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OST-00-7148

 


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 Issued March 28, 2000
Served March 31, 2000
U.S. DOT/OST - Notice U.S.-Turkey 

Notice requesting that all US air carriers interested in using the third-country ad referendum open-skies air transport agreement opportunities available immediately, should file applications for those services with the Department no later than April 14, 2000. Carriers without requisite operating authority should file exemption/frequency allocation applications and requests for statements of authorization to serve the affected markets in conjunction with their third-country code-share partners Answers are due April 21, 2000 Replies are due April 26, 2000 

By:  Paul Gretch


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 14, 2000 Application of American Airlines for Third-Country Code-Share Opportunity U.S.-Turkey 
    Service List  

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

OST-00-7148 April 14, 2000 Application of Delta Air Lines  U.S.-Turkey 
    Service List  

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

OST-00-7148 April 14, 2000 Application of Northwest U.S.-Turkey 
    Attachment: Code-Share Schedule  
    Service List  

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193

OST-00-7148 April 14, 2000 Application of United Air Lines for Designation and Frequency Allocation U.S.-Turkey 
    Attachment:  United/Lufthansa Code-Share  
    Service List  

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


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 20, 2000 Answer of American Airlines U.S.- Turkey 
    Service List  

American Airlines, Inc., pursuant to the Department's Notice of March 31, 2000, hereby answers the applications for U.S.-Turkey third-country codesharing authority submitted in this docket on April 14, 2000. Four applicants are seeking three available designations. American has applied to codeshare with Swissair via Zurich; United to codeshare with Lufthansa via Frankfurt; Northwest to codeshare with KLM via Amsterdam; and Delta to codeshare with Air France via Paris. American is also seeking to engage in bilateral codesharing with Turkish Airlines. American will provide significant competitive benefits in the U.S.-Turkey market under its proposals with both Swissair and Turkish Airlines, greatly expanding the number of U.S. gateways with on-line service.

If the Department nonetheless determines that the American/Swissair arrangement should not be favored in the circumstances presented, then the Department should not allow Delta to codeshare with Air France in addition to South African Airways in the U.S.-South Africa market. To maximize the number of U.S. carriers serving South Africa, the Department should revoke the Delta/Air France approval, and grant American's application for codesharing designation to South Africa with British Airways via London.

The application submitted by American and Turkish Airlines in for bilateral codesharing should be granted no later than the date the Department acts" on the third-country codesharing applications in this docket. The American/Turkish Airlines request is fully consistent with the March 22, 2000 Memorandum of Consultations between the U.S. and Turkey, and should be approved at an early date.

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


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 21, 2000 Consolidated Answer of Delta Air Lines

Scanned Copy

U.S.- Turkey 
    Service List  

Americanís attempt to analogize its Turkey application with Deltaís South Africa service offerings is inapposite. Here, in making its initial public interest determination, the Department is faced with a situation where two allied carriers have concluded and signed a binding commercial agreement to provide codeshare service. This is vastly different from a situation where, by virtue of changed circumstances, a bilateral codeshare partner has decided to migrate from one U.S. partner to another. The Departmentís longstanding policy in both direct-service and third-country codeshare service cases is to grandfather existing U.S. carrier services. To do otherwise would be contrary to the public interest because it would freeze evolution in the marketplace by forcing a carrier, such as Delta, to choose between maintaining service with its primary worldwide alliance partner, or, being able to implement new beneficial service through bilateral codesharing.

The proposals of Delta, United and Northwest to offer third-country codeshare services via the western European hubs of their respective alliance partners are roughly comparable. United and Delta have applied for seven frequencies each, and, as noted above, Northwest itself recognizes that its request for 14 of the 21 available frequencies is excessive. Under these circumstances, the Department should proceed by awarding seven frequencies to Delta, United and Northwest, so that each of these three carriersí alliances can offer a new daily codeshare service to compete with the American/Turkish Airlines alliance.

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

OST-00-7148 April 21, 2000 Consolidated Answer of United Air Lines

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U.S.- Turkey 
    Service List  

American offers no reason for wanting to code share with Swissair other than to prove a point in another proceeding where American is seeking a code-share opportunity to offer service to South Aftica.1/ There are no public benefits cited with respect to Swissair's service to Istanbul that American cannot equally well offer on THY's service. Indeed, THY serves Istanbul and other points in Turkey from a number of European gateways also served by American, whereas Swissair operates only from Zurich. American serves Zurich only from the Dallas/Ft. Worth gateway (effective in June 2000), whereas it would connect with certain of THY's other European points from multiple U.S. gateways. American could, therefore, offer a wider range of service between the U.S. and Turkey with THY than it could with Swissair. In these circumstances, it would be contrary to the public interest to award American a third-country code-share opportunity at the expense of United.

