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OST-99-6226

American Airlines, Inc.

American Airlines, Inc., under 49 USC 40l09, hereby applies for an exemption authorizing foreign air transportation of persons, property, and mail between points in the United States and the following points in Argentina: Cordoba, Mendoza, Bahia Blanca, Comodoro Rivadavia, Iguazu, Mar del Plata, Neuquen, Resistencia, Rio Gallegos, Rosario, Salta, San Carlos de Bariloche, Santa Fe, Tucaman, and Ushuaia. American further requests the right to integrate such authority with its certificate of public convenience and necessity for Route 389 (U.S. points-Buenos Aires).

Counsel:  American Airlines, Carl Nelson, 202.496.5647, carl_nelson@amrcorp.com

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.

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 

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