OST-95-657 / Federal Express / US-Saudi Arabia Exemption Renewal / September 16, 1997

NOTICE: Any person wishing to support or oppose this Application must file an answer with the DOT's Documentary Services Division by October 1, 1997. A copy of such answer must be served upon Federal Express and its counsel and all persons named on the attached Service List. 208992

Application of :

for an exemption pursuant to 49 U.S.C. § 40109 (U.S.-Saudi Arabia Cargo Service)

September 16, 1997

Federal Express Corporation (Federal Express) hereby applies, pursuant to 49 U.S.C. § 40109 and Part 302.400 of the Procedural Regulations of the Department of Transportation (the Department), for renewal of its exemption authority to engage in scheduled foreign all-cargo air transportation between a point or points in the United States and a point or points in Saudi Arabia, via two intermediate points and to two beyond points with full traffic rights, and via other intermediate and beyond points without traffic rights.

Federal Express requests that the foregoing exemption authority be renewed for a period of two years, through November 29, 1999.

In support of this Application, Federal Express states as follows:

1. By Order 96-1-4, served January 10, 1996, the Department granted renewed exemption authority to Federal Express authorizing Federal

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Express to provide scheduled foreign air transportation of property and mail between New York, NY and a point or points in Saudi Arabia, via two intermediate and two beyond points named in Federal Express' certificates for Route 119 and 205-F with traffic rights, and via other intermediate and beyond points without traffic rights, for a period of two years, through November 29, 1997. Federal Express is currently designated by the U.S. Government to provide all-cargo service to Saudi Arabia pursuant to the October 2, 1993 Bilateral Air Transport Agreement between the United States and Saudi Arabia (the 1993 Agreement), and has been continuously designated to serve Saudi Arabia since May 1988. /1

2. Federal Express currently serves Jeddah and Riyadh, Saudi Arabia on a six-day-a-week basis in conjunction with its around-the-world DC-10-30 freighter service, which operates eastbound over a routing Newark (EWR) - Stansted (STN) - Paris (CDG) - Dubai (DBX) - Bombay (BOM) -Bangkok (BKK) - Subic Bay (SFS) - Anchorage (ANC) - Memphis (MEM). That around-the-world flight is connected to Jeddah and Riyadh via the operation of six-day-a-week "feeder" flights operated for Federal Express on a contract basis by Falcon Express, Inc., a foreign charter air carrier, from Dubai to Riyadh and Jeddah and back to Dubai. The foregoing feeder flights are operated utilizing

l/ Federal Express was designated to replace Flying Tigers for cargo service to Saudi Arabia on September 23, 1989, subsequent to its acquisition of Flying Tigers. Flying Tigers was first designated to serve Saudi Arabia on May 10, 1988, and had served Saudi Arabia since 1985.

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4,000-pound payload Beech-1900 all-cargo aircraft on a schedule which is closely integrated with the DC-10-30 flights operated by Federal Express serving Dubai.

3. The foregoing service enables Federal Express to extend its world-renowned high-quality daily air express and expedited air freight services to and from Saudi Arabia. That service provides direct access between Saudi Arabia and points throughout the worldwide air cargo distribution system operated by Federal Express, providing service to shippers and consignees in Saudi Arabia and the United States, and throughout the world.

4. The U.S. all-cargo service route description under the 1993 Agreement, as amended on May 27, 1995, provides that designated U.S. all-cargo carriers may provide scheduled all-cargo air transportation over the following route:

The authority at issue in this renewal application is wholly consistent with the foregoing route description and with the 1993 Agreement, as amended, under which the U.S. is permitted to designate two carriers to provide all-cargo service between the two countries. Accordingly, Federal Express submits that grant of the requested exemption is in the public interest because it will enable the U.S. to fully utilize the valuable rights available to U.S. carriers under the 1993 Agreement, by enabling Federal Express to continue to conduct air express and expedited air cargo services between the U.S. and Saudi Arabia.

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5. Federal Express is fit, willing and able to perform the air transportation applied for herein and to conform to the provisions of the Act and the rules, regulations, and requirements of the Department thereunder. The air transportation service which Federal Express proposes to render is consistent with the public convenience and necessity and the grant of an exemption is consistent with the public interest.

6. Federal Express hereby invokes and relies upon the provisions of Section 558(c) of the Administrative Procedure Act, 5 U.S.C. § 558(c), as implemented by Part 377 of the Department's Special Regulations, 14 C.F.R. § 377, to continue in effect its exemption authority to serve the U.S.-Saudi Arabia market at issue until the Department makes a final determination on this Application. In accordance with Section 377.10(c), this renewal application is being filed more than sixty (60) days prior to the expiration date of the authority at issue.

7. Federal Express requests that its exemption be renewed for a two-year period, through November 29, 1999. Grant of a two-year extension is consistent with the practice of the Department in numerous comparable exemption proceedings involving limited-entry international route authority.

WHEREFORE, Federal Express respectfully requests the Department to renew the exemption authority most recently granted by Order 96-1-4, so as to authorize Federal Express to provide scheduled foreign air transportation of property and mail between points in the United States and Saudi Arabia, as

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Saudi Arabia Exemption described herein, for a two-year period through November 29, 1999, and that Federal Express be granted such additional or other authority, consistent with this application, as the Department may deem necessary or appropriate.

Respectfully submitted,

Nathaniel Breed of Shaw Pittman for Federal Express