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


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 21, 2000 Consolidated Answer of Northwest Airlines
Electronic Submission
U.S.- Turkey 
    Service List  

Both the available U.S.-Turkey third-country code-share designations and the total frequency pool for operation of such services are oversubscribed. The Department therefore must select among the competing applications. With three code-share opportunities and 21 daily frequencies available for allocation, Northwest anticipates that the Department will allocate the available frequencies evenly among three of the applicants, leaving no residual frequencies. The record clearly demonstrates, however, that Northwest should be one of the three carriers selected to provide third-country code-share service to Turkey, and should be allocated 7 of the 21 frequencies available. The record also shows that Americanís Application is the weakest of the four submitted. Under the circumstances, the Departmentís decision should be relatively simple. As American acknowledges in its Application, it already has a bilateral code-share relationship with Turkish Airlines, approval of which is pending before the Department in Docket OST-00-7151. The code-share arrangement between American and Turkish Airlines is authorized under the MOC, and without the restrictions applicable to third-country code-share service. Under the circumstances, Americanís request for one of the three limited third-country code-share designations and 7 of the 21 available frequencies should be denied. American as much as acknowledges so in its application, stating that it "recognizes that in limited-entry markets, the Department may be required to weigh competing applications, and determine whether applicants engaging in bilateral codesharing should also be awarded third-country codesharing authority." Americanís application in this proceeding appears to be motivated primarily by its competition with Delta for a U.S.-South Africa third-country code-share opportunity. This underlying motive is highlighted by the sketchy service proposal information American has supplied in this docket. First, American failed to identify the operating carrier on each of the U.S.-Zurich segments of its proposed service.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 26, 2000 Reply of American Airlines 

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U.S.-Turkey 
    Service List  

United asserts that American's application to codeshare to Turkey with Swissair is "spurious" because American is also seeking approval of a bilateral codesharing arrangement with Turkish Airlines (OST-00-7151). United argues that this proceeding should be decided without comparing the relative benefits of each proposal simply by eliminating American from contention, and granting seven weekly frequencies to each of the three remaining applicants. American's application is not "spurious." American's proposal with Swissair will provide nonstop-to-nonstop connections between Atlanta, Boston, Chicago, Dallas/Ft. Worth, Los Angeles, Miami, New York, Newark, San Francisco, and Washington, on the one hand, and Istanbul, on the other, via Swissair's Zurich hub. Such services will supplement the American/ Turkish Airlines codesharing arrangement between Istanbul and U.S. points via New York, Miami, and Chicago, and will provide significant public benefits.

If, however, the Department adopts United's position and eliminates American from consideration for third-country codesharing because of its bilateral arrangement with Turkish Airlines, then the same principle should absolutely apply to United in the U.S.-Ukraine market, as well as to Delta in the U.S.-South Africa market. On April 26, 2000, United applied for limited-entry third-country codesharing authority with Austrian Airlines to the Ukraine, even though United already holds a designation with Lufthansa. United should not be permitted to codeshare to the Ukraine with both Lufthansa and Austrian Airlines to the exclusion of American/Swissair proposal pending in OST-00-7227 and OST-00-7228. Nor should Delta be permitted to codeshare with both South African Airways and Air France to the exclusion of the American/British Airways arrangement pending in OST-99-6507 and OST-99-6595.

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

OST-00-7148 April 26, 2000 Consolidated Reply of Delta Air Lines

Scanned Copy

U.S.-Turkey 
    Service List  

Counsel:  Shaw Pittman, Alexander Van der Bellen, 202.663.8060

 

OST-00-7148 April 26, 2000 Consolidated Reply of United Air Lines

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U.S.-Turkey 
    Service List  

American continues to use this proceeding to leverage approval of its proposal in Docket OS T-99-6595 to code share to South Africa with British Airways by replacing the Delta/Ar France code share. As United noted in its answer, the South Africa third-country code-share situation raises issues unrelated to this proceeding. If American's application here to code share with Swissair is denied because of American's code share with THY, American is free to raise that as a precedent for South Africa code shares at the appropriate time. Because, however, American's chosen partner for service to South Africa is British Airways, not Swissair, the issue is not ripe for decision in any event due to considerations applicable to the American/BA code share under the restrictive terms of U.S./U.K. bilateral relationship.

