OST-97-2856 / Fedex / Answer of United / September 9, 1997

Application of

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

United Air Lines, Inc. ("United") submits the following answer to the above-captioned application of Federal Express Corp. ("FedEx"):

1. By its application, FedEx seeks an exemption to operate scheduled all-cargo service between the U.S. and Vietnam. FedEx notes in its application that it already holds dormant authority to serve Vietnam in its Certificate of Public Convenience and Necessity for Route 205-F. Because FedEx also holds this dormant certificate authority, its exemption application raises the issue as to whether it needs the exemption for which it has applied.

2. As the Department is aware, United has for some time sought to exercise its right to serve Vietnam under its own dormant 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.

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3. 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 and American, as well as FedEx, have applied for renewal of existing but dormant 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 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. ) 1/

4. The Department should not award new Vietnam authority to FedEx in the form of its requested exemption unless it is also prepared at the same time to grant other deferred applications for Vietnam authority such as United's long pending renewal

1/ 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. In an exchange of letters dated May 22, 1997 and July 11, 1997, the Department advised FedEx that it could not expect to exercise its dormant certificate authority without a re-examination by the Department of the market and the needs of the public for service. See Docket OST-97-2345. Although its exemption application does not address the issue, FedEx would apparently not pursue its exemption application if its dormant certificate application were renewed pursuant to its 1989 application.

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application. 2/ The selective and preferential grant of individual U.S. carrier applications 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 that of FedEx must also be deferred until the Department is prepared to grant them all or, if necessary, make 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,

GINSBURG FELDMAN, JOEL STEPHEN BURTON
Counsel for UNITED AIR LINES, INC.

September 9, 1997 

2/ 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.