# UNITED.,

Mr. Donald Bright Director ofOffice ofAirline Information Bureau ofTransportation Statistics Department ofTransportation, K-25 400 Seventh St., S.W

.. Washington, DC 20590

Re: Motion ofUnited Airlines, Inc. April 18, 2013

(f/k/a Continental Airlines, Inc., as successor by merger to United Air Lines, Inc.) ForConfidential Treatment; Schedule B-7, Airframe and Aircraft Engine Acquisitions and Retirements

Dear Mr. Bright: Enclosed are three copies ofUnited Airlines Inc.'s (f/k/a Continental Airlines, Inc., as successor by merger to United Air Lines, Inc.) Motion to Withhold Information from Public Disclosure for the period ended December 31, 2012. The original ofthe Motion togetherwith the information requested is presently enroute to the Office ofAviation Information and Management today.

Enclosures Sincerely,

David B. Olaussen Managing CounselMotion of BEFORETHE DEPARTMENTOFTRANSPORTATION OFFICE OFTHESECRETARY WASHINGTON, D.C.

UNITED AIRLINES, INC.

(f/k/a Continental Airlines, Inc., as successor by merger ofUnited Air Lines, Inc.) Docket OST-95-675 For Confidential Treatment Under Section 302.39

MOTION OF UNITED AIRLINES, INC. (f/k/a Continental Airlines, Inc., as·successor by merger ofUnited Air Lines, Inc.) TO WITHHOLD INFORMATION

FROM PUBLIC DISCLOSURE

Communicationswith respect to this document should be sent to: DAVID B. OLAUSSEN ManagingCounsel UNITED AIRLINES, INC. 233 South Wacker Drive Chicago, IL60601 312-997-8069

DATED: April18, 2013Motion of BEFORETHE DEPARTMENT OFTRANSPORTATION OFFICE OFTHESECRETARY WASHINGTON, D.C.

UNITED AIRLINES, INC. Docket OST-95-675

(f/k/a Continental Airlines, Inc., as successor by merger ofUnited Air Lines, Inc.)

·For Confidential Treatment Under Section 302.39

MOTION OFUNITED AIRLINES, INC. (f/k/a Continental Airlines, Inc., as successor by merger ofUnited Air Lines, Inc.) TOWITHHOLD INFORMATION

FROM PUBLIC DISCLOSURE

Pursuant to Rule 39( e) ofthe Department ofTransportation, Office ofthe Secretary Procedural Rules, United Airlines, Inc. (f/k/a Continental Airlines, Inc., as successor by merger ofUnited Air Lines, Inc., (together "United"))hereby files this Motion to Withhold From PublicDisclosure the information contained in a sealed envelope and captioned Schedule B-7 Airframe and Aircraft Engine Acquisitions and Retirements and delivered to the Office of Aviation Transportation Management. This information is provided pursuant to Part 241 ofthe Department's Economic Regulations, 14 CFR 241, and is part ofForm 41 Schedule B-7

.. The information sought to be withheld from public disclosure details United's acquisition cost and sales realization amountswith respect to new and used aircraft and aircraft engines, each broken downby model, individual serial number, and individual purchase orsale prices. The information for which United seeks confidential treatment under this instant Motion is similar to and consistent with that for which the Department granted, in 1993 and 1994 orders, confidential treatment to similar Schedule B-7 data filed separately by United, American Airlines, Inc. ("American") and Delta Air Lines, Inc. ("Delta")

.

.2-The information sought to be withheld falls within Exemption 3 ofthe Freedom ofInformation Act (5 U.S.C. 552(b)(3)), which exempts from disclosure information required by statute to be withheld. Exemption 3 provides that: "(b) This section does not apply to matters that are... 

