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Updated: Tuesday, July 29, 2008 10:48 AM


OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding


Support Letters | Direct Exhibits | Rebuttal Exhibits | Briefs


US-China Air Services
US-China Air Services 2001
OST-2004-18468 - New US-China Route Opportunities - Cargo
OST-2004-18469 - New US-China Route Opportunities - Combination
OST-2004-19077 - 2005/2006 US-China Air Services Case and Designations
OST-2005-20889 - Continental Airlines - New York/Newark-Shanghai
OST-2008-0127 - 2009 US-China All-Cargo Proceeding
OST-2007-28567 - 2007/2008/2009 US-China Services and Combination Frequency

US-China Bilaterals


Carrier China Web Sites:

American's China site: http://www.flytochinaonaa.com

Continental's China Site: http://www.continental.com/web/en-US/content/company/shanghai.aspx?SID=721DF6F1AE9A4283AF92E94A00F00570

Northwest's China site: http://nwa.com/features/shanghai

United's China Site: http://capitaltocapital.net/


2007 US-China Combination and All-Cargo Frequency Allocation Proceeding

Order 2006-7-9
OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding

Issued and Served July 10, 2006

Order Instituting Proceeding and Inviting Applications | Word - Corrected Copy

On June 18, 2004, representatives of the United States and the People’s Republic of China initialed a protocol amending the U.S.-PRC aviation agreement, greatly expanding opportunities in the U.S.-China market through 2010. The amended agreement phases in rights for the respective parties according to an agreed schedule.  In light of that schedule, we have already awarded rights in several previous proceedings. Under the phase-in schedule, the amended agreement provides, effective March 25, 2007, for an increase of seven combination and 15 all-cargo frequencies for U.S. carriers to serve points in either China Zone 1 or China Zone 2. The new agreement also provides, effective March 25, 2007, for seven additional frequencies for combination or all-cargo services specifically limited to serving points in China Zone 2. Since the amended agreement does not provide for a new U.S. carrier designation until 2008, only incumbent U.S. carriers that are currently designated to operate combination and/or all-cargo services to China are eligible for these additional frequencies.

See Orders 2004-10-8, dated October 13, 2004, 2005-3-24, dated March 15, 2005, and 2005-3-40, dated March 29, 2005.

As defined by the amended agreement, China Zone 1 consists of Beijing, Shanghai, and Guangzhou.  China Zone 2 consists of Anhui, Fujian, Guangdong (except Guangzhou), Hebei, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Shandong, Shanxi, Tianjin, and Zhejiang.

The incumbent combination carriers are Northwest Airlines, Inc., United Air Lines, Inc., Continental Airlines, Inc., and American Airlines, Inc. The incumbent all-cargo carriers are Northwest Airlines, Inc., Federal Express Corporation, United Parcel Service Co., and Polar Air Cargo Inc.

The Agreement provides valuable new frequencies for currently designated U.S. carriers to serve China effective March 25, 2007. We believe that it is in the public interest to select carriers on a timetable that will allow the selected carriers to enjoy the maximum benefit of these frequencies as soon as they become available. To this end, we are establishing the following procedural schedule for submissions in this case:

Petitions for Reconsideration: July 17, 2006
Answers to Petitions: July 24, 2006
DOT Information Responses: August 10, 2006
New Applications: August 17, 2006
Direct Exhibits: September 25, 2006
Rebuttal Exhibits: October 16, 2006
Briefs: October 31, 2006

By this order we (1) institute the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding and (2) invite incumbent U.S. carriers to file applications for allocation of frequencies that become available effective March 25, 2007.

By: Michael Reynolds



July 17, 2006

Petition of Continental Airlines for Reconsideration

Continental asks the Department to reconsider Order 2006-7-9 and amend to specify that applications for certificate authority will be considered in this proceeding and to require all applicants to identify on the August 17 due date for new applications and amendments to existing applications the U.S. and Chinese gateways to be served using the new frequencies applied for.

Unless the Department is prepared to consider certificate (or exemption) applications in this proceeding, the additional frequencies could be used only between U.S. and Chinese gateways for which the incumbent airlines already hold authority. Thus, Continental would be limited to the New York/Newark- Beijing route, and American would be limited to the Chicago-Shanghai route. (See Orders 2005-3-24 and 2005-3-40) Although Northwest and United hold broader U.S.-China authority, they are also limited to specific U.S. and Chinese gateways. For this reason, the Department should amend the scope of this proceeding to clarify that it will consider applications for certificate authority for new U.S.-China gateway services available pursuant to the U.S.-PRC agreement, as amended.

As a practical matter, both Continental and American will be required to indicate new gateways they propose to serve on the due date for applications. Northwest and United, on the other hand, hold such broad authority that they could defer revealing the routes they would serve until the due date for direct exhibits by planning to serve gateways encompassed by the broad authority they already hold. Given the great disparity between the broad route authority and large number of frequencies held by longtime incumbents United and Northwest, on the one hand, and the extremely limited route authority and frequencies held by Continental and American, on the other hand, it would be particularly unfair to require Continental and American to state the U.S. and Chinese gateway cities they would serve using the additional frequencies now available without also requiring Northwest and United to do so at the same time.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com


July 17, 2006

Request of United Air Lines for Expedited Proceeding

On behalf of United Air Lines, Inc., we are hereby requesting that the Department take whatever action may be necessary to enable the Competition and Policy Analysis Division to make the historical traffic data in the above-referenced proceeding available to all interested parties earlier than the date set out in Order 2006-7-9. We have spoken with Mike Lane, who has advised that it might be possible to have the DOT data for the historic base period and prior years ready before the August 10th deadline if the Department approves the earlier release of the data. The earlier release of DOT'S data would facilitate United's, as well as the other applicants, review of its proposed service in this proceeding.

To the same end, United anticipates having its Information Response data ready prior to the August 10th deadline and will file its data with the Department and serve it on all interested parties when its data are complete.

Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com



July 20, 2006

Application of American Airlines for a Certificate of Public Convenience and Necessity and Allocation of Frequencies (DFW-Beijing)

Hereby applies under 49 USC 41102 for a certificate of public convenience and necessity to engage in scheduled foreign air transportation of persons, property, and mail between Dallas/Ft. Worth, Texas and Beijing, People's Republic of China. American also applies for the allocation of seven weekly U.S.-China combination frequencies for the DFW-Beijing route. American proposes to initiate daily nonstop service between Dallas/Ft. Worth International Airport, one of the Nation's largest connecting hubs, and Beijing on March 25, 2007 using B777-200ER aircraft

Continental Airlines is the remaining U.S. incumbent combination carrier serving China. Continental received authority by Order 2005-3-24, March 17, 2005, and started service between Newark and Beijing in June 2005. On April 1, 2005, Continental applied for the seven additional 2007 frequencies at issue here, proposing service between Newark and Shanghai (OST-2005-20889). This proceeding in effect presents a one-on-one contest between American's Dallas/Ft. Worth-Beijing service and Continental's Newark-Shanghai proposal.

Northwest operates all of its U.S.-China combination service on a connecting basis via Tokyo. Northwest also holds three U.S.-China frequencies that it currently uses for all-cargo service (but could use for combination service). In addition, by Order 2004-10-8, October 13, 2004, the Department awarded Northwest six U.S.-China all-cargo frequencies (OST-2004-18468)

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



Order 2006-7-27

Issued and Served July 31, 2006

Order on Reconsideration

On July 17, 2006, Continental filed a petition for reconsideration of Order 2006-7-9. Continental requests that the Department clarify that applications for certificate authority, in addition to frequency allocation, will be considered in this proceeding. Continental further requests that we require all applicants to specify, by the August 17 due date for applications, the U.S. and Chinese gateway points that they would serve.

In support of its petition, Continental states that unless the Department is prepared to consider certificate applications. the additional frequencies could be used only between U.S. and Chinese gateways for which incumbent airlines already hold authority. As to its second request, Continental states that absent its proposed change. earners already holding broad China authority might not reveal their proposed gateways until the date for direct exhibits. whereas carriers such as Continental with more limited China authority would need to reveal their gateways by August 17. Continental states that its requested change would level the playing field and avoid unfairness.

We received no answers to Continental's petition.

In this order we grant the petition of Continental Airlines, Inc. for reconsideration of Order 2006-7-9 in the above-captioned proceeding and, on reconsideration, grant the relief requested.

By: Michael Reynolds



August 1, 2006

Notice of FedEx Requesting Service

Federal Express Corporation hereby requests service by e-mail Docket OST-2006-25275 upon Sarah Prosser (ssprosse@fedex.com) and Bailey Leopard (gbleopard@fedex.com) from all parties to this proceeding. Additionally, FedEx Express respectfully requests that all parties serve two hard copies of their Direct Exhibits and Rebuttal Exhibits.

Upon request, FedEx Express will be pleased to reciprocate by serving the parties to this proceeding with two hard copies of its Direct Exhibits and Rebuttal Exhibits via overnight delivery.

Counsel: FedEx, Bailey Leopard, 901-434-6664, gbleopard@fedex.com



August 3, 2006

Information Response of United Air Lines

Attached is the Information Response of United Air Lines, Inc. as required by Section III.A.2. of the Appendix to Order 2006-7-9 issued in the above referenced docket.

Page 1 of United's response reflects the number of flights and type of aircraft operated by United in the U.S.-China market for the twelve-month period ended May 2006. Page 2 reflects United's U.S.-China code-share services on flights operated by Air China for the period beginning June 2005 through May 2006.

United has included this information regarding its code-share services on flights operated by Air China although it does not believe that this information is required. See, Information Response of Northwest, dated February 1,2000, in Docket OST-1999-6323.

Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com



August 10, 2006

Information Responses of American Airlines

Pursuant to Order 2006-7-9, American Airlines hereby submits the attached Information Responses reflecting (1) American's operations between Chicago and Shanghai and (2) AA* codeshare service on trasnspacific and intra-China flights operated by China Eastern Airlines.

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


August 10, 2006

Information Response of Continental Airlines

Continental Airlines is currently authorized to operate, and is operating, seven weekly U. S.-China frequencies. The complete routing is Houston-New York/Newark-Beijing with a change of gauge at New York/Newark.

Continental does not codeshare to/from China.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com


August 10, 2006

Response of Federal Express to Information Request

The subject flights are not operated under "code-share arrangements."

FedEx Express does not intend to establish its cargo hub at the Baiyun International Airport in Guangzhou prior to March 25, 2007. It intends to do so in 2009.

Counsel: FedEx, G.B. Leopard, 901-434-6664, gbleopard@fedex.com


August 10, 2006

Information Response of Northwest Airlines

Pursuant to Order 2006-7-9, please find attached the information response of Northwest Airlines, Inc. in the above captioned proceeding. Northwest did not operate any codeshare flights during the subject period.

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com


August 10, 2006

Incumbent Carrier Information Response of Polar Air Cargo

12 currently authorized frequencies utilized. The service was sustained year-round without interruption. There were no services conducted pursuant to a code share. There were no services in which a change of gauge was used.

Polar does not intend to establish a cargo hub in China prior to March 25, 2007.

Counsel: Wilmer Hale, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com


August 10, 2006

Information Response of UPS

UPS currently operates 21 U.S.-China all-cargo frequencies.

Our goal and intention is to establish a hlly operating, commercially viable cargo hub in Shanghai in 2007, and we are confident that we will be able to do so next year with the continued cooperation of the Chinese authorities. At that point, UPS will be able to avail itself of the cargo hub operating benefits expressly contemplated by the 2004 Protocol-including the practical ability to determine frequencies and capacity ''based upon commercial considerations in the marketplace."

Among the issues that need to be resolved before UPS establishes its hub are those dealing with slots, customs, and facilities.

UPS is not in a position to represent to the Department that this can occur by March 25, 2007. UPS will keep the Department advised when UPS can give a definitive date for the establishment of its Shanghai hub.

Counsel: Kelley Drye, David Vaughan, 202-342-8400, dvaughan@kelleydrye.com


August 10, 2006

Answer of Continental Airlines in Opposition to American's Application

Nearly 16 months after Continental applied for New York/Newark-Shanghai certificate authority and seven frequencies to offer the first U.S. -flag nonstop service in the largest U.S.-China market lacking such service, American applied for certificate authority and seven frequencies to offer nonstop service in the extremely small Dallas/Fort Worth-Beijing market. Continental opposes American's application and urges the Department to grant Continental's long-pending New York/Newark-Shanghai application instead as promptly as possible.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com



August 17, 2006

Application of Federal Express for an Allocation of Frequencies

FedEx Express requests an allocation of four of the fifteen all-cargo frequencies to serve points in China Zone 1 or China Zone 2, which will be available on March 25, 2007.

FedEx Express holds broad U.S.-China certificate authority, most recently issued by Order 2004-5-23 and requires no additional certificate authority. It also holds, inter alia, certificate for U.S. domestic all-cargo air transportation, most recently reissued by Order 1998-7-6.

FedEx Express intends to operate the requested frequencies with MD-11 and/or A310 freighter aircraft from its fleet. An MD-11 freighter has an approximate maximum gross payload of 196,000 pounds, and an A310 freighter has an approximate maximum gross payload of 81,200 pounds.

Counsel: FedEx, Bailey Leopard, 901-434-6664, gbleopard@fedex.com


August 17, 2006

Application for a Certificate and Frequency Allocation of Northwest Airlines - Bookmarked

Northwest Airlines Inc. hereby applies for allocation of U.S.-China frequencies, and seeks a new or amended certificate under 49 U.S.C. 41102 authorizing Northwest to provide nonstop scheduled foreign air transportation of persons, property and mail between its major hub at Detroit, Michigan and Shanghai, People’s Republic of China. More specifically, with regard to the U.S.-China frequency allocation this proceeding was instituted to consider, Northwest requests: (i) seven combination frequencies to enable Northwest to operate daily service on the Detroit-Shanghai route, and (ii) four Zone 1 all-cargo frequencies to enable Northwest to increase its U.S.-Guangzhou all-cargo service from three weekly to seven weekly flights.

Northwest proposes to commence nonstop Detroit-Shanghai on or about March 25, 2007 using Boeing 747-400 aircraft configured with 338 economy and 65 World Business Class seats. Northwest’s additional U.S.-Guangzhou all-cargo services will be operated with B-747F aircraft with a total capacity of 108 tons.

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com

Northwest Press Release: 8/17/06


August 17, 2006

Application of Polar Air Cargo for Allocation of Frequencies

Pursuant to Order 2006-7-9 served July 10, 2006 as amended by Order 2006-7-27 served July 31, 2006, the Department invited applications for the next available opportunities under the June 18, 2004 protocol amending the U.S.-China air transport services agreement. In response, Polar Air Cargo, Inc. hereby applies for an allocation of four weekly U.S.-China Zone One all-cargo frequencies available to U.S. carriers beginning March 25, 2007.

Polar currently operates twelve weekly frequencies between the U.S. and China. Ever since these frequencies were awarded, Polar has consistently and successfully operated its U.S.-China all-cargo services, allowing Polar to develop and grow both its U.S.-China market presence and its U.S.-Asia network while providing competitive benefits to shippers in the U.S.-China market and all other connecting markets. Polar requests an additional allocation of four weekly U.S.-China Zone One all cargo frequencies to enable it to expand upon its successful operations in the U.S.-China market and offer additional service options to shippers.

Counsel: Wilmer Hale, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com


August 17, 2006

Application of United Air Lines for Frequency Allocation

United, pursuant to Order 2006-7-9 submits this application for seven weekly U.S.-China combination service frequencies that will be available for allocation in 2007. United hereby requests allocation of these seven frequencies so that it may operate daily roundtrip service between Washington, DC (IAD) and Beijing beginning March 25, 2007. United would operate this service using B747-400 equipment, currently in its fleet, with 347 seats.

See Application of United for Renewal and Amendment of a Certificate of Public Convenience and Necessity, dated September 16, 2002, as supplemented by the Answer of United to Application of Northwest, dated September 24, 2004, in Docket OST-1997-3020, requesting that the Department amend United's certificate of public convenience and necessity for Route 246 to include authority for all U.S.-China city-pairs, which was unopposed.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com

United Press Release: 8/15/06



August 18, 2006

Motion of FedEx Express for an Immediate Allocation of All-Cargo Frequencies

Since the allocation of the subject all-cargo frequencies is not contested in this case, and since further proceedings are unnecessary, FedEx Express requests that the Department suspend the remainder of the procedural timetable set forth in Order 2006-7-9 with regard to the fifteen all-cargo frequencies.

FedEx Express respectfully requests that the Department immediately issue an Order: (1) granting each of the applicants' requests for four all-cargo frequencies to serve China Zone 1 or China Zone 2; and (2) suspending the remainder of the procedural timetable set forth in Order 2006-7-9 as it relates to the subject all-cargo frequencies.

Counsel: FedEx, Bailey Leopard, 901-434-6664, gbleopard@fedex.com


August 18, 2006

Motion of Polar Air Cargo for Immediate Action

Polar hereby requests the Department immediately to grant Polar's application filed yesterday in this proceeding for the allocation of four weekly U.S.-China Zone One all-cargo frequencies.

As noted in Order 2006-7-9, only incumbent carriers are eligible for allocation of these frequencies. In view of the fact that only 12 such frequencies are requested out of the 15 that are available, there is no need for the Department to adjudicate among the three applications that were filed.

In these circumstances, the Department should move immediately to grant Polar's application since the grant of Polar's four frequencies does not mutually exclude the grant of the other two applications. Furthermore, the Department should terminate this proceeding insofar as it relates to the allocation of U.S.-China all-cargo frequencies.

Counsel: Wilmer Hale, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com



Served August 22, 2006

Notice Shortening Answer Period

By Order 2006-7-9, issued July 10, 2006, the Department instituted the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding, and invited incumbent U.S. carriers to file applications for allocation of frequencies for combination and all-cargo service that become available effective March 25, 2007. At issue, among other things, are 15 all-cargo frequencies to serve points in China Zone 1 or China Zone 2. Applications were due August 17, 2006. On August 17, incumbent cargo carriers Northwest Airlines, Inc., Federal Express Corporation and Polar Air Cargo, Inc. each submitted an application seeking four all-cargo frequencies, for a total of 12 such frequencies. The fourth incumbent U.S. all-cargo carrier eligible to participate, United Parcel Service Co., did not submit an application for additional all-cargo frequencies in this proceeding.

On August 18, 2006, Polar and FedEx Express submitted separate motions requesting immediate grant of the pending applications for 12 available all-cargo frequencies from the pool of 15 such frequencies at issue in this proceeding, along with suspension of the remainder of the procedural timetable provided in the instituting order, Order 2006-7-9. FedEx Express stated in its motion that it was authorized to state that Northwest and Polar supported the motion. Answers to the motions would normally be due August 29, 2006.

