OST-98-4010 / Federal Express / New Cargo Certificate Authority / June 29, 1998

FEDERAL EXPRESS REQUESTS THAT THIS APPLICATION BE PROCESSED THROUGH EXPEDITED NONHEARING PROCEDURES PURSUANT TO SUBPART Q OF THE PROCEDURAL REGULATIONS OF THE DEPARTMENT.

Notice: Answers to this Application are due to be filed on July 27, 1998.

Application of :

FEDERAL EXPRESS CORPORATION : Docket OST-98-4010

for issuance of a new certificate of public convenience and necessity pursuant to 49 U.S.C. §41102

(Foreign All-Cargo Air Transportation)

Federal Express Corporation (Federal Express) hereby applies, pursuant to 49 U.S.C. §41102 and Subpart Q of the Procedural Regulations (14 C.F.R. Part 302.1701, et seq.) of the Department of Transportation (the Department), for issuance of a new certificate of public convenience and necessity authorizing Federal Express to provide scheduled foreign air transportation of property and mail between points in the United States, on the one hand, and points in the forty-eight (48) foreign countries listed herein, on the other hand. The purpose of this application is to expand the existing all-cargo certificate authority held by Federal Express to encompass authority to serve various other countries which place no limits on U.S.-flag all-cargo service designations, either pursuant to

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existing bilateral air transport service agreements with the United States or in accordance with principles of comity and reciprocity.

Federal Express requests that the foregoing new certificate authority be granted on a discretionary basis for an indefinite term, based on the absence of any limitations on U.S.-flag all-cargo designations between the U.S. and each of the countries applied for in this Application.

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. Federal Express is a wholly-owned subsidiary of FDX Corporation, which is a holding-company corporation duly organized and existing under and pursuant to the laws of the State of Delaware. More than seventy-five percent of the issued and outstanding voting stock of FDX Corporation is owned or controlled by persons who are citizens of the 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

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United States pursuant to an All-Cargo Air Service Certificate issued under 49 U.S.C. § 41 103, and in numerous international markets pursuant to various Certificates of Public Convenience and Necessity issued under 49 U.S.C. § 41102.

4. Federal Express hereby requests that it be issued a new Certificate of Public Convenience and Necessity authorizing Federal Express to provide scheduled all-cargo service:

"Between any point or points in the United States, on the one hand, and any point or points in the following countries, on the other hand:

Albania Kyrgyz Republic

Armenia Latvia

Aruba Lithuania

Azerbaijan Macao

Barbados Macedonia

Belarus Malawi

Bosnia Malta

Botswana Moldova

Bulgaria Namibia

Cote d'Ivoire Netherlands Antilles

Costa Rica New Zealand

Croatia Nicaragua

Czech Republic Panama

Dominican Republic Peru

El Salvador Qatar

Estonia Slovakia

Ethiopia Slovenia

Georgia Tajikistan

Ghana Tanzania

Greece Trinidad and Tobago

Guatemala Turkmenistan

Honduras Uganda

Hungary Uzbekistan

Jordan Zaire

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5. Federal Express submits that grant of the scheduled all-cargo authority requested in this application is wholly consistent with existing bilateral air transport service agreements between the United States and each of the foregoing listed countries with which the U.S. has entered into such agreements. In the case of all other listed countries, Federal Express submits that the authority requested in this application is consistent with principles of comity and reciprocity.

6. Federal Express further submits that grant of the authority requested in this application, although broad in geographic scope, will not result in any "substantial change" in the existing worldwide scheduled all-cargo operations by Federal Express within the meaning of Section 204.5(a) of the Department's Economic Regulations. Moreover, Federal Express anticipates that it will make no immediate changes in its existing international flight schedules following the grant of this application, in light of the developmental nature of the markets at issue, and in reliance on the discretionary nature of the certificate authority requested.

7. In light of the limited and non-controversial nature of the new 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, insofar as those regulations require applicants for certificate authority to provide detailed information relating to proposed points to be served, flight schedules and aircraft to be operated, and related annual operating and fuel-consumption statistics. Federal Express will, of course, promptly submit any

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additional information in support of this application which the Department may request. Furthermore, in light of the lack of any significant near-term planned change in the level of operations flown by Federal Express in its international operations, grant of the requested new certificate will not result in any material change in the annual fuel consumption requirements of Federal Express, and thus will not constitute a major regulatory action by the Department within the meaning of Section 313.4(a)(1) of the Department's Economic Regulations.

8. Federal Express submits that grant of the requested authority is consistent with the public convenience and necessity, in that it will expand the ability of Federal Express to adjust the scope of its international air express and time-definite air freight services at its own discretion in response to shifting traffic-demand and operational 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 each of the foreign countries at issue, on which thousands of its customers rely to meet their expedited air express and time-definite air freight transportation requirements. /1

9. 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

1/ Federal Express currently holds temporary exemption authority to serve five of the countries listed in this application (Barbados, Macau, New Zealand, Panama and Trinidad/Tobago). In addition, Federal Express currently provides indirect all-cargo air transportation to most of the countries at issue in this application through the exercise of the authority of Federal Express to provide worldwide air freight forwarder services, utilizing direct air transportation provided by other U.S. and foreign air carriers, pursuant to the blanket exemption authority contained in Part 296 of the Department's Economic Regulations.

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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 the detailed Form 41 reports filed by Federal Express 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.

10. Finally, Federal Express requests that this certificate 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.

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WHEREFORE, Federal Express respectfully requests that the Department issue a new Certificate of Public Convenience and Necessity authorizing Federal Express to provide scheduled foreign air transportation of property and mail between points in the United States and points in forty-eight (48) foreign countries, as requested in this application.

Respectfully submitted,

Nathaniel P. Breed, Jr.

SHAW PITTMAN POTTS TROWBRIDGE

Attorneys for FEDERAL EXPRESS CORPORATION

June 29, 1998