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OST-99-6225

Aerolineas Argentinas, S.A

Aerolineas Argentinas, S.A., under 49 USC 40109, hereby applies for an exemption authorizing foreign air transportation of persons, property, and mail between points in Argentina and the following points in the United States and beyond: Atlanta, Boston, Chicago, Dallas/Ft. Worth, Denver, Detroit, Houston, Las Vegas, Minneapolis/St. Paul, New Orleans, Philadelphia, Salt Lake City, San Diego, San Francisco, San Juan, Seattle, and Washington, D.C. and beyond to Montreal, Toronto, Italy, France, Japan, Korea and Spain.

Counsel:  Sanders Dempsey, Robert Papkin, 202.626.6601

American Airlines, Inc. and Aerolineas Argentinas, S.A.

Counsel:  Continental and Crowell Moring, Bruce Keiner

Counsel:  Kirkland Ellis, Jeffery Manley, 202.879.5161

American Airlines, Inc, and Aerolineas Agentinas, S.A.

As we show below, the Department should promptly approve the American/Aerolineas codesharing proposal. The joint applicants' arrangement will in itself bring competitive benefits to the marketplace, as recognized by the Department's Statement of United States International Air Transportation Policy, 60 Fed. Reg. 2l84l, May 3, l995, and will lead directly to new entry by carriers such as Continental and Delta in the U.S.-Argentina market. United's obstructionist answer is retrogressive and anticompetitive, and should be recognized for what it is -- false and misleading complaining by an incumbent which is about to lose the privileged position it has long held in a closed market. The Department should reject United's effort to undo the bilateral agreement achieved between the U.S. and Argentina in August.

Counsel: Sanders Dempsey, Robert Papkin, 202.626.6601, rpapkin@ssd.com / American Airlines, Carl Nelson,
202.496.5647, carl_nelson@amrcorp.com

American Airlines, Inc. and Aerolineas Argentinas, S.A.

American and Aerolineas assert that United’s opposition to their code-share is motivated by a desire to preclude new service opportunities available under the U.S./Argentina MOC. In fact, United supported the conclusion of an open skies agreement with Argentina in order to create opportunities for new services such as those proposed by United between Los Angeles and Buenos Aires. United opposed and continues to oppose an open skies agreement, however, where it may be gained only at the cost of antitrust immunity for an American/Aerolineas alliance. United also opposes new transitional service opportunities that may be exercised only at the cost of approving an anticompetitive code sharing by American/Aerolineas.

Counsel:  Kirkland Ellis, Jeffery Manley, 202.879.5161, jeffery_manley@kirkland.com

American Airlines, Inc. and Aerolineas Argentinas, S.A.

The Dallas/Fort Worth International Airport Board answers in strong support of the American/Aerolineas Argentinas Code-Share Application and the related Aerolineas Application for Exemption Authority filed September 14, 1999. Approval of both are critical so that Aerolineas can commence DFW-Buenos Aires nonstop service in September 2000. Dallas/Fort Worth also moves for leave to file this answer in the interest of a complete record for the Department's consideration. No party will be harmed by receipt of Dallas/Fort Worth's answer at this time.

Counsel:  Silverberg Goldman, Michael Goldman, 202.944.3305

American Airlines, Inc. and Aerolineas Argentinas, S.A.

On the very day that the Department resoundingly rejected for the third time the efforts of United to block the implementation of an open-skies agreement and an alliance in Chile, United once again seeks to place obstacles in the path of the transition to open skies that has been negotiated by the Governments of the United States and Argentina. United's continuing attempts to establish that competition between the United States and Latin America is of a different nature than competition between the United States and Europe, and that a different approach and analysis are required for open skies agreements and alliances in Latin America have now been thoroughly discredited by the Department's Order on United's Petition for Reconsideration in the American-LAN Chile proceeding. (Order 99-10-20, October 20, 1999). Like the fabled dodo bird whose turned back head allows it only to see where it has been and not where it is going, United fastens on the past history of a United States-Argentina aviation market that has been ruled by restrictions on the number of carriers and capacity restraints rather than on the benefits that will occur over time as the transition to full open skies takes place and as Argentina becomes accessible to other global networks. As the Department observed in Order 99-10-20 in the American-LAN Chile proceeding: "Long-term opportunities and experience define the reality of open skies, not a snap shot of the present moment."  United's response makes it clearer than ever that United is simply dissatisfied with the outcome of the recent bilateral negotiations between the United States and Argentina, and that United now seeks to enlist the Department in United's effort to prevent the benefits of those negotiations from being realized. United claims that it supported the conclusion of an open skies agreement with Argentina, but now that such an agreement was achieved in a manner that United finds uncongenial, United seeks to overturn the essence of the agreement. United concedes that Argentina insisted that transitional capacity increases must be accompanied by comparable phases of codeshare approvals.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@amrorp.com and Squire Sanders Dempsey, Robert Papkin, 202.626.6601, rpapkin@ssd.com

Legend supports "Open Skies" and believes that all carriers should be able to expand both domestically and internationally. As the Department supports international growth of large carriers, however, it should refrain from supporting growth of a carrier and an airport that have provided false and misleading information to the Department and have used their market power and resources to eliminate competition. For the past several years, in order to protect its primary tenant, DFW has stated in news articles, court filings, the Department’s Love Field Interpretation Proceeding, and most recently before the Fifth Circuit Court of Appeals, that its hub will be destroyed by any level of competition introduced at Love Field. Although the evidence clearly shows that DFW is not falling apart, DFW and American have failed to refute any of their doomsday claims. Apparently, these parties believe that it is acceptable to invent facts in order to maintain market control. Thus, it is up to the Department to insist that these parties set the record straight — is DFW on the edge of collapse or not? In administering federal law, the Department has an obligation to ensure the integrity of its proceedings. The Department cannot permit an airline and an airport that make misleading comments to be rewarded with additional international routes. Until DFW refutes statements that DFW is falling apart, the Department should strike any DFW filing that supports additional routes and services from DFW to any domestic or international destination. The Department cannot ignore DFW’s flagrant disregard for veracity in its filings.

