OST-97-3034 / US Airways / Exemption, Pittsburgh-Paris / October 21, 1997

NOTICE: Any person may support or oppose this application by filing an answer and serving a copy of the answer upon US Airways and all persons served with this application on or before November 5, 1997.

Application of

US AIRWAYS, INC.

for an exemption pursuant to 49 U.S.C. 40109

(Pittsburgh - Paris)

APPLICATION OF US AIRWAYS, INC.

FOR AN EXEMPTION

Pursuant to 49 U.S.C. § 40109 and Subpart D of the Department's Rules of Practice (14 C.F.R. Part 302), US Airways, Inc. applies for a two-year exemption from 49 U.S.C. § 41101 to engage in scheduled foreign air transportation of persons, property and mail between Pittsburgh, Pennsylvania and Paris, France. In support of this application, US Airways respectfully states as follows:

Summary of Supporting Points

• The positive direction recently taken in U.S. - France aviation relations opens immediate opportunities for the peak season of 1998, either as a result of a final or interim agreement or simply as the product of reciprocity and comity.

• US Airways seeks authority to operate new daily nonstop service between Pittsburgh and Paris, France, commencing in April 1998.

Application of US Airways, Inc.

Page 2

• Pittsburgh is a strong hub airport with a proven track record for transatlantic service. It is an ideal U.S. gateway to Paris. US Airways' extensive behind-gateway support for Pittsburgh - Paris service, combined with its established presence in France, will ensure that the route will be very successful.

• Nonstop Paris service from Pittsburgh will complement US Airways' existing nonstop service from Philadelphia. Experience in markets such as Pittsburgh/Philadelphia - Frankfurt has demonstrated that both Pennsylvania gateways require and support transatlantic service.

• Additional nonstop transatlantic service from the Pittsburgh gateway has the strong, unequivocal support of the community. Last April, key members of the Pennsylvania Congressional delegation, including Senators Specter and Santorum, the Governor of Pennsylvania and his transportation staff, the Mayor of Pittsburgh, the Allegheny County Commissioners and numerous local business leaders wrote to the Secretary urging that Pittsburgh - Paris nonstop service be placed at the top of the agenda during negotiations with Prance.

• US Airways' Pittsburgh - Paris route should be the top U.S. Government priority in further negotiations with France. Even absent a formal agreement, approval of US Airways' new route should be pursued on the basis of comity and reciprocity in the new, positive aviation climate.

Opening Argument

1. The most recent negotiating session between the U.S. and France heralded a new era in aviation relations between the two nations. Everything is relative, of course, but relative to the deadlock which existed prior to those negotiations, the prospects for meaningful liberalization and new market opportunities are now very real, to the point where there could be additional frequencies and designations available in time for the 1998 peak season. This application is being

Application of US Airways, Inc.

Page 3

filed today in recognition that time is of the essence and with the expectation that the Pittsburgh - Paris service proposed by US Airways will be permitted either explicitly by the terms of a new or amended bilateral agreement with France or implicitly by a newly positive spirit of reciprocity and comity.

2. US Airways proposes the first nonstop service linking Pittsburgh and Paris, commencing in April 1998. All service will be through Charles de Gaulle Airport. At the Pittsburgh gateway, where US Airways operates its largest hub with over 500 daily flights, US Airways will provide convenient single-carrier roundtrip service to Paris from 75 U.S. communities. See Exhibit D. The proposed service will complement US Airways' existing nonstop service from Philadelphia, much as US Airways' nonstop Frankfurt services from both Pittsburgh and Philadelphia are complementary. In fact, US Airways will introduce one-stop connecting service at Pittsburgh for 47 cities that do not have direct on-line service via US Airways' existing Philadelphia - Paris route. See Exhibit E. This extensive on-line service will make Pittsburgh a new gateway competitive with New York/Newark, Chicago, Washington and other current gateways in the eastern and midwest United States. US Airways has made a significant investment in developing Pittsburgh as a transatlantic gateway, and the addition of Paris and London to US Airways' Frankfurt service will help achieve US Airways' goal. Moreover, US Airways' operation of a new daily

Application of US Airways, Inc.

