OST-97-2477 / 97-2481 / 97-1988 / 97-2161 / Undocketed / American and Aero California et al. / Answer of United

Applications of

for exemptions, designations and statements of authorization (U.S.-Mexico Code Sharing)

DATED: August 19, 1997

1. American and Aero California state their support for the Department's tentative decision in Order 97-7-31 to condition U.S.-Mexico code-share authority. The proposed condition would

1/ In their joint comments, American and Aero California also seek reconsideration of Order 97-7-31 to the extent that it deferred action on certain portions of their applications to code share with each other. United reserves the right to file an answer to that portion of the joint comments pursuant to the procedures established for answering petitions for reconsideration. Under those procedures, an answer would be due on August 25, 1997.

Answer of United

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allow the Department to withdraw a U.S. designation for codeshare service if additional designations are not available and the Department decides that proposed direct service would provide superior public benefits.

2. United also supports the Department's tentative decision to condition U.S.-Mexico code-share authority for the same reasons cited by American and Aero California. Those carriers note their support for the condition on the basis that it will apply to other code shares between U.S. and Mexican carriers. The position of American and Aero California fails, however, to address one important issue raised by the Department's tentative decision. In Order 97-7-31, the Department proposes to condition only those code shares involving a U.S. and a Mexican carrier. In addition to American/Aero California this would include United/Mexicana, Delta/Aeromexico and United/Aeromar. United objects to that decision being made final, however, unless the condition is applied to all U.S. carriers involved in U.S.-Mexico code shares.

United is aware of at least one U.S.-Mexico code share that involves two U.S. carriers. This is the code share operated by Alaska Airlines, Inc., and Northwest Airlines, Inc. (Order 96-12-8) That code share also has an impact on U.S. carrier designations to the extent that Northwest must be designated on certain U.S.-Mexico city pairs in order to hold out service in its own name. It would be unfair to impose the proposed

Answer of United

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condition only on U.S./Mexican carrier code shares while leaving the U.S./U.S. carrier code shares unconditioned. Indeed, the issue of imposing such a condition was originally raised by United in the context of the Alaska/Northwest code share. See Answer of United, dated May 9, 1996 in Docket OST-96-1332.

3. In these circumstances, United objects to issuance of a final order based on the tentative findings and conclusions in Order 97-7-31 with respect to the condition on U.S.-Mexico code shares unless the Department is prepared to impose the same condition on all U.S. carrier U.S.-Mexico code shares, including those involving two U.S. carriers. The Department should issue an amended order to show cause proposing to apply that condition to the code share of Alaska and Northwest as well as to any other outstanding and future U.S.-Mexico code shares involving two U.S. carriers.

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.