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7500

American Airlines, Inc. and Aerolineas Argentinas, S.A.

Legend is a non-operating airline today. When and if it begins service it plans to operate from Dallas Love Field and serve predominantly short- and medium-haul domestic routes. Based on Legend's public statements, Legend has no plans to operate internationally and certainly none to serve Buenos Aires, Argentina. Legend's interest in this Docket clearly is not motivated by any concern to improve air service between DFW and Argentina -- or apparently for the traveling public --, but by its unrelated dispute with Dallas/Fort Worth and others over the scope of certain Bond Ordinances entered into by Dallas and Fort Worth and the Love Field Amendment. Those issues are presently on appeal before the U. S. Court of Appeals for the Fifth Circuit in New Orleans which is reviewing a series of DOT interpretive orders.  Legend's attempt to show relevance to the American/Aerolineas Argentinas Applications is its claim that DOT "should refrain from supporting growth of a carrier and an airport that has provided false and misleading information to the Department..." Legend's assertions are preposterous, and Dallas/Fort Worth will not sully the Department's processes by taking the time to respond to such irrelevant and unsubstantiated charges. The outcome of this litigation has absolutely nothing to do with whether Aerolineas' DFW-Buenos Aires service should be authorized and the related code-sharing with American approved.

Counsel:  Silverberg Goldman, Michael Goldman, 202.944.3305

American Airlines, Inc. and Aerolineas Argentinas, S.A.

In its three-page Motion for Leave to File and Answer to Motion to Strike, Dallas/Fort Worth International Airport Board ("DFW") fails to answer the very basic question raised in Legend's Motion to Strike - is it on the edge of collapse as it has claimed in the Love Field Interpretation Proceeding or is it deserving and capable of supporting new international service? Clearly, one of these positions is false and misleading. Although DFW tries to deflect attention from the contradictory statements it has made by claiming that these issues are on appeal and that Legend is "apparently oblivious 'to the public benefits the new route holds out for the community that Legend aspires to serve," it is still unable to answer Legend's simple question. Instead of avoiding the question, Legend asks one more time that Mr. Fegan state which of the following is true:

• a) DFW is on the verge of collapse and about to become a second-tier hub. or...
• b) DFW is deserving and capable of supporting new international service.

Under 14 CFR 300.6(b), parties filing with DOT are required to "refrain from statements or other actions designed to mislead DOT . . . ." Until DFW sets the record straight on this fundamental issue, DOT should refrain from awarding DFW any new international service. A party unable to identify fact from fiction cannot argue that it speaks on behalf of the public interest.

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7500

American Airlines, Inc. and Aerolineas Argentinas, S.A.

American Airlines, Inc. and Aerolineas Argentinas, S.A. hereby jointly move to dismiss the captioned applications, which were submitted on September 14, 1999.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com and Sanders Dempsey, Robert Papkin, 202.626.6601, rpapkin@ssd.com 

Notice of Action Taken Dismissing Applications:  American Airlines, Inc. and Aerolineas Argentinas, S.A.; Russia Airlines; Ukraine International Airlines;; Ansett New Zealand Limited; Kendell Airlines, (AUST) Pty. Limited; North East Cargo Airlines, , Ansettt Australia Limited

American Airlines, Inc. and Aerolineas Argentinas, S.A., filed September 14, 1999. Joint applications of American and Aerolineas Argentinas seeking exemption authority and statements of authorization to conduct reciprocal code-share services between the United States and Argentina. On October 3, 2001, American and Aerolineas Argentinas filed ajoint motion requesting that we dismiss the applications.

Russia Airlines, filed August 7, 1998. Initial foreign air carrier permit to engage in scheduled foreign air transportation of persons, property and mail between the Russian Federation and specified points in the United States. Information available to the Department indicates that Russia Airlines has no plans to prosecute this application.

Ukraine International Airlines, filed May 26, 1999. Renew exemption authority, last granted June 1, 1998, in this docket, to engage in scheduled foreign air transportation of persons, property and mail between Ukraine and New York and Chicago, via Paris, France, pursuant to a code share arrangement with Trans World Airlines. Also, by
application filed August 18, 2000, Ukraine International requested that we amend its existing exemption authority to include authority to serve St Louis in addition to New York and Chicago. Information available to the Department indicates that Ukraine International has no plans to prosecute this application.

Ansett New Zealand Limited, filed April 15, 1996. Renew exemption authority and statement of authorization, last granted April 25, 1995, and confirmed by Order 95-5-5, to continue operating code-share services for United Airlines, Inc. between Auckland, New Zealand, on the one hand, and Wellington and Christchurch, New Zealand, on the other hand, in conjunction with United's U.S.-Auckland services. Information available to the Department indicates that Ansett New Zealand has no plans to prosecute this application.

Kendell Airlines (Aust) Pty. Limited, filed June 29, 2000. Renew underlying exemption to allow it to display the designator code of United Air Lines, Inc., on flights operated by Kendell between Sydney and Canberra, Australia, and between Melbourne and Canberra/Hobart, Australia. By letter dated September 24, 200 1, United informed the Department that the code share had been terminated.

North East Cargo Airlines, filed August 17, 1995. Initial foreign air carrier permit to engage in charter foreign air transportation of property and mail between the Russian Federation and the United States; and authority to conduct other all-cargo charters in accordance with Part 212. Information available to the Department indicates that North East Cargo has no plans to prosecute this application.

By:  Paul Gretch

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