OST-00-7655 / US-Colombia Combination Service Proceeding / Answer of Delta Air Lines to Petition for Reconsideration of Continental Airlines / October 23, 2000
U.S.- COLOMBIA COMBINATION SERVICE PROCEEDING (2000) /
Docket OST-2000-7655
ANSWER OF DELTA AIR LINES, INC.
TO PETITION FOR RECONSIDERATION
OF CONTINENTAL AIRLINES, INC.
Continental's Petition for Reconsideration should be denied. The Petition raises nothing new and Continental merely repeats the same erroneous legal and factual arguments that the Department has already fully considered and addressed. The Department's Final Order was based on substantial evidence and provided a thorough and well-reasoned explanation of the Department's determination. Continental's complaints about the Department's procedures have no merit and provide no basis for reconsideration of the Final Order.
In light of Continental's prior vigorous defense of the Department's use of expedited route case procedures on occasions when Continental was awarded authority, Continental should not now be heard to complain that the very same procedures are deficient or somehow deny Continental "requisite due process." Petition at 2. Indeed, Continental has explained at length that such abbreviated
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procedures are a routine and appropriate exercise of the Department's decisionmaking authority:
American and the San Jose Parties complain mightily that the Department's procedure in this case is contrary to precedent and deprived the parties' [sic) of due process. This claim is disingenuous coming from American and San Jose since both were proponents of a similar but more expedited procedure in the 19-U U.S.-Japan Combination Service Proceeding, where the Department awarded 78 new U.S.-Japan frequencies, the only two new U.S.-Japan designations and significant new route authority based only on the pleadings and over objections by Continental and Continental Micronesia. (See
Consolidated Answer of Continental, Docket OST-96-1642 (August 17, 1998) at Paragraph l(emphasis added.).
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Now, when the shoe is on the other foot, Continental complains that these same routine procedures, which Continental previously advocated, are a "diverge[nce] from [the Department's] normal standards" and that the Department is judicially obligated to provide an "explanation" of its choice of procedure. Petition at 2. Neither of these contentions are true.
First, as so aptly described by Continental above, the procedures employed in this case are hardly a "divergence" from the Department's normal process. The Department has increasingly employed abbreviated procedures in simple carrier selection cases such as this one - a fact which Continental, as a repeated beneficiary of the Department's policy, should know better than anyone. The Department has already thoroughly explained in multiple Orders that Department has discretion to decide between competing proposals using expedited procedures when "no meaningful public interest purpose would be served by adopting further evidentiary procedures" consistent with the Department's "commitment to achieving sound regulatory results with a maximum of efficiency and a minimum of procedural burden."
Order 98-10-19 at 4; see also Order 97-7-25; Order 98-11-19.Second, there is no question that the Department has the legal authority to decide what internal procedures it will use in the circumstance of a particular case. Continental is owed no further "explanation" of the Department's
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procedures here. See, Delta Air Lines. Inc. v. Department of Transportation 51 F.3d 1065 (D.C. Cir. 1995). (Holding that the Department has discretion to use expedited show cause procedures and is not required to hold an evidentiary hearing in awarding international route authority.)
Continental's procedural arguments are utterly without merit, and its factual arguments fare no better. The Department's Show Cause Order took into account all of the significant public interest considerations affecting U.S.-Colombia service. The Department correctly determined that the better choice was authorizing the first service by Delta, thereby adding a strong new network competitor to Colombia, rather than allowing Continental, one of just two U.S. flag Colombia incumbents, to add a third small aircraft service to a secondary city in Colombia. /1
Continental seeks to ignore the significant market structure and service improvements that will result from installing a third network competitor to Colombia. Regardless of the number of gateways served by Continental and American, travelers today have just two U.S. flag choices for service to
1/ Delta's B-757 aircraft will provide nearly 50 percent more nonstop Colombia capacity than Continental's B-737 proposal. The Department has routinely decided simple expedited cases such as this without the benefit of detailed traffic forecasts. However, in this instance, given Delta's overwhelming capacity advantage, it is readily apparent even to the most casual observer which carrier will benefit the most U.S.-Colombia passengers.
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Colombia. When Delta begins service from Atlanta, travelers in virtually every city across the country will have three competitive choices. /2
The alleged "factual discrepancies" that Continental complains about in the Show Cause Order amount to nothing more than inadvertent clerical and arithmetic errors, which in no way affected the valialty of the Department's fundamental analysis that it was more beneficial to authorize Delta as a new nonstop competitor to Colombia, than to award Continental its third Colombia route. Moreover, the minor errors noted by Continental were fully addressed and corrected in the Department's final Order. There is no need to reconsider them again here.
The Department fully considered all the arguments raised again by Continental's Petition in favor of its Houston-Cali proposal, but the Department found that Delta's Atlanta-Bogota proposal would produce superior public
2/ Considering that Continental has been rapidly shrinking across its Latin American route network - withdrawing from markets such as Bolivia, and Chile (where Delta is introducing new service), Continental may soon find that it has surplus Bogota frequencies at its disposal following Delta's entry into Colombia. In such circumstances, Continental would be free to seek to move a portion of its current Bogota frequencies to less vigorously competitive Colombia destinations, such as Cali.
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benefits. While Continental may be disappointed with the result, there was nothing arbitrary or capricious about the Department's decision.
Wherefore, the Department should deny Continental's Petition for Reconsideration.
Respectfully submitted,
Robert Cohn
Alexander Van der Bellen
October 23, 2000