OST-97-2477 / 97-2481 / 96-1988 / 97-2161 / Undocketed / August 25, 1997

Applications of

AMERICAN AIRLINES, INC.

AERO CALIFORNIA S.A. DE C.V.

UNITED AIR LINES, INC.

COMPANIA MEXICANA DE AVIACION, S.A. DE C.V.

DELTA AIR LINES, INC.

AEROVIAS DE MEXICO, S.A. DE C.V.

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

DATED: August 25, 1997

 

JOINT ANSWER OF UNITED AIR LINES, INC.

AND COMPANIA MEXICANA DE AVIACION, S.A. DE C.V.

 

Pursuant to 14 CFR §302.37(a), United Air Lines, Inc. ("United") and Compania Mexicana de Aviacion, S.A. de C.V. ("Mexicana") hereby answer the comments of American Airlines, Inc. ("American") and Aero California S.A. de C.V. dated August 14, 1997, in the above-captioned proceeding: /1

1. American and Aero California seek reconsideration of the Department's decision in Order 97-7-31 to the extent that the

1/ United and Mexicana are answering the American/Aero California pleading pursuant to 14 CFR §302.37 (a) insofar as it seeks reconsideration of action taken by the Department in Order 97-7-31 not subject to an order to show cause relating to tentative findings and conclusions. United has previously answered that pleading to the extent that it contained an objection to tentative findings and conclusions in Order 97-7-31. That answer was filed on August 19, 1997, in response to ad hoc procedural dates established in Order 97-7-31 for answering objections to tentative findings and conclusions.

 

Joint Answer of United and Mexicana

Page 2

 

Department deferred action on certain portions of those carriers' applications for exemptions and statements of authorization to code share for each other in conjunction with their services between the U.S. and Mexico. The Department decided to defer action until such time as Aero California "provides evidence of its underlying authority and designation from Mexico to serve the subject markets." Order 97-7-31 at 7.

Rather than defer action pending Aero California's designation, American and Aero California urge that the deferred portions of their applications be granted immediately subject to two conditions precedent to their effectiveness: (1) designation of Aero California for the city pair in question and (2) receipt by Aero California of underlying DOT exemption authority to serve the city pairs for which it is designated.

2. United and Mexicana are also parties to a code-share agreement involving U.S.-Mexico services. As was-.the case with the American/Aero California code share, certain portions of the United/Mexicana code-share authorizations were deferred pending receipt by Mexicana of designation by Mexico and issuance of exemption authority by DOT for the city pairs subject to deferral. See Notices of Action Taken dated June 13, 1997, and June 24, 1997 in Docket OST-96-1988 (Orders 97-6-32 and 97-7-31) .

3. If the Department decides to grant the relief requested by American and Aero California relating to the deferred portions of their code-share applications, it should grant the same relief to United and Mexicana with respect to the deferred portions of their code-share applications. The benefits recited by American and Aero California to be derived from the conditional grant of their deferred applications apply with equal weight to those of United and Mexicana. According to American and Aero California conditional grant of their deferred code-share applications will:

 

° clarify the Department's intentions with respect to the remainder of the American/ Aero California applications and facilitate their planning for future implementation of code-share services; and

° unambiguously signal to the Mexican government that the Department favors expansion of U.S.-Mexico code-share service options.

 

United and Mexicana would similarly benefit from a clarification of the Department's intentions and the ability to plan for future implementation of their code-share services consistent with actions by both the U.S. and Mexican governments. United also believe that conditional grant of deferred applications will send a useful message to the Mexican authorities regarding the Department's intentions to allow maximum implementation of code-share services. Indefinite deferral, on the other hand, sends the wrong message -- i.e., that the Department may not be prepared to allow timely implementation of otherwise beneficial services affected by those deferred portions of code-share applications. Although Mexicana

 

Joint Answer of United and Mexicana

Page 4

 

 

supports the present bilateral arrangement, Mexicana believes that the ultimate decision whether or not to expand code-share service options in light of the current bilateral limits on designations is a matter that must be resolved directly between the governments of the U.S. and Mexico.

4. United and Mexicana, in these circumstances and for the reasons set forth above, support the relief requested by American and Aero California so long as that same relief is granted with respect to the deferred portions of the joint application of United and Mexicana in Docket OST-96-1988.

Respectfully submitted,

 

ROBERT D. PAPKIN

SQUIRE SANDERS & DEMPSEY, L.L.P.

For Mexicana

 

Joel Burton

GINSBURG, FELDMAN and BRESS

For United

DATED: August 25, 1997