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OST-02-12683

 


2002 U.S.-Brazil All-Cargo Service Proceeding

Order 02-6-20
OST-02-12683
Issued June 28, 2002
Served July 3, 2002
Order Instituting Proceeding and Inviting Applications 2002 U.S.-Brazil All-Cargo Service Proceeding -

Consistent with the provisions of the Department's route transfer order, we have decided to institute the 2002 U.S-Brazil All-Cargo Service Proceeding, to authorize a fourth U.S. carrier to provide all-cargo service in the U.S.-Brazil market and to allocate the four available weekly frequencies for U.S.-Brazil all-cargo services.

Under the Air Transport Agreement between the United States and Brazil, four U.S. carriers may be designated to operate all-cargo services. These carriers collectively may operate a maximum of 24 round-trip all-cargo wide-body frequencies per week between the United States and Brazil. I Federal Express Corporation, Polar Air Cargo, United Parcel Service, and Atlas Air are the four carriers now designated to provide all-cargo services in the market. Federal Express is allocated 6 weekly frequencies, Polar 4 weekly frequencies, UPS 4 weekly frequencies, and Atlas 10 weekly frequencies.

The designation and frequencies at issue in this proceeding are valuable route rights for U.S. carriers. We believe that it is-in the public interest to select carriers on a timetable that will allow the recipients to enjoy these rights as soon as possible. To this end, we are establishing the following procedural schedule for submissions in this case:

By:  Read Van de Water


In the Matter of 2002 U.S.- Brazil All-Cargo Service Proceeding

OST-02-12683 July 19, 2002 Application for Amerijet International for a Certificate of Public Convenience and Necessity and Request for Frequencies U.S.- Brazil Service Proceeding
    Service List  

By this application, Amerijet is seeking authority to operate two round-trip narrow-body flights each week in the following U.S.-Brazil markets via the intermediate point or points indicated: Miami via Georgetown, Guyana and/or Port of Trinidad and Tobago to Manaus and Recife and return.

Counsel:  Crispin Brenner, John Richardson, 202.371.2258, jrichardson@crispinandbrenner.com 

OST-02-12683 July 19, 2002 Application of Evergreen International Airlines for a Certificate of Public Convenience and Necessity and Allocation of Frequencies U.S.- Brazil Service Proceeding
    Service List  

Hereby applies for a certificate of public convenience and necessity authorizing Evergreen to engage in scheduled foreign air transportation of property and mail between a point or points In the United States, via intermediate points, and the co-terminal points Manaus and Sao Paulo, Brazil. Evergreen further seeks authority to integrate this authority with its existing certificate and exemption authority and to commingle traffic consistent with applicable aviation agreements. In addition, Evergreen seeks designation as the fourth U.S.-Brazil all-cargo airline and an allocation of four weekly round trip frequencies.

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com 

OST-02-12683 July 19, 2002 Application of Gemini Air Cargo for a Certificate of Public Convenience and Necessity and for an Allocation Frequencies U.S.- Brazil Service Proceeding
    Service List  

Gemini seeks designation as the fourth U.S. scheduled all-cargo carrier to Brazil and asks the Department to allocate to Gemini the four all-cargo frequencies that are presently available. Gemini will serve Los Angeles, New York, and Miami in the United States. Two flights will operate Los Angeles - Miami - Manaus - Sao Paulo - Manaus - Miami - Los Angeles. The other two flights will operate on the same routing except that they will originate and terminate in New York instead of Los Angeles. Although each of the four flights will operate either to New York or to Los Angeles, Gemini may adjust the number of flights between New York and Los Angeles as the result of the dynamic U.S.Brazil cargo market. Gemini's Direct Exhibits will provide the detailed traffic and other data specified in Order 2002-6-20.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 July 31, 2002
Docketed August 1, 2002
Letter from Amerijet International to Office of International Aviation

2002 U.S.-Brazil All-Cargo Service Proceeding

Letter of Amerijet International, Inc. to the Office of International Aviation requesting that all-cargo carriers currently serving the U.S.-Brazil market to provide, as soon as possible but no later than August 9, 2002, a complete description of their services in the U.S.-Brazil market for the period June 1, 2001 through May 31, 2002.

Counsel:  Crispin Brenner, John Richardson, 202.828.0152

OST-02-12683 Served August 1, 2002 Notice

2002 U.S.-Brazil All-Cargo Service Proceeding

On July 31, 2002, Amerijet filed a letter in the above-captioned docket, served on all parties as well as Federal Express, United Parcel Service, and Atlas Air/Polar Air Cargo, requesting that the Department require each allcargo carrier currently designated to provide service in the U.S.-Brazil market (Federal Express, UPS, and Atlas/Polar) to submit, by no later than August 9, a complete description of their services in the U.S.-Brazil market for the period June 1, 2001 through May 31, 2002. In the alternative, Amerijet states that the incumbent carriers may agree to voluntarily submit the requested information for the record of the case.

We will treat Amerijet's letter as a motion under our regulations (14 CFR Part 302.11), which would normally allow seven days for answers (i.e., August 9). However, to ensure that the issues raised by Amerijet's letter are addressed in an expedited manner, we will require that answers to Amerijet's letter be filed in the above referenced docket by Monday, August 5, 2002. Any replies shall be filed by Tuesday, August 6, 2002.

