Order 2011-10-21 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

 UNITED STATES OF AMERICA 

 DEPARTMENT OF TRANSPORTATION 

 OFFICE OF THE SECRETARY 

 WASHINGTON, D.C.

 Issued by the Department of Transportation 

 on October 26, 2011 

 

 Served: October 26, 2011 

In the matter of

 

 AEROLINEAS ARGENTINAS, S.A.

under Section 41310(c)(2) of the International Air 

Transportation Fair Competitive Practices Act, as amended Docket DOT-OST-2003-15092

ORDER TO SHOW CAUSE 

Summary

By this Order, we propose to remove countermeasures imposed upon Aerolineas Argentinas, S.A. 

(Aerolineas) in 2003 that required it to establish and pay certain amounts into a U.S. escrow account. 

We tentatively end the requirement for Aerolineas to maintain the escrow account and order 

disbursement of the escrowed funds. 

Background

This matter arises out of a complaint under former section 2(b) of the International Air Transportation 

Fair Competitive Practices Act, as amended, (49 U.S.C. 41310(d)), filed by American Airlines, Inc. 

(American), Federal Express Corporation (Fed Ex), United Air Lines, Inc. (United) and United Parcel 

Service Co. (UPS), referred to here as the Joint Complainants, against the Government of Argentina 

and Aerolineas Argentinas, S.A. (Aerolineas) in 2003. The complaint alleged that the Government of 

Argentina violated the Air Transport Agreement between the United States and Argentina by imposing 

unreasonable airport charges (for landing fees, parking and air traffic control) on U.S. air carriers at 

Buenos Aires International Airport (Aeropuerto Internacional Ministro Pistarini de Ezeiza—EZE) 

(Ezeiza) and by requiring the Joint Complainants to pay airport charges approximately three times 

higher than those paid by Aerolineas. Aerolineas had obtained judicial relief allowing it to pay in 

pesos at a more favorable exchange rate. 

By Order 2003-6-33 we approved the complaint, but deferred on the issue of countermeasures. By 

Order 2003-11-26, we imposed certain countermeasures on Aerolineas. Under the terms of the 

countermeasures, Aerolineas’s foreign air carrier permit is conditioned by requiring the carrier to remit 

into a U.S. escrow account, on a per-flight basis, until further order of the Department, the difference 
between what it actually pays for services at Ezeiza and the higher amounts it would be paying if it 

were not benefiting from discriminatorily favorable treatment vis-à-vis U.S. carriers. 

Despite a number of unsuccessful attempts in different venues to have this condition lifted,1 Aerolineas 

began paying the required amount into an established escrow account beginning January 2004, and 

continues to submit weekly reports in accordance with the terms and conditions for escrow payments 

prescribed in an appendix to Order 2003-11-26. In essence, Aerolineas has been paying into the 

escrow account the difference between the amount it pays for services at Ezeiza in pesos and the 

amount it would be paying for these services if it paid in U.S. dollars. 

Recent Developments

Following a March 2, 2011, motion from the Joint Complainants, and subsequent submissions from 

Aerolineas and from the Joint Complainants, the record now supports the tentative conclusion that the 

matter of discriminatory treatment has been resolved and there no longer exists any need for 

countermeasures.2 

According to Aerolineas, an October 2009 decision of the Argentina Supreme Court determined that 

Aerolineas should have paid its airport charges at the higher dollar rate as opposed to the lower, more 

favorable peso rate. Under that ruling, Aerolineas has been paying fees to Aeropuertos Argentina 2000 

S.A. (AA2000), the concessionary that manages Ezeiza, at the same rates as the Joint Complainants 

since June 2010, and to the Administracion Nacional de Aviacion Civil (ANAC) since August 2010. 

However, Aerolineas owes AA2000 and ANAC the difference between the amounts Aerolineas had 

been paying since 2002 and the higher amounts it should have paid under the ruling of the Argentina 

Supreme Court.3

 

The issue remaining before us is the appropriate disposition of the funds in the escrow account.4 The 

Joint Complainants do not take issue, in principle, with the assertions of Aerolineas that it should not 

be required to pay the differential twice, once in the United States and also in Argentina. They agree 

that if Aerolineas pays the full amount of the differential from 2002 to 2010 to an appropriate 

Argentinean entity, and certain conditions are met, the discrimination against the Joint Complainants 

would be cured and they would relinquish their claim to the U.S. escrow account. 

