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OST Docket Filings for July 5, 2006

Updated: 7/7/06 | 12:53 PM

Applications and Renewals:

Aeropycsa - Mexican Taxi Renewal

Flightexec - Canada-US Charter Renewal

IATA - Mail Vote 496 (Special Passenger Amending from Thailand to Africa, Middle East), North Atlantic Canada-Europe Expedited Resolution, North Atlantic USA-Europe and Mail Vote 492 (except Austria, Belgium, Czech Republic, Finland, France, Germany, Iceland, Italy, Netherlands, Scandinavia, Switzerland)

Answers and Replies:

Aerolineas Argentinas - Escrow Account Deposit Report

SNPRM on Control of US Airlines - Comments of ACI-Europe, ACI-North America, AFL-CIO TTD, Air Line Pilots Association, Aircraft Mechanics Fratermal, Association of European Airlines, bmi, British Airways, Continental, Delta, DePaul University College of Law, FedEx, Hawaiian Airlines, IATA, Independent Pilot Association, United, UPS, USA-BIAS, US Airways, Virgin Atlantic and Washington Airports Task Force

Notices of Action Taken:

Delta and El Al - US-Israel Codeshare - Corrected Copy

Notices and Orders:

EAS at Minto and Manley Hot Springs, AK - Reselecting Carrier

IATA Tariff Conference Proceeding - Show Cause




Aerolineas Argentinas, S.A.

OST-2003-15092 - International Air Transport Competitive Practices

July 5, 2006

Re: Escrow Account Deposit Report

Counsel: Rosen Weinhaus, John Romans

http://www.aerolineas.com.ar/

Index


Aeropycsa, S.A. de C.V.

OST-1996-1847 - Exemption Renewal - Mexico-US Charter

June 26, 2006

Application for Renewal of Exemption

AeropIycsa, S.A. de C.V., a Mexican operator of executive aircraft, requests a renewal of its exemption which authorizes Aeropycsa to engage in the foreign transportation of persons and their accompanying baggage in a small aircraft between Mexico an the United States. Aeropycsa also requests renewal of its stopover privileges and renewal of its relief from the requirement to obtain advance approval for each Mexico-U.S. flight, based on the belief that considerations of comity and reciprocity favor such relief. The Department granted the above authority on December 2, 1996. Aeropycsa requests that this authority, which is scheduled to expire on August 31, 2006, be renewed fix a period of at least one year.

Under current authority, Aeropycsa currently operates a single twelve passenger Canadair Challenger CL-6002B16, which is registered in Mexico. Aeropycsa has no immediate plans to acquire additional aircraft.

As under the current authorization, Aeropycsa anticipates approximately 30 flights to the United States per year, which would be undertaken regardless of seasonal variations. They would be primarily non-stop/multi-stop passenger flights. The usual or anticipated cargo or baggage on. these flights would be limited to the personal luggage of the passengers and/or spare parts to be repaired/overhauled.

Counsel: Luis Romero, 55-5261-8000

Index


Delta Air Lines, Inc. and El Al Israel Airlines, Ltd.

OST-2001-8772 - Exemption - US-Israel Codeshare

Filed June 9, 2006 | Issued July 3, 2006

Notice of Action Taken - Corrected Copy

By: Paul Gretch

http://www.delta.com/
http://www.elal.co.il/

Index


Essential Air Service at Minto and Manley Hot Springs, Alaska

Order 2006-7-4
OST-2004-17563

Issued July 5, 2006 | Served July 10, 2006

Order Reselecting Carrier

By Order 2004-9-6, September 10, 2004, the Department reselected Warbelow’s to provide subsidized EAS at Minto and Manley Hot Springs, through August 31, 2006. Under that order, Warbelow’s operates three flights a week over a Fairbanks-Manley Hot Springs-Minto-Fairbanks routing with 3-seat Cessna 206 or 207 aircraft, at an annual subsidy rate of $49,536. Warbelow’s also serves Rampart as an upline point.

