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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

U.S.-Brazil Combination Frequencies / US Carriers - Waiver of Dormancy Conditions

Order 2001-11-15 seriously errs in concluding that  "The February 15 notice requirement will provide all interested carriers notice of any authorities that will be dormant after the expiration of the blanket waiver, and sufficient time to plan for services during the summer traffic season." Order, at 4. Contrary to this assumption, at least 90 days notice is necessary to schedule aircraft, crews, ground handling and other incidentals, and, most importantly, to provide an adequate booking window for the advertisement and sale of tickets essential to launch or sustain a viable major long-haul international service such as U.S. - Brazil.  Because the February 15 notice deadline gives Delta less than 45 days notice as to whether it might be permitted to continue its daily Atlanta - Rio de Janeiro nonstop service beyond March 31, the Order creates uncertainty that forces Delta as a practical matter to assume it will not be able to continue service beyond March 31 as it plans for the Summer Season. Since Delta must make its Summer planning decisions long before February 15, the current deadline effectively guarantees that Delta’s additional Atlanta-Rio de Janeiro services will be disrupted on March 31, 2002, regardless of whether there ultimately are unused U.S. - Brazil frequencies that would have allowed Delta to continue it. Thus, while the Department’s stated objective in the Order was to "ensur[e] that services in restricted markets are available to consumers to the full extent possible," (Order 2001-11-15 at 3), the Order gambles this goal on the hope that all carriers with permanent allocations will in fact restart their service by April 1. If any of them do not, the Order virtually guarantees a completely unnecessary disruption of U.S.-Brazil service, to the detriment of consumers, Delta, and the public interest.

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

U.S.-Brazil Combination Frequencies (Atlanta-Rio de Janeiro) / US Carrier Dormancy Waivers

Hereby notifies the Department that no U.S.-Brazil combination carrier has objected to Delta’s request for a shortened answer date of December 12, 2001, concerning Delta’s Petition for Reconsideration of Order 2001-11-15. Delta further notes that there are twenty-six (26) dormant Brazil frequencies held by other carriers, rather than eleven as originally stated in Delta’s Petition. A summary of the dormant frequencies is contained in Attachment A.

Counsel:  Shaw Pittman, Robert Cohn, 202.663.8060

U.S.-Brazil Combination Frequencies; U.S. Carrier Dormancy Waivers, and Delta Air Lines, Inc.

By:  Paul Gretch

U.S.-Brazil Combination Frequencies; U.S. Carrier Dormancy Waivers, and Delta Air Lines, Inc.

The Georgia and Atlanta Parties agree with Delta that it is highly unlikely that all twenty-six currently dormant frequencies would be recalled for other Brazil services on April 1, 2002. This large number of dormant frequencies represents approximately one quarter of the entire U.S. bilateral allotment of U.S.-Brazil frequencies. Especially considering that even prior to September 11, other carriers' utilization of U.S.-Brazil frequencies had been sporadic, it is very likely that at least four of the twenty-six currently dormant frequencies will be available on April 1 for the continuation of daily Atlanta-Rio de Janeiro service. The Department should make every effort to ensure continuity of service and avoid unnecessary short term cancellations, which are highly disruptive the traveling public and harmful to communities and the carriers that serve them.

Counsel:  Atlanta, Holly Beth Anderson, handerson@macoc.com

U.S.-Brazil Combination Frequencies; U.S. Carrier Dormancy Waivers

Accordingly, the notice date should remain February 15, 2002. As for Delta's further contention that carriers seeking individual dormancy waivers beyond March 31 be required to do so by December 31, that request should be denied as well, and for the same reason. In this period of temporary uncertainty following September 11, December is too early for carriers to be expected to finalize their summer 2002 schedules.

