OST-97-3289 / Undocketed / Delta and Aeromexico / Answer of Continental / January 13, 1998
Joint Applications of
DELTA AIR LINES. INC. and AEROVIAS de MEXICO, S.A. de C.V.
Docket
OST-97-3289 and Undocketedfor Exemptions under 49 U.S.C. § 40109 and Statements of Authorization under 14 C.F.R. Part 207 and 212.
(U.S.-Mexico code-sharing)
ANSWER OF
CONTINENTAL AIRLINES, INC.
Continental /1 opposes the Delta/Aeromexico application to provide code-share services between the U.S., particularly in Houston and New York/Newark markets. and Mexican points served by Aeromexico unless and until Mexico agrees that no designations are necessary for code-share services or that designations only for code-sharing will not count against the limits on designations. Although the Department's policies on Mexico code-sharing recognize that authority for flights operated by U.S. airlines should take precedence over code-share services on foreign-carrier flights, granting code-share authority to Delta for the
1/ Common names are used for airlines.
Answer of Continental
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Aeromexico flights could delay the institution of additional flights by Continental in Houston and New York/Newark-Mexico markets without providing any public benefits justifying those delays. Continental states as follows in opposition to the Delta/Aeromexico application.
1. Continental opposes the Delta/Aeromexico code-share application, particularly to the extent that Delta is applying for exemption authority to place its code on flights between Houston and New York/Newark and Aeromexico's interior domestic points via Delta's Mexico gateways. /2 Because the Delta/Aeromexico proposal for circuitous connecting flights via Delta's Mexico gateways could preclude or delay flights operated by Continental between Houston or New York/Newark and points in Mexico, the public interest would be harmed by granting Delta authority to offer such services. Until Mexico agrees that codesharing services do not require designations, or that designations for code-share services would not count against the limits on designations, Continental objects to the Delta/Aeromexico proposal, particularly as it relates to Houston and New York/Newark. /3
2/ Delta has requested authority only where designations are available, and many of the Houston city-pairs are already taken single-designation markets, but Delta would take the only designation available in other city-pairs.
3/ Negotiations between the U.S. and Mexico, scheduled for January 23, 1998, could resolve Continental's concerns.
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2. If the Department does not delay action on the Delta/Aeromexico codeshare application until Mexico agrees that designations are not required for codeshare services or that such designations do not count against designation limits, Delta should not be granted the Houston or New York/Newark-Mexico codesharing authority requested in any market unless another designation is available immediately for Continental to operate its own flights in that market. If Delta is awarded the authority to place its code on Aeromexico flights, it will use the only designation currently available in many of the U.S.-Mexico city-pair markets. /4 Continental is expanding its services between the U.S. and Mexico. /5 For Continental to secure authority to operate its own flights in a U.S.-Mexico city-pair market, it would be forced to "bump" the Delta/Aeromexico code-share. On August 22, 1997, in Dockets
OST-97-2845 and 96-1988, Continental applied to operate its own flights in the San Antonio-Mexico City market and, in accordance with the Department's Mexico policy on code-sharing, /6 asked the Department to withdraw United's designation in favor of Continental. Even though United itself had "no objection to the termination of its existing designation ... and the transfer4/ For example, Delta would have precluded Continental from receiving authority to operate between Houston, and Merida, Tampico and Veracruz.
5/ See
Notice of Action Taken, dated January 8, 1998, granting Continental Houston-Merida/Tampico/Veracruz authority.6/ See
Order 97-9-38 establishing a rebuttable presumption that replacing codeshare services with direct carrier services is in the public interest.
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of that designation to Continental", /7 it was not until December 5, 1997 that the Department issued a final order awarding Continental authority. (
Order 97-12-10) This delay of 15 weeks forced Continental to postpone its startup date for San Antonio-Mexico City flights. Delta/Aeromexico should not be granted authority which forces other carriers such as Continental that wish to institute their own flights to delay start-up for months. /8For the foregoing reasons. Continental urges the Department to deny the Delta/Aeromexico application to provide code-share services between the l-.S., particularly in Houston and New York/Newark markets, and Mexican points served by Aeromexico unless and until Mexico agrees that no designations are
7/ Objections of United to
Order 97-11-26 (Order to Show Cause) at 2.8/ If the Department were able to establish an automatic procedure in which authority for the flights to be operated by the U.S. carrier supplanted the codeshare services immediately, Continental's concerns would be alleviated but not eliminated.
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necessary for code-share services or that designations only for code-sharing will not count against the limits on designations.
Respectfully submitted,
CROWELL & MORING LLP
R. Bruce Keiner, Jr.
Steven A. Mirmina
Counsel for Continental Airlines, Inc.