By:  Paul Gretch


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 2, 2002 Direct Exhibits of Amerijet International

2002 U.S.-Brazil All-Cargo Service Proceeding

    Index of Exhibits  
    Exhibits AJ-1 through AJ-6:  Background Information, Financials, Schedules, Forecast Working Agreement  

Counsel:  Crispin Brenner, John Richardson, 202.371.2258, jrichardson@crispinandbrenner.com 

OST-02-12683 August 2, 2002 Direct Exhibits of Evergreen International

2002 U.S.-Brazil All-Cargo Service Proceeding

     Index of Exhibits   
       Testimony:  Anthony Bauckham    
     Testimony:  Richard Murphy   
      Exhibits 100 Series:  Proposed Schedules    
    Exhibits 200 Series:  Past Schedules   
      Exhibits 300 Series:  Forecast of Air Traffic    
      Service List   

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com 

OST-02-12683 August 2, 2002 Direct Exhibits of Gemini Air Cargo

2002 U.S.-Brazil All-Cargo Service Proceeding

    Index of Exhibits  
    Testimony:  Raymond Lawlor  
    Testimony:  Brian Campbell  
    Exhibit 100 Series:  Company History  
    Exhibit 200 Series:  Fleet  
    Exhibit 300 Series:  U.S.- Brazil Market  
    Exhibit 400 Series:  Forecast Projections  
    Exhibit 500 Series:  Market  

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 5, 2002 Joint Answer of Atlas Air and Polar Air Cargo

Microsoft Word File

2002 U.S.-Brazil All-Cargo Service Proceeding

Even more telling is the complete lack of relevance of incumbent carrier frequency utilization information. In justifying its request for a description of historical U.S.-Brazil services, Amerijet is able only to state vaguely that "[a] relevant question in this or any other route proceeding involves the degree to which incumbent carriers are and have been utilizing frequencies the Department has allocated to them" (emphasis added). Mere general interest in frequency usage does not validate the creation of substantial new information requirements. Moreover, the degree to which incumbent carriers have been using their allocated U.S.-Brazil frequencies is of no consequence in this particular case for the simple reason that those frequencies are beyond the scope of the proceeding. The case arose because the Department decided to replace Polar as one of the four all-cargo operators permitted to serve the U.S.-Brazil market. Polar's designation and four frequencies have been declared available, and Amerijet is seeking only two or perhaps three of those frequencies. With Amerijet seeking fewer than the maximum number and each of the other two applicants seeking the maximum number, incumbent carrier frequency utilization will have no bearing on the ultimate route award.

Counsel:  Atlas, Russell Pommer, 202.354.3843, rpommer@atlasair.com

OST-02-12683 August 5, 2002 Answer of Evergreen International Airlines to Motion of Amerijet International

Microsoft Word File

2002 U.S.-Brazil All-Cargo Service Proceeding

Evergreen agrees that information concerning existing, scheduled, all-cargo services operated by U.S. carriers could prove useful to the Department and the parties in this proceeding. The Department required similar information by its June 21, 2000 Notice in the last U.S.-Brazil all-cargo proceeding. In the Matter of U.S.-Brazil All-Cargo Frequencies, Docket OST-2000-7559. While the instituting order in this proceeding, Order 2002-6-20, only contemplated the filing of such information by incumbents seeking increased frequency allocations, specific issues raised by the Department and the applicants in this proceeding, such as the need for service to intermediate points and interior U.S. points, justify the filing of such information even though incumbents do not seek to increase Brazil service. Evergreen urges that incumbents be required to provide operational information by month and by direction and to identify all Brazilian, U.S., and third-country points included in their single-plane, U.S.-Brazil scheduled services for the time period requested by Amerijet.

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 6, 2002 Motion of Amerijet International for Order Regarding the Production of Documents 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

It should go without saying that the material requested by Amerijet is extremely relevant. In fact, it is hard to imagine how either applicant could be certificated if its proposed operations are in any way dependent upon its receipt of Federally subsidized loan guarantees issued under the Stabilization Act. It would certainly be inconceivable for the Department to award a certificate without making findings regarding financial fitness based on substantial evidence of record. And it would be equally inconceivable in these circumstances for the Department to deny itself and other parties access to information as critical as what must be in the possession of Evergreen, Gemini and the Stabilization Board regarding the current and projected financial condition of the two applicants. While there is some evidence regarding each applicants financial condition noticeable under the Department's Regulations, none of the evidence presumably submitted by Evergreen and Gemini with the Stabilization Board is publicly available or noticeable by the Department in this proceeding.

Counsel:  Crispin Brenner, John Richardson,202.371.2258, jrichardson@crispinandbrenner.com 

OST-02-12683 August 6, 2002 Reply of Amerijet International to Joint Answer of Atlas Air and Polar Air Cargo 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

The Department and the Civil Aeronautics Board have always recognized that the best evidence about the nature of an air transport market is in the possession of the carrier or carriers then serving that market. And, in virtually every proceeding where the issuance of additional certificates is at issue, the incumbent carrier or carriers are called upon to supply the Department and applicants-with relevant information and data with respect to the market at issue. It is not unreasonable or burdensome to expect those carriers, which have enjoyed their use of the relevant market, to be called upon to share relevant information with the Department and with applicants for new authority even when they have absolutely no economic incentive to do so. The same is true here, and Atlas/Polar has not offered any valid objection to grant of Amerijet's request.

Counsel:  Crispin Brenner, John Richardson,202.371.2258, jrichardson@crispinandbrenner.com 

OST-02-12683 August 6, 2002 Joint Reply of Atlas Air and Polar Air Cargo

Microsoft Word File

2002 U.S.-Brazil All-Cargo Service Proceeding

Evergreen International Airlines, Inc. has filed a "me too" answer in support of Amerijet's July 31 request that the Department direct all-cargo carriers currently serving the U. S.-Brazil market to provide a complete description of their U.S.Brazil services for the period June 1, 2001 through May 31, 2002. Going even further than Amerijet, Evergreen asks the Department to require all incumbents "to provide operational information by month and by direction and to identify all Brazilian, U.S. and third-country points included in their single-plane, U.S. scheduled services for the time period requested by Amerijet." Evergreen's arguments are as unconvincing as Amerijet's and should be rejected out of hand.