In anticipation of the end of the rate term, the Department issued Order 2006-4-21 on April 21, 2006, soliciting proposals to provide efficient EAS, with subsidy support if necessary, at Minto and Manley Hot Springs.

Warbelow’s submitted the only proposal to provide EAS at Minto and Manley Hot Springs for a new two-year rate term.

By this order, the Department is reselecting Warbelow’s Air Ventures, Inc. to provide subsidized essential air service at Minto and Manley Hot Springs, Alaska, at an annual subsidy rate of $65,808 for the period of September 1, 2006 through August 31, 2008.

By: Todd Homan

Index


Flightexec Corp.

OST-2004-17388 - Exemption - Canada-US Charter Air Transportation

July 5, 2006

Application for Renewal of Exemption

Flightexec Corp. proposes to conduct non-scheduled international service between points in Canada and abroad. We are authorized to transport passengers and/or cargo on a charter basis between Canada and any other country.

Flightexec currently owns 1 Falcon 10 and leases 2, we also lease the Falcon 900 and the Citation Excel.

Flightexec Corp. has no intention to operate large equipment (60+ seats/over 18,000 lbs).

Counsel: Flightexec, Dina Regalado, 519-964-3712

http://www.flightexec.com/

Index


International Air Transport Association Tariff Conference Proceeding


Order 2006-7-3
OST-2006-25307

Issued and Served July 5, 2006

Order to Show Cause - Bookmarked

We have now determined that we should reexamine our approval and grant of antitrust immunity for the IATA by-laws insofar as they establish tariff conferences that discuss fares and rates between the United States and Europe and Australia. Developments in the airline business have eliminated much of the need for tariff conferences to establish interlineable fares, assuming that the availability of interlining in international markets ever depended on such fares. In addition, the European Union and the Commonwealth of Australia have tentatively determined to reduce or terminate the IATA agreement's immunity from their own competition laws, as described below. The European Union has already eliminated the immunity held by the IATA tariff conference agreement for cargo rates for markets within the European Union.

We are therefore proposing to withdraw our approval for the IATA tariff conference agreement insofar as the agreement authorizes passenger and cargo fare and rate discussions and agreements for the transatlantic and U.S.-Australia markets. We are tentatively reaffirming our earlier findings that the IATA tariff conference regime substantially reduces competition. We tentatively find that foreign policy concerns no longer require the continuation of antitrust immunity for tariff conference proceedings in those markets and, more importantly, that the agreement does not provide public benefits that are otherwise unobtainable by means that are materially less anti-competitive. The IATA by-laws' tariff conference provisions allow airline competitors to discuss and agree upon fares and rates, which reduces competition. If we disapprove the agreement under section 41309, that would automatically terminate its antitrust immunity under section 41308.

We are giving interested persons forty-five days to file comments on this order and thirty days to file replies to the comments submitted by others. After we review the comments, we will decide whether to finalize our tentative findings. We currently plan to complete this proceeding by the end of this year, if possible.

This order focuses on the IATA passenger tariff conferences, but the arrangements established by the IATA by‑laws for tariff conferences on cargo rates are substantially the same as the arrangements for tariff conferences on passenger fares. We believe that there are no significant differences between the passenger and cargo tariff conference provisions for purposes of our section 41309 analysis. Our tentative findings therefore are the same for both the passenger fare and cargo rate arrangements.

By: Michael Reynolds


OST-2006-25313

July 3, 2006

Application for Approval of Agreements

Mail Vote 496 - Resolution 010u Special Passenger Amending from Thailand to Africa, Middle East (Memo 0304) and (Memo 0294) R1 010u Intended Effective Date: 13 July 2006.

Counsel: IATA, Douglas Lavin


OST-2006-25316

July 5, 2006

Application for Approval of Agreements

TC12 North Atlantic Canada-Europe Expedited Resolution 002cj (Memo 0121) R1 002cj. Intended effective date: 1 September 2006.

