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OST-99-6556

Delta Air Lines, Inc. and South African Airways

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com and Zuckert Scoutt, Frank Costello, 202.298.8660

Delta Air Lines, Inc. and South African Airways

On November 24, 1999, South African Airways ("SAA"), in conjunction with Delta Air Lines, filed the above applications in connection with the new SAA/Delta code-share agreement. SAA hereby submits the enclosed copy of a diplomatic note that has been sent by the Government of the Republic of South Africa to the U.S. Government confirming the selection of U.S. entry points and code-share points pursuant to Annex 1, section 1 of the Air Transport Agreement between the Government of the Republic of South Africa and the Government of the United States of America. SAA requests that you add the enclosed to the dockets referenced above. A copy of this letter and enclosure has been sent to all parties listed on the attached certificate of service via facsimile and/or first class mail.

Counsel:  Zuckert Scoutt, David Heffernan, 202.298.8660

Delta Air Lines, Inc. and South African Airways

On November 15, 1999, American and British Airways submitted a joint application for statements of authorization and related exemptions to engage in reciprocal codeshare services including, inter alia, services between the U.S. and Johannesburg and Capetown, South Africa, via London (OST-99-6507). On December 3, 1999, American applied for a U.S.-South Africa third-country codeshare designation (OST-99-6595). And on December 1, 1999, Continental Airlines, Inc. applied for a U.S.-South Africa third-country codeshare designation for proposed codeshare services with Alitalia via Milan (OST-99-6587) . Delta should not be permitted to codeshare with South African Airways and to hold one of the four third-country codeshare designations as well. American therefore opposes the Delta/South African Airways applications unless Delta surrenders its third-country designation with Air France (Order 99-1-5). Requiring Delta to do so will maximize competition in the U.S.-South Africa market. In addition to the Delta/South African Airways arrangement, competitive services will then be offered by American/British Airways, Continental/Alitalia, United/Lufthansa, and Northwest/KLM. Accordingly, the Department should not approve the Delta/South African Airways applications, unless Delta cedes its third-country codeshare designation with Air France in the U.S.-South Africa market.

Annex I to the 1996 U.S.-South Africa Air Transport Agreement provides that the U.S. may designate, as of November 1, 1999, a total of four U.S. carriers to serve South Africa under codeshare arrangements with carriers of third countries. Three of these four designations have been assigned. See Order 99-1-5, January 4, 1999 (Delta/Air France via Paris); Order 9710-14, October 12, 1997 (United/Lufthansa via Frankfurt and Northwest/KLM via Amsterdam).

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

The Department’s objective "to maximize the level of competitive services available to the public, thereby facilitating development of the market" for U.S.-South Africa services (Order 99-1-5 at 2) can only be met by authorizing as many competing networks as possible to offer U.S.-South Africa service via open-skies gateways in Europe. Although Continental has applied for the one opportunity currently available, American and British Airways are seeking that opportunity as well, and other carriers may yet apply. Thus, there may be insufficient opportunities available to meet the demand for U.S.-South Africa codeshare authority. Delta and South African Airways combined would offer 100% of the nonstop U.S.-South Africa flights, and Delta would also offer a third of the third-country codeshare flights currently offered. If Delta were to relinquish its U.S.-South Africa codeshare authority with Air France voluntarily, if that authority were withdrawn as a condition for approval of the proposed Delta/South African Airways codeshare authority or if South Africa were to allow additional, extra-bilateral third-country codeshare service, the Department could approve the Delta/South African Airways codesharing and maximize the level of U.S.-South Africa competitive service available to the public. So long as Continental is authorized to offer South Africa codeshare service with Alitalia via Milan it would have no objection to the Delta/South African Airways application for codeshare authority. If there are two applicants and only one U.S.-South Africa codeshare opportunity available, however, the Department should deny the Delta/South African codeshare application.

Counsel:  Crowell Moring, Bruce Keiner, 202.624.2615

Delta Air Lines, Inc. and South African Airways

Neither Continental nor American disputes the fact that the proposed codeshare arrangement between Delta and South African Airways is consistent with the U.S.-South Africa bilateral and is otherwise in the public interest. Rather, American and Continental contend that Delta should not be permitted to offer these authorized services unless Delta "surrenders" its third-country codeshare designation to serve South Africa in conjunction with Air France. That designation was duly awarded to Delta by the Department in Order 99-1-5, and Delta is currently fully utilizing the designation in accordance with its certificate terms and conditions. There is no lawful basis to revoke Delta's third-country codeshare authority as a precondition to the approval of this application.

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

The answers essentially address one and the same question: which flag carriers should the Department authorize to operate the four designations for third-country codeshare service available under the U.S.-South Africa Bilateral Agreement. That issue simply is not relevant to this proceeding, and the Department should not delay its approval of SAA'S applications while it considers the separate issue of U.S. carrier third-country code-share designations.  Continental and American do not dispute that the authority for which SAY has applied is in all respects consistent with the terms of the South Africa Bilateral Agreement. SAY has been appropriately designated and authorized by the Government of the Republic of South Africa to provide the services in question, and, for its part, the Department repeatedly has found SAY to be qualified to operate services to and from the United States. In short, the Department has an obligation under the U.S.-South Africa Bilateral Agreement to act on BAA'S applications without delay.

