Docket OST-97-2823 / Undocketed / American and China Airlines / Answer of United / August 26, 1997

Application of

AMERICAN AIRLINES, INC.

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

Application of

CHINA AIRLINES, LTD.

for Amendment of Statement of Authorization 96-612 (Property and Mail, Blocked-Space/Code -Sharing)

DATED: August 26, 1997

CONSOLIDATED ANSWER OF UNITED AIR LINES, INC.

1. By their applications, American and CAL seek to expand their blocked-space/code-share arrangement for property and mail to add service in five new city pairs. Among the city pairs for which additional authority is sought is Taipei-Ho Chi Minh City.

2. United takes no position with respect to the request to expand the code-share services to the other four city pairs. In

1/ Answers to American's application are not due until September 2, 1997. United reserves the right to supplement its answer as to American at any time up to and including that date.

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the case of the TPE-SGN code share, however, different issues arise. There is no agreement between the U.S. and Vietnam governing air services. In order for American to obtain the right to hold out service to Ho Chi Minh City on CAL's TPE-SGN flights, American will have to obtain "extrabilateral" authority from the government of Vietnam.

3. As the Department is aware, United has for some time sought to exercise its right to serve Vietnam under its existing certificate authority. United wants to operate service to Vietnam in its own aircraft by extending an existing transpacific flight from an intermediate point in Asia such as Tokyo or Osaka. Efforts by United to exercise these rights have, however, been unsuccessful in the absence of a bilateral agreement governing U.S.-Vietnam air services.

4. The Department has taken a cautious approach toward granting new U.S. carrier authorizations to serve Vietnam pending the conclusion of a bilateral air services agreement. For example, Northwest has applied for U.S.-Vietnam authority but action on its application has been deferred. Order 92-3-38 at 4, n.12. Moreover, other carriers such as United, Federal Express, and American have applied for renewal of existing U.S.-Vietnam authority issued to them in the form of certificates of public convenience and necessity. Rather than renew those authorizations, however, the Department has allowed them to

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continue in effect under Part 377 pending a final order on the renewal applications. (See, e.g;, Orders 92-3-38 and 96-5-9.) /2

5. The Department should not award new Vietnam authority to American and CAL for their proposed code share service unless it is also prepared to grant other deferred applications for Vietnam authority such as United's long pending renewal applications The selective and preferential grant of individual U.S. carrier application. /3 while others are deferred will prejudice the ability of deferred applicants in seeking to exercise rights to serve Vietnam. The Department should maintain an even-handed treatment of applications for authority to serve Vietnam. If some are to be deferred, which is now the case with respect to those of United and others, new applications such as those of American and CAL must also be deferred until the Department is prepared to grant them all or, if necessary, make

2/ See also Docket 46448 where Federal Express filed an application on August 16, 1989, to renew its U.S.-Vietnam authority. That application also remains pending without DOT action, and Federal Express' Vietnam authority continues in effect under Part 377.

3/ United's request to renew its U.S.-Vietnam authority has been pending since 1991 in Docket 46960. United has also requested renewal by application dated October 16, 1996, in Docket OST-96-1873 and, although unopposed, the Department has still not acted upon that application, which also sought renewal of United's certificate authority to serve Japan and the Philippines.

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selections consistent with the terms of a U.S./Vietnam bilateral agreement if entry is limited and applications for available authority are mutually exclusive.

Respectfully submitted,

JOEL STEPHEN BURTON

GINSBURG, FELDMAN and BRESS CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9130

Counsel for UNITED AIR LINES, INC.