OST-95-556 / United Air Lines (exemption for code-share Atlanta/Houston/Orlando/Tampa-Cayman Islands with Cayman Airways) / October 28, 1997

Application of

for exemption pursuant to 49 U.S.C. 40109 (Code Share Atlanta/Houston/Orlando/Tampa-Cayman Islands)

Pursuant to 49 U.S.C. Section 40109, United Air Lines, Inc. ("United") hereby applies for a two-year renewal of its exemption authorizing it to provide scheduled air transportation of persons, property and mail between Atlanta, Houston, Orlando and Tampa, on the one hand, and points in the Cayman Islands, on the other hand, through a code-share arrangement with Cayman Airways, Ltd. ("Cayman"). 1/

United invokes and relies upon the provisions of Section 558 (c) of the Administrative Procedure Act (5 U.S.C. Section 558 (c)), as implemented by Part 377 of the Department's Special Regulations, to continue in effect its existing exemption authority pending final action on this renewal application. The

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authority would expire on December 28, 1997 absent this renewal application, which is timely under 14 C.F.R. 377.10 (c) since it is filed more than 60 days in advance of the expiration date.

In support of its request, United submits the following:

1. By Order 96-3-17, the Department renewed United's exemption authority to operate scheduled combination services between Atlanta, Georgian Houston, Texas, and Tampa, Florida, on the one hand, and points in the Cayman Islands, on the other. By Order 96-9-28 this exemption was amended to add the additional U.S. gateway of Orlando, Florida. As stated above, this exemption, as amended, is scheduled to expire on December 28, 1997 and is the subject of the instant renewal application. 2/

2. United is fit, willing and able to continue to provide scheduled combination services between the U.S. and the Cayman Islands. See, e.g., United Air Lines Route 566 Renewals.

2/ By Orders 96-3-17 and 96-9-28, United was also granted exemption authority to integrate its services to the Cayman Islands operated pursuant to this exemption authority with other services authorized on its Certificates of Public Convenience and Necessity for Routes 57 and 632 to the extent such route integration is consistent with applicable international agreements. United also seeks renewal of this route integration exemption authority.

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3. Renewal of United's Atlanta/Houston/Orlando/Tampa-Cayman Islands authority is consistent with the public interest. United currently uses the exemption authority for which renewal is sought to offer code-share services between the Cayman Islands and Houston, Tampa, and Orlando on Cayman's services, connecting to points beyond these gateway cities to other United destinations such as Chicago and Denver. 3/ United's other present authority to serve the Cayman Islands is contained in its Certificate of Public Convenience and Necessity for Route 632 and includes only the U.S. gateways of Miami, New York/Newark, Philadelphia, Boston, and Washington/Baltimore. 4/

3/ United also offers code-share services on Cayman's flights between the Cayman Islands and Miami which connect to United's flights serving Miami from points throughout the U.S. That service is offered pursuant to United's Certificate of Public Convenience and Necessity for Route 632.

4/ In August 1992, United filed an application in Docket 48295 to amend its Certificate for Route 632. The requested amendment is pending and if granted, would make this renewal unnecessary because it would authorize service between all points in the U.S. and all points in the Cayman Islands.

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This code share authority is an integral part of United's service offering in -the Caribbean. The Cayman code share flights offer passengers convenient United on-line service to points served by Cayman in the Cayman Islands such as Grand Cayman and Cayman Brac. In the case of Grand Cayman, the code share offers valuable U.S. carrier competition with American, which is the dominant carrier in the Caribbean market. The codeshare arrangement is, therefore, pro-competitive and increases the U.S.-Caribbean service options available to U.S. passengers.

4. United's services are consistent with the U.S./U.K. bilateral air services agreement. U.S. carriers are authorized to serve any point in the Cayman Islands from any point in the U.S. pursuant to U.S. Route 1:L of that agreement. Cayman is authorized and currently operates services between the Cayman Islands and U.S. points Houston, Miami, Orlando and Tampa.

5. United requests a two-year renewal of its exemption. This will avoid unnecessary and repetitive renewals of an ongoing service that has already been determined on several previous occasions to be consistent with Department policy. The Department in the past granted renewal of this code share

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exemption for a two-year period and United's request is consistent with that prior decision. (See Order 96-3-17)

WHEREFORE, for the foregoing reasons, United requests that the Department renew for a two year period its exemption authority to offer combination service between Atlanta, Houston, Orlando and Tampa and the Cayman Islands pursuant to its code share agreement with Cayman Airways Ltd. and to integrate service under this exemption with service operated to other points authorized in its Certificates of Public Convenience and Necessity for Routes 57 and 632. United also requests the Department to grant it such other and different relief that the Department deems to be consistent with the public interest.

Respectfully submitted,

GINSBURG FELDMAN, Joel Stephen Burton
Counsel for UNITED AIR LINES, INC.

October 28, 1997