Counsel: IATA, Douglas Lavin


OST-2006-25319

July 5, 2006

Application for Approval of Agreements

TC12 North Atlantic USA-Europe and Mail Vote 492 (except Austria, Belgium, Czech Republic, Finland, France, Germany, Iceland, Italy, Netherlands, Scandinavia, Switzerland) (Memo 0194). Intended effective date: 1 September 2006.

Counsel: IATA, Douglas Lavin

http://www.iata.org/

Index


Supplemental Notice of Proposed Rulemaking - Actual Control of US Airlines

OST-2003-15759


July 5, 2006

Comments of AFL-CIO Transportation Trades Department

If the DOT wants to make changes to airline foreign ownership and control rules, it should go through Congress, carefully explain what those changes are, why they are needed and then let the legislative branch work its will. With this NPRM, the DOT has overstepped its authority and done so in a manner that will weaken the US aviation industry, its workers and threaten national security. It is time for the DOT to step back from this misguided proposal and announce that it will withdraw its proposal to allow foreign interests to control US airlines.

By: AFL-CIO, Edward Wytkind


July 5, 2006

Comments of the Air Line Pilots Association - Bookmarked

Although the SNPRM further explains, and proposes to modify in certain respects, the Department's rulemaking proposal, the essence of the proposal remains unchanged. Both in its original form and as revised in the SNPRM, the proposed rule would "interpret" the statutory requirement that U.S. air carriers must be under the "actual control" of U.S. citizens in such a way as to permit foreign citizens to exercise control over any or all commercial aspects of that airlines operations -- such as the markets to be served, the rates to be charged, the type of equipment to be acquired and used, the flight schedules, etc.

ALPA continues to oppose this proposal on both legal and policy grounds. Although the SNPRM does respond in certain respects to some of the issues that ALPA raised in its earlier comments, none of the modifications or explanations contained in the SNPRM remove ALPA's fundamental objections to the proposal. We therefore adhere to the position stated in our original comments, that the Department's proposal is both contrary to the statute and contrary to the public interest.

By: ALPA, Jerry Anker, 202-797-4086, jerry.anker@alpa.org


July 5, 2006

Comments of Aircraft Mechanics Fraternal Association

AMFA remains opposed to DOT's rule change. The United States Congress, in it role of advice and consent, must act as the ultimate broker of such a policy shift, a role DOT is attempting to circumvent.

By: AMFA


July 4, 2006

Comments of Airports Council International-Europe

ACI EUROPE notes with satisfaction that this SNPRM expressly confirms the objective sought by DOT to apply existing US Statutory requirements on the actual control of US air carriers in a way that would expand the opportunities for foreign citizens to invest ana participate in the management of US air carriers, so as to enhance US carriers access to global capital markets.

ACI EUROPE also notes that the SNPRM provides greater clarity compared withe the original NPRM in a number of areas which are of great importance for potential foreign investors.

ACI EUROPE is concerned by the fact that the SNPRM has Introduced new elements which nave increased the uncertainty faced by foreign investors.

ACI EUROPE believes that the SNPRM does nor provide the clarity and certainty that would allow the contemplated policy change to act as an efficient and effective Incentive to foster foreign investment in US air carriers. unequivocal terms and conditions about planned investments and the ability to protect such investments are a prerequisite for investors worldwide and ultimately condition their final decision.

By: ACI-Europe


July 5, 2006

Comments of Airports Council International-North America | Word

We strongly recommend that DOT explicitly indicate in its final order that it will accept the kind of provisions on minority shareholder rights and termination conditions, protections and penalties normally found in commercial arrangements.

ACI-NA urges DOT to finalize its proposed policy change with the suggested clarifications in order to start the process of moving from its detrimental interpretation that there be “no semblance” of foreign control of U.S. air carriers to allowing U.S. air carriers the access to global capital already enjoyed by many other U.S. companies and to promote the related liberalization and new and competitive air services.

By: ACI-NA, Diane Peterson, 202-861-8085, dpeterson@aci-na.aero


July 4, 2006

Comments of the Association of European Airlines

AEA takes the objective as outlined in the NPRM to revise the US administrative provisions on “actual control of US carriers” as a positive step forward in that direction. However the SNPRM introduces new elements that affect the quality of the draft final rule.