Counsel:  Atlas, Russell Pommer, 202.354.3843, rpommer@atlasair.com

OST-02-12683 August 6, 2002 Reply of United Parcel Service (UPS) 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

UPS opposes the Motion of Amerijet and the request made by Evergreen in its Answer. These requests harken back to the "bad old days" of strict regulation when incumbents were required to provide extensive information about their existing services. The Department of Transportation has not required this in recent years, and there is no reason to do so now. In the first place, questions regarding confidentiality and business sensitive information would be raised. In the second place, the burden of producing the data, when viewed m relation to its complete lack of relevance to the proceeding, warrants a denial of the request. None of the applicants in the case have requested the award of any frequencies now held by the incumbents. Accordingly, any information regarding frequency usage, aircraft routings, schedules, etc. has no bearing whatsoever on this proceeding. In the third place, it is too late in the proceeding for the requested information to be of use. The time for information responses, Petitions for Reconsideration, Answers to Petitions, Applications and Direct Exhibits has already passed. Also, UPS' Form 41 filings are fully available to all parties, and the Department, in the instituting Order (Order 2002-6-20), directed the Office of Aviation Analysis to provide the parties with extensive data including traffic data by month and segment data by month by direction. Compliance with Amerijet's and Evergreen's request would be a waste of time.

Counsel:  Kelley Drye, David Vaughan, 202.955.9864, dvuaghan@kelleydrye.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 Served August 7, 2002 Notice 2002 U.S.-Brazil All-Cargo Service Proceeding

This proceeding began shortly after the Department approved a de facto route transfer between Atlas and Polar, but did not approve the transfer of Polar's Brazil designation and four frequencies. The Department found that the transaction with respect to Polar's Brazil authority would not be consistent with the public interest, as it would have resulted in half of the four available designations for all-cargo service and over half of the 24 available frequencies in the U.S.-Brazil market being under single corporate control. Against this background, the Department subsequently instituted the 2002 U.S.-Brazil All-Cargo Service Proceeding in this docket to select a carrier for an authorization to be designated to serve the U.S.-Brazil all-cargo market and for allocation of four U.S.-Brazil all-cargo frequencies under the U.S.-Brazil aviation agreement.

The scope of the authority at issue was already well known at the time we instituted this case. In the circumstances presented, the instituting order did not include a general requirement that incumbent U.S.-Brazil all-cargo carriers report a complete description of their services in the market. Such a requirement would apply only to incumbents choosing to apply for an allocation of additional frequencies. Clearly, the Department would want to know how such an applicant had been using its own allocation before deciding on whether to award that applicant additional frequencies. However, each applicant in this case (Gemini, Evergreen, and Amerijet) is a non-incumbent carrier applying for the available designation and an allocation of frequencies. Neither Amerijet nor Evergreen has presented any persuasive reason why it needs incumbent carrier data in order to make its affirmative case in this proceeding. Indeed, Amerijet's own request only contemplated that the incumbent carrier data be submitted one week of er the direct exhibits in this case were due.

In these circumstances, we are not persuaded that the Department should require incumbent U.S.-Brazil all-cargo carriers to report on their current services in the market. We believe that such a requirement is unnecessary in this case, and we continue to believe that the applicants and the Department have access to the relevant information needed for, respectively, prosecuting and deciding this proceeding. For these reasons, we have decided that the public interest would be best served here by declining to require that incumbent carriers report on their U.S.-Brazil frequency utilization in this docket.

By:  Paul Gretch


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 9, 2002 Answer of Evergreen International Airlines to Motion of Amerijet International 2002 U.S.-Brazil All-Cargo Service Proceeding
    Exhibit 1:  Letter  
    Service List  

Amerijet's motion evinces its total lack of understanding of the rationale for the establishment of the ATSB and of its purposes.  ATSB is not a bankruptcy court, and the purpose of the Air Transportation Safety and System Stabilization Act, Pub. L. No. 107-42 (2001), is not to assist faltering entities interested in reducing or eliminating legitimate debt.  Rather, the program is meant to foster the financial health and development of airlines that have every intention of continuing safe and viable commercial operations.  Applicants must demonstrate that the borrowed funds will be used in a prudent fashion in accordance with a financially sound business plan, and they must provide reasonable assurances that the loans will be repaid.  It is reasonably clear that if an applicant is in serious need of extraordinary financial help, it would not be able to provide sufficient repayment assurances and would not receive any loan guarantees.  Contrary to the obvious implication of Amerijet's rhetoric, the fact that Evergreen is seeking loan guarantees that Congress and the President saw fit to make available to airlines does not bring into question the financial health of the company.  Consequently, there is no basis for providing any of the ATSB filings for Amerijet's review.

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com 

OST-02-12683 August 9, 2002 Answer of Gemini Air Cargo 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

The Department should summarily deny the motion that Amerijet International, Inc., filed on August 6, 2002, asking the Department to order Gemini Air Cargo, Inc, and Evergreen International Airlines, Inc. "to produce copies of their respective applications reportedly filed with the Air Transportation Stabilization Board". Amerijet is once again burdening the Department with a request seeking information that is unrelated to the purpose of this proceeding. Amerijet's Motion is not only spurious and lacking in merit in and of itself. It also reflects a singular disregard for Departmental procedures by trying to redefine the scope of this proceeding long after the time for raising such an issue.

