Order 2013-3-1

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation On March 15, 2013

Served: March 15, 2013

In the matter of

THE IMPOSITION OF UNJUST USER CHARGES AT

ITALIAN AIRPORTS

under Section 41310(c) of the International Air Transportation Fair Competitiv e Practices Act, as amended Docket DOT-OST-2013-0038

ORDER TO SHOW CAUSE

Summary

By this Order, we tentatively find that certain user charges imposed at Italia n airports constitute an unjustifiable or unreasonable discriminatory, predat ory, or anticompetitive practice against U.S. air carriers and impose an unjustifiable or unreasonable restriction on access of U.S. air carriers to the Italy market; violate Article 12 of the U.S.-EU Air Transport Agreement; and warrant remedial action under the International Air Transportation Fa ir Competitive Practices Act (IATFCPA).

Background

For a number of years, the Italian airport authorities have been impos ing one set of user charges at Italian airports for flights operating entirely within the European Union (intra-EU), and a separate set of charges for flights arriving in It aly directly from, or going from Ital y directly to, points outside the European Union (extra-EU). For example, in the most recent statement of charges for Rome’s Fiumicino Airport, for intra-EU f lights, landing and take-off charge s are assessed at the rate of 1.19 Euro for the first 25 tons or fraction thereof, a nd 1.82 Euro thereafter. By contrast, for extra-EUoriginating flights, landing and ta ke-off charges are assessed at the ra te of 2.05 for the first 25 tons or fraction thereof, and 2.56 Euro thereafter. Comparab le differences in intra- EU vs. extra-EU charges exist at other Italian airports.

Through the U.S.-EU Joint Committee, which has incl uded representatives of the Italian Government, the U.S. Government has objected di rectly to this situation and has engaged in consultations in an effort to resolve the issue. However, the Italia n authorities have not alte red their airport charging policies. Most recently at the Joint Committee m eeting held on January 15 of this year, the U.S.Government explicitly asserted that the different ial fee system for landings and takeoffs is not permitted under the user charges article (Article 12 ) of the U.S.-EU Air Transport Agreement. In a letter to the head of the U.S. delegation, the h ead of the EU delegation has himself questioned how Italy’s differentiation-by-destination approach can be reconciled with the Article 12 requirement that

fees be tied to costs. 1 He specified that he has officially aske d the Italian authoritie s to provide a legal justification for the differentiated fee system. In the meantime, however, the differentiated fee system continues, with U.S. carriers suffering its harmful effects.

Tentative Decision

We tentatively find that the Italian differentiated system of airport landing and takeoff user charges produces an unjust discriminatory effect on U.S. car riers, in violation of the U.S.-EU Air Transport Agreement, and thereby constitutes an unjustifiable discriminatory practice ag ainst U.S. air carriers, and imposes an unjustifiable restriction on U.S. air carriers’ access to the market, warranting remedial action under the International Air Transportation Fair Competitive Practices Act, as amended, 49 U.S.C. 41310 (c). We further tent atively find that because the Italia n system of airport user charges violates the U.S.-EU Air Transport Agreement, we can, in formulating a remedy that would be consistent with the public intere st and the rules of proportionalit y, impose operational restrictions on the Italian-flag carrier Alitalia - Compagnia Aerea Italiana S.p.A. (Alitalia), designed to bring about

the elimination of the differentiate d fee system. Specifically, we te ntatively conclude that if we finalize the present tentative findings, we will proceed to preclude Alitalia from participating in any or all services (on-line, interline or codeshare) between any point or poi nts in Italy, via any intermediate point in the EU, and any point or points in the United States.

ACCORDINGLY,

1. We direct all interested partie s to show cause why the tentat ive findings and conclusions set forth above should not be made final;

2. Comments in response to this order shall be filed with the Department of Transportation, Dockets, in Docket DOT-OST-2013-0038, Dock et 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 shal l be served on all parties named in ordering paragraph 4, below;

3. If timely and supported objections are filed, we w ill accord full considera tion 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 deem ed waived, and the Department shall enter an order, subject to the disapproval of the Pres ident pursuant to 49 U.S.C. 41307, which shall make final our tentative findings and conclusions set forth in this order; 2 and

1 A copy of this letter has been placed in this docket.

2 Since provision is made for the filing of comments to this order, we will not entertain petitions for reconsideration.4. We will serve this order on certificated U.S. air carriers operating large aircraft; foreign air carriers of the EU licensed by the Department to operate scheduled combination air services; the U.S. Department of State; the Assistant U. S. Trade Representative (Europe), Office of the U.S. Trade Representative; the U.S. Departme nt of Commerce; the Ambassador of Italy in Washington, D.C., and the Ambassador of the European Union in Washington, D.C.

By:

SUSAN L. KURLAND Assistant Secretary for

Aviation and International Affairs

(SEAL)

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