With the applicants for all-cargo frequencies all having indicated their support for immediate allocation and awarding of the frequencies, we are shortening the answer period for responding to the pending motions for immediate Department action. Therefore, acting under authority assigned in 14 CFR 385.13(p), answers to the motions of FedEx Express and Polar will now be due no later than noon, August 24, 2006. Persons entitled to petition the Department for review of the action set forth in this Notice under the Department's regulations, 14 CFR 385.30, may file their petitions within seven days after the date of issuance of this Notice. This action was effective when taken (August 22, 2006), and the filing of a petition for review will not alter such effectiveness.

By: Paul Gretch



August 23, 2006

Re: Polling Results of Federal Express

I have polled all parties listed on the attached certificate of service regarding Federal Express Corporation's August 18 Motion for an Immediate Allocation of All-Cargo Frequencies. I have received responses from most of those listed, and no one who has responded objects to the motion. More importantly, all of the carriers eligible to receive frequencies in this proceeding (American, Continental, Northwest, Polar, United, and UPS) have responded, and they do not object to our motion.

We are aware of the notice the Department issued yesterday shortening the answer period to our motion, but we wanted to provide you with this additional information.

Counsel: FedEx, Bailey Leopard, 901-434-6664, gbleopard@fedex.com


August 22, 2006

Answer of Northwest Airlines

Pursuant to the Department’s Notice dated August 22, 2005, Northwest Airlines, Inc. hereby answers in support of the Motion of FedEx Express, which urged the Department to immediately grant each of the applicants’ pending requests for four all-cargo frequencies to serve Zone 1 or Zone 2. Since the all-cargo opportunities are not over-subscribed, there is no need for further proceedings and the all-cargo portion of this case should be concluded immediately by Final Order.

Polar also filed a motion requesting immediate action, but limited to its own request for frequencies. Northwest does not object to Polar’s request, provided that Northwest’s application for all-cargo frequencies is granted contemporaneously.

Counsel: Northwest, Alexander Van der Bellen, 202-842-8184, sascha.vanderbellen@nwa.com



Issued August 24, 2006

Notice of Action Taken

By Order 2006-7-9, we instituted the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding to invite applications for, among other things, allocation of 15 all-cargo U.S.-China frequencies that become available on March 25, 2007, for U.S. all-cargo carriers to serve points in either China Zone 1 or China Zone 2.  Applications for these frequencies were due on August 17, 2006.  Because no new designation opportunity is available until 2008, the proceeding is limited to incumbent carriers that are already designated to operate all-cargo services to China. Only Federal Express Corporation, Northwest Airlines, Inc., and Polar Air Cargo, Inc. filed applications for all-cargo frequencies.  Each carrier requested four such frequencies, for a total of 12 frequencies.  All of the requested frequencies were for China Zone 1.  Accordingly, we are able to grant the applicants all of the frequencies for which they have applied without further procedures.  On August 18, 2006, FedEx Express and Polar filed separate motions requesting immediate allocation of the all-cargo frequencies for which each had applied.  FedEx Express stated in its motion that it was authorized to state that Northwest and Polar supported the motion.  On August 22, 2006, we issued a notice shortening the answer period for the FedEx Express and Polar motions to noon on August 24.  On August 23, 2006, Northwest filed an answer in support of the FedEx Express motion.  No other answers were filed.  Also, on August 23, FedEx Express filed a letter stating that it had polled all carriers eligible to receive frequencies in this proceeding and that none objected to the FedEx Express motion for immediate allocation of all-cargo frequencies

By: Paul Gretch



September 7, 2006

Notice of Appearance of Dallas/Ft. Worth/North Texas Parties

This Notice advises that the undersigned, Michael F. Goldman of Silverberg, Goldman & Bikoff, LLP, will represent in this proceeding the Dallas-Fort Worth International Airport, the City of Dallas, the City of Fort Worth, and the North Texas Commission. We respectfully request that we be added to the service list for this proceeding, and that we and the individuals listed on the cover page of this Notice be served with the direct and rebuttal exhibits and all subsequent filings of other parties in this proceeding.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305, mgoldman@sgbdc.com



September 15, 2006

New Orleans International Airport Request for Addition of One-Stop Connection

It has come to my attention that Continental Airlines has applied for the right to fly nonstop from Newark International Airport to Shanghai, China. The addition of a one-stop connection from the Louis Armstrong New Orleans International Airport would be of great benefit to the local business community conducting business in China.

During this time of recovery for New Orleans and Southeast Louisiana, every additional portal through which trade and commerce can flow is greatly appreciated.

By: Interim Director of Aviation, Sean Hunter


September 25, 2006


Direct Exhibits of American Airlines - 36MB - Bookmarked

Support Letters - 23MB

Errata Letter - Omitted Exhibits

Exhibits Divided Into 3 Volumes for Easier Downloading:

Volume One
Volume Two
Volume Three


Direct Exhibits of Continental Airlines - Bookmarked

Support Letters - Employees - 12,243 pages

Support Letters
Service List


Direct Exhibits of the Dallas/Ft. Worth/North Texas Parties - in Support of American - Bookmarked


Direct Exhibits of The Metropolitan Washington Airports Authority - In Support of United - Bookmarked

Supplement to Exhibit MWAA-T-2


Direct Exhibits of the New Jersey Parties - in Support of Continental - Bookmarked

Service List


Direct Exhibits of Northwest Airlines - Detroit-Shanghai - Bookmarked

Volume 2 - Congressional and Civic Support

Re: Compact Disk Containing 84,815 Letters of Support

Support Letters - Customers and Employees - 84,816 pages


Direct Exhibits of The Ohio Parties - in Support of Continental - Bookmarked

Service List


Direct Exhibits of The Port Authority of New York & New Jersey - in Support of Continental - Bookmarked

Service List


Direct Exhibits of United Air Lines - Bookmarked

United Response to Interrogatories - Omitted Exhibit UA-87


Direct Exhibits of Washington Airports Task Force


Direct Exhibits of Wayne County Airport Authority - in Support of Northwest - Bookmarked

Certificate of Service



September 25, 2006

Answer of US Airways in Support of the Application of United Air Lines for Frequency Allocation

Hereby files this Answer in support of the application of United Air Lines  for the allocation of the seven available U.S.- China frequencies to enable the first-ever nonstop service between the capitals of the United States and China. Because US Airways intends to place its "US" designator code on United's U.S.-China services, the proposed nonstop service will benefit US Airways travelers, consumers, and shippers throughout the United States.

US Airways is concurrently filing, in a separate docket, an application for exemption authority to serve China and beyond by placing the "US" designator code on all of United's U.S.-China services. The "beyond-Beijing" services will be provided pursuant to a code-share arrangement with Air China, still being negotiated, by which US Airways currently plans to serve 18 additional destinations in China, including Shanghai, Guangzhou, Nanjing, Van and Shenzen.

Counsel: US Airways, Howard Kass, 202-326-5153



September 28, 2006

Motion of United Air Lines for Leave to File

To the extent necessary, United Air Lines, Inc. hereby moves for leave to file its previously submitted response to interrogatories (Exhibit UA-87), which was inadvertently omitted when its Direct Exhibits were filed and served on September 25, 2006, in the above-captioned proceeding. As the attached Department of Transportation Docket Management System tracking information shows, the exhibit was filed electronically and served by e-mail on the parties to the proceeding as soon as the inadvertent omission was discovered on the morning of September 26, 2006. No party will be prejudiced by the Department's grant of this motion.

Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com



October 16, 2006


Rebuttal Exhibits of American Airlines - Bookmarked


Rebuttal Exhibits of Continental Airlines - Bookmarked


Rebuttal Exhibits of the Dallas/Fort Worth/North Texas Parties - Bookmarked


Rebuttal Exhibits of the Metropolitan Washington Airports Authority - Bookmarked


Rebuttal Exhibits of the New Jersey Parties - Bookmarked


Rebuttal Exhibits of the Port Authority of New York & New Jersey - Bookmarked


Rebuttal Exhbits of Northwest Airlines - Bookmarked

Volume II - Additional Congressional and Civic Support Letters
Customer and Employee Support Letters - 82,706 Pages


Rebuttal Exhibits of United Air Lines - Bookmarked

Volume II - Government, Civic, Business, Employee and Other Support Letters (Continued)
Volume III - Government, Civic, Business, Employee and Other Support Letters (Continued)
Volume IV - Government, Civic, Business, Employee and Other Support Letters (Continued)
Volume V - Government, Civic, Business, Employee and Other Support Letters (Continued)
Volume VI - Government, Civic, Business, Employee and Other Support Letters (Continued)


Rebuttal Testimony of Washington Airports Task Force - Bookmarked


Rebuttal Exhibits of Wayne County Airport Authority - Bookmarked



OST-2006-25967 - Exemption - Chicago/San Francisco-Shanghai; Chicago/San Francisco/Washington DC-Beijing

October 16, 2006

Consolidated Rebuttal/Reply of US Airways

US Airways, Inc. is currently the only major U.S. network carrier unable to offer its primary customer base access to China. An award to United tied with a US Airways code-share to serve China would help level the playing field between the "have" and "have not" carriers (and respective customer bases), when it comes to convenient China access. No longer would US Airways' large mid-Atlantic passenger base be excluded from US Airways access to the China market.

DOT already rejected Continental's opinion when it opened this case to all four incumbents. Now DOT should reject Continental and American's views as to what is in the public's best interest. US Airways is confident that United's B747-400 proposal for the large, un-served Washington-Beijing market best meets this public interest standard, and that US Airways will further promote competition and increase demand when it provides convenient codeshare service to its own passenger base.