Aerolineas states that a trust has been established between AA2000, Argentina’s Department of 

Transportation, and the Organismo Regulador del Sistema Nacional de Aeropuertos (ORSNA) for the 

 

1 See Order 2004-1-15, issued January 15, 2004, and the decision of the U.S. Court of Appeals for the District of Columbia 

in Aerolineas Argentinas S.A. v. U.S. Department of Transportation, 415 F.3d 1 (D.C. Cir. 2005). 2

 For the sake of securing a complete record we will grant all motions for leave to file and deem the subsequent submissions 

part of the record. The substantive submissions consist of the following: Aerolineas Argentinas’ Response to Joint 

Complainants’ March 2, 2011 Motion, and Aerolineas Argentinas’ Motion [for various relief], dated April 29, 2011 

(Response of Aerolineas); Aerolineas Argentinas’ Notice of Filing Deloitte Report, dated May 2, 2011; Motion of Joint 

Complainants for Leave to File and Reply to Response of Aerolineas Argentinas, S.A., dated May 6, 2011 (Reply of Joint 

Complainants); Aerolineas Argentinas’ Surreply to Joint Complainants’ May 6, 2011 Reply (Surreply of Aerolineas), dated 

May 13, 2011; Aerolineas Argentinas’ Notice of Filing Deloitte Report in Support of its Motion, dated June 14, 2011. 3

 In its pleadings, Aerolineas explains that the fees owed from 2002-2010 consist of two amounts--one is the differential 

amount owed for the period referred to generally by the parties as 2002-2004 and the other is the differential amount owed 

for the period referred to as 2004-2010. 

4

 Aerolineas retained Deloitte to conduct an audit of the amount that would cover the period of discriminatory treatment, 

from September 2002 to January 2004. See the Notices of Filing Deloitte Report dated May 2, 2011 and June 14, 2011, in 

the instant docket. The audit results are not contested. 
purpose of financing Argentina’s airport infrastructure and services, and that Aerolineas and AA2000 

have agreed, with the approval of ORSNA, that amounts owed by Aerolineas to AA2000 would be 

paid to the trust.5 Aerolineas has further agreed with ANAC that amounts owed to ANAC as a result 

of the Argentina Supreme Court’s decision would be paid directly to ANAC in two installments.6

The Joint Complainants argue that the Fideicomiso trust is not the appropriate Argentinean entity to 

receive the escrow funds because it is too broad as currently configured in that it is designed to finance 

airport infrastructure and improve services at Argentina’s National Airport System. They argue that 

allowing the fees they pay for services at Ezeiza to be used elsewhere would be contrary to the “just 

and reasonable” user charges provision of the United States-Argentina Air Transport Agreement, 

among other things, and that the trust must be amended to require that any funds transferred from the 

U.S. escrow account will be used at Ezeiza.7

 

Aerolineas states that it is not a party to the trust and cannot instruct it, nor can Aerolineas amend, 

modify or change it.8

 Further, Aerolineas asserts that if the Joint Complainants have a grievance with 

the rates charged at Ezeiza, this is not the appropriate proceeding in which to litigate such claims. 

Aerolineas requests that the Department disburse $9,138,513 of the escrow account funds to the 

Fideicomiso trust to cover the 2004-2010 differential, disburse the amounts owed by Aerolineas for the 

2002-2004 differential to the Fideicomiso trust, return to Aerolineas any remaining escrow account 

funds after the disbursements to the Fideicomiso trust,9

 remove the conditions placed on its foreign 

carrier permit by Order 2003-11-26, and terminate the escrow account requirements imposed as a 

countermeasure by Order 2003-11-26. 

Decision 

As a result of a decision of the Supreme Court of Argentina in October 2009, finding that Aerolineas 

should have paid airport charges in dollars and requiring that it now do so, we tentatively conclude that 

the matter of discriminatory treatment vis-à-vis U.S. carriers has been resolved and there no longer 

exists a basis for the continued imposition of the countermeasures imposed upon Aerolineas by Order 

2003-11-26. Accordingly, we propose to discharge Aerolineas of its obligation to maintain and make 

payments into a U.S. escrow account established pursuant to the condition imposed on Aerolineas’s 

foreign air carrier permit by Order 2003-11-26, and to direct the Escrow Agent to disburse the funds as 

directed by the Department. Following disbursement of all funds in the escrow account Aerolineas 

may dissolve it. 

