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OST-99-6227

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

American Airlines, Inc. (and its regional affiliates American Eagle Airlines, Inc. and Executive Airlines, Inc. d/b/a American Eagle) and Aerolineas Argentinas, S.A. hereby jointly apply for statements of authorization under l4 CFR Part 2l2 to engage in certain reciprocal codesharing services pursuant to the attached agreement.

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.

On September 14, 1999, American and Aerolineas Argentinas submitted a joint application in this docket for statements of authorization to engage in reciprocal codeshare services, and American and Aerolineas Argentinas submitted separate applications in Dockets OST-99-6226 and OST-99-6225, respectively, for exemption authority to conduct these codeshare services. Continental plans to submit a consolidated response within the time period for answering the exemption applications since the application for statements of authorization and the exemption applications raise the same issues.

Counsel:  Continental Airlines, Thomas Newton Bolling

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

Counsel:  United and Kirkland Ellis, Jeffrey Manley, 202-878-5000

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 

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