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United Air Lines, Inc.

As a result of the terrorist attacks on September 11, United is significantly reducing its schedule and will furlough approximately 20,000 employees. The combination of the significant reduction in passenger traffic and the increased costs of the new security initiatives has put tremendous operating pressures on United, as well as the entire airline industry. United announced the first tranche of these cuts on September 22 and additional cuts will follow. United agrees to notify the Department as soon as it decides to discontinue for 90 days or longer any service that is subject to a dormancy condition.

In light of the events of September 11 and their impact on United's operations, United is seeking a temporary waiver from any DOT dormancy conditions applicable to its international operating authority (e.g., frequency allocations or other international operating rights). This temporary waiver would only be applicable for the 2001/2002 Winter season (October 28, 2001 through March 30, 2002). The applicable dormancy periods would begin to run again on the first day of the 2002 Summer season, March 31, 2002. United believes that the Department should grant similar relief to any other U.S. carrier that seeks it.

We recognize that this is an unusual request, but given the crisis before our country and its carriers, this temporary waiver is necessary. Granting U.S. carriers a blanket waiver for the 2001/2002 Winter season would relieve the carriers and the DOT of the expense and delay of processing and responding to each individual request. In the present emergency circumstances, the resources of both DOT and carrier staffs can be better devoted to more critical issues. We greatly appreciate the support that the DOT has given to United and other U.S. carriers at this difficult and tragic time.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com 

United Air Lines, Inc.

UPS conditionally supports the Application of United for a temporary blanket waiver of all dormancy conditions applicable to its frequency allocations and other operating authorities for the winter season 2001/2002. UPS' support is premised upon the supposition that the Department of Transportation will (1) limit the period for which the waiver is effective, (2) grant the same relief requested by United to all air carriers that apply for similar treatment, and (3) grant temporary operating authority to requesting carriers that are fit, willing and able to provide service on a route for which a waiver has been granted.

UPS supports this condition to any grant of temporary waiver of dormancy conditions. Further, the rationale set forth by United warrants granting the same relief to all carriers, both combination and all-cargo. UPS urges that the Department, in instances where carriers suspend service in markets where designations and/or frequencies are limited, grant temporary operating authority to any other carrier(s) which wishes to operate in these market(s) during any suspension of service. Such relief would protect carriers from losing rights while, simultaneously, assuring passengers and shippers of the maximum sustainable amount of service from U.S. carriers.

The award of temporary frequencies is consistent with DOT precedent. Rather than have valuable frequencies go dormant in limited entry markets, the Department has allocated frequencies on a temporary basis to ensure the maximum use of U.S. bilateral opportunities. For example, in the US-Philippines Route 2 Case (Docket OST-96-1618/1655), the Department awarded temporary authority on two separate occasions. First, the Department authorized Continental Air Micronesia to use three of United's Route 2 frequencies from May 31, 1996 to August 31, 1996. (Order 96-5-37). Then, recognizing that United would still not be able to use the frequencies until March 1997, the Department granted Northwest temporary authority to use the same three United frequencies until the projected United start date. (Order 96-10-16). Further, in the latter Order, the Department imposed upon United a monthly reporting requirement so that United's progress toward service implementation could be monitored. Accordingly, some sort of progress reporting could be imposed by the Department on carriers making use of dormancy waivers to ensure that the routes will be used to their fullest possible economic benefit.

Counsel:  UPS and Kelley Drye, David Vaughan, 202-955-9864, dvaughan@kellydrye.com

Northwest Airlines, Inc. and United Air Lines, Inc.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

Northwest Airlines, Inc./United Air Lines, Inc./American Airlines, Inc. and Continental Air Lines, Inc.

Counsel:  FedEx, Thomas Donaldson, 901.434.8586, tfdonaldson@fedex.com 

Northwest Airlines, Inc./United Air Lines, Inc./American Airlines, Inc. and Continental Air Lines, Inc.

Continental and United oppose the additional conditions urged by Delta and request the Department to act expeditiously to issue the blanket dormancy waivers they are seeking subject only to the conditions they have proposed. If Delta's conditions were adopted, the administration of blanket dormancy waivers would actually subject the recipients to more procedural requirements and more stringent reporting rules than would be the case if they simply sought ad hoc waivers under normal procedures. Such burdensome conditions would negate the purpose underlying the blanket waivers. Continental and United jointly urge that the Department issue blanket waivers subject only to the conditions originally proposed by the applicants and do so as far in advance of the sort of one-time report of dormancy utilization and startup proposed by Delta is adopted.

Counsel:  Crowell Morning, Bruce Keiner, 202.624.6215, and Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com  

Northwest Airlines, Inc./United Air Lines, Inc./American Airlines, Inc./Continental Air Lines, Inc./US Airways, Inc. and Delta Air Lines, Inc.

Delta would not oppose the grant of blanket temporary waivers with respect to dormant international services as requested by United, American, Northwest, Continental, and other airlines, under which the 90-day dormancy provision would begin to run on March 31, 2002 and terminate on June 30, 2002. Delta's blanket waiver should have the same duration.

American, Continental, and United would not oppose the grant of Delta's application for the temporary allocation of four U.S.-Brazil combination frequencies for Atlanta-Rio service through March 31, 2002 and thereafter, subject to recall not less than 90 days after the carrier proposing to reinstitute U.S.-Brazil service using the last four dormant U.S.-Brazil frequencies gives the Department and Delta written notice of its intent to use such frequencies.