We also note that all carriers affected by the Department's action -- except for Delta -- consistently urged that the blanket dormancy waiver should extend for a period of 90 days beyond March 31, 2002 in order to afford maximum flexibility for the phase-in of restored service. The Department, however, denied blanket dormancy relief beyond March 31. It would be unfair and prejudicial to other carriers to require a final decision on summer 2002 schedules by December 31 to satisfy Delta's special request for the Brazil market, without also extending the blanket dormancy period for 90 days beyond March 31. Finally, Delta's letter of December 7, 2001 with respect to dormant Brazil frequencies is inaccurate. American is operating five weekly JFK-GIG nonstops, and 14 weekly MIA-GRU nonstops, effective December 15, 2001.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com

As Delta suggests, the U.S.-Brazil market may be "unique," with 26 frequencies unused (15 by American, 7 by United and four by Continental) and another carrier (Delta) using frequencies on an interim basis. Even under these circumstances, however, no relief should be given to Delta unless comparable relief is also given to Continental and other carriers. Thus, if Delta were to receive a temporary award of four Brazil frequencies beyond March 30, 2002, the other carriers should be granted dormancy waivers extending beyond that period as well. Continental would not object to an award of the four frequencies temporarily to Delta for an indefinite period so long as Continental is granted an indefinite dormancy waiver and could recall four^\ Brazil frequencies on 90 days' notice. With 26 Brazil frequencies currently dormant and the extraordinary uncertainties caused by the aftermath of the September 11 attacks, the Department should await plans for reinstitution of Brazil services by American, Continental and United rather than forcing those carriers to institute unprofitable Brazil services (as Delta has already done) or risk losing frequencies awarded to them. Delta has already incurred whatever costs were inherent in instituting additional frequencies on a route it already served with three weekly flights fully understanding that it was doing so based on a temporary, interim award of the frequencies. With a 90 day advance notice for recall, the problems cited by Delta in its petition could be resolved without burdening other carriers and other routes.

Counsel:  Crowell Morning, Bruce Keiner, 202.624.2500, rbkeiner@cromor.com 

Delta now complains, as it did previously, that it would be inconvenient and disruptive of its schedule planning for Delta to have to seek such an extension of its temporary allocation beyond March 31. Delta fails to note, however, that it was to avoid such inconvenience and disruption to their own schedule planning that caused carriers such as United to seek waivers of dormancy conditions that would give them 90 days following March 30, 2002, to restart dormant services. The Department rejected that flexibility to restart temporarily suspended operations during a 90-day period beyond March 30 for reasons similar to that which led it to deny Delta the flexibility to continue temporarily authorized services after that date.

Now, having made the necessary concessions to secure a timely startup for its temporary U.S.-Brazil frequencies, Delta is reneging on those concessions in an effort to achieve its goal of retaining the temporary frequencies beyond March 31, 2002. The Department should not tolerate this blatant gamesmanship. Delta's actions border on an abuse of the Department's process, and its petition for reconsideration should be denied in its entirety.

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

U.S.-Brazil Combination Frequencies / Waiver of Dormancy Conditions on Limited-Entry Authority

In order to prevent continued uncertainty and under-utilization of U.S.-Brazil frequencies, it is important for the Department to identify and promptly resolve any issues pertaining to further discrete U.S.-Brazil dormancy waiver requests beyond March 31. Whatever date the Department establishes for carrier notices of U.S.-Brazil frequency utilization should also be the due date for any Brazil dormancy waiver requests. American was the only carrier that addressed this issue, stating that it would not object to the establishment of a common notice and dormancy waiver application date.

Delta is compelled to respond to United's erroneous suggestion that its Brazil frequencies are not subject to revocation for dormancy, and that it can ignore the Department's required Brazil frequency utilization notice because of the terms of the certificate transfer under which United acquired its Brazil frequencies from Pan Am.  The Department required United to provide prompt updated information to the Department concerning its "plans to implement additional Brazil services to ensure that [United's] allocated frequencies are not wasted." Id. Accordingly, the Department should clarify for United's benefit that it is required, like all other carriers, to inform the Department of United's plans to use (or not use) its dormant Brazil frequencies on the specified notice date.

