### BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

) Application of ) ) National Air Cargo Group, Inc. d/b/a ) National Airlines ) ) for an exemption pursuant to 49 U.S.C. § 40109 ) and an amended certificate of public convenience ) and necessity pursuant to 49 U.S.C. § 41102 ) (foreign scheduled air transportation of persons, ) property and mail) ) ) Docket OST-2012-0204

CONSOLIDATED ANSWER OF NATIONAL AIRLINES TO SUPPLEMENTS TO PETITIONS FOR RECONSIDERATION OF UNITED AIRLINES AND DELTA AIR LINES

Communications with respect to this document should be addressed to: Mark W. Atwood Cozen O'Connor The Army and Navy Club Bldg. 1627 I Street, N.W. Washington, D.C. 20006 (202) 463-2513 Counsel for National Airlines

Dated: October 11, 2013

### BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

) Application of ) ) 

### National Air Cargo Group, Inc. d/b/a ) National Airlines ) ) for an exemption pursuant to 49 U.S.C. § 40109 ) and an amended certificate of public convenience ) and necessity pursuant to 49 U.S.C. § 41102 ) (foreign scheduled air transportation of persons, ) property and mail) ) ) Docket OST-2012-0204



### CONSOLIDATED ANSWER OF NATIONAL AIRLINES TO SUPPLEMENTS TO PETITIONS FOR RECONSIDERATION OF UNITED AIRLINES AND DELTA AIR LINES United Airlines' and Delta Air Lines' campaign to eliminate National Airlines as a perceived competitive threat in the U.S.-Dubai market has enjoyed some success. Thanks to United's intervention, the General Services Administration has terminated "for convenience" the City-Pair Program contract that National was awarded on August 16, 2013, handing United the remaining six of the 1,730 routes it sought, and leaving 24 city pairs from the United States to Afghanistan without GSA-contracted U.S. carrier service. Not content with this victory, United and Delta have filed another round of pleadings before the Department, supplementing the answers they filed to the Department's Order to Show Cause (Order 2013-4-12) tentatively awarding National scheduled passenger authority (U.S. points-UAE-Afghanistan points). The Department sensibly deemed those answers, filed four months late, petitions for reconsideration.United's and Delta's supplements add nothing meaningful to their initial answers,

which were fully rebutted by National in its Answer of September 4 and Reply of September 9 in this docket. National does, however, wish to address a couple of points made in those supplements. First, United says that in light of the GSA's contract termination, "National's intentions are unclear," and suggests that its application "may be moot...." To 

### clarify: National fully intends to implement the scheduled services between U.S. points and four points in Afghanistan for which it was found fit, to the same extent as it would have had the GSA contract remained in effect. The carrier's ability to do this, of course, is dependent on the approval and implementation of a codeshare agreement, which still requires further steps. National is still working to complete the FAA processes so that the remaining steps can be taken. It bears emphasis that the service proposed by National was 

### never contingent on the existence of a GSA contract. The carrier had not even bid on that contract when it first applied for scheduled passenger authority. National believes that the traffic will support its service with or without such a contract, especially considering that it will still be the only U.S. carrier operating scheduled passenger service into Afghanistan. Thus, while United would no doubt like to think that the matter is now moot, it is not. Delta makes the charge that National is "creat[ing] a subterfuge for Emirates" to obtain Fly America Act traffic, and that "National is doing little more than renting its U.S. carrier code to Emirates." National takes the strongest exception to this charge, which completely ignores the facts as presented in its application. National has provided U.S.- Afghanistan cargo service to the U.S. military and other government agencies for over

2ten years. This service has also involved traffic stops in Dubai. As an outgrowth of its

heavy involvement in this market, National began providing passenger service into Afghanistan, on a single-entity charter basis, to one of the major government contractors, Fluor Corporation, in 2011. This passenger service, provided with Boeing 757 aircraft, has operated daily between Dubai and points in Afghanistan for almost two years, and depends on other carriers to bring the passengers into Dubai. This, of course, requires passengers to make at least two separate sets of travel arrangements. Given the number of U.S. government and government contractor passengersthat did not qualify for its Fluor charter, National determined to meet the need for singlecarrier service, and this was the genesis of its application for scheduled passenger authority. It believed, and still believes, that this service would fill an important need even if operated on a Dubai-Afghanistan stand-alone basis. However, to enable passengers to book single-carrier flights all the way into Afghanistan, and to enjoy the benefit of traffic under the Fly America Act restrictions, National approached Emirates as its logical codeshare partner. There is simply no basis for inferring that Emirates is using National as its pawn in a ploy to take Fly America traffic from U.S. carriers. Such a conclusion is illogical given the background of National's proposed service. And, incidentally, it is false. Delta attempts to draw a parallel with the case of 

