Order 00-10-14

U.S.- Egypt Third Country Codeshare Opportunities Delta Air Lines, Inc. and Air France

We have tentatively decided that Delta's proposed service via Paris with Air France is subject to our review before implementation and to competitive consideration with the application of American. We have further tentatively decided, upon such review and consideration, that Delta should be selected for Egypt third-country code-share services with Air France.

Only one U.S. and one Egyptian carrier offer direct service between the United States and Egypt. On the other hand, under our agreement with Egypt, three U.S. carriers can offer thirdcountry code-share service. Thus, code-share opportunities under the agreement represent a valuable benefit for travelers in this market, providing the public with a variety of service options and the benefits that derive from competitive opportunities. In these circumstances, we tentatively conclude that the public interest requires that we act here to maximize the use of the bilateral code-share rights. Since one of the three Egypt opportunities is currently unused, this means acting to authorize another third-country code-share operation.

While both Delta and American have presented proposals that would offer benefits to the public, we tentatively find that Delta's proposal offers the greater overall benefits, and we thus tentatively conclude that Delta should be authorized to use the designation available for third-country code-share services to Egypt.

First, Delta would offer an additional weekly frequency. Delta and Air France would provide seven weekly services as opposed to six for American and Swissair. Furthermore, the Delta/Air France operation would be provided with somewhat larger-capacity aircraft. Air France serves the Paris-Cairo market with either B777or Airbus 343 aircraft while Swissair serves the Zurich-Cairo market with Airbus 332 aircraft. While American would provide nonstop connecting service to an additional U.S. city (ten versus Delta's nine), seven of those cities are the same as those to be served by Delta. We tentatively believe that overall the benefits offered by American are outweighed by the service benefits offered by Delta.

By:  Susan McDermott

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