OST-97-3034 / US Airways / Pittsburgh-Paris / Answer of Northwest Airlines / November 5, 1997

Application of

US AIRWAYS, INC.

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

(Pittsburgh-Paris)

ANSWER OF NORTHWEST AIRLINES, INC.

USAir's Application is premature as there currently is no aviation agreement between the United States and France. In 1993, the Government of France renounced the U.S.-France aviation agreement in effect at that time. Since France's renunciation, there essentially has been a freeze on new U.S.-France services by US carriers. With limited exceptions, the Government of France has not permitted U.S. airlines to increase their frequencies in the US-France market, serve new city pairs or replace other U.S. services that have been discontinued. While USAir is correct that the two countries currently are engaged in ongoing negotiations, it is uncertain when, if ever, the two countries will reach an agreement and what new US carrier service such bilateral will authorize.

It has been the Department's longstanding policy under circumstances such as those present here to refuse to consider any applications for new authority until such time as a new agreement is reached between the U.S. and the country involved. See e.g., Applications of Continental Airlines. et al., Order 93-6-6, June 11, 1993, pp. 6-7 (citing the Department's "longstanding practice" to "refrain from making extrabilateral route awards, save where we have reason to expect the foreign government to permit the operation on an extrabilateral basis"); Application of United Air Lines. Inc. and American Airlines. Inc., Order 89-4-6, April 4, 1989, p. 2 (dismissing applications of United and American for extrabilateral authority to serve Chicago-Tokyo on the ground that grant of such applications "would be inconsistent with the current aviation regime and would undermine our negotiations objectives"); U.S.-Vancouver Application, order 87-8-52, August 24, 1987, p. 2 ("where limited entry routes not provided for in the bilateral are at issue, it is our general-policy not to award U.S. carriers new route rights unless we have first obtained those rights from the foreign government involved"); TWA Exemption Dismissal, Order 85-9-1, September 1, 1985, p. 3 ("Our general policy on limited-entry routes not provided for in bilateral aviation agreements is to negotiate now route rights in advance of awarding new certificate authority"); American Airlines, Chicago-London Dismissal, order 85-4-44, April 9, 1985, p. 4 ("we believe this approach -- i.e., negotiate route rights first and then conduct a proceeding to select a carrier for the route -- is a sensible policy."). The Department recently confirmed its policy by deferring action on applications by numerous carriers for new authority to serve Japan and London's Heathrow Airport while talks with Japan and the U.K. are ongoing.

Like USAir, Northwest presently is precluded from adding new service between the United States and France. The Government of France also has refused to permit Northwest to serve the US-France market pursuant to code-sharing with KLM Royal Dutch Airlines, via Amsterdam. If and when the U.S. and France reach a new aviation agreement which authorizes new U.S. carrier service to/from France, all carriers will be given the opportunity to submit applications. USAir's present application may be considered at that time. To the extent there are more applicants for new US-France service than there are opportunities, the Department will have to conduct a comparative carrier selection proceeding to select among the competing applicants/gateways. Unless and until a new bilateral is reached, however, the Department should follow its well-established policy and precedent and refuse to consider any applications seeking new US-France authority, including the present application by USAir.

WHEREFORE, Northwest Airlines, Inc. respectfully urges the Department to deny as premature, or defer action upon the above-referenced Application of USAir.

Respectfully submitted,

Megan Rae Poldy

Associate General Counsel

NORTHWEST AIRLINES, INC.

901 15th Street, N.W., Suite 310

Washington, D.C. 20005

(202) 842-3193

November 5, 1997