Counsel: US Airways, Howard Kass, 202-326-5153, howard_kass@usairways.com


OST-2006-25275


October 31, 2006


Brief of American Airlines - Bookmarked


Brief of Continental Airlines - Bookmarked


Brief of Dallas/Fort Worth/North Texas Parties - Bookmarked


Brief of Metropolitan Washington Airports Authority - Bookmarked


Brief of New Jersey Parties


Brief of Northwest Airlines - Bookmarked


Brief of Port Authority of New York and New Jersey - Bookmarked


Brief of United Air Lines - Bookmarked


Brief of US Airways - Bookmarked


Brief of Washington Airports Task Force | Word


Brief of Wayne County Airport Authority/Detroit Metropolitan Airport - Bookmarked


OST-2006-25275


December 8, 2006

Motion of American Airlines for Leave to Amend its Dallas/Ft. Worth-Beijing Application and to Reopen the Record - Bookmarked

American Airlines, Inc., under 14 CFR 302.5(b), hereby moves for leave to amend the application submitted in this docket on July 20, 2006 for a certificate of public convenience and necessity and seven weekly frequencies to engage in scheduled foreign air transportation of persons, property, and mail between Dallas/Ft. Worth and Beijing.

By this amendment, American seeks authorization to serve the route (1) nonstop in both directions, or (2) in the alternative, nonstop in the inbound Beijing-to-DFW direction and one-stop in the outbound DFW-to-Beijing direction on a single-plane basis via the intermediate point Chicago.

American further moves to reopen the record in order to submit the attached supplemental exhibits and to provide an opportunity for other parties to respond.

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


December 8, 2006

Motion of Northwest Airlines to Dismiss Application of American Airlines

The seven new frequencies at issue in this case become available on March 25, 2007, scarcely more than 3 months away. Time is already critically short for the successful applicant or applicants to market and implement new service, and the public interest clearly demands prompt utilization of these very valuable rights. None of the evidence of record contemplates a nonstop Chicago‑Beijing proposal by American.

Consideration of a wholly new proposal by American would grossly complicate and delay these proceedings, would be highly prejudicial to the other applicants, and would violate the procedural due process requirements of the APA.

Counsel: Northwest, Alexander Van der Bellen, 202-842-8184


OST-2006-25275


December 11, 2006

Answer of Continental Airlines

American has asked the Department either to re‑open the record to consider a new service proposal adding a Chicago stop to American's Dallas/Fort Worth to Beijing flights or to give American leave to withdraw its application, and Northwest has asked the Department to dismiss American's application. Whatever step the Department takes in response to these motions, one thing is clear: Continental should be selected without delay to serve the Cleveland‑New York/Newark­ Shanghai route since only Continental among the three remaining credible applicants requires the seven new frequencies and new route authority to implement its proposed service.

American has not proposed the addition of a tech stop and crew change at a point directly en route between Dallas/Fort Worth and Beijing, as it might have done to solve the crew‑time issue raised by its agreement with its pilots. Instead, American has proposed service at a hub where it already offers China service, where far more China traffic originates and where another U.S.‑flag carrier is operating nonstop Beijing service, raising fundamental issues about American's application, American's intentions and the factual predicate for American's direct and rebuttal exhibits, the comparable exhibits of other parties, and the briefs submitted by all parties.

Counsel: Continental and Crowell & Moring, Bruce Keiner, 202-824-2615


Issued and Served December 11, 2006

Notice Shortening Answer Period | Word

On December 8, 2006, American Airlines, Inc. filed a motion in the captioned docket for leave to amend its Dallas/Ft. Worth-Beijing application and to reopen the record.  Specifically, American seeks to amend its nonstop service proposal between Dallas/Ft. Worth and Beijing, China so that it has flexibility to serve the route on a single plane one-stop basis via the intermediate point Chicago, in the outbound Dallas/Ft. Worth-to-Beijing direction only.  In its motion, American states that this change to its service proposal is necessary to satisfy on-duty time restrictions in the collective bargaining agreement between American and its pilots union.

On the same date, Northwest Airlines, Inc. filed a motion to dismiss American’s application stating that American’s motion amounted to a completely new service proposal and that consideration of such a proposal would grossly complicate and delay the proceedings, would be highly prejudicial to the other applicants, and would violate the due process requirements of the Administrative Procedure Act.

In the interest of avoiding or minimizing any delay in the proceeding, we have decided, first, to shorten the answer period on American’s motion.  We will require answers no later than December 13, and replies no later than December 15.  Furthermore, we ask that parties choosing to answer address not only the procedural issue of whether we should accept American’s filing and grant its request to reopen the record, but also, on a contingent basis, any substantive issues they might wish to address in relation to American’s submission.  We emphasize that in seeking comment on both the procedural and substantive issues raised by American’s motion, we are taking no position as to whether we will grant the motion.  We are taking this action in the interest of achieving a timely final result in the proceeding.

By: Paul Gretch


OST-2006-25275


December 13, 2006

Answer of American Airlines to Motion of Northwest

The Department should deny Northwest's motion to dismiss, and grant American's motion to amend its application and to reopen the record.

American remains fully committed to providing nonstop service in the Dallas/Ft. Worth-Beijing market in both directions. We will immediately and enthusiastically operate such service as soon as we are able to do so. Even with a stop in Chicago in one direction, American's DFW-Beijing service will provide greater public benefits than any other proposal in this proceeding.

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


December 13, 2006

Answer of the Dallas/Fort Worth/North Texas Parties

The consequences of granting Northwest's motion and dismissing American's application for procedural reasons should also be considered by the Department in deciding how to respond to American's motion to amend. Such a course of action should be rejected where, as here, it would leave the Department with a choice between United and Northwest, the dominant incumbents operating almost 80 percent of the China frequencies available to U.S.-flag carriers, and Continental, a newer entrant like American, but one that seeks only to bring additional nonstop service to the already well-served New York/Newark gateway. No matter which of those three applicants might ultimately be chosen, the result would be an award that would not establish a new Southern Tier nonstop gateway, but would widen the disparity in U.S.-China service between the Southern Tier and the rest of the United States and would increase service to areas of the country - - the Northeast and Midwest - - that already have convenient, non-circuitous service to China. The Department should, at the very least, reopen the record to consider American's amended application before making such a choice.

The Dallas/Fort Worth/North Texas Parties respectfully request that the Department grant American's Motion to Amend its Application and to Reopen the Record and deny Northwest's motion to dismiss.

Counsel: Silverberg Goldman, Michael Goldman, mgoldman@sgbdc.com


December 12, 2006

Answer of the Metropolitan Washington Airport Authority in Opposition to Motion of American

The Department cannot permit American to submit a revised proposal without reopening the entire record and allowing other parties to file detailed rebuttal exhibits and to submit new Briefs addressing the new proposal. Such a result would substantially delay this proceeding and make it impossible for the Department to issue a decision in sufficient time for the selected carrier to implement service in March 2007. The change in American's service proposal affects every element of American's case and the claimed public benefits of an award to American contained in the existing record. The change to one-stop DFW-Chicago-Beijing service raises a host of new issues not addressed in the record such as connectivity, traffic forecasts, passenger convenience for many communities now having two-stop service over Dallas/Ft. Worth and Chicago and dramatically longer elapsed travel times, and the levels of service from Chicago and the upper Midwest, among others. The new proposal amounts to a Chicago service in one direction and a Dallas/Ft. Worth one in another. For its part, Chicago already receives a substantial amount of China service, and the newly proposed one-stop DFW-Chicago-Beijing service would add approximately 3 hours to the Dallas/Ft. Worth-Beijing service. The new service proposal would create inconvenient service for many communities by making service to Beijing a two-stop offering, rather than a one-stop service.

The Metropolitan Washington Airports Authority strongly opposes the Motion of American Airlines, Inc. requesting approval to amend its application in this proceeding. American's motion should be denied, and its alternative request to withdraw its application should be granted.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com


December 13, 2006

Answer of the New Jersey Parties

The New Jersey Parties oppose American's motion to reopen the record for consideration of American's new proposal and support American's request for leave to withdraw its application and Northwest's motion to dismiss American's application. Nearly five months after American applied for certificate authority and committed itself to offering daily nonstop roundtrip service between Dallas/Fort Worth and Beijing and only slightly more than three months before seven new U.S.-China frequencies become available, American has now proposed to offer nonstop service from Chicago to Beijing instead. Although American would offer through service from Dallas/Fort Worth to Beijing through its Chicago hub and nonstop service from Beijing to Dallas/Fort Worth, this fundamental last-minute change to American's proposal affects its traffic forecast, alleged benefits from its proposed service, connecting opportunities and comparisons with other proposed flights and gateways.

By: Newark Regional Business Partnership, Chip Hallock, 973-242-4209, challock@rbp.com


December 13, 2006

Answer of Northwest Airlines to Motion of American - Bookmarked

American’s Motion must be denied, and American’s Application dismissed, for all of the reasons set forth in Northwest’s December 8, 2006 Motion. Even American recognizes the serious procedural deficiency of its request to submit a new proposal after the record has closed, and has requested alternative relief “for leave to withdraw our application . . .” and resubmit in next year’s case. The Department should promptly dismiss, or allow American to withdraw, its application.

Counsel: Northwest, Alexander Van der Bellen, 202-842-8184, sascha.vanderbellen@nwa.com


December 13, 2006

Answer of United Air Lines to Motion of American - Bookmarked

United Air Lines, Inc. opposes the Motion of American Airlines, Inc. to reopen the record in this proceeding in order to allow American to submit a new application for service to China. American's request is untimely and flagrantly disregards the procedural rules the Department has established for the proceeding. United strongly supports the Motion of Northwest Airlines, Inc. -- and American's own (contingent) motion -- to dismiss American's application from the proceeding. Due process, fundamental fairness, the Department's own rules, and the strong public interest in an expedited decision in this proceeding all require nothing less.

