Home | OST Filings by Number | OST Orders and Notices | OST Filings by Carrier
OST Filings by Proceeding | OST Filings by Day | Office of Intl Aviation Filings by Carrier | Office of Intl Filings by Day

OST-99-5723

Expanded Air Services and Hawaii International Airports

The State of Hawaii respectfully urges the Department to issue an Order granting blanket exemption authority to all foreign air carriers which currently hold or subsequently receive effective Department authority, and inviting applications by foreign air carriers for further specific exemption authority, as set forth in Order 96-11-2 and Order 99-5-9, for the purpose of permitting and promoting expanded international air service activity at Hawaii's two international airports, as requested in this Petition.

Counsel:  Hawaii and Shaw Pittman, Nathaniel Breed, 202-663-8078

Expanded Air Services / Petition of The State of Hawaii

The referenced petition was filed at the Department on behalf of the State of Hawaii yesterday, and was assigned docket number OST-99-5723. The purpose of this letter, which is being sent to all persons served with the Petition, is to apprise interested persons that the docket number for the Hawaii Petition is OST-99-5723, rather than the erroneous docket number which appears on page 1 of the Petition and which should be disregarded. In addition, this letter will confirm my understanding that the due date for Answers to Hawaii's Petition is Thursday, June 3, 1999 in accordance with Rule 6 of the Department's Rules of Practice.

Counsel:  Shaw Pittman, Nathaniel Breed, 202-663-8078

Expanded Air Services at Hawaii International Airports

The purpose of this letter, which is being sent to all persons served with the referenced Petition of the State of Hawaii, is to advise interested persons that I have just been advised that the Office of the General Counsel has decided to establish a 15-day period for the filing of Answers to the referenced Petition, rather than the 7-day answer period provided for by Rule 6 of the Department's Rules of Practice. As thus modified, Answers to Hawaii's Petition are due to be filed on or before June 8, 1999.

Counsel:  Shaw Pittman, Nathaniel Breed, Jr., for the State of Hawaii, 202.663.8078, nathaniel.breed@shawpittman.com

Expanded Air Services at Hawaii International Airports

The answer to Hawaii's problem lies in expanding reciprocal opportunities in countries which currently lack open skies agreements with the U.S. Where open skies agreements already exist, the only inhibition on expanded service is the reduced traffic flow caused by the current difficulties in Asian economies. As those economies improve, expanded services will be operated where bilateral rights and airport access are available to permit such operations. With no additional slots available at the critical Narita Airport, however, service between Japan and Hawaii by U.S. carriers will not be able to increase because of slot constraints. Granting Japanese airlines additional Hawaii rights without, addressing the Narita slot issues would sacrifice long-term access for extremely limited short-term goals. If reciprocal rights - and the slots to use them - are available to U.S. airlines, however, the U.S. should be willing to negotiate additional opportunities for Hawaii. Indeed, Continental and Continental Micronesia supported an "open skies" proposal for services between points in Japan and Hawaii, Guam and Saipan in negotiations with Japan, but no such agreement was obtained.

Counsel:  Continenetal and Crowell Moring, Bruce Keiner, 202-642-2615

Delta recognizes and appreciates Hawaii's desire to encourage additional foreign air service, which Delta understands is extremely important to the State's economy. However, Delta is concerned that certain actions proposed by the State would lessen U.S. negotiating leverage to achieve liberal aviation agreements in the Pacific, and that the resulting situation would have the unintended consequence of reducing Asia - Hawaii opportunities for U.S. carriers ultimately producing fewer air service benefits for the State.  The Department should not give up Hawaii access - an important motivation for future negotiations with Japan - particularly when such action is unlikely to result in any immediate service benefit to the State. The situation in China is even worse. China is tightly frequency and designation controlled, -and Delta's first opportunity to serve China will not come until 2001. Chinese carriers should not be invited to freely serve Hawaii, seek extrabilateral service points on the U.S. mainland, or be relieved of bilateral frequency limitations by virtue of the fact that such services may be operated via Hawaii.

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-663-8060

Hawaii's second request - a grant of blanket exemption authority permitting foreign air carriers to serve any point or points in Hawaii, and coterminalize those points with other points in the U.S. for which they hold authority - is no small request. In the interest of supporting Hawaii's efforts to bolster its economy, however, United will not oppose this unilateral expansion of operating authority to foreign air carriers. At the same time, however, it should be noted that Hawaii's requested relief would permit many carriers from non-Open Skies countries to benefit from serving additional points in Hawaii and coterminalizing their Hawaii service in a manner not otherwise authorized by the applicable bilateral agreements. In the interests of protecting the U.S. bilateral negotiating position with respect to these limited-entry countries, the Department should withhold liberalized authority from foreign carriers whose homeland governments impose unacceptable restrictions on the traffic rights or operating flexibility of U.S. carriers.   Hawaii's third request - that foreign air carriers be granted, on the basis of individual applications, authority to serve additional mainland U.S. points on an extra-bilateral basis provided they operate via Hawaii - is a proposal with which United cannot agree. Adopting such a policy would severely undermine U.S. negotiating leverage and inflict competitive harm on U.S. carriers that would continue to be subject to restrictive aviation regimes abroad while their foreign counterparts receive the unilateral grant of virtually unlimited access to the U.S.