Regarding the disbursement of the funds collected in the escrow account to an appropriate Argentinean 

entity, we propose to honor the request of Aerolineas to disburse the funds to the Fideicomiso trust. 

The decision of the Supreme Court of Argentina makes Aerolineas liable to AA2000 and ANAC for 

payment of the 2002-2004 differential and the 2004-2010 differential, amounts that are currently held 

 

5

 The formal name of the trust is the Fideicomiso de Fortalecimiento del Sistema Nacional de Aeropuertos, referred to here 

as the Fideicomiso trust. 

6 See Response of Aerolineas at 6. 7 See Reply of Joint Complainants. 8 See Surreply of Aerolineas at 3. 9

 Aerolineas states that, due to misinterpretation of the Department’s Order 2003-11-26, it continued to deposit weekly 

amounts into the escrow account even though it had begun paying at the same exchange rate as the Joint Complainants, and 

has therefore overpaid $1,466,009.43 into the escrow account since June 2010. See Response of Aerolineas. Aerolineas 

agrees that this amount should be applied first to the 2002-2004 differential and any remaining balance returned to 

Aerolineas. See Surreply of Aerolineas at 3. 
in the escrow account, and the Argentine entities have agreed with Aerolineas that such amounts shall 

be paid to the Fideicomiso trust. We find no persuasive basis in the Joint Complainants’ objection to 

disregard or dishonor this arrangement. Order 2003-11-26 only addressed the higher exchange rate 

imposed on U.S. air carriers. The instant proceeding regarding the Aerolineas escrow is not the 

appropriate venue to consider whether the rates charged at Ezeiza are contrary to the “just and 

reasonable” user charges provision of the United States-Argentina Air Transport Agreement. 

Accordingly, we have tentatively decided to grant the motion of Aerolineas to disburse the funds as 

proposed.10 To the extent excess funds remain in the escrow account after the 2002-2004 differential 

and the 2004-2010 differential have been disbursed to the Fideicomiso trust, we tentatively grant the 

motion of Aerolineas that any excess funds be returned to it. 

ACCORDINGLY, 

1. We tentatively grant the April 29, 2011 motion of Aerolineas Argentinas, S.A. and tentatively 

discharge Aerolineas Argentinas, S.A. of its obligation to establish and remit into an escrow 

account with a U.S. Bank payments in the amount and manner prescribed in this docket 

pursuant to the condition imposed on Aerolineas’s foreign air carrier permit by 

Order 2003-11-26; 

2. We direct all interested parties to show cause why the tentative decisions set forth above should 

not be made final; 

3. Comments in response to this order shall be filed with the Department of Transportation, 

Dockets, in Docket DOT-OST-200315092, Docket Operations, M-30, West Building Ground 

Floor, Room W12-140, 1200 New Jersey Avenue, SE, Washington, DC, 20590, no later than 7 

calendar days from the date of service of this order, and any replies thereto shall be filed no 

later than 5 calendar days thereafter, and shall be served on all parties named in ordering 

paragraph 6, below; 

4. If timely and supported objections are filed, we will accord full consideration to the matters or 

issues raised by the objections before we take further action. In the event no comments are 

filed, all further procedural steps shall be deemed waived, and the Department shall enter an 

order, subject to the disapproval of the President pursuant to 49 U.S.C. 41307, which shall 

make final our tentative findings and conclusions set forth in this order;11 and 

 

10 Consistent with this result, we have tentatively decided to deny the March 2, 2011 motion of the Joint Complainants that 

the funds be disbursed to the Joint Complainants. 

11 Since provision is made for the filing of comments to this order, we will not entertain petitions for reconsideration. 
5. We will serve this order on American Airlines, Inc., Federal Express Corporation, United Air 

Lines, Inc., United Parcel Service Co., Aerolineas Argentinas, S.A., the U.S. Department of 

State, the Assistant U.S. Trade Representative (South America), Office of the U.S. Trade 

Representative, the U.S. Department of Commerce, and the Ambassador of Argentina in 

Washington, D.C. 

By: 

SUSAN L. KURLAND 

Assistant Secretary for 

 Aviation and International Affairs 

(SEAL) 

An electronic version of this document is available on the World Wide Web at: 

www.regulations.gov