United supports Northwest's filing only to the extent that it urges the Department to dismiss American's application or alternatively to grant American's request for leave to withdraw its application.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


December 13, 2006

Answer of Washington Airports Task Force to Motion of American | Word

The request of American Airlines to be permitted to serve China on a circuitous one-stop basis through Chicago in the westbound direction very substantially reduces the already-weak public benefits of its Dallas/Fort Worth proposal.

American’s original proposal relied heavily on behind-the-gateway connecting traffic through Dallas/Fort Worth because that gateway’s O&D traffic is extremely weak in comparison to that of the other gateways in contention.  It defies credulity that this behind-the-gateway traffic will choose two-stop service to China via both Dallas/Fort Worth and Chicago rather than flying directly to Chicago or another more convenient gateway to pick up China service on a one-stop basis.

The focus of this proceeding is on how best to maximize the public and national interest in allocating the additional China frequencies that will shortly become available.  Consequently, the economic and geopolitical benefits to members of the public must be given primacy – not the mercantile interests of the airlines.  On that basis, American’s new proposal now places it at the very bottom of the list.

Counsel: Stephen Gelband, 202-337-8970


OST-2006-25275

December 14, 2006

Comments of Business Travel Coalition

The Business Travel Coalition is writing to formally request that the U.S. Department of Transportation reopen and extend the China route case proceeding to such time as the agency can fully consider the competitive ramifications of potential major airline merger proposals, in particular the reported potential merger of United Airlines and Continental Airlines - two key applicants in this route proceeding.

If a United/Continental merger were to occur, and either airline were to be awarded the new China authorities, then the "new" United/Continental would command 42 weekly U.S-China frequencies followed by Northwest Airlines with 21 frequencies and American Airlines with 7. In RTC's view, such an outcome is inconceivable and would have dramatic negative impacts for business travelers in terms of sharply higher airfares and fewer service options.

There is no U.S.-China protocol that would prevent the Department from holding its decision in abeyance and thus avoid prematurely reaching a decision in this case. The Department should not be rushed in a decision with such strategic, long-term implications for travelers, communities and the competitive structure of this important market.

By: BTC, Kevin Mitchell, 610-341-1850


OST-2006-25275


December 14, 2006

Answer of the Port Authority of New York and New Jersey | Word

It is too late in the season and too close to the March 2007 launch date to re-open this case, accordingly, the Port Authority of New York and New Jersey opposes the application to reopen the record in this proceeding to consider a new proposal. However, we are sure that considering Santa's warm-hearted nature, next year he will happily entertain a new set of wishes. More than forty days after final briefs were submitted, this case is ripe for a decision, not a new service proposal.  No new service proposal could change the fact that selection of New York/New Jersey to receive its first daily, nonstop U.S.-flag Shanghai service will maximize the public benefits that will result from award of route authority and the seven frequencies available March 25, 2007, provide the best service to the traveling public and enhance the overall market structure and level of competition in the U.S.-China market.   Rather than delaying a final decision in this proceeding further, the Department should grant Northwest’s motion to dismiss American’s application or American’s request for leave to withdraw its application and deny American’s motion to re-open the record in this proceeding to consider a new proposal.

By: PANYNJ, Bradley Rubinstein, 212-435-3741, brubinst@panynj.gov


December 15, 2006

Reply of American Airlines - Bookmarked

Granting American's motion would be consistent with Department precedent which favors consideration of the best and most current information available in reaching a decision that will provide the greatest public benefits.

In U.S.‑Vietnam Third‑Country Codesharing Opportunities Order 2001-5-27, May 22, 2001, the Department granted the motion of Northwest to amend its application and change its service proposal long after all the evidence and pleadings had been submitted and - as here - the case was awaiting the Department's decision. Northwest urged that "it is in the public interest for the Department to make a decision in this case based on the best and most current information available, especially when increased consumer benefits would result." The other applicants opposed Northwest's motion, presenting the same stock arguments as the opponents do here.

The Department has provided the opportunity for answers and replies, and should now proceed to a tentative decision based on comparative consideration of each application, including American's amended proposal, consistent with the line of the case cited above.

American's Dallas/Ft. Worth-Beijing proposal, even with an outbound stop in Chicago until a labor issue is resolved, will have the greatest positive impact on overall market structure and competition. American's application, as amended to provide the flexibility of one-stop single-plane service in the outbound direction, should be ranked ahead of Continental, Northwest, and United for the primary award.

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


December 15, 2006

Reply of Continental Airlines

Continental, Northwest, United, the New Jersey Parties, the Metropolitan Washington Airport Authority, the Washington Airports Task Force and the Port Authority of New York and New Jersey all agree with the position taken previously by American and the Department that changes to proposals late in carrier-selection proceedings cannot lawfully be allowed under the Department's rules, the ground rules established for the proceeding, the Administrative Procedure Act and fundamental due process principles. Under these clear and well-established principles, the Department has no legitimate choice other than denying American's motion to reopen the record for acceptance of its new proposal and granting either Northwest's motion to dismiss American's application or American's own motion for leave to withdraw its application.

Rather than wasting further time considering American's motion to reopen the record, the Department should immediately issue a show-cause order selecting a carrier to institute new China service in 2007. To maximize the public benefits from the award by authorizing service in the largest market without daily nonstop U.S.-flag service, in the only market which would be abandoned to foreign-flag carriers without an award, to the only remaining applicant that requires an award so it can offer service to both of China's primary cities, the Department must select Continental for New York/Newark-Shanghai service in 2007.

Counsel: Continental and Crowell & Moring, 202-624-2615


December 15, 2006

Reply of Northwest Airlines

American's Answer to Northwest's Motion to Dismiss offers nothing new that could possibly excuse American's blatant violation of the Instituting Order and the procedural rules established for this case. Northwest will not belabor the point. For the reasons set forth in Northwest's Motion and Answer, American's application must be dismissed, or, in the alternative, American's request for leave to withdraw granted. Among the remaining applicants, Northwest's Detroit‑Shanghai proposal will benefit the most U.S. cities, the most U.S. passengers, and is far and away the superior public interest choice.

Counsel: Northwest, Alexander Van der Bellen, 202-842-8184


Order 2007-1-4
OST-2006-25275

Issued and Served January 9, 2007

Order Addressing Motions of American and Northwest and to Show Cause on Allocation of US-China Combination Frequencies - Bookmarked

We tentatively decide to allocate United seven weekly combination frequencies for its proposed Washington (Dulles)-Beijing services in the U.S.-China market because it will offer the greatest overall public benefits. The rights would become available to United on March 25, 2007.

The record in this proceeding highlights the growing inadequacy of U.S.-China air services, with demand far exceeding supply under the current restrictive bilateral environment. Though China is the second largest trading partner of the United States, a combined total, on average, of only eleven daily nonstop flights are offered between the two countries. This shortfall of available nonstop service options emphasizes the importance of injecting as much nonstop capacity into the U.S.-China market as possible when awarding these frequencies.

The market between the Washington, D.C. metro area and China represents the largest overall O&D market without nonstop service. Currently, Washington, D.C.-China services operated by U.S. airlines involve only one-stop on-line connections via a U.S. hub or two-stop on-line connections via Tokyo. In the 12 months ended March 2006, approximately 92,000 passengers traveled between the Washington, D.C. metro area and China. Furthermore, the O&D traffic to China from the Washington, D.C. metro area is growing at a rapid pace. Only San Francisco, Chicago, and New York/Newark have more China O&D traffic than the Washington, D.C. metro area, and each of those gateways already has more than one nonstop service option to China.

United's B-747 service would provide 253,310 seats between the U.S. and China on an annual basis, 22% more capacity than Continental. Although Northwest will offer capacity almost equal to that of United, the record shows that there is much greater need for this capacity to China from the Washington, D.C. metro area than from Detroit, since, as we have emphasized already, the Washington, D.C. metro area is the largest O&D market without nonstop service to China.

By: Andrew Steinberg


OST-2006-25275


January 10, 2007

Emergency Motion of United Air Lines for Pendente Lite Authority

Special circumstances warrant the issuance of pendente lite authority to United to allow it to commence the promotion of nonstop Washington-Beijing service the acceptance of reservations for such service and the issuing of passenger tickets and cargo weigh bills. The Show Cause Order allows for 14 days for objections to be filed and seven days thereafter for answers to such objections to be filed. If United were required to wait for the issuance of a final decision after the filing of objections and answers it would have less than two months (perhaps closer to one month) to begin marketing and sales activities before the new services must commence. To effectively promote its new service and avoid the risk of having to operate largely empty aircraft during the early days of this service, United needs to begin advertising and selling those services as soon as possible. Taking into consideration the Department's objective in limited-entry route cases not to allow valuable route rights to be wasted and, in this case, to expedite the introduction of the new China service as soon as such opportunity is available, the public interest will be best served by the issuance of a pendente lite award as requested herein in order to ensure the success of United's Washington-Beijing nonstop service.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


Served January 10, 2007

Notice Shortening Answer Period

On January 10, 2007, United filed an emergency motion for pendenie li/c authority in the captioned docket. United requests immediate issuance of pendente li/c authority to enable United to commence the sale and marketing of its Washington-Beijing nonstop service. United maintains that if it were required to wait for issuance of a final decision after the filing of objections and answers, it would have less than two months to begin marketing and sales activities before the new services must commence.

United requests that the Department require answers to its motion be filed no later than two business days from issuance of a notice shortening the answer period.

In the circumstances presented, we have decided to shorten the answer period. However, rather than two business days (which would have had answers due on January 12), we will accord interested parties until noon on January 16, 2007, to file answers. Replies will be due no later than close of business on January 17.