Counsel:  United and Kirkland Ellis, Jeffrey Manley, 202-879-5161, jeffrey_manley@kirkland.com

Expanded Air Services at Hawaii International Airports

Accordingly, Hawaii respectfully submits that the concerns expressed by the answering carriers - while valid - do not demonstrate any reason why the relief requested by Hawaii in its Petition should not be granted in its entirety. On the contrary, Hawaii has demonstrated, and the answering carriers do not dispute, that grant of the relief requested by Hawaii will provide potentially significant economic benefits to Hawaii (and to U.S. air carriers serving Hawaii), and that Hawaii urgently needs those new revenues to offset the adverse economic impact of reductions in foreign passenger and cargo traffic and foreign air carrier service which have resulted from the recent distressed economic conditions throughout the Asia/Pacific region.

Counsel:  Hawaii and Shaw Pittman, Nathaniel Breed, 202-663-8078

Expanded Air Services at Hawaii International Airports

Hawaii's attempt to equate its situation with that of Alaska is untenable. Order 99-5-9, which finalized the expanded, extra-bilateral service available to foreign carriers that stopped in Alaska, was promulgated to mitigate the adverse effects (on Alaska) of new long-range aircraft and the opening of new overflight routes over Russia-not because of an unfortunate but temporary downturn in the economic cycle. Hawaii, unlike Alaska, has been, is, and will continue to be a popular international traffic destination in its own right, and to apply to Hawaii the same extra-bilateral exemption procedures as applied to Alaska would amount to a long-term, unreciprocated loss of U.S. bilateral bargaining power in exchange for remedying a short-term problem relating to the present economic downturn in Asia.  Many of the foreign air carriers that would be eligible to take advantage of expanded extra-bilateral privileges connected with Hawaii are from limited-entry countries in the Asia-Pacific region. The public interest of ensuring a continued level playing field for the U.S. in the international air traffic bargaining arena vis-a-vis these countries is particularly pressing. Granting the carriers of these countries such extensive extra-bilateral privileges would unnecessarily put the U.S. at a disadvantage because these countries would immediately be getting something for nothing. Moreover, any future incentive to expand and liberalize their own air service markets by granting reciprocal expanded access to U.S. carriers would be substantially reduced or even eliminated.

Counsel:  Kirkland & Ellis, Jeffrey Manley for United, 202.879.5161, jeffrey_manley@kirkland.com

Expanded Air Service at Hawaii International Airports

Hawaii submits that United misapprehends Hawaii’s position. As Hawaii clearly stated in its Petition and subsequent Reply, Hawaii has emphasized its intention that the liberalized authority for foreign air carriers proposed in Hawaii’s Petition should not be granted to foreign carriers "whose homeland governments impose unacceptable restrictions on the traffic rights or operating flexibility of U.S. air carriers in those countries" Hawaii intended for that limitation to apply to all three forms of liberalized authority contemplated by its Petition. Hawaii hereby reconfirms its intention that applications filed in response to the invitation to foreign air carriers to apply for authority to serve new points in the U.S. mainland on an extra-bilateral basis in conjunction with operations serving Hawaii should be carefully evaluated by the Department in accordance with the Department’s international aviation policies and negotiating objectives. In that connection, Hawaii agrees with United that application of the eligibility and decisional standards established by the Department in the 1990 International Cities Program (Order 90-1-62, p. 5) would be appropriate in the context of extra-bilateral applications by foreign air carriers serving Hawaii.

Counsel:  Shaw Pittman, Nathaniel Breed, Jr. for Hawaii, 202.663.8078

Expanded Air Services at Hawaii International Airports

Counsel:  Shaw Pittman, Nathaniel Breed

Expanded Air Services at Hawaii International Airports

By:  Bradley Mims

Expanded Air Services at Hawaii International Airport

On December 14, 1999, the U.S. Department of Transportation issued an Order, 99-12-10, granting certain foreign air carriers blanket exemption authority under 49 U.S.C. § 41301 to conduct expanded cargo transfer activities at Honolulu and Kona International airports, to serve Honolulu and Kona, and coterminalize these Hawaiian destinations with other U.S. points. In addition, DOT invited certain foreign carriers to apply for authority to serve new U.S. points on an extrabilateral basis, by also serving Honolulu and/or Kona. This "Expanded Air Services Authority" is set to expire on December 13, 2001.