The greater the degree of ambiguity and uncertainty in the final rule, the lower the incentive to invest will be. Therefore, the final rule should be aimed at meeting industry needs for new sources of investment and although the SNPRM states that no “template” is possible and that each case will continue to be examined on its own unique merits, this objective should be further pursued.

Following a close examination of the SNPRM, a number of new questions arise from the proposal, which as it stands, would discourage DOT’s stated objective of facilitating foreign investment in a US carrier.

By: AEA, Ulrich Schulte-Strathaus


July 5, 2006

Comments of British Airways

The Department’s May 5, 2006, Supplemental Notice of Proposed Rulemaking is a step backwards. The SNPRM creates new confusion and ambiguity. To the extent the SNPRM provides answers, those suggest more restrictive, not more liberal, policies would apply. Under these circumstances, it is unlikely that finalization of the SNPRM would facilitate access to foreign capital.

The more discretion reserved to the Department, the less certainty provided to investors. If the Department hopes to facilitate significant foreign investment, it should propose new legislation or, at the very least, promulgate new regulations, providing far more specificity, clarity, and certainty than the proposed policy statement.

Counsel: Garofalo Goerlich, Don Hainbach, 202-776-3970


July 5, 2006

Comments of British Midland International

It is bmi's conclusion that DOT's proposed policy thrust remains clear. bmi has suggested further refinements for the final rule to make the proposal unambiguous and attractive to potential investors.

We urge DOT to publish a final rule as soon as possible.

Counsel: bmi, Peter McClymont


July 5, 2006

Comments of Continental Airlines - Bookmarked

The Department's May 5, 2006, Supplemental Notice of Proposed Rulemaking at 71 Fed. Reg. 26425 is just as unlawful, poorly conceived and unworkable as the Department's November 2005 proposal. The Department's insistence on adopting a proposal turning the requirement for "actual control" by U.S. citizens of all activities of U.S. airlines all the time into permission for "actual control" of virtually all aspects of U.S. airlines by foreigners without a statutory change has alienated Congress, the European airlines the Department seeks to appease, airline employees and U.S. airlines. Although the Department claims it decided, after reviewing comments on its initial proposal and consulting with other Executive Branch agencies, "to strengthen the proposal in several areas," the Department in fact barely changed the proposed policy statement at all. As a result, the Foreign Control SNPRM fails to resolve any of the numerous significant objections raised in comments on the Foreign Control NPRM and by Congress.

The Department's proposed policy statement itself remains hopelessly vague. Since the proposed policy statement provides neither clarity nor transparency and rejects the only mechanisms proposed that would ensure adequate participation by interested stakeholders in the process for evaluating foreign control of individual U.S. airlines, the supplemental proposal is just as unlawful as the original proposal and just as certain to be rejected by Congress and the courts.

The proposal should be withdrawn in light of the obvious flaws in the Department's Foreign Control NPRM and SNPRM, the likelihood that Congress will not permit its adoption or implementation (and that a future Congress or Administration would reverse the policy), the fact that courts would overturn the proposed rule if Congress did not, the strong potential for litigation and other disputes if the rule became effective, and the fact that the very foreign investment the Department claims to be seeking would be discouraged by the Department's proposal.

Pursuit of a U.S.-EU air services agreement based on the Department's unlawful proposal would be irrational without resolving the critical issue of securing economically-viable, competitive slots and facilities at London Heathrow for Continental and other U.S. airlines that have been excluded from operating flights at Heathrow while the dominant carriers at Heathrow cornered the market for slots at critical times for transatlantic flights and secured all the competitive facilities at Heathrow. Rather than pursuing a rulemaking proposal fraught with danger and an EU-U.S. agreement that fails to protect U.S. interests adequately, the Department should return to the drawing board on both fronts: opening a dialogue with Congress on acceptable means for encouraging foreign investment in U.S. airlines and making it perfectly clear to the EU that, absent competitive and commercially viable access at Heathrow for additional U.S. airlines, a multilateral agreement simply cannot be agreed upon.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com


