OST-97-3273 / OST-97-3269 / US-Brazil / Consolidated Answer of United / January 2, 1998
Application of
CONTINENTAL AIRLINES, INC. /
Docket OST-97-3273under 49 U.S.C. §§41108 and 41102 for a certificate of public convenience and necessity (Houston-Brazil) and U.S.-Brazil)frequency allocation
Application of
AMERICAN AIRLINES, INC. / Docket OST-97-3269
for allocation of seven weekly U. S. -Brazil combination frequencies (Miami-Manaus)
CONSOLIDATED ANSWER OF UNITED AIR LINES, INC.
United Air Lines, Inc. ("United") submits the following consolidated answer in opposition to the above-captioned applications of Continental Airlines, Inc. ("Continental") and American Airlines, Inc. ("American") for additional U.S.-Brazil frequencies:
By their applications Continental and American request allocation of the seven (7) U.S.-Brazil frequencies that are
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available on October 1, 1998. Continental proposes to use these frequencies for Houston-Sao Paulo service while American would use them to add services to Brazil from its Miami hub. American's service would be operated to Manaus, Brazil.
2. United opposes the-applications of Continental and American. United has proposed to use the new frequencies to offer the first U.S. carrier nonstop service in the Los Angeles-Sao Paulo market. Los Angeles is the largest U.S. gateway to Brazil that lacks U.S. carrier nonstop service. The Los Angeles-Sao Paulo market is currently the preserve of several foreign flag carriers. U.S. carrier competition is clearly required in a major market of this size as a matter of priority over services in markets such as those which Continental and American propose to serve.
Houston is not comparable in size to Los Angeles as a gateway to Brazil. See
Exhibit UA-2 attached to United's December 19, 1997, application. It is more important to inject U.S. carrier competition into the major Los Angeles-Sao Paulo market than to allow Continental to add service via Houston.American already uses its large Brazil frequency allocation to provide multiple daily services between Miami and several
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points in Brazil, in one case operating triple daily nonstop services in a single city pair. To award additional frequencies for Miami-Manaus service to American would merely allow it to increase its dominance of U.S.-Latin American service via its fortress hub at Miami. To the extent that American deems appropriate to institute service from its Miami hub to Manaus, it should use frequencies from its present allocation.
3. Because there are an insufficient number of U.S.-Brazil frequencies to satisfy all present U.S. carrier demands, the Department will have to engage in a carrier selection proceeding in order to determine which of the four applicants should be allocated the available frequencies. United is confident that the Los Angeles-Sao Paulo service it has proposed will be found in such a proceeding to produce more public benefits than the services proposed by other applicants. In these circumstances, United urges the Department to act quickly
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to set down a carrier selection proceeding to allocate the seven weekly U.S.-Brazil frequencies available on October 1, 1998.
Respectfully submitted,
JOEL STEPHEN BURTON
GINSBURG, FELDMAN & BRESS CHARTERED
1250 Connecticut Avenue, N.W.
Suite 800
Washington, D.C. 20036
(202) 637-9130
Counsel for UNITED AIR LINES, INC.
DATED: January 2, 1998