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 12, 2002 Reply of Amerijet International 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

Counsel:  Crispin Brenner, John Richardson, 202.371.2258, jrichardson@crispinandbrenner.com 


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 14, 2002 Re:  Letter from Rickenbacker International Airport in Support of Evergreen 2002 U.S.-Brazil All-Cargo Service Proceeding

By:  Robert Selig


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 Served August 16, 2002 Notice

2002 U.S.-Brazil All-Cargo Service Proceeding

We have decided to deny Amerijet's request. The mere fact that Evergreen and Gemini have filed applications before the ATSB in no way in and of itself calls into question the financial fitness of either carrier. Nor was the material requested to be submitted under the Air Transportation Safety and System Stabilization Act intended to address the question of an air carrier's fitness to obtain or hold economic authority under Section 41101 of our Act. In these circumstances, we believe that the evidence we have already required to be submitted in this proceeding, along with data officially noticeable under rule 24(g) of the Department's regulations, will be adequate for us to make any fitness findings that may be necessary. Accordingly, we will not require that Gemini and Evergreen submit copies of any applications and supporting documents filed with the Air Transportation Stabilization Board seeking Federal loan guarantees.

By:  Paul Gretch

OST-02-12683 August 16, 2002 Letter from Amerijet International - Will Not File Rebuttal Exhibits 2002 U.S.-Brazil All-Cargo Service Proceeding

Counsel:  Crispin Brenner, John Richardson, 202.371.2258, jrichardson@crispinandbrenner.com

OST-02-12683 August 16, 2002 Rebuttal Exhibits of Gemini Air Cargo 2002 U.S.-Brazil All-Cargo Service Proceeding
    Exhibit List  
    Testimony:  Dr. Brian Campbell  
    Exhibits 1-15:  
    Exhibit 16-27:    

Counsel:  Roller Bauer, Moffet Roller, 202.331.3300, mroller@rollerbauer.com

OST-02-12683 August 16, 2002 Rebuttal Exhibits of Evergreen International Airlines 2002 U.S.-Brazil All-Cargo Service Proceeding
    Exhibit List  
    Testimony:  Richard Murphy  
    Exhibits EX-R-1 to 15:    
    Service List  

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com


2002 U.S.-Brazil All-Cargo Proceeding

OST-02-12683 August 22, 2002
Docketed August 26, 2002
Re:  Greater Columbus Chamber of Commerce Support of Evergreen's Application 2002 U.S.-Brazil All-Cargo Proceeding

By:  Sally Jackson


U.S.- Ecuador All Cargo Frequency Allocations

OST-02-12683 August 29, 2002 Re:  Gemini Exhibits GR-R-1 and GR-R-2 2002 U.S.-Brazil All-Cargo Proceeding

Gemini Air Cargo, Inc., prepared two rebuttal exhibits, Exhibit GR-R-1 and Exhibit GR­R-2 based upon the best available DOT Form 41 data. Counsel for Evergreen has advised that these exhibits are not accurate as to Evergreen because the Form 41 data did not contain all of the relevant Evergreen data for the time period in question.

Counsel:  Roller Bauer, Moffett Roller, 202-331-3300


2002 U.S.- Brazil All-Cargo Service Proceeding

OST-02-12683 August 30, 2002 Brief of Amerijet International U.S.- Brazil All-Cargo Service Proceeding

It is clearly not in the public interest for the Department to award scarce scheduled service frequencies in the U.S.-Brazil market to an applicant which will merely duplicate existing services. Rather, to maximize the public benefits available under the all-cargo air transport regime the governments of the U.S. and Brazil have negotiated, the Department should certificate Amerijet and authorize it to expand its established scheduled all-cargo service beyond its current geographic boundaries into the next adjoining country of Brazil.

Counsel:  Crispin Brenner, John Richardson, 202.371.2258, jricharson@crispinandbrenner.com  

OST-02-12683 August 30, 2002 Brief of Evergreen International Airlines U.S.- Brazil All-Cargo Service Proceeding

The purpose of this proceeding is to authorize a replacement U.S. carrier for Polar Air Cargo," one of the four U.S. airlines designated to offer all-cargo service in the U.S.­Brazil market, and to reallocate Polar's four, weekly, all-cargo frequencies. Three airlines - Evergreen International, Gemini Air Cargo, and Amerijet International -- seek to replace Polar as the fourth designated U.S. carrier, and the evidentiary record shows clearly that Evergreen is the best choice. Evergreen's proposal will: maximize utilization of the valuable, limited rights afforded U.S. cargo airlines in the U.S.-Brazil Air Transport Agreement; provide the maximum benefits for shippers and receivers in the Miami-Brazil market; and provide very important and substantial beyond-Miami benefits, including single-plane service to the U.S. Midwest currently served by Polar.

Counsel:  Verner Liipfert, William Evans, 202.371.6030, wcevans@verner.com 

OST-02-12683 August 30, 2002 Brief of Gemini Air Cargo U.S.- Brazil All-Cargo Service Proceeding

The Department should grant the Application of Gemini Air Cargo, Inc. for a certificate to operate scheduled all-cargo service to Brazil and award Gemini the four available all-cargo frequencies to conduct its service. In its Direct and Rebuttal Exhibits, which include the comprehensive analysis of the U.S.-Brazil all-cargo market and of the competing service proposals provided in the Direct and Rebuttal testimony of Dr. Brian Campbell, Gemini has demonstrated the marked superiority of the service that it proposes over the alternative proposals submitted by Evergreen International Airlines, Inc., and Amerijet International, Inc.

