Order 971108 - American International Airways, Inc. and Kitty Hawk Air Cargo, Inc.

OST Filings by Docket Number

American International Airways, Inc. and Kitty Hawk Air Cargo, Inc.

Order 97-11-8 | OST-97-3015 | Issued and Served November 6, 1997

Order Granting Exemption

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We will grant the request of Kitty Hawk and AIA for an exemption from the provisions of section 41105 pending our ruling on their request for a de facto transfer of AIA's economic authorities, subject to the condition that Kitty Hawk and AIA will remain separate and independently operated corporations until such a ruling has been made. Based on our preliminary review of the documentation underlying the applicants' proposed combination, we have not identified any provisions or transactions that would adversely affect either carrier's fitness or that would bar our eventual approval of the de facto transfer of AIA's economic authorities. Moreover, as the applicants note, where it is not contrary to the public interest, our practice has been to allow scheduled business transactions to go forward pending completion of all applicable regulatory processes. In this instance, Kitty Hawk and AIA have promised that their operations will not be merged prior to the Department's ruling on the de facto transfer issue; therefore, should we find cause to deny that request, KHI could divest itself of the Kalitta companies. We conclude that allowing the acquisition to close with a "keep-separate" condition pending our decision on the transfer will not impede the carriers' merger plans yet will prevent the formation of an irreversible situation.

By: Charles Hunnicutt