Counsel:  Zuckert Scoutt, Frank Costello, 202.298.8660

Delta Air Lines, Inc. and South African Airways

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202-663-8382

Delta Air Lines, Inc. and South African Airways (SAA) 

By:  Paul Gretch

Delta Air Lines, Inc. and South African Airways (SAA) 

Statements of authorization pursuant to 14 CFR 212 of the Department's regulations to permit: (1) Delta to display SAA's designator code on flights operated by Delta between Atlanta and the 25 U.S. cities listed in Exhibit B of its application (copy of which is attached); and (2) SAA to display Delta's designator code on flights operated by SAA between Atlanta/New York, and Johannesburg/Cape Town, and beyond to the points in Africa listed in Exhibit B (attached) of its application. (OST-99-6656)

Responsive pleadings: Continental Airlines and American Airlines stated that the Department should deny the requested authority unless Delta surrenders its third-country code-share designation to serve South Africa in conjunction with Air France, and the Department approves Continental's and American's respective South Africa third-country code-share applications. SAA and Delta filed responsive pleadings.

By:  Paul Gretch

Delta Air Lines, Inc., Atlantic Southeast Airlines, Inc. and South African Airways

Delta and SAA, together with Delta's wholly-owned Delta Connection subsidiary, Atlantic Southeast Airlines, Inc. ("ASA") (collectively, the "Joint Applicants") request an amendment of Delta's statement of authorization to the extent necessary to permit ASA to carry SAA's "SA" designator code on ASA services operating over the same previously approved routes.

Counsel:  Zuckert Scoutt, Frank Costello, 202-298-8660 for South African / Delta and Shaw Pittman, Robert Cohn, 202-663-8060

Delta Air Lines, Inc. and South African Airways

By:  Theresa Bingham

Delta Air Lines, Inc., Atlantic Southeast Airlines, Inc. and South African Airways

Delta and SAA, together with Delta's wholly-owned Delta Connection subsidiary, Comair, Inc. request an amendment of Delta's statement of authorization to the extent necessary to permit Comair to carry SAA's "SA" designator code on Comair services operating between SAA's authorized U.S. gateways and the same previously approved U.S. interior codeshare points.' The requested amendment is fully consistent with the codeshare provisions of the U.S.-South Africa bilateral agreement, and approval will enable the Joint Applicants to match their codeshare services with the most effective connections available on the Delta/Delta Connection network.

Delta and SAA plan to begin codeshare operations utilizing Comair's connection carrier services as soon as this application is approved. Accordingly, the Joint Applicants request expedited consideration.

Delta periodically adjusts its schedules and the division of services between mainline and connection carrier equipment, depending on the needs of the marketplace. Therefore, in order to mirror Delta's service pattern, it is important for the Joint Applicants to have the flexibility to codeshare on both Delta mainline and Delta Connection services.

Counsel:  South African, Zuckert Scoutt, Frank Costello, 202.298.8660 and Delta, Shaw Pittman, Robert Cohn, 202.663.8060

Delta Air Lines, Inc., Atlantic Southeast Airlines, Inc. and South African Airways

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060, robert.cohn@shawpittman.com 

Delta Air Lines, Inc. and South African Airways

By:  Theresa Bingham

Delta Air Lines, Inc.; Atlantic Southeast Airlines, Inc.; Comair, Inc. and South African Airways

Hereby apply for amended exemption authority and statements of authorization. The Joint Applicants seek authority to expand their existing codeshare arrangement to include Delta/Delta Connection operated service to West Palm Beach, Florida, and SAA-operated service to Entebbe/Kampala, Uganda.

The Joint Applicants also plan to introduce SAA codeshare service on Delta operated flights between New York (JFK) and Fort Lauderdale. Fort Lauderdale is an existing SAA gateway point.

In order to add West Palm Beach as a U.S. point authorized for codeshare-only service, SAA has asked its government to designate Washington, D.C., currently a codeshare-only point, as an additional U.S. gateway for direct service from South Africa. Under the bilateral agreement, gateway points may also be served on a codeshare basis. SAA previously selected - - and the Department issued SAA exemption authority to serve - - all 25 U.S. codeshare only points available under the bilateral. Included among the current authorized codeshare-only points is Washington, D.C. Although the Joint Applicants intend to continue to serve Washington on a codeshare basis in the near term, SAA has asked the Government of South Africa to notify the Government of the United States that Washington has been designated as the final available direct service gateway under the bilateral agreement, thereby opening up codeshare only service to an additional U.S. point. SAA has requested that its government also select West Palm Beach as a new codeshare point, and expects the appropriate notification to be issued shortly.

Counsel:  Zuckert Scoutt, Frank Costello, 202.298.8660 and Shaw Pittman, Robert Cohn, 202.663.8060

Delta Air Lines, Inc.; Atlantic Southeast Airlines, Inc.; Comair, Inc. and South African Airways

(1) Amend exemptions from 49 U.S.C. 41301 (last granted January 18, 2002, in Dockets OST-99-6555 and OST-2000-6756) to permit SAA to: (a) conduct scheduled foreign air transportation of persons, property and mail between Johannesburg/Cape Town, South Africa, via the intermediate point Ilha do Sal, Cape Verde, and Washington, D.C.; (b) serve Washington, D.C. on a coterminal basis with its existing U.S. gateways at Atlanta, New York, Fort Lauderdale, Miami and Los Angeles; and (c) add West Palm Beach, FL, as one of the 25 U.S. points SAA may serve only on a codeshare basis beyond its U.S. gateways. (SAA requested that this authority remain in effect through January 18, 2004, coextensive with its existing exemption authority in this docket.)

By:  Paul Gretch

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