OST-96-1381 / OST-97-2877 (former docket 42462) / Korean Air Lines (exemption Seoul-Denver) (exemption intermodal cargo service) / Motion to File an Otherwise Unauthorized Response and Supplemental Reply to World Airways' Response / October 20, 1997

Application of

for an exemption from 49 U.S.C. S41301 (Seoul-Denver, CO)

Application of

for renewal of an exemption from former Docket 42462 49 U.S.C. S41301 and 14 C.F.R. Part 222 (Intermodal cargo service)

1. On September 26, 1997, KAL filed its reply to the answer filed by World Airways to the above-captioned applications of Korean Air Lines Co., Ltd. ("KAL") to amend existing exemption authority. (On September 29, 1997, KAL filed its reply to the answers filed by other carriers and parties.) On October 8, 1997, World filed a motion with a supplemental response directed to the arguments made by KAL in its replies.

2. In its October 8 response, World appears to dispute the assertions KAL made in its replies that the pending applications do not materially augment or expand KAL's existing exemption authority. As Korean Air explained in its replies, the modifications sought in these two applications do not expand or increase KAL's authority. World disagrees with KAL's characterization, and KAL wants to elucidate further.

3. In Docket OST-96-1381, KAL is asking the Department to modify an exemption granted by Order 96-8-46. That exemption allows CAL to serve the Denver, CO-Seoul market via Los Angeles. KAL desires, effective October 26, 1997, to route that Denver-Seoul service over San Francisco. This routing change does not augment, expand or increase KAL'S existing authority.

4. From a transportation and international regulatory standpoint, KAL has Denver-Seoul exemption authority now. Whether KAL exercises that authority by operating its own flights Denver-Seoul nonstop, Denver-Seoul one-stop via Los Angeles, Denver-Seoul one-stop via San Francisco, or Denver-Seoul one-stop via any other U.S. point at which KAL has authority does not alter KAL's existing underlying Denver-Seoul authority. The substitution of one intermediate point for another intermediate point is not a substantive change to KAL's current authority.

5. With respect to KAL's request in Docket OST-97-2877, again the modification sought does not expand KAL's intermodal rights. KAL has economic authority for intermodal authority in three U.S. city pairs. KAL is not seeking to increase the number of city pairs in which it has intermodal rights. But KAL seeks to substitute three different city pairs for the three currently authorized.

6. This proposed change is, technically, different authority than now exists because the names of the city pairs would be different. But this proposed change is not an expansion of KAL's existing authority. If KAL were seeking to change the current three city pairs for four different city pairs, that would be an expansion of existing authority. But because the United States has found it in the public interest to allow KAL intermodal rights in three city pairs, it should not matter which three city pairs KAL wants to serve because the Department made no specific findings of public interest in approving one city pair vis a vis any other city pair, when it issued the authority to KAL in 1983. Indeed, the Department's regulations in Part 222 and Order 83-9-35 are indifferent as to which city pairs may be chosen by KAL.

7. World continues to make allegations that the Korean government has denied operating right to World; however, as KAL has shown in previous filings in these and other proceedings, World's allegations do not in any manner justify World's request that KAL's applications be denied.

WHEREFORE, Korean Air Lines Co., Ltd. requests the Department (1) to grant it leave to file this supplemental reply and (2) to approve the exemption amendment applications pending in Dockets OST-97-2877 and OST-96-1381.

Respectfully submitted,

Herbert A. Rosenthal
Attorney for KOREAN AIR LINES CO., LTD.

October 20, 1997