By: Paul Gretch


OST-2006-25275


January 16, 2007

Answer of Continental Airlines

Continental is generally sympathetic to United and other airlines when they are required to start new international services rapidly to use new international opportunities as soon as they become available. The lack of timely decision making is particularly difficult for new entrant airlines which must secure foreign authority, hire staff, build infrastructure and develop marketing plans to compete with entrenched incumbents in a timely manner. Fortunately for United, it is already the entrenched incumbent providing double the nonstop services of all other U.S. carriers combined. In fact United already offers Washington passengers nine options to reach Beijing each day and offers 3,200 annual Washington-China options directly and via its codeshare partner. A's a result, United will certainly be able to start an effective operation within the 90 days normally permitted.

Depriving the other applicants of their due process right to consideration of their objections to allow the entrenched incumbent to further its dominance of the market would make a mockery of the Department's show-cause process. In the circumstances presented by this case, where the Department's decision was undoubtedly delayed while the Department wrestled with the fact that its decision flies in the face of so many well-established principles and precedents and would have such extraordinarily adverse consequences on the competitive structure of the U.S.-China market, there are already substantial questions about the wisdom of the Department's decision which would be exacerbated if the Department breaks procedural precedents as well as substantive precedents rushing to make an award to United. Continental opposes United's "emergency" request for pendente lite authority, which would violate Continental's due process rights to fair consideration of its objections to the Department's show-cause order. The government's inability to complete the decision making process in a timely and effective manner provides no excuse for violations of these due process rights of the other parties.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com


January 16, 2007

Answer of the Metropolitan Washington Airports Authority

The Show Cause Order awarding these frequencies for nonstop Washington (Dulles) -Beijing service provides parties with 14 calendar days to file answers and 7 calendar days thereafter to file replies. (See DOT Order 2007-1-4) At the same time, the DOT Order requires United to commence service on March 25, 2007. There would be less than two months (and perhaps as little as one month) between the date of a Final Order and the start-up date for this new Capital-to-Capital service, leaving insufficient time for the new services to be marketed and sold.

MWAA appreciates the Department's efforts in issuing a decision as quickly as possible given the substantial exhibits and briefing submitted and the December proposal change of American Airlines. Despite those laudable efforts, the time remaining in which United and MWAA have to ramp up for the commencement of this service in late March is short. United needs to begin actively marketing and selling this critically important service to the public immediately in order to ensure that this new service's potential is fully exploited for the benefit of consumers and shippers right from the start. Any further delay in these efforts would unnecessarily impede the ability of United and MWAA to fulfill this service's potential at the outset.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com


January 16, 2007

Answer of Northwest Airlines

Northwest Airlines Inc. hereby answers in opposition to the Motion of United Airlines, Inc. for pendente lite authority in the 2007 U.S.-China Combination and All Cargo Frequency Allocation Proceeding.

United already serves both Washington Dulles (a United hub) and Beijing (with two daily flights from two other hubs). With stations and a major marketing presence on both ends of the proposed new route, there is no need for the extraordinary relief of pendente lite authority in this case.

If the Show Cause Order were to be made final (which it should not) then United would have nearly two months in which to market and sell nonstop service on the Washington-Beijing route that is already marketed by United under single flight number change-of-gauge (via Chicago), plus single connection service (via San Francisco).

The Department should consider and resolve the remaining issues and controversies in this Show Cause proceeding before allowing sales and marketing.

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com


January 16, 2007

Answer of Washington Airports Task Force | Word

It is our firm belief that if United Air Lines is to successfully initiate service to Beijing on March 25, 2007, as required by the Department and as desired by the community, it must begin promotion and sales of its new service as soon as possible.  Without such authority, United will have little more than one month to attract passengers to its initial flights which will substantially diminish the possibility of their initial financial viability.

As set forth in detail in United’s Motion, there is ample precedent for granting United’s request at this time.  No one will be prejudiced by such action because United has committed to place all passengers on the flights of other carriers if the Department does not ultimately confirm its tentative award of Washington-Beijing authority.

Counsel: Stephen Gelband


OST-2006-25275

January 17, 2007

Reply of United Air Lines

In their answers, Continental and Northwest object to United's request for pendente lite relief on three grounds. First, they argue that the Department erred in tentatively selecting United to provide nonstop Washington-Beijing service over their own proposals for new service to China. Second, they claim that United has no real need for the requested pendente lite authority. Third, they argue that awarding United pendente lite authority will prejudice the Department's final decision for an award in this case.

These objections are without merit. To begin with, Continental's and Northwest's objections to the Department's tentative selection of United's Washington-Beijing proposal are irrelevant to United's request for pendente lite relief. The only issue before the Department with regard to United's request is whether it is consistent with the public interest to allow United to market and sell its proposed service before the Department has finalized an award. Objections to the Department's tentative selection of United are a separate matter, and the Department has established a separate procedure to evaluate those objections. While the Department will consider such objections before finalizing an award in this case, the fact that Continental and Northwest intend to file objections has no probative value with regard to the merits of United's request.

Moreover, neither Continental nor Northwest effectively challenges the public interest basis for United's request. Instead, they argue that because United already serves China, has a Chinese codeshare partner, and has demonstrated tremendous demand for its new Washington-Beijing service, United's request should be denied. Continental and Northwest ignore the fact, however, that United is proposing to add 347 daily seats to the U.S.-Beijing market starting March 25, 2007, and has no means to fill those seats with paying passengers unless it is able to start holding out and selling those seats to paying passengers. Their objections also ignore the fact that because replies to objections to the Show Cause Order are not due until January 30, United will have less than 54 days (perhaps significantly less) from when the award is finalized to the required start date to market and sell its new service. That is simply not enough time to market effectively and sell the service, notwithstanding the tremendous demand United expects. Back in 2005, Continental told the Department that it would need at least two-and-a-half months (approximately 75 days) before starting its new U.S.-China service to effectively market and sell that service.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


OST-2006-25275


January 23, 2007

Objections of Continental Airlines

For the last three decades, the Department and the Civil Aeronautics Board before it consistently supported the cause of competition by injecting new airlines and their U.S. networks into international markets dominated by the largest airlines flying the largest aircraft. Until now. Rather than injecting new competition and an entire new U.S.-flag network into the U.S.-Shanghai market, the Department took the unprecedented step of selecting United, which already operates twice the nonstop frequencies of Continental and American combined, to duplicate U.S.-Beijing service it already provides. The Department's decision to award even more frequencies to United rather than injecting effective new competition in the U.S.-Shanghai market flies in the face of a fundamental principle that has guided the Department's decisions for decades: additional competition, particularly direct competition with foreign carriers in the largest markets and network competition for both U.S. and foreign carriers, is far more important than adding additional seats in a market already served by a dominant incumbent applicant. United already operates four times the number of nonstop U.S.-China flights operated by its nearest U.S.-flag competitor and would serve a smaller market than Continental, which would bring an entire new U.S. network to the U.S.-Shanghai market as well as bringing nonstop service to the largest origin and destination market in this proceeding. Under these circumstances, the tentative decision to select United is not only unexplained but inexplicable unless external factors not relevant to this proceeding influenced the Department, as media reports have suggested, or the Department has adopted an industrial policy of supporting the interests of dominant incumbents over the interests of competition and the traveling public.

Continental objects strongly to the Department's decision to award seven additional frequencies to United rather than awarding Continental authority to provide the first daily nonstop New York/Newark-Shanghai service and the first nonstop U.S.-flag New York/Newark-Shanghai service in competition with United, the dominant U.S.-flag carrier, other U.S.-flag carriers and foreign carriers offering New York/Newark-Shanghai service. Continental also objects to the Department's failure to award Continental backup authority in the event the misguided tentative decision awarding authority to United is not reversed.

Counsel: Crowell & Moring, Bruce Keiner, 202-624-2500, rbkeiner@crowell.com


January 23, 2007

Objections of Northwest Airlines

Northwest strongly objects to the tentative findings of the Show Cause Order (Order 2007-1-4) selecting United to receive all seven combination frequencies at issue in this proceeding. United already operates four daily nonstop flights between the United States and China -- with double daily service from both Chicago and San Francisco. Accordingly, United already enjoys unique and unprecedented service coverage of the entire U.S. to China market from East and West Coast hubs. Apart from the narrowly limited nonstop benefits on a single city-pair route, United’s proposed Washington-Beijing service offers nothing new to the traveling public.

By contrast, the record shows that selection of Northwest’s Detroit-Shanghai proposal would create the largest and most effective hub gateway to China -- with new nonstop-to-nonstop service to 108 U.S. cities. The Washington-Beijing local market is already very well served with convenient and competitive service by a number of carriers, including single flight number change-of-gauge service on United via O’Hare, and single connection service on United via San Francisco. The Show Cause Order erroneously prioritized the needs of Washington local passengers over the scores of U.S. cities that would have receive new single connection service via Detroit – including the first nonstop-to nonstop service for 15 U.S. cities, and first competitive service for 29 more. Consistent with the Department’s stated objective in the Instituting Order to “maximize public benefits” (Order 2006-7-9) the tentative findings of the Show Cause Order should be vacated and a Final Order issued to provide Northwest with the frequencies it needs to commence nonstop service from Detroit.

