OST-97-2823 / American Airlines / August 15, 1997

NOTICE: Answers supporting or opposing this application are due on September 2, 1997.

Application of

AMERICAN AIRLINES, INC.

under 49 USC 40109 for an exemption (U.S.-Ho Chi Minh City via Taipei)(property and mail code-sharing with China Airlines, Ltd.)

American Airlines, Inc., under 49 USC 40109, hereby applies for an exemption authorizing scheduled foreign air transportation of property and mail to serve, under a blocked space/code-sharing arrangement with China Airlines, Ltd., between points in the United States and Ho Chi Minh City, Vietnam, via Taipei, Taiwan.

China Airlines is this day filing an application for an amended statement of authorization under 14 CFR Part 212 (undocketed) with respect to the subject arrangement. /1 That application includes a copy of the parties' amended agreement,

1/ Pursuant to the parties' initial agreement, the Department granted a statement of authorization under 14 CFR Part 212 to China Airlines on November 8, 1994 (94-662), renewed on March 12, 1997 (95-612), authorizing the display of the "AA" designator code with respect to property and mail on certain flights operated by China Airlines between the U.S. and Taipei.

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which provides for property and mail code-sharing through the display of American's "AA" designator code on certain flights operated by China Airlines beyond Taipei to Jakarta, Kuala Lumpur, Singapore, and Ho Chi Minh City.

American presently holds certificate authority to serve between points in the U.S. and points in Taiwan, Indonesia, Malaysia, and Singapore (Route 137, segment 7, as reissued by Order 96-5-9, May 12, 1996). In order to provide the additional services described above, American requires route authority to carry property and mail between the U.S. and Ho Chi Minh City via Taipei.

Grant of the requested authority is in the public interest. While there is no air transport agreement between the United States and Vietnam, principles of comity and reciprocity support approval of American's application. The proposed services will expand options available to the public, and are consistent with the Department's statement of international air transportation policy issued in April 1995.

In response to the Department's letter of June 1, 1995 to participants in the Civil Reserve Air Fleet Program, American states that the arrangement at issue will have no impact on American's CRAF commitments.

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American requests expedited approval of this application, and of the accompanying application for a statement of authorization being submitted by China Airlines.

Respectfully submitted,

CARL B. NELSON, JR.

Associate General Counsel

American Airlines, Inc.

August 15, 1997