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


U.S.-Turkey Third Country Code Share Combination Service

OST-00-7148 April 27, 2000 Motion for Leave to File and Consolidated Reply of Northwest Airlines U.S.-Turkey 
    Exhibit:  Summary of Third- Country Code-Share Proposals  
    Attachment:  United/Lufthansa Summer 2000 Schedule  
    Service List  

No party has disputed that Northwest should be allocated at least seven frequencies in this proceeding. Both Delta and United advocate an award of seven frequencies each to Northwest, Delta and United, and argue that American's application for third-country code-share authority should be denied. In its Answer, American does not attempt to demonstrate that its proposal is superior to the other applicants. Rather, American simply asserts that it will provide "significant competitive benefits in the U.S. -Turkey market under its proposals with both Swissair and Turkish Airlines, greatly expanding the number of U.S. gateways with on-line service.". Northwest does not dispute that American's proposed U.S.-Turkey code-share services with both Swissair and Turkish Airlines will provide competitive benefits. Since there are four applicants and only three U.S.-Turkey third-country code-share opportunities, however, the Department must eliminate one of the applicants. Even disregarding the fact that American already has access to Turkey via code-sharing with Turkish Airlines, American's proposal appears to be the weakest of the four, and Northwest's application is clearly superior to American's. See Exhibit NW-R-1; United Application, Attachment 1. The record demonstrates that the public interest would best be served by the Department allocating Northwest, Delta and United seven U.S. -Turkey third-country code-share frequencies each, and authorizing American to code-share with Turkish Airlines. Northwest urges the Department to act promptly upon the applications in this proceeding, and to approve American's application with Turkish Airlines simultaneous with the issuance of a final order here.

Counsel:  Northwest, Megan Rae Rosia, 202.842.3193, megan.poldy@nwa.com 


U.S.-Turkey Third Country Code Share Combination Service

Order 00-7-25
OST-00-7148
Issued July 20, 2000
Served July 20, 2000
Order to Show Cause

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U.S.-Turkey 
    Attachment:  U.S.- Turkey Codeshare Applications  

While in terms of service benefits the proposals have many comparable feature, in terms of market structure considerations, we tentatively conclude that the selection of Northwest, United and Delta will clearly provide superior competitive benefits. Northwest and United are new entrants to the U.S.-Turkey market. The authorization of their services will facilitate services by two new carriers and competitive services by four U.S. airlines in the market. We tentatively find that this factor, coupled with the significant service benefits offered by their proposals, including service to the most U.S. cities, warrants the selection of United and Northwest for two of the three available authorizations.

The selection between American and Delta for the remaining authorization is closer, but, on balance, we believe that the selection of Delta will better maximize the benefits to the traveling public and our goal to promote competition in the market. Delta currently serves Turkey with its own aircraft, operating a daily flight in the Atlanta-Istanbul market and American will soon enter the market under its extensive code-share arrangement with THY involving service in three U.S.-Turkey gateway markets on 13 weekly flights, as well as services within Turkey beyond Istanbul and services within the U.S. beyond THY's gateways at New York, Miami, and Chicago. Thus, both Delta and American have or will have a presence in the market. Under their proposed third-country code-share arrangements with Air France and Swissair, respectively, each would operate comparable services to nearly the same number of the U.S. cities. Although both carriers' third-country code-share services would also involve cities served under their other Turkey services, American's service involves a greater degree of overlap. Delta's proposed third-country codeshare services will complement its current nonstop services and will facilitate a broader range of competitive service by Delta with the third-country code-share services of Northwest and United and the bilateral code-share services by American and THY. On the other hand, American's third-country code-share service with Swissair would largely duplicate its code-share service with THY. In these circumstances, we tentatively conclude that Delta's proposed third-country code-share service with Air France provides greater service and competitive benefits in this case.

We emphasize that our decision here does not establish or reflect a policy, as suggested by American, that would preclude a carrier from holding both bilateral and third-country code-share authority in contested limited-entry markets. We believe that the public interest is better served by considering each situation on a case-by-case basis after a full review of the relative competitive benefits each proposal would offer the market, as well as all other relevant circumstances. We have followed that approach here.

With respect to the number of frequencies allocated to each code-share arrangement, we have tentatively decided to allocate each seven weekly frequencies, thereby affording each the ability to operate daily service in the market. Although Northwest had sought 14 weekly frequencies, it has made clear on the record of this proceeding that it would accept an allocation of seven weekly flights.

By:  Bradley Mims


U.S.-Turkey Third-Country Codeshare Opportunities

OST-00-7148 July 27, 2000 Comments of American Airlines on Show-Cause Order 2000-7-25 US-Turkey Third-Country Codeshare Oppotunites

Counsel:  American, Carl Nelson, 202-496-5647, carl_nelson@aa.com


U.S.-Turkey Third-Country Codeshare Opportunities

OST-00-7148 July 31, 2000 Answer of Delta Air Lines

Scanned Copy

U.S.- Turkey Third- Country Codeshare
    Service List  

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

OST-00-7148 July 31, 2000 Answer of United Air Lines U.S- Turkey Third- Country Codeshare
    Service List  

Counsel:  Wilmer Cutler, Jeffrey Manley, 202-663-6670


U.S.-Turkey Third-Country Codeshare Opportunities

Order 00-8-17
OST-00-7148
Issued August 18, 2000
Served August 18, 2000
Final Order U.S.- Turkey Third- Country Codeshare

By:  Bradley Mims


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