Counsel:  Roller Bauer, Moffett Roller, 202.331.3300, mroller@rollerbauer.com


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 August 30, 2002
Docketed September 5, 2002
Correspondence of Honorable David L. Hobson, Deborah Pryce and Patrick J. Tiberi in Support of Evergreen International 2002 U.S.-Brazil All-Cargo Service Proceeding

By:  Honorable David L. Hobson, Deborah Pryce and Patrick J. Tiberi


2002 U.S.-Brazil All-Cargo Service Proceeding 

OST-02-12683 September 9, 2002 Letter of Support 2002 U.S.-Brazil All-Cargo Service Proceeding 

Correspondence of Honorable Mike DeWine and Honorable George V. Voinivich to Norman Y. Mineta in support of the application of Evergreen International Airlines to provide new all-cargo services between the United States and Brazil, replacing all-cargo flights currently operated by Polar Air Cargo.

By: Honorable Mike DeWine and Honorable George V. Voinovich


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 October 28, 2002 Contingent Motion of Amerijet International to Reopen the Record 2002 US-Brazil All-Cargo Service Proceeding
    Service List  

Amerijet’s contention is that the U.S.-Brazil market is saturated with U.S. air carriers designated to provide bulk service with wide-body equipment in major city-pair markets. Amerijet also contends that demand in the market is insufficient  to absorb the frequency supply the Department has already provided. As a result, Amerijet argues that no additional bulk service with wide-body equipment can be justified or supported by the market. Accordingly, Amerijet is urging the Department to give it the chance to use its experience elsewhere in the region to create and integrate a real scheduled cargo service for the entire U.S.-Brazil market.

Counsel: Crispin Brenner, John Richardson,  202 371-2258


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 November 6, 2002 Answer of Evergreen Internationl Airlines to Contingent Motion of Amerijet International 2002 U.S.-Brazil All-Cargo Service Proceeding

Evergreen has no intention of burdening the record or wasting the Department's time and resources by responding in detail to Amerijet's characterization of the information it wants the Department to notice; the Department is fully capable of analyzing information in its official files and reaching its own conclusions without assistance from Amerijet. However, Evergreen is compelled to make a few comments on Amerijet's filing.

Counsel: Piper Rudnick, William Evans, 202 371-6030

OST-02-12683 November 6, 2002 Answer of Gemini Air Cargo to Contingent Motion of Amerijet International 2002 U.S.-Brazil All-Cargo Service Proceeding

Amerijet’s real objective in this “motion” is to revisit arguments in support of its position seeking designation and frequencies in this proceeding -- two months after August 30, 2002, when the parties filed their final briefs in this proceeding, and the Department should firmly reject this pleading for that reason. To the extent, however, that the Department is inclined to give any credence to the substance of Amerijet’s untimely and self-serving arguments, the Department should reopen the proceeding for further briefing by all parties.

Counsel:  Roller & Bauer, Moffett Roller, 202-331-3300, mroller@rollerbauer.com


2002 U.S.-Brazil All-Cargo Service Proceeding

Order 02-11-16
OST-02-12683
Issued and Served November 26, 2002 Order to Show Cause

Microsoft Word File

2002 U.S.-Brazil All-Cargo Service Proceeding

We have tentatively decided to select Evergreen and allocate it four weekly frequencies for all-cargo services in the U.S.-Brazil market.  In addition, we have tentatively decided to award backup authority to Gemini.  

Both Gemini and Evergreen would serve Brazil using all four of the available frequencies. Amerijet, on the other hand, would make only partial use of the available authority. Specifically, Amerijet would use only two wide-body frequencies, converting them to provide four narrow-body flights per week to Brazil. While Amerijet has argued that its proposal would serve shippers with special needs and undeveloped secondary markets, we tentatively find that any such benefits are outweighed by the benefits of the Evergreen/Gemini proposals, both of which would make full use of the available authority. The available service opportunity and attendant frequencies represent valuable operating rights. These rights were obtained through negotiations in exchange for operating rights for Brazilian carriers, and the public interest favors full use of these limited-entry route rights. Consequently, we tentatively believe that Amerijet’s more limited, narrow-body frequency proposal would offer fewer benefits than the proposals of Gemini and Evergreen, as discussed below, and we tentatively conclude that Amerijet should not be selected in this proceeding.

Concerning the applications of Evergreen and Gemini, we tentatively believe that each proposal holds the potential to offer meaningful public benefits. Both carriers would use all four of the available frequencies, fully utilizing the authority at issue here. Furthermore, both would serve Brazil from Miami, the largest U.S. gateway to Brazil, and each carrier would provide single-plane behind-gateway service from two interior U.S. points. Specifically, Evergreen proposes single-plane behind-gateway services from New York (two days a week) and Columbus, Ohio (two days a week), while Gemini proposes single-plane behind-gateway services from New York (two days a week) and Los Angeles (two days a week).

By:  Susan McDermott


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 December 6, 2002 Objections of Amerijet International to Order to Show Cause 2002 U.S.-Brazil All-Cargo Service Proceeding

As all parties and the Department concede, the U.S.-Brazil market is very weak. Indeed, it is so weak that U.S. all-cargo carriers designated to provide service in the market are not using all the frequencies the Department has allocated to them. And the Department has issued appropriate dormancy waivers so the incumbents will not be forced to place unneeded capacity in the market. In such a situation, it is hard to accept the contention that Evergreen and/or Gemini will in fact be willing and able to introduce four new wide-body round-trip frequencies per week.