July 5, 2006

Comments of Delta Air Lines - Bookmarked

Although Delta supports the Department’s proposed new Policy Statement, Delta believes that one area of the SNPRM, relating to the issue of revocation of the delegation of authority to a foreigner, warrants clarification in order to ensure that the Department’s new policy statement achieves its expected benefits, including execution of an U.S.-EU Open Skies Agreement. Delta believes that such a clarification will respond to concerns voiced by certain U.S. and EU constituencies, facilitate a positive response to the Department’s proposal by the EU Member States, and accelerate the achievement of a new U.S.-EU Agreement.

The Department should eliminate the “revocation” requirement and emphasize the select points discussed above to mitigate potential concerns about the new standard.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com


July 3, 2006

Comments of DePaul University College of Law - International Aviation Law Institute

After reviewing the supplemental notice of proposed rulemaking recently published by the United States Department of Transportation it is apparent that, while useful clarifications and modifications have been inserted, one of the contemplated interpretive changes in particular is unlikely to “strengthen” the original proposed rule as the DOT suggests. The proposal to require that “any…delegation of [decision-making] authority [regarding commercial issues] to foreign interests by the U.S. citizen majority owners be revocable” is problematic. This interpretation, if followed, could potentially deter strategic investments in U.S. airlines by foreign investors and sidetrack European Union approval of the draft U.S./EU air transport agreement. However, the Institute fully supports the DOT’s broadening of the scope of decision-making authority that must remain under the “actual control” of U.S. citizens in the areas of safety, security, and national defense airlift commitments.

The Institute, as argued in our previous submission, believes that only a comprehensive elimination of foreign control limitations will truly liberate the marketplace. But the DOT’s approach remains a solid incremental step within the constraints imposed by the current law.

By: DePaul University


July 5, 2006

Comments of Federal Express Corporation - Bookmarked

FedEx wholeheartedly supports the Department's proposed policy statement. The proposal abides by Congress' instruction that actual control over a US airline remain in US hands, while reversing an unneccessarily restrictive and outdated agency interpretation under which foreign investors could not have even a shadow of substantial influence in the company in which they have invested. The proposal offers real value by allowing foreign investors greater participation in the commercial management of US airlines, and US airlines access to greater pools of capital.

Counsel: FedEx, Nancy Sparks, 202-756-2461, nssparks@fedex.com


July 5, 2006

Comments of Hawaiian Airlines

While Hawaiian would like to see a more far reaching change to the restrictions on foreign ownership in U.S. airlines than proposed in the SNPRM, we support the efforts of DOT to reduce the regulatory uncertainty that has become the reality for those having to deal with the legislated restrictions on the free flow of capital imposed on U.S. airlines. Our comments on this SNPRM deal exclusively with the proposition that DOT seek to further clarify and de-mystify the application of existing U.S. law in this area.

With the issuance of the SNPRM DOT has reaffirmed its intent to improve U.S. airlines’ access to capital by modifying the complex and difficult to administer “no semblance of control” test and replacing it with one more faithful to the “actual control” requirement of the statute. Upon receiving and analyzing the comments to the SNPRM, DOT proposes to issue a final rule that will streamline the process of regulating foreign investment in U.S. air carriers.

Hawaiian supports DOT’s efforts as set forth in the SNPRM because it has the potential to (1) improve the U.S. airline industry’s access to capital, and (2) reduce the regulatory burden associated with DOT’s current subjective process for conducting citizenship reviews during fitness determinations.

Counsel: Dow Lohnes, Jonathan Hill


July 5, 2006

Comments of the Independent Pilots Association

IPA argues today, as it argued in its earlier filing in this docket, for the Department to abandon this rulemaking effort and pursue a correct and legally appropriate path for attracting needed strategic investment capital to U.S. carriers and promoting free international aviation markets. This can be accomplished by DOT initiating the process for a change in U.S. law. A change in U.S. aviation ownership and control law would encourage significant strategic investment in U.S. carriers; it would promote liberalization of air services globally; and, the open, deliberative process required for a change in law would ensure that the interests of all U.S. airline industry stakeholders — including U.S. air carrier employees — would be taken into full account. This rulemaking, even as revised under the supplemental notice, will accomplish none of those objectives.