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

U.S.-Brazil Combination Frequencies / Waiver of Dormancy Conditions on Limited-Entry Authority

Delta's latest request for reconsideration of Order 01-11-15 ignores the fact that the order itself and the pleadings giving rise to it addressed only one type of frequency allocation -- i.e., those allocations subject to dormancy conditions. There are other types of frequency allocations which may become unused or "dormant" but to which that order does not refer. These include the type of U.S.-Brazil frequency held by United under "grandfather" allocations. It was such a grandfather allocation that was referred to in Order 95-3-52 cited by Delta in its reply. The Department has in earlier cases "reallocated" such unused grandfather frequencies for temporary periods of nonuse (as it did in the order cited by Delta) and has reallocated them on a permanent basis where a carrier has abandoned their utilization altogether. The procedures used for such reallocations are fundamentally different, however, from the more recent procedures adopted in 1996 under which dormancy conditions have been imposed which automatically subject frequencies to reversion to the Department after 90 days of nonutilization. See, e.g., Order 96-2-17.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202-663-6670, jmanley@wilmer.com

U.S. Carrier Dormancy Waivers, Delta Air Lines, Inc. and U.S.-Brazil Combination Frequencies (Atlanta-Rio de Janeiro)

By this order, we grant the petition of Delta Air Lines for reconsideration of Order 2001-11-15 and, upon reconsideration, affirm, with one exception, our decision in that order. Specifically, we affirm our decision to require all U.S. carriers holding blanket dormancy waivers to file a notice no later than February 15, 2002, in Docket OST-2001-11065, listing each limited-entry market in which they will not resume service beginning April 1, 2002. We have decided to modify our decision in Order 2001-11-15 with respect to the filing of requests for further dormancy waivers in the U.S.-Brazil market. Carriers holding U.S.-Brazil service frequencies will be required to file any requests for further dormancy waivers by February 15, 2002, the same date that they are required to file notice of their U.S.-Brazil frequency utilization.

Given Delta's current temporary use of frequencies in the U.S.-Brazil market, we believe that establishing a specific due date for further dormancy waiver requests is justified. It is not unreasonable to expect that by February 15, carriers will have made plans to resume service in a particular market if they are going to do so. A specific date will also afford Delta more accurate information on which to make its plans with respect to its expanded Atlanta-Brazil services. Indeed, we note that with respect to its request here, Delta has stated: "Whatever date the Department establishes for carrier notices of U.S.-Brazil frequency utilization should also be the due date for any Brazil dormancy waiver requests."

By:  Read Van de Water

All U.S. Air Carriers; Waiver of Dormancy Conditions on Limited Entry Route Authority

Dormancy Waiver Chart

Brazil. As of April 1, 2002, American will not be using two of its seven weekly U.S.-Brazil frequencies granted for New York (JFK)-Rio de Janeiro service by order 2000-12-2, December 1, 2000 in the 1998 U.S.-Brazil Combination Service Case. American is this day filing an application in OST-1999-6284 asking that the dormancy condition for these two frequencies be waived for a period of nine months, or through January 8, 2003.

France. As of April 1, 2002, American will not be using seven weekly U.S.-France frequencies granted for service to Chicago or San Jose by Notice of Action Taken, OST­2000-7628, September 7, 2000 in the U.S.-France Frequency Allocation Proceeding. On January 22, 2002, the United States and France signed an open skies agreement, thereby ending the need for frequency allocations.

Japan. As of April 1, 2002, American will not be using seven U.S.-Japan frequencies granted for Dallas/Ft. Worth-Osaka service by order 98-5-17, May 18, 1998 in the 1998 U.S.-Japan Combination Service Proceeding. American is this day filing an application in OST-1998-3419 asking that the dormancy condition for these frequencies be waived for a period of one year, or through April 1, 2003.

Ukraine. As of April l, 2002, American will not be using its third-country codeshare designation for service to Ukraine granted by Order 2000-11-1, November 2, 2001 in U.S.­Ukraine Third-Country Codesharing Opportunities; see also Notice of Action Taken, OST-2000-7784, January 26, 2001. American is this day filing an application in OST-2000-7784 asking that the dormancy condition for this designation be waived for a period of six months, or through October 1, 2002.