Counsel: Crispin Brenner, John Richardson, 202 371-2258


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 December 6, 2002
Docketed December 9, 2002
Objections of Gemini Air Cargo to Order to Show Cause 2002 U.S.-Brazil All-Cargo Service Proceeding
    Service List  

The analysis of the traffic forecasts is essential because commercial viability must be an integral element of each carrier's service proposal. In the SCO, the Department has adopted an impermissibly narrow approach to its responsibility of selecting the carrier that best meets the public interest. That determination cannot focus solely on the specific service that the carrier states that it will offer to the public - in this case, shippers who transport cargo to and from Brazil. If that were the case, the award would always go to the airline that submits the most grandiose service proposal, without regard to its economic viability. Obviously, the most attractive proposal from the perspective of U.S. shippers would be one in which a carrier provides through service between Brazil and the greatest number of U.S. points. Gemini could easily submit a proposal, for example, in which it would operate via Miami to three or four of the most significant U.S.-Brazil markets -- on each of the four flights. Such frequent direct service would be ideal from the point of view of shippers in each market served. Airports seeking to increase trade with Brazil would also find it appealing as would state and local government officials.

Counsel: Roller Bauer, Moffett Roller, 202 331-3300


2002 U.S.-Brazil All-Cargo Service Proceeding

OST-02-12683 December 11, 2002 Answer of Amerijet International to Objections of Gemini to Order to Show Cause 2002 U.S.-Brazil All-Cargo Service Proceeding

Amerijet joins with Gemini and supports Gemini's Objections to the Order to Show Cause to the extent Gemini has demonstrated a failure in the Order to conduct a disciplined market examination which traditionally precedes the carrier selection process. Moreover, Amerijet believes that when that market examination is conducted, the only fair conclusion will be that the U.S.-Brazil all-cargo market cannot accommodate more bulk carriers intent on introducing more wide-body capacity in saturated markets. Rather, what the market needs is Amerijet's disciplined scheduled service program expanded from a well-established fully integrated system currently operating in the region.

Amerijet respectfully asserts these objections to the Order to Show Cause, urges the Department, upon review, to conduct the rigorous market examination it is statutorily required to conduct, and contends that, based on substantial evidence of record, the Department cannot find that Evergreen or Gemini may be certificated lawfully in this proceeding. Upon that further investigation, Amerijet is confident that the Department will reverse the findings of the Order to Show Cause and certificate Amerijet to provide new and important services in the U.S.-Brazil all-cargo market in accordance with its proposal.

Counsel:  Crispin Brenner, John Richardson

OST-02-12683 December 11, 2002 Answer of Evergreen International 2002 U.S.-Brazil All-Cargo Service Proceeding

Gemini's underlying complaint with the Show Cause Order is that the Department chose Evergreen rather than Gemini to serve the U.S.-Brazil market. Had the Department chosen Gemini, it is unlikely that Gemini would have charged that the Show Cause Order was "arbitrary" and failed to provide "anything more than a very superficial explanation for its decision." However, since Evergreen was selected, Gemini has found it necessary to charge the Department, in rather severe and intemperate terms, with a myriad of illegal and arbitrary actions in reaching its decision -- a decision which Gemini characterizes as "inherently defective as a matter of law."

For example, Gemini contends that the Department did not conduct a detailed analysis of the traffic projections submitted by Evergreen and Gemini and that the failure to do so makes the selection of Evergreen "defective as a matter of law." Gemini Objections at 4. Such a proposition should find support in precedent, but none is cited. Gemini has not referenced a single carrier selection proceeding in which the Department memorialized in its decision a description of the analyses used to evaluate applicants' traffic projections.

Counsel:  Piper Rudnick, William Evans, 202 371-6030

OST-02-12683 December 11, 2002 Reply of Gemini Air Cargo to Objections of Amerijet International 2002 U.S.-Brazil All-Cargo Service Proceeding

Gemini hereby rejects once again Amerijet’s argument that Gemini is not financially able to introduce new scheduled all-cargo service to Brazil as set forth in its service proposal. Amerijet’s assertion that the Department ignored the “evidence” cited by Amerijet regarding the financial fitness of Gemini and Evergreen, Objections, p. 5, is completely unfounded. To the contrary, the Order indicates that the Department did consider Amerijet’s arguments in this regard. First, the Department noted that the information on which Amerijet relied was “officially noticeable data” that Amerijet could cite “without a formal reopening of the record.” SCO, page 5, n.11. Thus, when the Department states that “[n]o information has come to our attention that leads us to question the fitness of the applicants to conduct the air transportation operations at issue here,” the Department’s reference to information necessarily includes the “information” that Amerijet did bring to the attention of the Department. Amerijet therefore has no basis to claim that the Department did not consider its argument. The Department in fact considered, and properly rejected, Amerijet’s challenge to Gemini’s financial fitness.

Counsel:  Roller & Bauer, Moffett Roller, 202-331-3300, mroller@rollerbauer.com


Issued April 2, 2003 | Served May 28, 2003

Order 03-05-27
OST-02-12683 - 2002 U.S.-Brazil All-Cargo Service Proceeding

Final Order | Word

Order 2003-5-27 makes final the Department's tentative findings and conclusions set forth in Order 2002-11-16; awards Evergreen International Airlines, Inc. certificate authority for scheduled all-cargo service between Miami and Brazil and allocates it 4 weekly frequencies for its services; and makes final our tentative selection of Gemini Air Cargo, Inc. for backup authority in this case.

We have decided to make final our tentative findings and conclusions set forth in Order 2002-11-16 and select Evergreen as the fourth designated carrier to provide scheduled all-cargo services in the Miami-Brazil market with a backup award to Gemini. Our tentative decision determined that an award to Evergreen would provide the greatest public benefits in this case. We reached that tentative conclusion after carefully considering the relative merits of each proposal of record. Having carefully reviewed the objections and responses to our tentative decision, we find that no party has presented any new arguments or evidence that would warrant a different decision.

