OST-97-3151 / Ost-97-3269 / OST-97-3271 / OST-97-3273 / US-Brazil Frequencies / Answer of Continental to Motion to Consolidate / January 2, 1998

Application of :

for a certificate of public convenience and necessity pursuant to 49 U.S.C. § 41102 and for allocation of U.S.-Brazil frequencies

Application of

for allocation of seven weekly U.S.-Brazil combination frequencies

(Miami-Manaus)

Application of

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

Application of :

under 49 U.S.C. §§ 41108 and 41102 for a certificate of public convenience and necessity (Houston-Brazil) and U.S.-Brazil frequency allocation

American /1 Delta and United have sought seven weekly Brazil frequencies each to duplicate service offered by other carriers. Continental has sought seven

1/ Common names of carriers are used.

Answer of Continental to Motion to Consolidate

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weekly frequencies to open a new Brazil gateway at its Houston hub, which today receives no single-plane U.S.-Brazil service whatever. Although the four applicants have sought a total of 28 U.S.-Brazil combination frequencies, only seven frequencies become available October 1, 1998.

American and Continental have asked the Department to consolidate their applications with Delta's for comparative consideration, and the Department should grant those motions and institute an appropriate proceeding to select the carrier to utilize the seven U.S.-Brazil frequencies which will become available this year. Continental states as follows in support of its position:

1. American has applied again for U.S.-Brazil frequencies to operate the Miami-Manaus service only recently rejected by the Department, Delta has applied again to duplicate JFK-Sao Paulo/Rio de Janeiro service offered by other carriers and United has applied to duplicate Los Angeles-Sao Paulo service already offered by United and its code-share partner (VARIG) as well as three other carriers. Although each of these carriers would duplicate existing service, Continental has applied to open a new gateway for Brazil at Houston, the largest U.S. city without nonstop Brazil service and Continental's largest hub.

2. Continental believes the merits of its proposal to serve Houston so far outweigh any merits of the other proposals that its application should be granted immediately, but the Department is constrained by the Ashbacker doctrine and its own policies to institute a proceeding to consider the competing applications. American and Continental have sought consolidation of their applications with

Answer of Continental to Motion to Consolidate

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Delta's, while United has indulged in some wishful thinking about Brazil's potential willingness to offer more frequencies to the U.S. and failed to submit a motion seeking consolidation. Clearly, the American and Continental motions to consolidate should be granted whether United formally seeks consolidation or not.

For the foregoing reasons, Continental urges the Department to consolidate the American and Continental applications with Delta's application and institute a proceeding to give those applications comparative consideration.

Respectfully submitted,

CROWELL & MORING LLP

R. Bruce Keiner, Jr.

Counsel for Continental Airlines, Inc.