Page 4

Pittsburgh - Paris flight will provide strong new price, service and gateway competition, benefiting many travellers in the U.S. - Paris market.

3. US Airways' introduction of new daily nonstop service to Paris will reinvigorate a market that has actually seen a reduction in U.S. carrier service since 1992 when the bilateral agreement was terminated despite widespread and increasing demand for new service in the market. US Airways seeks to address this pent-up demand with a new daily Paris flight. The public interest requires that new U.S.-flag service be quickly authorized to satisfy increasing consumer demand. Not a day should be wasted. US Airways' application should be approved as soon as possible to enable US Airways to provide the new competition that the market so sorely lacks.

4. Pittsburgh - Paris will fit perfectly into US Airways' transatlantic strategic expansion plan. Along with US Airways' new services to Frankfurt, Madrid, Rome and Munich inaugurated during the last two years, US Airways' recently approved Philadelphia-Gatwick route, and US Airways' pending London Heathrow application, the proposed new Pittsburgh - Paris route will strengthen US Airways' international route network and enhance its participation in international markets. US Airways' development as a major international carrier requires both London Heathrow service and this new route to Paris.

5. The importance of Pittsburgh as a transatlantic gateway has been clearly demonstrated by the success of US Airways' service to Frankfurt, one of its strongest

Application of US Airways, Inc.

Page 5

routes. The strength of this gateway, combined with US Airways' established presence in France developed as a result of US Airways' successful Philadelphia -Paris flights, will ensure that the Pittsburgh - Paris route is a success.

6. US Airways is prepared to inaugurate daily service from Pittsburgh to Charles de Gaulle Airport (CDG) in April 1998, utilizing Boeing 767-200ER aircraft configured for 203 seats or other suitable aircraft. A route map illustrating US Airways' service pattern is attached as Exhibit A. Illustrative service schedules are included as Exhibit B. and US Airways' annual operating statistics and estimated fuel consumption are detailed in Exhibit C.

7. US Airways is fully qualified to commence Pittsburgh - Paris service. US Airways is a Delaware corporation with its principal office at Crystal Park Four, 2345 Crystal Drive, Arlington, Virginia 22227. US Airways is a citizen of the United States within the meaning of 49 U.S.C. § 40102(a)(15)(C) and is fit, willing and able to serve the U.S. - France market. US Airways holds various certificates of public convenience and exemption authorities. Be_ em, Orders 97-7-2 and 96-3-17. Pursuant to Rule 24 of the Department's Rules of Practice, US Airways requests that the Department take official notice of all information previously filed to establish the company's fitness.

Application of US Airways, Inc.

Page 6

8. US Airways will accept and abide by all terms, limitations and conditions which the Department normally attaches to exemption authority for foreign air transportation.

9. As detailed in Exhibit C, US Airways' fuel consumption for the proposed new service would not exceed the ten million gallon threshold specified in Section 313.4(a)(1) of the Department's regulations. US Airways anticipates no difficulties in obtaining adequate fuel supplies for this service.

WHEREFORE, US Airways, Inc. requests that the Department grant it an exemption from 49 U.S.C. § 41101, effective for a period of two years, authorizing US Airways to engage in scheduled foreign air transportation of persons, property and mail between Pittsburgh, Pennsylvania and Paris, France.

Respectfully submitted,

ZUCKERT, SCOUTT & RASENBERGER, L.L.P.

Richard D. Mathias

Frank J. Costello

Cathleen P. Peterson

888 Seventeenth Street, N.W.

Suite 600

Washington, D.C. 20006

(202) 298-8660

Counsel for US Airways, Inc.

October 21, 1997

• Exhibit A - Proposed Route
• Exhibit B - Proposed Summer Schedule
• Exhibit C - Annual Operating Statistics
• Exhibit D - Pittsburgh-Charles De Gaulle Connection Summary
• Exhibit E - Pittsburgh Unique Connection Cities to Charles De Gaulle