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com


Order 2007-1-15
OST-2006-25275

Issued and Served January 25, 2007

Order Denying Motion of United Air Lines for Pendente Lite Authority

We have decided to deny United’s motion for pendente lite sales and marketing authority. While we understand United’s concerns, and those of the Washington civic parties supporting its request, we have decided, taking into account all of the circumstances present in this case, that the public interest favors our according the greater weight here to the avoidance of pendente lite action. We are not persuaded by the cases cited by United. In the 1999 U.S.-Italy Combination Services Case, where Delta sought and was granted pendente lite sales and marketing authority the Department concluded that granting Delta’s request was in the public interest in light of the specified combination of decisional factors(See notice of action taken dated March 4, 1999, in Docket OST-1998-4854). We do not find a comparably compelling set of factors here to warrant granting United pendente lite authority. The other cited precedents also involved special circumstances including the nature of the rights granted. For example, in the Japan and Canadian proceedings the Department solicited separate simultaneous pendente lite applications that were resolved prior to a tentative decision in the route case (See Orders 1998-2-12 and 1995-2-52). In the Canadian cases, the grant of prompt authority was essential to take advantage of phased-in rights which would have become moot by the time a full proceeding could have been completed. In none of the cases cited by United, unlike in this case, were objections filed by any party. Therefore, we will deny United’s motion.

By: Andrew Steinberg


OST-2006-25275


January 30, 2007

Answer of Continental Airlines

Continental and Northwest agree on two key points in this proceeding: United should not be awarded additional China frequencies for its proposed Washington-Beijing service and Shanghai, not Beijing, should receive new service. Beyond that, they disagree: in Continental's view, the importance of adding nonstop New York/Newark-Shanghai service for thousands of nonstop origin and destination passengers and an entire new network for connections between the U.S. and Shanghai is far greater than awarding additional frequencies to Northwest to offer duplicative service at its Detroit hub when it offers no nonstop U.S. -China combination service using the frequencies it already holds.

Counsel: Continental and Crowell & Moring, Bruce Keiner, 202-624-2615, rbkeiner@crowell.com


January 30, 2007

Answer of The New Jersey Parties

As the objections to the Department's tentative decision in this proceeding submitted by Continental Airlines demonstrate, awarding seven frequencies to Continental so it can offer the first daily nonstop flight between Newark/New York and Shanghai and the first nonstop Shanghai flight at Continental's Newark Liberty International hub would provide far more public benefits than awarding seven frequencies to duplicate service already available for WashingtonChina passengers. Unless the Department reverses its tentative decision, Newark and New Jersey will have no nonstop or direct service to Shanghai, China's commercial center, and New Jersey travelers and shippers, U.S.-China trade, and the competitiveness of Newark, New Jersey and Newark Liberty International Airport will suffer. The New Jersey Parties support Continental's objections and urge the Department to award Continental seven frequencies to bring the firstever nonstop Shanghai service to Newark and New Jersey.

By: Newark Regional Business Partnership, Chip Hallock, 973-242-4209, challock@rbp.org


January 30, 2007

Reply of Washington Airports Task Force to Objections of Continental and Northwest | Word

It is apparent from reading the comments of both Continental and Northwest that they are largely pro forma since they raise no relevant facts or arguments that were not previously made and fully taken into account by the Department in Order 2007-1-4. The fact that United is offering capital-to-capital service with the largest capacity aircraft of any applicant in this case; that Washington is the largest metropolitan area in the United States in terms of both population and size of economy that does not already have non-stop service to China; that more Washington area passengers already travel to China than from any other area of the United States that does not already have non-stop service to China; that the Washington area is home to a substantially larger Chinese population than any other area of the United States that does not already have non-stop service to China; and that Washington is the largest and fastest growing area of the United States that doesn’t already receive the benefits of non-stop service to China, fully justifies making United’s tentative award of Washington-Beijing frequencies final.

Counsel: Stephen Gelband, slg@glebanlaw.com


January 30, 2007

Answer of United Air Lines to Objections of Continental and Northwest

The Department quite properly concluded that the "attractive attributes" of the competing proposals "are outweighed by the superior service benefits of United's Washington, D.C.-Beijing proposal and the benefits of that new gateway."

In their Objections, Continental and Northwest feign surprise over this conclusion - with each contending now, as they did in their pre-decisional submissions, that their proposals are superior. In their view, to quote Continental, the Department's "tentative decision to select United is not only unexplained but inexplicable."

In fact, the Department's selection of United is fully explained in the Show Cause Order, and its explanation is amply documented by citations to the record. Continental and Northwest may disagree with the Department's assessment of the comparative public benefits of the alternative proposals, but their suggestion that the Department's decision is somehow unexplained or contrary to the evidence of record is preposterous. What's more, they offer absolutely nothing new in support of the claims that their proposals offer greater public benefits than United's. They simply rehash the same arguments they made earlier, arguments that were shown by United to be without merit and fully considered by the Department in reaching the decision in the Show Cause Order. While their commercial disappointment is understandable, it provides no substantive ground for challenging the Department's decision.

Counsel: Wilmer Hale, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com


OST-2006-25275


January 30, 2007

Answer of the Metropolitan Washington Airports Authority

The arguments offered by Continental and Northwest for not finalizing the Show Cause Order were previously made in this proceeding and rejected. Merely repeating these same points in their Objections does not somehow make them more compelling than they were a couple of weeks ago, when the Department wisely found them to be much less compelling than those in favor of nonstop service between the Nation's Capital and Beijing. Indeed, the compelling facts underlying Washington-Beijing service have not changed at all.

Simply put, Continental and Northwest have raised nothing new in their Objections, other than to attack the Department itself (which is unfounded and irrelevant). Accordingly, the Department should reject their Objections and finalize the Show Cause Order awarding these U.S.- China frequencies for Washington, D.C.-Beijing service as expeditiously as possible.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com


January 30, 2007

Answer of Port Authority of New York and New Jersey | Word

The important public benefits of New York/Newark-Shanghai service must not be sacrificed to a new decisional standard elevating incremental capacity and codeshare service beyond foreign gateways with foreign airlines over the need for nonstop service in primary markets such as New York/Newark-Shanghai and competition for dominant incumbents in frequency-constrained international markets.  To maximize the public benefits from the award of route authority and the seven U.S.-China frequencies available March 25, 2007, provide the best service to the traveling public and enhance the overall market structure and level of competition in the U.S.-China market, the Department should award seven frequencies to Continental for service between New York/Newark and Shanghai.

Counsel: PANYNJ, Bradley Rubinstein, 212-435-3741, brubinst@panynj.gov


OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding
OST-2005-22922 - Approval of and Antitrust Immunity for Alliance Expansion Agreements and an Amended Coordination Agreement
OST-1996-1434 - Approval of and Antitrust Immunity for Commercial Alliance Agreements

February 7, 2007

Motion for Leave to File and Supplement to Objections of Northwest Airlines

Northwest Airlines, Inc. hereby (i) moves for leave to file this Supplement to its Objections in the 2007 U.S.-China service proceeding, and (ii) requests reexamination of transpacific competition issues, including, at minimum, the exclusion of China from the proposed grant of global antitrust immunity to United and Air Canada in the Star Alliance proceeding.

Substantial service and capacity will be added by Air Canada on the Toronto-Shanghai route, as well as new Beijing service at Vancouver. Altogether, Air Canada intends to add 50 percent more flights between North America and China. With its major hub at Toronto, and access to all of the largest and most important U.S. markets to China, Air Canada is a serious threat to Northwest’s one-stop U.S.-China service from Detroit. In addition, Air Canada’s new Vancouver-China services compete directly at all of the Western U.S. gateway cities Northwest serves via Narita. Because the Show Cause Order failed to award Northwest frequencies it requires to commence nonstop Detroit-Shanghai service without dismantling its western U.S.-China network, Northwest is powerless to respond to this substantial new foreign flag challenge.

In light of the significant new U.S.-China and transpacific competition issues raised by Air Canada’s announcement, Northwest requests (1) leave to file this Supplement; (2) that the Department revise the analysis in Order 2006-12-17 to include the competitive effects of the alliance on U.S.-China and other transpacific markets; and (3) urges that Order 2007-1-4 be amended to grant Northwest the frequencies it requires to provide competitive U.S.-China service against United and Air Canada via Detroit.

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com


OST-2006-25275

February 8, 2007

United Will Not File a Substantive Response to Objections of Northwest

On February 7, 2007, Northwest Airlines filed in this docket an unauthorized pleading styled a Supplement to Objections, accompanied by a Motion for Leave to file, United does not intend to file a substantive response to Northwest's unauthorized filing.

Northwest's Supplement focuses exclusively on a recent announcement by Air Canada of increased nonstop Canada-China service during a portion of the up-coming summer travel season. Such an announcement by a third-country carrier is irrelevant to the core issue in the 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding-- which U.S. carrier's proposal for additional U.S.-China nonstop service will provide the greatest public benefits.

Northwest's objective in filing its unauthorized Supplement is a thinly veiled attempt to protect its position in the U.S.-China market from new U.S.-flag competition by delaying a final award of the seven additional U.S.-China combination frequencies that become available March 25, 2007. The Department should not tolerate such behavior by Northwest, which is contrary to the public interest. Each day the Department's final decision in this proceeding is delayed impacts United's ability to move forward with the regulatory procedures required to obtain approval from the Government of China to implement the new frequencies it has tentatively been awarded by the Department, potentially impacting United's ability to start the service in a timely manner.

To facilitate United's ability to start its new Capital-to-Capital Washington-Beijing service on March 28, as planned, the Department should promptly deny Northwest's Motion for Leave to file and proceed expeditiously to finalize its tentative award of the available U.S.-China frequencies to United.