Therefore, the State of Hawaii hereby requests that the Department renew the Expanded Air Services Authority beyond its termination date. Pursuant to Part 377 of the Department's Regulations, the State of Hawaii intends to rely upon the automatic renewal provision of 5 U.S.C. § 558(c) to continue this exemption authority in effect pending final DOT action on this petition.

The State of Hawaii also requests that the Department extend the applicability of the blanket exemption authority to include Hilo International Airport.

Counsel:  Hawaii and Spiegel McDiarmid, John Corbett, 202-879-4000

Expanded Air Services at Hawaii International Airport

Background: By Order 99-12- 10, issued December 10, 1999, the Department granted the petition of the State of Hawaii requesting certain blanket exemption authority to foreign air carriers. Specifically, we granted blanket exemption authority to all foreign air carriers that hold scheduled permit or exemption authority (except foreign air carriers of the United Kingdom) 1 (1) to conduct expanded cargo transfer flexibility at Honolulu and Kona International Airports and (2) to serve Honolulu and Kona, and to coterminalize Honolulu and Kona with other U.S. points for which they hold our authority. We also invited eligible foreign carriers to apply, subject to the standard discussed in Order 99-12- 10, for authority to serve new U.S. points on an extrabilateral basis, so long as these flights also serve Honolulu and/or Kona.

Relief requested: On April 12, 2001, the State of Hawaii petitioned the Department to renew the authority granted by Order 99-12- 10, and to extend the applicability of Order 99-12- 10 to include Hilo International Airport. In support of its petition, the State of Hawaii stated that extending this authority to include Hilo will guarantee that the many communities on the eastern shore of the island will be able to enjoy the expected long-term economic benefits of this exemption, and that its request should be approved based on the same public interest findings the Department relied on in initially granting this authority.

For the reasons discussed in Orders 96-9-19 and 96-11-2, we did not grant this type of extrabilateral authority to foreign air carriers of the United Kingdom. However, the existing Hawaii authority held by carriers of the United Kingdom was not affected by our actions in Order 99-12-10.

By:  Paul Gretch

June 24, 2003

OST-99-5723 - Expanded Air Services at Hawaii International Airports

Petition of the State of Hawaii for Renewal of the Expanded Air Services Authority at Hawaii's International Airports

The current blanket exemption authority is set to expire by its own terms on June 25, 2003. Therefore, the State of Hawaii hereby requests that the Department renew the Expanded Air Services Authority (as modified by the Notice of Action Taken of June 25, 2001) beyond its current expiration date and for an additional two year period. With encouraging signs that the regional economic downturn may be subsiding, the State of Hawaii continues to work diligently to develop new opportunities for cargo and passenger air service from points throughout the Pacific Rim.

Service List

Counsel: Spiegel McDiarmid, Rise Peters, 202-879-4000, rise.peters@spiegelmcd.com

OST-99-5723

Filed June 24, 2003 | Issued November 18, 2003

Notice of Action Taken

By Order 99-12-10, issued December 10, 1999, the Department granted the petition of the State of Hawaii requesting certain blanket exemption authority to foreign air carriers. Specifically, we granted blanket exemption authority to all foreign air carriers that hold scheduled permit or exemption authority (except foreign air carriers of the United Kingdom) (1) to conduct expanded cargo transfer flexibility at Honolulu and Kona International Airports and (2) to serve Honolulu and Kona, and to coterminalize Honolulu and Kona with other U.S. points for which they hold our authority. We also invited eligible foreign carriers to apply, subject to the standard discussed in Order 99-12-10, for authority to serve new U.S. points on an extrabilateral basis, so long as these flights also serve Honolulu and/or Kona. By Notice of Action Taken dated June 25, 2001, in this Docket, the Department renewed this authority, and, at the request of the State of Hawaii, amended the authority to extend its applicability to include Hilo International Airport, in addition to Honolulu and Kona.

On June 24, 2003, the State of Hawaii petitioned the Department to renew the authority granted by our June 25, 2001, Notice of Action Taken, stating that its request should be approved based on the same public interest findings the Department relied on in previously granting this authority.

By: Paul Gretch

Home | OST Filings by Number | OST Orders and Notices | OST Filings by Carrier
OST Filings by Proceeding | OST Filings by Day | Office of Intl Aviation Filings by Carrier | Office of Intl Filings by Day