If any U.S.-Brazil frequencies are withdrawn for dormancy, any carrier may seek permanent allocation of those frequencies at the appropriate time.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060

Delta Air Lines, Inc./United Air Lines, Inc./American Airlines, Inc./Continental Air Lines, Inc. and U.S.- Brazil Frequencies

OST-01-10782 OST-01-10699 OST-01-10769 OST-01-10771

November 1, 2001

Re:  Request of Delta Air Lines, American Airlines, United Air Lines and Continental Airlines for Immediate Action

Temporary Allocation of Unused Frequencies (Atlanta-Rio de Janeiro) / Temporary Blanket Waiver of Dormancy Conditions for Winter 2001/2001 Season

Letter of Delta Air Lines, Inc., American Airlines, Inc., Continental Airlines, Inc. and United Airlines, Inc. urging the Department to take actions immediately with respect to Brazil frequency allocation and dormancy waiver issues.

Delta requests the Department immediately allocate to Delta four U.S.-Brazil frequencies for Atlanta-Rio de Janeiro service through March 31, 2002, subject to recall on not less than 90 days notice to the Department. Delta. American, Continental and United concur with this request subject to the simultaneous grant of the relief described in paragraph 2 below.

United, Continental and American request the Department immediately to grant dormancy waivers with respect to U.S.-Brazil authority through March 31, 2002. Delta concurs with this request subject to the simultaneous grant of the relief described in paragraph 1 above. This request is without prejudice to the position taken by the carriers in the blanket dormancy proceedings (which Delta concurs with) that blanket waivers should provide that the 90-day dormancy period begins on March 31, 2002.

Counsel:  Crowell Morning, Bruce Keiner, 202.624.6215, and Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com, Shaw Pittman, Robert Cohn, 202.663.8060 and American, Carl Nelson, 202.496.5647, carl.nelson@aa.com

United Air Lines, Inc., American Airlines, Inc. and Continental Air Lines, Inc. 

By: Paul Gretch 

Waiver of Dormancy Conditions on Limited Entry Route Authority; Delta Air Lines, Inc., United Air Lines, Inc., American Airlines, Inc., Continental Air Lines, Inc., Northwest Airlines, Inc., US Airways, Inc. and U.S.- Brazil Frequencies

We have decided to grant the captioned carriers temporary blanket relief from the dormancy conditions on their limited-entry route authorities, subject to certain conditions, described below. We will also grant such relief to all other U.S. carriers holding limited-entry international authority that is subject to our standard dormancy conditions. As the carriers have noted in their applications and other responsive pleadings, airline services have been in a temporary period of adjustment since the events of September 11. Given these circumstances, we find that temporary blanket relief from the dormancy conditions is warranted and in the public interest, and will serve to afford the carriers needed flexibility to resume their international services on a phased-in basis, without risk that they will lose their route awards for nonuse. All of the parties filing applications and comments support the award of temporary relief.

At the same time, we recognize the value of limited-entry route awards and the importance of ensuring that services in restricted markets are available to consumers to the full extent possible. Taking these factors into consideration, we have decided to grant carriers a waiver of the dormancy conditions through March 31, 2002, i. e., through the 2001/2002 -winter traffic season. Under the terms of this waiver, any limited-entry authorities that have not been used for the applicable dormancy period prior to April 1, 2002, will be deemed dormant as of that date. We will also require all U.S. carriers to notify the Department, in writing, no later than February 15, 2002, of the limited-entry route rights that they will not be using beginning April 1.

While the applicants in this case have offered a somewhat different proposal for the duration of the dormancy relief and attendant conditions, we believe that our decision here best balances our objectives to provide the carriers needed flexibility in resuming their international airline services, while at the same time encouraging the use of valuable route rights to the benefit of the traveling and shipping public. In this regard, we note that the waiver would afford carriers over six months since September 11 to resume services in their authorized limited-entry markets. The February 15 notice requirement will provide all interested carriers notice of any authorities that will be dormant after expiration of the blanket waiver, and sufficient time to plan for services during the summer traffic season, including receipt of the necessary regulatory authorities.

Moreover, we recognize that specific cases may call for relief going beyond that which we have deemed justified on a blanket basis. In this regard, carriers are free to seek extension of the dormancy waiver beyond March 31 for specific city-pair limited-entry services where they can demonstrate that circumstances warrant. However, carriers should file such requests in sufficient time for other interested carriers to comment and for the Department to make a decision in a timely manner with respect to disposition of the authority at issue.

Finally, we will entertain applications from other carriers for temporary reallocation of limited-entry route authorities that are not being used during the blanket waiver period. This will facilitate greater use of the rights available and the potential for more services to the public in important international markets during the blanket waiver period.

We have decided to deny the balance of Delta's request for allocation of the frequencies beyond March 31, 2002. For the reasons stated above, we have granted all U.S. carriers blanket dormancy relief for their international services, including Brazil, through March 31, 2002. In these circumstances, we are not persuaded that granting a longer-term Brazil allocation to Delta at this time is in the public interest. Should one of the other authorized carriers seek a further extension of the dormancy waiver for its Brazil services, Delta, at that time, can seek a further extension of its frequency allocation. We remind all carriers of the need to ensure a smooth transition of services in circumstances involving temporary reallocation of limited-entry route authorities.

By:  Read Van De Water

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