OST-97-2787 / OST-97-2786 / OST-97-2885 /Pan Am and Carnival / Contingent Motion for Leave to File and Reply to Amended Opposition of Richard Bartel / October 17, 1997

Joint Application of

PAN AM CORPORATION
And
CARNIVAL AIR LINES, INC.  

For approval of transfer of route Authority under 49 U.S.C. 41105

Joint Application of

PAN AM CORPORATION
And
CARNIVAL AIR LINES, INC.  

For an exemption from the provisions of 49 U.S.C. 41105

Joint Application of

PAN AMERICAN WORLD AIRWAYS, INC.
And
CARNIVAL AIR LINES, INC.

For an exemption from Subparts K&S of 14 C.F.R. Part 93 (slot restrictions at New York JFK International Airport)

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Transfer(s) of Route Authorities ("Opposition"), should the Department accept the Bartel Opposition for filing as a late and unauthorized document in the three above-captioned proceedings.

1/ Bartel's frequent appearances before DOT demonstrate a history of late and inappropriate filings. During his Rule 14 participation in the ATX case, Administrative Law Judge Barton found Bartel had "directly disregarded" certain procedural rulings and also refused to admit an "inflammatory" exhibit that Bartel sponsored. ATX Inc. Fitness Investigation, Docket 48780, Order Requiring Statement of Richard Bartel to be Removed from the Record, served November 29, 1993; undated Tentative Ruling on Admissibility of Rule 14 Participants' Narrative Testimony and Exhibits (available on LEXIS, DOTAV file). The Department also rejected a late, unauthorized Bartel "surreply" in Application of Pan American Airways, Inc., Order 96-9-33.

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time for answers has long since passed in the other two proceedings.

Despite the absence of good cause for Bartel's Motion, should the Department accept the Bartel Opposition for filing, permitting the Joint Applicants to respond to Bartel's pleading will help ensure a full and fair record on which the Department may judge the propriety and credibility of Bartel's Opposition in the proceedings that remain open.

The Joint Applicants do not welcome Bartel's unjustified attempts to interfere in the conduct of their business and the Department's regulatory duties, but they are not surprised by the tenor or timing of his pleading. For years Bartel has waged an unsuccessful, personal campaign against Martin R. Shugrue, Jr., a founder of PAC and Pan Am and formerly the Trustee of the bankruptcy estate of Eastern Air Lines, Inc. ("Eastern"). Bartel's objectionable conduct in the Eastern bankruptcy ultimately led to a 1994 order finding him in contempt for asserting claims he was not entitled to assert; the details were described in Eastern's Sept. 5, 1996 Response to Bartel's Answer to Order 96-8-25 in Dockets OST-96-1211 and OST-961588.

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Bartel continued his longstanding vendetta against Mr. Shugrue and his successor, John Sicilian, in Pan Am's initial certificate application. In that proceeding Pan Am disclosed that Bartel was a defendant in a lawsuit seeking the transfer of certain Pan Am intellectual property. After the certificate application had been before the Department for almost five months, and after the Department issued a show cause order tentatively finding Pan Am fit, Order 96-8-25, Bartel suddenly appeared and objected. Bartel alleged that Shugrue and Sicilian were responsible for "questionable transactions" involving Eastern and that Federal agencies were investigating certain Pan Am founders and shareholders -- the same arguments he has restated in the instant Opposition. The Department, however, "found no evidence whatsoever to support Mr. Bartel's charges concerning ongoing investigations of Mr. Shugrue's activities and of the "questionable transactions." Order 96-9-25 at 14. Perhaps recognizing that a year-late collateral attack on Order 96-9-25 would properly be rejected, Bartel has sought to bolster the same, tired arguments with spotty recitations of the Joint Applicants' current financial condition. 2/ His claim that Carnival "explicitly

2/ Bartel identifies himself in the Motion only as a "Pan Am shareholder." He does not disclose that he is a defendant in the litigation described above or that he styles himself a "private investigator," specializing in bankruptcy fraud issues for creditors, who purports to have investigated Eastern for several years. See April 19, 1996 Minutes of the National Bankruptcy Review Commission, available at http://nacba.com/nbrchtml/mi960419.htm (printout upon DOT request).

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anticipates" a bankruptcy filing, though, stretches Proxy Statement language that "[i]n the event Carnival Air is unable to finance operations, Carnival Air may be required to adopt one or more alternatives," such as bankruptcy protection. Proxy Statement at 11. Since both Pan Am and Carnival file financial information with the Department on Form 41, and since both carriers' finances are widely reported in the trade press, Bartel's financial information is not news to the Department. Moreover, the Department already has begun to consider the fitness of both carriers without Bartel's preferred assistance. Pan Am and Carnival will be addressing issues relating to their financial fitness in response to standard, post-transaction inquiries the Department already has made.

As a final note, the Joint Applicants must question whether Bartel has even read the above-captioned applications he has opposed. Contrary to his assertions, PAC and Carnival do not seek Department approval to transfer (or, in Bartel's words, "strip") route authority from Carnival; rather, they request that the Department approve the technical, de facto route transfer that arises, under Department precedent, out of PAC's ownership of Carnival.

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Further, Bartel's characterization of Carnival's international authority as "valuable" is hardly appropriate, since all markets for which Carnival holds authority are open to entry by U.S. carriers (with the limited exception of Carnival's San Juan-Toronto segment, due to open to all U.S. carriers early next year). Finally, it seems inconsistent for Bartel, who purports to advance the rights of Carnival creditors, to oppose the grant of slot exemption authority to Pan Am and Carnival under 49 U.S.C. § 41714. Such authority would permit Carnival or Pan Am to operate new service at New York's John F. Kennedy International Airport without the high cost and uncertainty of operations using slots leased on a short-term basis from major airline competitors.

The Department has heard, and previously rejected, the majority of Bartel's spurious allegations against Pan Am and its principals. Any new, factual information in Bartel's Opposition is already being considered by the Department in the context of a continuing fitness investigation. The Joint Applicants respectfully submit that Bartel's late, conclusory pleading should be given no weight.

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WHEREFORE, the Joint Applicants urge the Department to reject the Bartel Opposition and, to the extent not already granted, grant the authority requested in the above-captioned proceedings.

Respectfully submitted,

VERNER LIIPFERT, William Evans, John Mietus, Jr.
Counsel for Pan Am Corporation and Pan American World Airways, Inc.

BOROS GAROFALO, Aaron A. Goerlich
Counsel for Carnival Air Lines, Inc. (Pan American Airways Corp.)

October 17, 1997