Counsel: IPA, Tom Nicholson, 800-285-4472, tnicholson@ipapilot.org


July 5, 2006

Comments of The International Air Transport Association

IATA understands the Department’s concern that a final rule with exclusive examples of acceptable or unacceptable control might limit its discretion to review and approve specific foreign investment in U.S. carriers in the future. However, given the importance of U.S. airline access to foreign capital and DOT’s stated goal to remove unnecessary barriers in this regard, the final rule should include as many examples and as much definition as possible of control provisions that will either be accepted or rejected by DOT officials going forward. The Department can maintain its discretion and ensure that it remains within the boundaries set by applicable statutes, by stating in the final rule that: (a) its list of provisions commonly demanded by global financial markets to stimulate investments by minority investors that ordinarily will not shift control to foreign citizens is not exclusive; and (b) it retains the right to construe all applicable provisions of relevant investment documents as a whole and on a case-by-case basis.

IATA repeats its firm support for the Department’s initiative to dismantle regulatory barriers that restrict U.S. airlines’ access to the global capital market. The Department can, and should, dismantle barriers created by overly restrictive, and sometimes conflicting, interpretations of the Actual Control provisions in the past, and provide the Iegal certainty that will enable U.S. airlines to gain greater access to the global capital market in the future.

Counsel: IATA, Douglas Lavin, 202-293-9292


July 5, 2006

Comments of United Air Lines - Bookmarked

United submits these Comments in support of the revised Policy Statement the Department has set out in its Supplemental Notice of Proposed Rulemaking. As United explained in its January 6, 2006, Comments supporting the Department's initial proposal, such a change in policy is a small - albeit important - step forward in the U.S. government's long-standing effort to transform the aviation industry from a highly-regulated, government-directed sector of the economy into an openly competitive global industry guided by market forces. United has been a strong and consistent supporter of the Department's efforts to eliminate outdated governmental restrictions that discourage global expansion of the U.S. airline industry.

As the SNPRM reflects, the Department has given careful consideration to the numerous comments it received in response to the NPRM. The Department has also engaged Congress in an extended dialogue to address any questions or concerns over the Policy Statement. This consensus building, coupled with the Department's well-established statutory authority to adopt the new Policy Statement, should allay concerns about the vulnerability of the Policy Statement to legal challenges by disgruntled parties with ulterior motives. The Department should, therefore, move forward expeditiously and adopt the proposed Policy Statement set out in the SNPRM.

Counsel: Wilmer Cutler, Bruce Rabinovitz


July 5, 2006

Comments of United Parcel Service

In the aviation sector, where we operate the ninth largest airline in the world, we have strongly supported and benefited from the U.S. Government Open Skies Policy and will continue to do so in the future. UPS sees the proposed U.S.-European Union Open Skies Agreement as a stepping stone toward a worldwide open market regime for international aviation. For our company, as for all major U.S. industries, economic globalization is not an option - it is a fact of life.

Over the longer term, we hope such an agreement can provide a framework both for reducing business impediments and helping address potential regulatory threats to our European business activities, such as night flight restrictions.

In considering the U.S.-E.U. agreement and the related DOT proposal, full account must be .taken of their positive implications for moving forward with the long-standing and bipartisan U.S. interest in achieving truly free and fair international trade in aviation. This is an important goal made even more essential by the fact of economic globalization. Short-lived commercial concerns of the type raised by some airlines in recent Congressional hearings should not divert attention from that goal.