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

Continental will not be operating service or operating reduced service over the following routes beginning April 1, 2002: Brazil Frequencies - Continental is serving New York/Newark-Rio de Janeiro via connections at Sao Paulo on its Houston-Sao Paulo-Rio de Janeiro flights, but not using the four frequencies allocated to it for New York/Newark-Rio de Janeiro nonstop service. (See Order 97-4-13, Docket OST-96-2016) Ecuador Frequencies - Continental will not be using 1.5 of the frequencies allocated to it for Houston-Panama City-Quito service. See Order 2000-8-19, Docket OST-95-958) Japan Frequencies - Continental will not be operating two of the seven U.S.-Japan frequencies awarded to it for New York/Newark-Tokyo service. See Order 98-5-7, Docket OST-98-3419) San Antonio-Mexico City - Continental has terminated the San Antonio-Mexico City service authorized by its Route 561 certificate authority.  See Order 2001-5-31, Docket OST-99-5868).

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@crowell.com 

Continental is currently offering daily nonstop service between New York/Newark and Sao Paulo, with connecting service offered to Rio de Janeiro passengers at Sao Paulo, as well as Houston-Sao Paulo-Rio de Janeiro services. Continental has temporarily suspended its four weekly nonstop New York/Newark­Rio de Janeiro flights, however, in the wake of the tragic events of September 11 and the resulting decline in demand for U.S.-Brazil services.

Continental currently holds an allocation of 10.5 weekly U.S.-Ecuador frequencies granted by Orders 91-5-24, 92-3-45, 92-11-46, and most recently renewed by Order 2000-8-19 in Docket OST-95-958. Continental will be operating two frequencies per week as of April 1, 2002. Thus, Continental is requesting a waiver of the dormancy condition applicable to 1.5 of its U.S.-Ecuador frequencies.

Good cause exists for waiving the dormancy conditions applicable to Continental's U.S.-Brazil, U.S.-Ecuador and U.S.-Japan frequencies through December 31, 2002. The "marketplace uncertainties" that the Department noted in Order 2002-2-2 when it granted a blanket waiver of dormancy conditions to U.S. carriers regrettably continue to exist, and demand for services on U.S.-Brazil, U.S.­-Ecuador and U.S.-Japan routes remains depressed. Continental is seeking the requested dormancy waivers to maintain the flexibility to re-introduce New York/Newark-Rio de Janeiro service and resume additional Houston-Panama City­Quito and New York/Newark-Tokyo services when economic conditions improve.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@crowell.com 

Continental Micronesia will not be operating service between Honolulu and Tokyo as of April 1, 2002. Continental Micronesia has been awarded waivers of the dormancy condition applicable to its Honolulu-Tokyo authority see, e.g., Notice of Action Taken dated August 3, 2000 in Docket OST-98-3419 and Orders 2001-11-5 and 2002-2-2 issued in this docket), and Continental Micronesia is submitting a request for a waiver of the dormancy condition applicable to its Honolulu-Tokyo frequencies today in a separate docket.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@crowell.com 

Continental Micronesia applies for waiver of the 90-day dormancy condition applicable to its allocation of five weekly frequencies for service between Honolulu, Hawaii, and Tokyo, Japan, awarded in the 1998 U.S.-Japan Combination Service Proceeding. Continental Micronesia asks that the dormancy waiver for its Honolulu-Tokyo frequencies be extended until at least March 28, 2003.

Counsel:  Continental and Crowell Moring, Bruce Keiner, 202.624.2500, rbkeiner@crowell.com 

Pursuant to Orders 2001-11-15 and 2002-2-2, Delta Air Lines, Inc. hereby notifies the Department of the following routes where Delta holds authorities that are subject to the Department's blanket dormancy waiver, and where Delta will not be operating service as of April 1, 2002:

• Los Angeles–Nagoya (7 frequencies)

• Los Angeles-Tokyo (7 frequencies)

• New York-Tokyo (7 frequencies)

• Portland-Osaka/Fukuoka (13 frequencies)

Pursuant to the Department's Order granting blanket temporary dormancy waivers for all U.S. carvers, FedEx submits this notice of service for limited-entry route rights for Russia and the Tashkent overflights, beginning April 1, 2002.

