OST-97-2823 / Undocketed / OST-97-2856 / American Airlines and China Airlines / Federal Express / August 29, 1997

Application of :

Docket OST-97-2823

under 49 U.S.C. S 40109 for an exemption to : expand code-share with China Airlines, Inc. :

Application of :

(Undocketed)

for an amendment of a Statement of Authorization pursuant to 14 C.F.R. Part 212

Application of:

Docket OST-97-2856

for grant of an exemption pursuant to 49 U.S.C. S 40109 (U.S.-Vietnam All-Cargo Service)

There currently is no bilateral agreement between the United States and Vietnam governing air services. To date, the Department has refused to authorize applications for service to Vietnam in the absence of a bilateral air services agreement. On October 6, 1989, Northwest applied for an amendment to its Route 129 certificate of public convenience and necessity seeking to add Vietnam to the route description and to add a provision

1/ This Consolidated Answer of Northwest is directed at American/CAL's request for authority to code-share to Vietnam only. Northwest takes no position with respect to these carriers' request to expand their code-share services to four additional points.

2/ Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945).

permitting Northwest to combine on a single flight its services between the United States, on the one hand, and its services to Vietnam and Japan, on the other hand. (Docket 46528). By Order 92-3-38 at 4, n.12, the Department deferred consideration of Northwest's application with respect to service to Vietnam. On February 3, 1994, President Clinton lifted the trade embargo on Vietnam. The following day, Northwest filed an update to its Vietnam service proposal. Northwest's application for amended certificate authority to serve Vietnam, via Japan, remains pending. The Department similarly has refused to take action on applications for renewal of existing U.S.-Vietnam authority.

The Department should not even consider granting the above referenced applications of American/CAL and FedEx unless the Department also is prepared to grant all other deferred applications for Vietnam authority, including Northwest's long-pending application. Indeed, the selective and preferential grant of individual U.S. carrier applications while others are deferred would prejudice the ability of deferred applicants in seeking rights to serve Vietnam.

Before granting any applications for U.S.-Vietnam service, the Department should determine whether the Government of Vietnam is prepared to allow U.S. air carriers to commence scheduled service between the United States and Vietnam, either on the basis of comity and reciprocity or upon the conclusion of a new bilateral agreement between the two countries. In the event the Government of Vietnam is prepared to authorize U.S. air carrier service but on a limited basis only, the Department will be required to give mutually exclusive applications contemporaneous consideration under the Ashbacker Doctrine.

Respectfully submitted,

Megan Rae Poldy

Associate General Counsel

NORTHWEST AIRLINES, INC.

901 15th Street, N.W.

Washington, D.C. 20005

(202) 842-3193

August 29, 1997