Designating a fourth U.S. carrier for scheduled all-cargo services and allocating four frequencies for U.S. carrier service in the U.S-Brazil market would make use of valuable rights obtained in exchange for rights to Brazilian carriers. As noted in the show-cause order, our award to Evergreen will fully utilize the four available frequencies, offer the greatest capacity to the shipping public, provide single-plane behind-gateway service to the two largest behind-Miami U.S-Brazil feed markets of record in this case (New York and the Midwest via Columbus, Ohio), and offer Midwest shippers an easily accessible, competitive service. As we found in our showcause order, and reaffirm here, this distinct combination of benefits offered by Evergreen's proposal convinces us that the public interest would be best served by selecting Evergreen.

By: Susan McDermott


OST-02-12683

July 24, 2003

Application of Evergreen International Airlines for Waiver of Start-Up Condition

Evergreen is prepared to inaugurate U.S.-Brazil all-cargo service as soon as it receives the necessary approvals from the Brazilian Departamento de Aviacâo Civil. After the issuance of the Department's final order in this proceeding, Evergreen immediately began seeking representation in Brazil to assist in obtaining DAC authority and to perform cargo handling activities.

Counsel: Evergreen and Piper Rudnick, William Evans, 202-371-6030, bill.evans@piperrudnick.com


July 24, 2003

Tentative Notice of Evergreen International Airlines of Service Inauguration

By Order 2003-5-27, dated April 20, 2003, and served May 28, 2003, the Department issued Evergreen International Airlines, Inc. an Experimental Certificate of Public Convenience and Necessity for Route 816 authorizing Evergreen to engage in foreign air transportation of property and mail between Miami, Florida and the co-terminal points Manaus and Sao Paulo, Brazil. In addition, the Department allocated four weekly all-cargo frequencies to Evergreen. The terms of the Certificate require that Evergreen inaugurate service on or before August 25, 2003.

Under Condition 5 of the Order, Evergreen is required to give notice 30 days prior to the date on which it plans to inaugurate service.. Pursuant to that Condition, Evergreen hereby gives notice that it is prepared to institute service on August 25, 2003, assuming t receives authorization from the Brazilian Departamento de Aviacao Civil prior to that date. However, as described in Evergreen's application for waiver of the start-up condition filed contemporaneously herewith, it appears very likely that Evergreen will

Counsel: Evergreen and Piper Rudnick, William Evans, 202-371-6030, bill.evans@piperrudnick.com


Filed July 24, 2003 | Issued August 6, 2003

OST-02-12683 - Application of Evergreen for Waiver of Start-Up Condition

Notice of Action Taken | Word

By Order 2003-5-27, the Department awarded Evergreen certificate authority and an allocation of four weekly frequencies to operate service in the Miami-Manaus/Sao Paulo market. That award was subject to the condition that Evergreen must begin service with the frequencies by August 25, 2003. Once service was implemented, the frequencies were subject to a 90-day dormancy condition whereby the frequencies would expire and revert automatically to the Department if they were not used for a period of 90 days. Evergreen seeks an extension of the start-up date until September 25, 2003. Evergreen states that although it is prepared to inaugurate service by August 25, it is very likely that it will not receive Brazilian authority in time to meet the August 25 start-up date.

By: Paul Gretch


Filed July 24, 2003 | Issued August 13, 2003

OST-02-12683 - Application of Evergreen for Waiver of Start-Up Condition

Corrected Notice of Action Taken | Word

Corrected Notice of Action Taken dated August 6, 2003, to reflect that the action is effective through September 25, 2003, and to clarify information.

By: Paul Gretch


August 26, 2003

OST-02-12683

Second Tentative Notice of Evergreen of Service Inauguration

Counsel: Piper Rudnick, William Evans, 202-861-6459, bill.evans@piperrudnick.com


OST-02-12683

September 24, 2003

Notice of Evergreen Surrendering Certificate of Public Convenience and Necessity for Route 816

Evergreen was very enthusiastic when it received the U.S.-Brazil authority from the Department and it proceeded to file for and obtain authority from the Brazilian Departamento de Aviaçäo Civil to provide service as the fourth U.S. airline serving allcargo market. Evergreen has worked diligently and devoted considerable time and resources to develop the market in an effort to make the service economically viable, and to meet its commitment of instituting southbound service on September 25, 2003; in fact, at the moment, it has a crew member in Brazil for the purpose of making preparations for the return flight. Despite these efforts, Evergreen has regrettably concluded that there simply is not sufficient cargo in either direction to support the institution of a new allcargo operation on a viable basis. The failure of the U.S.-Brazil cargo market to recover from recent political and economic events is reflected in the requests by Atlas and UPS for dormancy waivers and by the return of one frequency by Federal Express.

Taking into account all the circumstances, Evergreen's senior management reached the business judgment that its U. S.-Brazil service would be uneconomic and that rather than institute service with one frequency and preserve the certificate for an additional 90 days, the better course is to return the certificate to the Department so that Gemini Air Cargo can begin the process of implementing its back-up certificate.

Counsel: Piper Rudnick, William Evans, 202-861-6459, bill.evans@piperrudnick.com


OST-02-12683 - US-Brazil All-Cargo Service Case
OST-03-16272 - Exemption - US-Brazil All-Cargo Scheduled Service

October 3, 2003

Motion of Arrow for Leave to File an Otherwise Unauthorized Document and Requestion for Clarification and Supplement to Order 03-5-27

Under the circumstances and for reasons hereinafter set forth, the Department should take such steps as may be necessary to determine the bona fides of the intentions of Gemini to implement the backup certificate authority in a timely manner. In the event Gemini will not implement service the Arrow exemption application should, in the public interest, be granted immediately. If Gemini advises that, in fact, it will implement service by a date certain, the Arrow exemption application should be granted to be effective if Gemini fails to meet its commitment to begin service.