### TIE Aviation, Inc. (Order 2000- 9-20). That case, however, is easily distinguished, and does not apply to National's situation at all. To begin with, TIE was applying for its initial certificate of public convenience and necessity; until that time, it only had authority as a Part 298 air taxi, and a fitness finding to operate small aircraft as a commuter. It had never been found fit

3to operate large aircraft 

### (i.e. over 60 seats), and did not even propose to operate such

aircraft. Its application for certificate authority was 

### solely for the purpose of being able to enter into codeshare agreements with foreign carriers to transport mail. That being the case, the applicant made no attempt to show its fitness to operate large aircraft, and thus the Department had no basis on which to grant TIE a certificate. As the Department found, TIE was proposing effectively to hold out "no more than indirect air carriage as an air freight forwarder." The contrasts with National's situation are obvious. National has held certificate authority for 10 years, first as a cargo carrier, 1 and since 2010 as a passenger charter carrier. 2 These certificates assume, by definition, operation of large aircraft, and indeed National is operating large aircraft between the United States, UAE and Afghanistan today, including in the Dubai-Afghanistan markets. Once National implements itsscheduled passenger service, it will be operating large aircraft in the scheduled DubaiAfghanistan markets, and offering codeshare service on the U.S.-Dubai segments. This is precisely the service for which the Department found National fit. This is a very far cry from an air taxi that acts only as a freight forwarder for carriers operating large aircraft. The fact that the aircraft that Emirates uses on these routes (Boeing 777, A340 or A380) are larger than the aircraft National would use (Boeing 757) is of no consequence — they are all 

### large aircraft within the legal meaning of the term. Seen in the full context of the facts of the TIE case, the quotation that Delta isolates — "we do not find that it is in the public interest to permit TIE to hold out service as a direct air carrier that it is not capable of providing in its own right" — takes on a very
National's initial certificate authority was issued under the name Murray Air, Inc. (Order 2003- 6-26).

2 Order 2010-11-25.

4different meaning than that which Delta assigns it. It has never been DOT's policy to

prevent carriers from offering codeshare service on routes which may be too long for the particular type of aircraft that they operate. The requirement is that each carrier hold necessary scheduled authority for the market. That requirement is fully met in National's case. ACCORDINGLY, National Airlines requests that the Department deny the petitions for reconsideration filed by United, Delta, Airlines for America and the Air Line Pilots Association, or, upon reconsideration, affirm the decision made in Order 2013-7-
12. Respectfully submitted,

Mark W. Atwood 

### Cozen O'Connor The Army & Navy Club Bldg. 1627 I Street, N.W. Washington, D.C. 20006 Tel. 202-463-2513 Email: 

### matwoodRcozen.com Counsel for 

### National Air Cargo Group, Inc. d/b/a National Airlines Dated: October 11, 2013



### 5

### CERTIFICATE OF SERVICE

I certify that I have served the foregoing document on the following persons on this 11 th day of October, 2013, in accordance with the Department's Rules of Practice:

francis.heil@aa.com robert.wirick@aa.corn jrichardson@johnlrichardson.corn russell.pommer@atlasair.corn sascha.vanderbellen@delta.corn chris.walker@delta.corn esauer@ssd.com charters@evergreenairlines.corn kevin.montgornery@polaraircargo.com Russell.bailey@alpa.org dberg@airlines.org agoerlich@ggh-airlaw.com anita.mosner@hklaw.com jennifernowak@hklaw.com howard.kass@usairways.corn Benjamin.slocurn@usairways.corn mbenge@zsrlaw.corn psanderlin@kalittaair.corn john.s.duncan@faa.gov lhalloway@crowell.com grnurphy@crowell.com Sarn tta.c.barne @d r lta

. corn

M. Pefley

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