Counsel: UPS and Kelley Drye, David Vaughan, 202-342-8451, dvaughan@kelleydrye.com


June 30, 2006

Comments of the United States Airports for Better International Air Service

USA-BIAS members are concerned about the concept introduced in the SNPRM that U.S.-citizen shareholders and board members must retain the ability to revoke their delegation of commercial management duties to foreign-citizen investors—in areas other than the sensitive ones of safety, security and national defense functions. Our concern is that unless clarified the revocation provision could be read to significantly weaken the incentives and ability of non-U.S. citizens to invest in U.S. airlines and as a result the proposed interpretation may not be acceptable to the EU thus impacting bringing the U.S.-EU agreement to fruition. We believe, however, that these concerns can be
alleviated by appropriate clarification in the final rule’s explanatory statement that will make clear precisely what conditions affecting revocation will be permitted and what will not. These concerns arise because the only guidance the Department provides on this important subject is the vague statement that revocation must “not be conditioned on terms that would make revocation impracticable.”

Our U.S. communities believe that enabling the implementation of the Open Aviation Area agreement with the European Union is of the highest priority, and we urge the Department to permit the broadest interpretation of control possible consistent with the statute, so that the EC and the EU Transport Ministers Council will be able to sign the existing draft agreement.

By: USA-BIAS


July 5, 2006

Comments of US Airways Group - Bookmarked

US Airways strongly opposes implementation of a rule or agreement in a way that affords UK interests the privileges that inure to "true" Open Skies partners of the United States - until and unless US Airways is assured of commercially meaningful access to Europe's most important airport, London Heathrow.

Counsel: US Airways, Howard Kass


July 5, 2006

Comments of Virgin Atlantic Airways

While the revised proposal purportedly preserves the objectives of the initial proposal, the way in which DOT has modified the proposal serves only to reinforce Virgin Atlantic’s initial conclusion that the proposal is deeply flawed, and offers less to prospective investors than DOT might believe.

While Virgin Atlantic welcomes the intention of DOT to move away from the narrow definition of “actual control” that has previously been used, Virgin Atlantic believes that the proposed changes will be insufficient in themselves to persuade a foreign company to invest in a US airline. In fact, certain of the modifications to the original proposal have made the NPRM less, rather than more, attractive to prospective investors. While Virgin Atlantic strongly supports the full liberalisation of all global air transport markets, it believes that the SNPRM cannot and will not be used as a meaningful vehicle for the relaxation of cross-border ownership restrictions.

Virgin Atlantic wishes to emphasise that its concern about the viability of the NPRM is not indicative of its overall support for air service liberalisation. In fact, Virgin Atlantic would urge negotiators from the US and EU to take steps that are more far-reaching than those being contemplated. Virgin Atlantic has strongly supported the creation of an Open Aviation Area between the EU and the US, which would remove all restrictions on ownership and control of airlines established within the OAA by nationals of any Party to the agreement. In Virgin Atlantic’s view, the current proposal does not go far enough, and should not be accepted as a “solution” to barriers to entry into the air transport market.

Counsel: Virgin, Barry Humphreys, barry.humphreys@fly.virgin.com


June 30, 2006

Comments of the Washington Airports Task Force

In our view, the SNPRM cannot be considered in isolation from the “Open Skies Plus” agreement that was negotiated last year with the European Union because the E.U. has clearly indicated it cannot go forward with such an agreement unless existing U.S. requirements that restrict ownership and control of U.S. carriers are liberalized, which is precisely what the SNPRM seeks to accomplish. An “Open Skies Plus” agreement between the U.S. and the E.U. is extremely important to us because it will, when implemented, be of profound benefit to many growing, as well as established, international gateways in the United States -- of which Washington Dulles International Airport is one.

This country’s Open Skies policy positioned our airlines to lead the formation of international alliances in the early 1990’s. The proposed U.S.-E.U. agreement would help our airlines and U.S. capital sustain that leadership. Without the U.S.-E.U. agreement, the major European carriers will be positioned to lead the world’s air transport industry. When we see the error of our ways we will then be left to negotiate our way back from a position of disadvantage. The world will not stand still and wait for us.

The Washington Airports Task Force, thus, strongly urges the Department to make final the rules proposed in the SNPRM so that the fruits of the U.S.-E.U. agreement can become available to our communities and air carriers as quickly as possible.

By: WATF, Leo Schefer

Index



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