# Weekly Cabinet Report for 

# Week of December17, 2001

# Read C. Van de Water

# Assistant Secretary for Aviation

#  And International Affairs

# The Secretary

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###### WEEK OF DECEMBER 17

**[Belgium]{.underline}**: The Belgians have requested urgent
consultations to discuss their concerns about aviation security issues.
The consultations will be held December 17 in Washington.

**[U.S.-U.K. Alliance Case]{.underline}**: The Department granted a
request by the opponents in the American/British Airways and United/bmi
antitrust immunity applications for an extension of the procedural
schedule in the Alliance Case. The Department previously consolidated
the American/British Airways and the United/bmi antitrust cases. Answers
are due to the consolidated applications by December 17 and replies by
December 21. In that order, the Department also denied motions filed by
Northwest Airlines asking that the Department strike certain evidentiary
material submitted as answers by American in the American/British
Airways antitrust case, and denied the joint motion by Continental,
Delta, and Northwest requesting an oral evidentiary hearing in the
American/British Airways case.

**[Delta/Air France/Czech Airlines/Alitalia Antitrust
Immunity]{.underline}**: The Department expects to issue a tentative
decision in this alliance/antitrust immunity case in mid-December.
Responses to the application have been filed and the record is ready for
a Department decision.

**OUTLOOK FOR NEXT FOUR WEEKS**

## [Small Community Air Service Development Program]{.underline}*:* A new rural air service program was authorized in April 2000 as part of AIR-21. However no funds were appropriated in FY 2001. Congress funded the program at \$20 million for FY 2002. We are working with OGC to establish rules and regulations that are needed in order to set out criteria that the Department will use in evaluating the relative merits of the various proposals. 

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**[Midway Airlines]{.underline}**: Midway has been compensated \$10.1
million under PL 108-42 and has been given oral notice that it is
re-certified economically fit. We expect to issue an Order confirming
that oral grant during the week of December 21.

**[Latvia]{.underline}**: The United States has proposed to reschedule
open-skies negotiations with Latvia, January 15-17, in Washington. We
are waiting for the Latvian response. The earlier talks were cancelled
in the aftermath of September 11.

**[Uzbekistan Carrier Authority to Serve the U.S.]{.underline}**: Within
the next several weeks, the Department expects to issue Avialeasing
Aviation Company (a foreign air carrier of Uzbekistan) operating
authority to conduct cargo charter operations between the U.S. and
Uzbekistan consistent with our open-skies agreement with Uzbekistan.

**[Hong Kong]{.underline}**: The United States and Hong Kong have agreed
to resume aviation liberalization talks January 23-25 in Washington.

[**Asia Pacific Economic Cooperation (APEC)**:]{.underline} In response
to the APEC Heads of State Meeting and subsequent statement on
counter-terrorism, we are developing a coordinated program for
counter-terrorism in APEC. The Transportation Working Group\'s
transportation security expert group, chaired by the U.S., will meet on
January 7-9, in Singapore to formulate options for an APEC wide
coordinated approach to address transportation security problems among
member economies.

**[Nigeria Transportation Program (NTP)]{.underline}**: The Department
is continuing its efforts as part of the USAID funded NTP. In early
January a DOT team will travel to Nigeria to have discussions on
security equipment, continuation of the safety oversight program, and
the completion of port security and environmental assessments.

####### RESULTS OF RECENT ACTIVITIES

**[Air Transportation Safety and System Stabilization
Act]{.underline}**: Carrier applications for the second round of
compensation for losses attributable to terrorist activity have been
submitted. The Department began receiving applications on November 1,
and 324 applications were filed by Friday, December 7. To date, 41
second-round applications for a total of \$3.82 billion for compensation
had been paid.

**[Orbitz]{.underline}**: Exemption Order for Orbitz' display of travel
agency fees was issued on December 7.

**[U.S.-Chile Free Trade Agreement]{.underline}**: DOT staff contributed
to the development of U.S. positions and text in the Services and Market
Access areas for the most recent round of U.S.-Chile Free Trade
Agreement negotiations, which took place in Miami, from November 27 to
December 4. The negotiations included market access, customs/rules of
origin, services, financial services, investment, safeguards, dispute
settlement, intellectual property rights, e-commerce, government
procurement, institutional issues, and labor. Another round is scheduled
for January. Negotiators expect to conclude the Agreement next year.

**[Western Hemisphere Transportation Initiative]{.underline}**: The
Western Hemisphere Transportation Initiative's (WHTI) Executive
Committee met in Washington,

D.C., on December 4, to discuss and act on the agenda resulting from the
Ministers' meeting in Punta del Este last March. Particular emphasis was
placed on the development of a mechanism for increased aviation safety
and security in the Western Hemisphere. Members were informed by
Inter-American Development Bank officials of a recently established Line
of Activity, to be funded through the Multilateral Investment Fund, for
airport security projects in the region. Under the leadership of the
Office of Aviation and International Affairs, FAA, MarAd, and the U.S.
Mission to the Organization of American States participated in the WHTI
Executive Committee meeting. On December 18, the DOT representative to
the Executive Committee will report on the outcome of the session at an
inter-agency meeting on Summit of the Americas Follow-up.

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