Russia. FedEx plans to resume service between New York/Newark and Moscow on or before April l, 2002. FedEx holds authority to operate this route on its certificate for Route 119 granted by Order 90-11-54. FedEx will initially operate at least one weekly frequency. FedEx is continuing to assess market conditions and may increase the service if demand warrants.

Counsel:  FedEx, Melissa Paul, 901-434-8580

Pursuant to Orders 02-2-2 and 01-11-15, Polar Air Cargo, Inc. submits the following notice identifying each limited-entry market subject to the blanket dormancy waiver contained in Order 01-11-15 in which Polar will not resume service as of April 1, 2002:

• Allocation of three (3) weekly U.S.-South Africa all-cargo frequencies (Docket OST-97-2939). Polar does not intend to seek a further dormancy waiver with respect to these three frequencies.

• Allocation of two (2) weekly U.S.-Saudi Arabia ail-cargo frequencies (Docket OST-98-3652). Polar intends to seek a limited dormancy waiver to maintain these frequencies in effect and will file such an application shortly.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.8060, jmanley@wilmer.com 

Pursuant to Orders 02-2-2 and 01-11-15, United Air Lines, Inc. submits the following notice listing each limited-entry market authorization subject to the blanket dormancy waiver of Order 01-11-15 in which United will not resume service beginning April 1, 2002:

• Allocation of fourteen (14) Europe-India Russian overflight frequencies (7 eastbound and 7 westbound) in Docket OST-97-2610.

• Denver-Mazatlan: exemption to code share on Mexicana flights in Docket OST-96-1988.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.8060, jmanley@wilmer.com

All U.S. Air Carriers; Waiver of Dormancy Conditions on Limited Entry Route Authority

hereby submits this motion for leave to file out of time and notice identifying each limited-entry market subject to the Department's blanket dormancy waiver set forth in Order 01-11-15 as to which Evergreen does not intend to resume service as of April 1, 2002. Evergreen seeks leave to file this notice one business day after the February 15, 2002 due date fixed in the Department's order on the ground that it was unable, for unforeseen reasons, to complete the required coordination with its counsel on February 15.

The markets as to which Evergreen submits this notice are as follows: 

• Evergreen intends to seek a continued dormancy waiver for a period of one year, through March 31, 2003, with respect to its operation of one weekly flight between the United States and Thailand. Evergreen will shortly file an appropriate application for a continued dormancy waiver in Docket OST-01-8879. 

• Evergreen intends to seek a continued dormancy waiver for a period of one year, through March 31, 2003, with respect to the operation of three weekly flights between the U.S. and certain points in Russia, specifically, Khabarovsk, Petropavlovsk, Vladivostok and Yuzhno-Sakhalinsk. Evergreen will shortly file an appropriate application for a continued dormancy waiver in Docket OST-96-2025.

Counsel:  Steptoe Johnson, David Coburn, 202.429.8063

Continental Air Lines, Inc.

Applies for a waiver of the dormancy conditions applicable to its allocation of seven U.S.-Colombia frequencies for service between New York/Newark and Cali and Medellin, Colombia through December 31, 2003.  Good cause exists for waiving the dormancy condition applicable to Continental's U.S.-Colombia frequencies through December 31, 2003. Continental was the only applicant for the seven Colombia frequencies at issue when they first became available see Order 2001-5-26), and the Department has waived the dormancy condition applicable to Continental's Colombia frequencies until October 1, 2002.  With a sluggish U.S. economy, an economic crisis developing in South America and large losses reported by the U.S. airlines serving South America^, instituting service at new foreign points in South America would be particularly difficult in the current economic and operating climate. Continental is seeking this dormancy waiver to maintain the flexibility to introduce New York/Newark-Cali/Medellin service when economic conditions improve. Continental remains committed to instituting New York/Newark-Cali/Medellin service, but it may well be unable to do so prior to December 2003.

Counsel:  Crowell Morning, Bruce Keiner, 202.624.2615

Continental Airlines, Inc. and All U.S. Carriers

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com

Continental Airlines, Inc.

Notice granting, in part the application. Effective September 18, 2002 through April 1, 2003. Petitions due September 27, 2002.

By: Paul Gretch

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