What is presented to the Department as a result of Evergreen's surrender is not simply a substitution by the backup certificated carrier, but a question of whether the proposals and forecasts on which the Department based its decision can be relied upon, and if not, what alternative action can be taken to provide the service required by the public interest. And it is really in the public interest to find out from Gemini whether it is prepared to commit to serve Brazil as a scheduled all-cargo operator and to inaugurate service within a reasonable period of time and not seek further delay in implementing the backup certificate.

Counsel: Lawrence Wasko, 202-862-4370, ldwasko@erols.com


October 3, 2003

Application for an Exemption

Hereby applies for an exemption from 49 U.S.C. § 41101 to authorize it to conduct scheduled all-cargo foreign air transportation of property and mail between a point or points in the United States and a point or points in Brazil, nonstop or via intermediate points, to Manaus, Brasilia, Rio de Janeiro, Sao Paolo, Recife, Porto Alegre, Belem, Belo Horizonte, Salvador de Bahia, Curitiba and Forteleza, Brazil, and beyond Brazil to Argentina, Uruguay, Paraguay and Chile.' Arrow requests authority to integrate scheduled operations to and from Brazil with its other exemption and certificate authority. Arrow seeks designation as a U.S. scheduled all-cargo carrier to Brazil and asks the Department of Transportation to allocate to Arrow four all-cargo frequencies. Arrow also requests that the exemption be issued for a period of at least two years or such other time as the Department deems appropriate. Proposes to commence operations to Brazil with four weekly frequencies utilizing all-cargo L-1011 aircraft.

Counsel: Lawrence Wasko, 202-862-4370, ldwasko@erols.com


OST-02-12683 - US-Brazil All-Cargo Service Case
OST-03-16272 - Exemption - US-Brazil All-Cargo Scheduled Service

October 15, 2003

Answer of Amerijet International to Motion for Leave to File an Otherwise Unauthorized Document

While Amerijet could certainly join Arrow in encouraging the Department to urge Gemini to decide expeditiously what it intends to do with its back-up authority in the U.S.-Brazil all-cargo market, it vigorously opposes Arrow's suggestion that it would be good public policy to replace Evergreen and Gemini with another wide body operator which wants to concentrate on the same bulk shippers in major markets that are and have been failing to. support other U.S. cargo carriers for years.

Counsel: Crispin Brenner, John Richardson, 202-371-2258, jrichardson@crispinandbrenner.com


OST-02-12683 - US-Brazil All-Cargo Service Case
OST-03-16272 - Exemption - US-Brazil All-Cargo Scheduled Service

October 15, 2003

Answer of Gemini Air Cargo to Motion for Leave to File an Otherwise Unauthorized Document

Arrow’s Request effectively constitutes a motion for reconsideration of Order 2003-5-27, which granted the primary route award to Evergreen and the backup award to Gemini and set the terms for the exercise of that authority, including the 90 day startup period. Paragraph 9 of Order 2003-5-37, however, expressly states that the Department will not entertain petitions for reconsideration. The Department’s policy prohibiting petitions for reconsideration of orders issued following extensive administrative proceedings is well founded in order to insure the finality of Department determinations. If the Department adopted Arrow’s standard, i.e., that “there have been significant changes in underlying facts which bear directly on the Department’s decision,” Arrow Request, p. 1, n. 1, no route award would ever be final since underlying facts and assumptions are always subject to change following a route award.

Counsel: Roller Bauer, Moffett Roller, 202-331-3300


OST-02-12683 - US-Brazil All-Cargo Service Case
OST-03-16272 - Exemption - US-Brazil All-Cargo Scheduled Service

Filed October 3, 2003 | Issued November 20, 2003

Notice of Action Taken | Word

We have dismissed, without prejudice, Arrow's request for exemption authority, frequency allocation, and authorization to be designated in the U.S-Brazil all-cargo market. We have also dismissed the relief sought by Arrow in its Request for Clarification and Supplement to Order 2003-5-27. Specifically, we will not modify the terms of Order 2003-5-27 to require Gemini to immediately declare its intentions with respect to its U.S-Brazil backup authority, and we will not grant U.S-Brazil backup authority to Arrow at this time.

By Order 2003‑5‑27, the Department made final its decision to award Gemini Air Cargo backup authority in the event that the primary carrier (Evergreen) defaults on its proposed U.S‑Brazil services. Evergreen failed to implement its proposed services, and Gemini's backup authority has been activated.

By: Paul Gretch


OST-02-12683

November 24, 2003

Notice of Gemini Air Cargo Surrendering Certificate of Public Convenience and Necessity for Route 816

By this Notice Gemini Air Cargo, Inc. surrenders its Experimental Certificate of Public Convenience and Necessity for Route 816 that authorizes Gemini to operate scheduled all-cargo service to Brazil. Gemini takes this action reluctantly in light of the substantial time and cost expended by the company in this proceeding and in the prior proceeding in an effort to obtain authority to operate scheduled all-cargo service between the United States and Brazil. Due, however, to the continuing depressed state of the air cargo market between the United States and Brazil, Gemini has determined that it is not at this time able to introduce scheduled all-cargo service to Brazil on a commercially viable basis.

From its receipt of authority to operate scheduled all-cargo service to Brazil on September 26, 2003,1 to the present, Gemini has worked diligently to introduce service within the 90-day startup period, including, in addition to marketing, taking steps to obtain the necessary scheduled authority from the Government of Brazil.

Counsel: Roller Bauer, Moffett Roller, 202-331-3300


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