OST-95-911 / Korean Air Lines / Korea-Saipan / Motions and Further Response of World Airways / April 2, 1998

Application of

for an exemption from 49 U.S.C. § 41301

(Republic of Korea - Saipan)

OF WORLD AIRWAYS. INC.

World recognizes that this further response is an unauthorized document. Nevertheless, it believes it should be given special dispensation to submit it, and it respectfully moves for permission to do so.

KAL's reply contains new matter not set forth in its application. For this reason alone, World should be allowed to file a limited further response. KAL could and should have discussed this new matter in its application, and its intentional

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failure or oversight at that time cannot be overlooked. Moreover, it should not be allowed to insert new matter at the reply stage of this proceeding. But if new matter is to be accepted and considered, fairness dictates that World be permitted to respond.

In addition, to the extent necessary, World respectfully moves for permission to file its further response late. This pleading has been prepared, coordinated and filed with the Department within the shortest possible time after receipt of KAL's reply, and World should not be deprived of its right to respond.

For all these reasons, World respectfully moves that the Department accept this further response.

In its answer, World showed that KAL had failed to offer evidence and argument sufficient to establish that approval of its application satisfied the most important of the governing statutory requirements. Indeed, World demonstrated that KAL offered no evidence intended to show that approval of its exemption application would be "consistent with the public interest." Accordingly, World urged the Department to dismiss the application for failure to satisfy governing legal standards.

KAL's response demonstrates either a failure to understand and appreciate the importance of compliance with Congressional and Departmental mandates or utter disdain for its obligation to

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address and satisfy those standards. It is perhaps a reflection of that position that KAL chooses to characterize World's objections as inconsequential "rhetoric" or "carping."

World believes that Congressional and Departmental decisional standards are serious and must be satisfied by all applicants -- most especially by those which know they face serious problems trying to satisfy the governing public interest standards. KAL's effort to finesse those standards or dismiss them as unimportant details should not be sanctioned.

Even in its reply, KAL minimizes the significance of its public interest obligations. For example, KAL asserts that its application "demonstrated" that renewal of its exemption "would benefit the traveling and shipping public." It is true that such a statement is included in the application as is an allegation that renewal of the exemption would be "fully consistent" with the U.S.-Korea bilateral. Neither of those conclusions is supported by any probative evidence, however, and neither is entitled to any weight.

It simply would not be credible for KAL to contend that it did not have to address and offer evidence to support its "public interest" contentions. KAL knew about World's dispute with the Government of Korea, the U.S. Government's effort to help World resolve that dispute, the failure and frustration of that effort for almost two years, and the Department's many public expressions of concern about it. Nevertheless, in its application, KAL chose to ignore all these matters. KAL should

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not be permitted to rely on conclusory statements to satisfy its obligation to show that approval of this application would be consistent with the public interest. As a result of this failing, the application should be dismissed.

In the alternative, the application should be denied on its merits. This is not the first time KAL has faced opposition from World in Department proceedings, and it is not the first time KAL has been obligated to explain away its government's action. It has become KAL's style to deal with World's controversy with the Korean Government by relying upon statements which have absolutely no factual basis. And it has responded in that manner here. KAL readily admits that it is not able to offer any probative evidence -- or what it calls "first-hand knowledge" with respect to the dispute. With this admission, the Department should dismiss all the unsupported observations KAL offers based on what it allegedly "understands" or what "appears" to it to be fact or what it believes "may have been."

To be clear, World categorically states that there are no open issues, no unanswered questions, and no unreturned requests for information respecting the nature of World's proposed operation in the U.S.-Korea-Malaysia market. Any suggestion to the contrary is baseless. The fact of the matter is, as World stated in its March 5, 1998 answer in this proceeding,

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KAL's suggestion that the Department should continue to defer asserting an effective response to the Government of Korea's recalcitrance by pursuing World's controversy with the Government of Korea "through other means" borders on silliness. For almost two years, the Department has effectively stayed its hand, limited its response, and refused to take decisive action against renewal applications filed by Korean carriers. The Department's patience has not been rewarded, and there is no reason to believe that further forbearance will be productive in any way.

In summary, for all these reasons, World respectfully requests that the KAL application be dismissed for failure to comply with governing statutory and Departmental requirements or,

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in the alternative, denied on its merits because it is impossible for the Department to find that approval would be "consistent with the public interest."

Respectfully submitted,

John L. Richardson

SEEGER POTTER RICHARDSON

2121 K Street, N.W.

Suite 700

Washington, D.C. 20037

(202) 496-1234

April 2, 1998