be better served by continuing to address temporary dormancy waiver requests on an individual basis. Such individual consideration will enable us to assess whether a specific waiver is in the public interest based on the circumstances prevailing and any comments received. We find that our practice of entertaining individual waiver requests best balances our objectives of providing carriers the flexibility they need to adjust to the existing economic circumstances with our interest in utilization of valuable route rights for the benefit of the traveling and shipping public. By: Michael Reynolds
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