OST-97-3271 / United Air Lines / US-Brazil / December 19, 1997

NOTICE: Answers in support of or opposition to this application are due on January 5, 1998, and should be served on United Air Lines, Inc., and all persons on the Service List.

Application of

for a combination frequency allocation under the U.S./Brazil bilateral air services agreement of 1989, as amended

United Air Lines, Inc. ("United") hereby requests the allocation of seven (7) additional U.S.-Brazil combination service frequencies effective October 1, 1998, pursuant to the U.S./Brazil bilateral air services agreement, as amended by the Memorandum of Consultations ("MOC") signed on November 12, 1997. United proposes to use these frequencies to operate daily services between Los Angeles, CA, and Sao Paulo, Brazil beginning on October 1, 1998. In support of its request, United submits the following:

1. United holds authority to operate Los Angeles-Sao Paulo service pursuant to its Certificate of Public Convenience and Necessity for Route 632, segment 1. United has been designated to operate and is operating scheduled combination services between the U.S. and Brazil under the provisions of the U.S./Brazil bilateral air services agreement of 1989, as amended. United is fit, willing and able to operate as an air carrier as

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witnessed by its continuing services over this and other routes and requests the Department to take official notice of this fact.

4. Nonstop services between Los Angeles and Brazil is presently dominated by foreign flag carriers. According to current schedules, there are four foreign flag carriers currently operating nonstop services between Los Angeles and Sao Paulo: Varig, VASP, Japan Airlines and Korean Air Lines. /1 United's

1/ United presently offers code-share services between Los Angeles and Sao Paulo on the four weekly nonstop flights operated by Varig. United would expect those code-share services to continue after it introduces its own daily nonstop services. Moreover, United would expect to display Varig's designator code on United's new nonstop flights, offering additional service options to passengers in this important market.

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proposed daily Los Angeles-Sao Paulo nonstop service will offer valuable competition for these foreign flag services. Moreover, because United and United Express carriers offer connections at Los Angeles to 54 cities in the U.S. and overseas, United's services and between Los Angeles and Sao Paula will provide additional valuable online service benefits to passengers at points throughout United's extensive network.

5. United recognizes that Delta Air Lines, Inc. ("Delta") has filed an application for allocation of the seven (7) additional U.S.-Brazil frequencies available on October 1, 1998. Delta, however, proposes to use these frequencies for services in the New York-Brazil market which is already well served on a nonstop basis by three U.S. carriers in addition to three foreign flag carriers. In its contemporaneous answer to Delta's application, United has urged the Department to seek the necessary frequencies from the government of Brazil to allow both United and Delta to operate the new U.S.-Brazil services they are proposing. In the event sufficient frequencies are not available, United urges the Department to engage in a carrier selection proceeding. As United has noted in its answer to Delta's application, allocation of these frequencies to United for first U.S. carrier nonstop service at Los Angeles would produce more consumer benefits than would an award to Delta to

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enable it to become the fourth U.S. nonstop carrier in the New York-Brazil market. Should the Department decide to set down a comparative carrier selection proceeding, United reserves the right to modify its service proposal consistent with whatever procedural and evidentiary requirements the Department may establish for such a proceeding.

WHEREFORE, on the basis of the foregoing, United Air Lines, Inc. ("United") urges the Department to allocate to United the seven (7) additional U.S.-Brazil combination service frequencies that become available on October 1, 1998.

Respectfully submitted,

JOEL STEPHEN BURTON

GINSBURG, FELDMAN and BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9130

Counsel for UNITED AIR LINES, INC.

DATED: December 19, 1997