Counsel: Wilmer Hale, Jonathan Moss, 202-663-6655, jonathan.moss@wilmerhale.com


February 8, 2007

Answer in Opposition and Contingent Motion for Leave to File and Reply of the Metropolitan Washington Airports Authority

The Metropolitan Washington Airports Authority hereby opposes the belated Motion for Leave to File and Supplement to Objections of Northwest Airlines, Inc., dated February 7, 2007. For the reasons stated below, the Motion should be denied. In the event the Department grants Northwest's motion, MWAA moves for leave to file this Reply to Northwest's supplemental objections.

The Department should deny Northwest's belated Motion or, alternatively, reject the substance of its comments as irrelevant to the Department's well reasoned and substantially supported decision to award the seven available U.S.-China frequencies to United Air Lines, Inc. for first-ever daily nonstop service between Washington, D.C. (Dulles) and Beijing, China. In either case, the end result must be the same: the Department should finalize the Show Cause Order awarding these U.S.-China frequencies for Washington, D.C.-Beijing service as expeditiously as possible.

Northwest's Motion provides nothing new to undermine the numerous bases upon which the Department reached its decision in the US. -China Proceeding In referring the Department to the Air Canada flights to China, Northwest is grasping at a very thin reed. This Motion has no merit, but it will have the effect of further impeding the ability of United and MWAA to commence marketing and promotion of this new and vitally important service to China by delaying the issuance of a Final Order confirming the award of these frequencies to United for nonstop Washington, D.C.-Beijing service. This, indeed, may be the purpose of the Motion. Northwest's Motion should be recognized as such, and dismissed out-of-hand. This matter is ripe for decision; objections and answers to the Show Cause Order have been received. The March date contained in the U.S.-China bilateral for this service requires a final decision at this time; no further pleadings should be entertained.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, rechon@hhlaw.com


Order 2007-2-10
OST-2006-25275

Issued and Served February 8, 2007

Final Order

By this Order, we make final our tentative findings and conclusions set forth in Order 2007-1-4, and allocate United Air Lines, Inc. seven weekly combination frequencies for its proposed Washington (Dulles)-Beijing combination services in the U.S.-China market. Under the protocol to the U.S.-China agreement, these rights become available on March 25, 2007.

We grant United’s request to integrate Beijing on its Certificate of Public Convenience and Necessity for Route 246 with its authority to serve Washington, D.C. on its Certificate of Public Convenience and Necessity for Route 130. We will also grant United’s request to change the proposed start-up date for its Washington (Dulles)-Beijing service to March 28, 2007.

We are not persuaded by Continental’s argument that because of United’s position as the carrier having the largest number of frequencies in the market, United’s selection is counter to the Department’s pro-competition policy. We disagree. As stated above, we selected American in 2006 based on the record in that case to address a competitive deficit in those circumstances. While considering the number of frequencies and the current service of each applicant, and in analyzing the record before us, we weighed the various carrier selection factors in light of the particular circumstances presented in this specific case. We tentatively concluded that the public interest benefits of United’s service proposal -- gaining the first-ever nonstop service to China from a new gateway representing the largest O&D market in this proceeding, coupled with the largest capacity to maximize the benefits of that new service -- were compelling. Nothing asserted by Continental in its objections would now persuade us to change that analysis and conclusion.

We do not agree with Northwest’s argument that our tentative decision erroneously prioritizes the needs of local Washington, D.C., passengers over the U.S. cities that would have received new service via Detroit. While Northwest’s proposed service would offer convenient connections through Detroit from a substantial behind-gateway catchment area, United’s proposal immediately rectifies the most critical shortfall in the current U.S.-China market -- the lack of any nonstop service to China from the largest U.S. market without such service -- the Washington, D.C. metro area. We found that United’s Washington, D.C. (Dulles)-Beijing proposal fills that service gap with significant capacity and provides other valuable service benefits, including the added value of beyond gateway code-share services in China, which, in sum, clearly outweigh the potential attributes of Northwest’s Detroit-Shanghai nonstop service.

By: Andrew Steinberg



February 28, 2007

Application of Polar Air Cargo for Waiver of Start-Up Condition

Because Beijing is a slot coordinated airport, Polar has been diligently pursuing the additional slots at Beijing it needs to commence operations using the additional four frequencies that become available March 25, 2007. In meetings during September, October and December 2006, Polar engaged in discussions with the slot coordinator for Beijing, the Air Traffic Management Bureau and the Civil Aviation Administration of China in order to obtain slots at commercially viable times, consistent with the service Polar already operates and the needs of its customers. Unfortunately, despite those efforts, ATMB has been unable to allocate to Polar slots for Beijing in the upcoming Summer Season at commercially viable times on any of the following days: Tuesday, Thursday, Friday or Sunday.

Polar fully intends to continue pursuing diligently the slots it needs at Beijing to institute expanded service to that city using the four frequencies. Polar is hopeful that a solution can be found during the Summer Operating Season that would allow Polar to start these new services during that time. In the meantime, Polar will continue to operate at a level of two flights per week (each Wednesday and Saturday) at Beijing.

To obtain adequate time to address the matter and resolve the situation, Polar is requesting a waiver of the ten-day start-up condition through the end of the Summer 2007 Season, on October 28, 2007. This amount of time is required to enable Polar to continue to explore all viable opportunities.

Counsel: Polar, Kevin Montgomery, 202-828-1002, kevin.montgmery@polaraircargo.com



Filed February 28, 2007 | Approved March 21, 2007

Department Action on Application of Polar Air Cargo

We will require the carrier to institute service no later than October 28, 2007.

By: Esta Rosenberg



September 25, 2007

Application of Polar Air Cargo for Extension of Waiver of Start-Up Condition

By Notice of Action Taken, issued August 24, 2006, the Department granted the application of polar' for four weekly U.S.-China Zone One all-cargo frequencies becoming available on March 25, 2007. Because Polar was experiencing serious difficulties obtaining commercially viable slots at Beijing, where it was planning to use the frequencies, it requested and was granted a waiver of the start-up condition through October 28, 2007.

At the time Polar filed its start-up waiver application, it hoped to be able to obtain commercially viable Beijing slots beginning with the Winter 07-08 IATA traffic season. Unfortunately, obtaining the necessary slot times has proven difficult. In meetings held only this last week in Beijing, Polar engaged in discussions with the Air Traffic Management Bureau and the Civil Aviation Administration of China in order to obtain slot assignments at usable times each Tuesday, Thursday, Friday and Sunday. Our efforts have as yet not yielded a satisfactory outcome, but there is the very good possibility that after the Olympic Games, ending on August 24 next year, that slots will become available.

Yet, to have time to secure the slots it needs in Beijing, Polar now finds itself in the position of having to request an extension of the start-up waiver. With the 2008 Summer Olympics and the difficulty of obtaining slots for Beijing operations until after that period, extension is sought for nearly one year, or until the end of August 2008.

Polar Air Cargo Worldwide, Inc. respectfully requests extension of its current waiver, through August 31, 2008, of the ten-day start-up condition attached to Polar's allocation of four weekly U.S.-China Zone One all-cargo frequencies that became available on March 25, 2007, and such further relief as the Department finds to be consistent with this application and the public interest.

Counsel: Polar, Kevin Montgomery, 202-828-1002, kevin.montgomery@polaraircargo.com



Filed September 25, 2007 | Approved October 22, 2007

Department Action on Application of Polar Air Cargo

We will require the carrier to institute service no later than August 31, 2008.

By: George Wellington



OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding
OST-2004-18468 - 2004 Cargo Desitnation and 2004/2005 All-Cargo Frequencies

April 29, 2008

Motion of Northwest Airlines for a Dormancy Waiver

Hereby moves for a waiver of the 90 day dormancy condition applicable to seven (7) of Northwest's U.S-China all-cargo frequencies

As a result of unprecedented oil prices, now verging on $120 per barrel, Northwest is suspending its daily all‑cargo service to Guangzhou. Northwest ceased operation of two U.S.‑Guangzhou cargo frequencies effective April 27, 2008, and is planning to suspend its remaining five Guangzhou all‑cargo frequencies in July, 2008.

Grant of Northwest's dormancy waiver request is in the public interest and will not prejudice any carrier. At present, there are 17 all-cargo frequencies available in the unallocated pool. Fifteen (15) all-cargo frequencies become available on March 25, 2009; a further fifteen (15) additional all-cargo frequencies become available on March 25, 2010; followed by the unlimited availability of all-cargo frequencies on March 25, 2011. The unique hub benefits available to FedEx and UPS provide yet another source of China all-cargo frequencies in the interim.

Accordingly, Northwest requests a waiver of the dormancy condition applicable to its seven U.S.-Guangzhou cargo frequencies through March 25, 2011. The requested waiver will enable Northwest to resume service as warranted by fuel and economic conditions. Other U.S.-China carriers have recently sought and received similar dormancy waiver relief due to fuel prices and the slowing economy. See, Motion of United Airlines for a dormancy waiver and Department action approving deferral of startup condition for United's seven U.S.-Guangzhou combination frequencies (Docket OST-2007‑28567).

Counsel: Northwest, Alexander Van der Bellen, 202-842-4184, sascha.vanderbellen@nwa.com



OST-2006-25275 - 2007 US-China Combination and All-Cargo Frequency Allocation Proceeding
OST-2004-18468 - 2004 Cargo Desitnation and 2004/2005 All-Cargo Frequencies

Filed April 29, 2008 | Approved July 3, 2008

Granting Motion of Northwest Airlines for a Dormancy Waiver

We will grant Northwest's request for a waiver of the 90-day dormancy condition applicable to seven of Northwest's U.S.-China all-cargo frequencies. We note that no party opposed Northwest's request. In the circumstances presented, we will grant Northwest a one-year waiver instead of the two-year waiver requested by the carrier and accordingly will require the carrier to resume service no later than March 25, 2010.

By: Esta Roseburg


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