OST-97-2443 | May 5, 1997

Application of

For Additional Frequencies (U.S.-ECUADOR ALL-CARGO)

Challenge Air Cargo, Inc. ("Challenge") hereby requests that it be allocated additional scheduled all-cargo frequencies in the U.S.-Ecuador market. In support of this application, Challenge respectfully states as follows:

Within the past few weeks, several carriers - including, American International (Docket OST-97-2325), Florida West (Docket OST-97-2342) and Fine Airline (Docket OST-97-2423) - have filed applications for scheduled all-cargo frequencies in the U.S.-Ecuador market. These filings were triggered by the discovery that Millon Air currently is not exercising its authority in the market and apparently is not in a position to resume operations in the near future. It is unclear what action, if any, the Department may take in response to these filings. Nevertheless, to the extent that the Department may decide to reallocate to other carriers the three weekly authorizations previously granted

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to Millon Air, Challenge very much would like to receive one or more additional frequencies in the market.

Challenge has been providing scheduled all-cargo service between the United States and Ecuador since 1989. At the time Challenge initiated service to Ecuador, it was the only U.S. allcargo carrier in the market. Challenge now operates a full complement of seven weekly flights between the U.S. and Ecuador -the level currently authorized by DOT - together with frequent extra section flights.

If granted such authority, Challenge would operate additional Miami-Quito/Guayaquil-Miami frequencies which would complement its existing services in the market. Challenge's existing flights in the market consistently operate at high load factors - in fact, its Northbound flights often operate at load factors in excess of ninety percent - which underscores its urgent need for the additional frequencies. Since Challenge's permit from the Government of Ecuador gives it the right to operate additional frequencies, and Challenge has sufficient B757-200PF aircraft on hand with which to operate the service, it is in a position to begin service immediately.

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Challenge's qualifications to operate its proposed additional service to Ecuador are second to none. In addition to its seven weekly scheduled flights to Ecuador, Challenge also operates frequent scheduled services to Panama City, Bogota, San Jose, Lima, Caracas, San Pedro Sula, Guatemala City, San Salvador, Manaus/Sao Paula, Tegucigalpa, Santo Domingo and La Paz. While Miami, Challenge's hub, is the primary gateway for cargo traffic destined for Ecuador, by virtue of its established GSA arrangements in Tokyo, Frankfurt and London and its own sales offices in New York, Chicago, Atlanta, Houston, Washington and Los Angeles, Challenge also would be able to flow a substantial amount of cargo to and from Asia, Europe and North America to connect with its Miami-Ecuador services. Challenge's facilities at Miami also are unrivaled among U.S. operators. It recently opened a new 163,000 square foot warehouse facility with 26,000 square feet of cooler capacity and a state-of-the-art cargo handling system. Challenge also has constructed special cargo handling facilities at Quito and Guayaquil to better accommodate the needs of its customers.

WHEREFORE, for the foregoing reasons, Challenge Air Cargo, Inc. respectfully urges the Department to allocate to it additional scheduled all-cargo frequencies in the U.S.-Ecuador market.

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Respectfully submitted,

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

By:

William H. Callaway, Jr.

Counsel for CHALLENGE AIR CARGO, INC.

May 5, 1997