OST-98-3435 / Federal Express / US-Japan All-Cargo / February 5, 1998

Notice: Answers to this Application are due to be filed on March 5, 1998.

Application of :

FEDERAL EXPRESS CORPORATION : Docket OST-98-3435

for amendment of a certificate of public convenience and necessity pursuant to 49 U . S. C . §41110

(U.S.-Japan All-Cargo Service)

Federal Express Corporation (Federal Express) hereby applies, pursuant to 49 U.S.C. §41110 and Subpart Q of the Procedural Regulations (14 C.F.R. Part 302.1701, et seq.) of the Department of Transportation (the Department), for amendment of its existing certificate authority to provide scheduled foreign air transportation of property and mail between points in the United States, on the one hand, and points in Japan, on the other hand, as contained in Federal Express' certificate of public convenience and necessity for Route 205-F. The purpose of this application is to amend the route description in Federal Express' U.S.-Japan all-cargo certificate for Route 205-F to conform to the liberalized U.S.-flag all-cargo route authority for "incumbent" carriers designated pursuant to the August 11, 1952 Civil Air Transport Agreement

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Specifically, the 1998 MOC provides and/or confirms that Federal Express, as the incumbent U.S.-flag all-cargo carrier under the 1952 Agreement, enjoys the right to operate scheduled all-cargo services between any point or points in the U.S. and any point or points in Japan, either directly or via intermediate points without limitation, and beyond Japan, with full traffic rights, to any point or points outside of Japan.

Federal Express requests that the foregoing amended certificate authority be granted for a five-year term, or, at a minimum, through June 2, 1999, which date is co-extensive with the term of Federal Express' most recently renewed U.S.-Japan certificate authority as described hereinafter.

In support of this Application, Federal Express states as follows:

1. Federal Express is a corporation duly organized and existing under and pursuant to the laws of the State of Delaware, with its principal offices located at 2005 Corporate Avenue, Memphis, Tennessee 38132.

2. Federal Express is a citizen of the United States, as defined in 49 U.S.C. § 40102(a)(15). The president and more than two-thirds of the board of directors and other managing officers of Federal Express are citizens of the United States, and more than seventy-five percent of the issued and outstanding voting stock of Federal Express is owned or controlled by persons who are citizens of the

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United States or one of its possessions. Federal Express is prepared to furnish by affidavit or otherwise such evidence as may be necessary in support of the facts set forth above.

3. Federal Express is an air carrier of property and mail in scheduled air transportation, operating such services between numerous points in the United States pursuant to an All-Cargo Air Service Certificate issued under 49 U.S.C. § 41103, and in numerous international markets pursuant to various Certificates of Public Convenience and Necessity issued under 49 U.S.C. § 41102.

5. Federal Express hereby requests that its existing Certificate for Route 205-F be amended to revise the U.S.-Japan route description in that certificate so as to authorize Federal Express to provide scheduled all-cargo service:

Federal Express suggests that the foregoing amendment be accomplished through insertion of the foregoing route description as a new

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Segment 4 in Route 205-F, and the deletion of Japan from the countries named in Segment 3 of the Route 205-F, with a conforming revision to Condition (10) of that certificate.

6. At the present time, Federal Express operates numerous scheduled all-cargo flights each week between the United States and Japan utilizing various freighter aircraft in its existing fleet, including the DC-10-30, MD-11 and A-310 aircraft, operating over various routines between the United States and Japan, and beyond Japan to points in various other countries.

Federal Express anticipates that it will make immediate changes in its existing U.S.-Japan flight schedules to operate new services beyond Japan to points in Indonesia and Macau, and will begin carrying local 5th freedom traffic on its existing "blind-sector" operations between Tokyo and points in China. The foregoing immediate schedule revisions contemplated by Federal Express will not involve any significant change in the current level of total flight hours flown by Federal Express in its existing U.S.-Japan flight operations. Accordingly, grant of the requested amendment will not result in any material change in the annual fuel consumption requirements associated with the U.S.-Japan operations of Federal Express. /1

1/ In light of the limited and non-controversial nature of the amended certificate authority requested in this application, Federal Express requests the Department to waive compliance with Sections 201.4(e) and 201.4(f) of its Economic Regulations, and Sections 302.1704(a) and (b) and 302.1707 of its Procedural Regulations. Federal Express will, of course, promptly submit any additional information in support of this application which the Department may request.

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7. Federal Express submits that amendment of its existing U.S.-Japan certificate authority, as requested in this application, is wholly consistent with the terms of the 1952 Agreement, as amended and/or confirmed by the 1998 MOC between the U.S. and Japan. Grant of the requested amendment is also consistent with the public convenience and necessity, in that it will afford increased operating flexibility to enable Federal Express to adjust the routing and frequency of its U.S.-Japan services more quickly in response to shifting operational or traffic-demand considerations. That increased operating flexibility will enhance the ability of Federal Express to provide efficient, reliable and high-quality all-cargo service between the U.S. and Japan, on which thousands of its customers rely to meet their U.S.-Japan expedited air express and time-definite air freight transportation requirements.

8. Federal Express is fit, willing and able to perform the air transportation applied for herein and to conform to the provisions of the Act and the rules, regulations, and requirements of the Department thereunder. To the extent necessary, Federal Express requests the Department to take official notice pursuant to Rule 24 of the Procedural Regulations of the extensive data on file at the Department, including Federal Express' Form 41 reports and other evidence submitted by Federal Express in recent competitive carrier-selection proceedings, which conclusively establishes the fitness of Federal Express to operate the services at issue.

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9. Finally, Federal Express requests that this certificate amendment application be processed through expedited non-hearing procedures pursuant to Subpart Q of the Department's Procedural Regulations. There are no issues of material fact which require an evidentiary hearing in the case of this application, and the use of expedited non-hearing procedures will serve the public interest by making efficient use of the Department's staff and resources.

WHEREFORE, Federal Express respectfully requests that the Department issue an order amending Federal Express' Certificate for Route 205-F authorizing Federal Express to provide scheduled foreign air transportation of property and mail between points in the United States and points in Japan, as requested in this application.

Respectfully submitted,

Nathaniel P. Breed, Jr.

SHAW PITTMAN POTTS TROWBRIDGE

Attorneys for FEDERAL EXPRESS CORPORATION