### * * 

### * * 

### * (3) specifically exempted from disclosure by statute (other than section 552(b)ofthis title), provided that such statute (A) requires that the

. mattersbe withheld from the public in such a manner as to leave no discretion on the issue, or (B)establishes particular criteria for withholdingorrefers to particular types ofmatters to be withheld;" Section 1104 ofthe Federal Aviation Act of 1958, as amended (the Act), provides that: ·"Any person may make written objection to the public disclosure ofinformation contained in any application, report, or document filed pursuant to the provisions ofthis Act

...statingthe grounds for such objection. Any information contained in such application, report, or.document

...shall be withheld from public disclosure by the

... Secretary ofTransportation

... if disclosure ofsuch information would

... adversely affect the competitive position ofany air carrier in foreign air transportation." United considersthe requested information deleted from Schedule B-7 to be highly sensitive and confidential. The air transportation industry, both domestically and internationally, has become highly competitive. Aircraft ownershipcosts are a major cost of doing business for all certificated carriers. A carrier's ability to reduce its aircraft ownership costsrelative to its competitors can, therefore, provide a carrier a significant competitive advantage. In an effort to secure such an advantage, United applies considerable management resources to tryingto reduce its aircraft ownership costs. This includes devoting substantial resources to tryingto obtain airframes and engines at the lowest possible acquisition cost and disposing ofthese assets at the highest possible salesprice. Moreover, the negotiations for new equipment are made more difficult by the fact that there are only three manufacturers oflarge jet airframes and only three oflargejetengines. However, as long as the Department makes available to the public United's acquisition cost for each airframe and engine it acquires and the sales proceeds realized on each saleofsuch equipment, United is denied the benefitofthese efforts, harming United commercially. Once United's costs are divulged, United's competitors can use these cost data to negotiate contract price adjustments from the same suppliers United is using or from competing suppliers. Since many ofthese competingcarriers are foreign flag carriers, their equipment

-3-prices will neverbe reported to the Department, let alone be made public. Itis not only commercially damagingbut basically unfair to United and all other U.S. carriers to require them to divulge to their non-reporting foreign flag competitors the fruits oftheir competitive efforts with manufacturersto secure the best possible purchase price.**See.~.** Order 81-12-9. The disclosure ofUnited's purchases and dispositions ofindividual aircraft and aircraft engines would allow competingforeign and domestic airlines, manufacturers ofaircraft and engines, and new and used aircraft owner/lessors to calculate and closely track United's costs to inquire, modify, transfer ordispose ofits various fleets ofused models aircraft (and related used aircraft engines). It would adversely affect United's competitive position by strengthening the bargainingposition ofother airlines, includingforeign airlines, and aircraft owner/lessors seekingto purchase aircraft equipmentfrom manufacturers and others. They would be able to use theirknowledge ofUnited's confidential purchase and sale arrangements as startingpoints in their own negotiations, and thus improve their ability to obtain equal or more favorable prices. This would lead to United's competitors, including foreign competitors, beingable to enjoy lower capital costs than otherwise the case, and to their being able to operate and compete more efficiently with United than otherwise. United submits that FOIA Exemption 3 is applicable, as a result ofthe provision in Section 1104ofthe Act requiring the withholding from public disclosure ofany information contained in a report filed pursuantto the Act, ifsuch disclosure would "adversely affect the competitive position ofany aircarrier in foreign air transportation" (49 U.S.C. App. 1504). Theinformationfor which United seeks confidential treatment under this instant Motion is similarto and consistent with that for which the Department granted confidential treatment, in (i) a March 29, 1993 orderconcerning similarSchedule B-7 data filed by Delta, (ii) a November 1, 1993 orderconcerningsimilar Schedule B-7 data filed by American, (iii) a December 29, 1993 order concerning similar Schedule B-7 data filed by United, (iv) an August 23, 1994orderconcerningsimilar Schedule B-7 data filed by Delta, and (v) a November 18, 1994 order concerningsimilar Schedule B-7 data filed by United. The Department's grants of confidentiality were specifically made under Exemption 3 (and its 1993 grants were made exclusively under Exemption 3) since Delta and American, like United, compete with foreign air carriers who do not file such information yet are free to obtain U.S. carrier information from the Department. The Department there stated: "this lackofreciprocal access, the Department believes, could substantially harm the competitive position ofAmerican, resulting in the erosion ofthe U.S. international airline industry." United also submits that the information sought to be withheld falls within exemption 4 from the Freedom ofInformation Act, 5 U.S.C. 552(b)(4), which provides protection from disclosure for "trade secrets and commercial or financial information obtained from aperson and privileged orconfidential;

..." Unitedbelieves the requested information deleted from Schedule B-7 clearly satisfy all three elements required for protection under Exemption4. First, the acquisition cost and salesrealization amounts reported are substantiallythe same as negotiated between the parties, which purchase and sale prices are clearly financial orcommercial in nature. Second, United established these prices through its negotiations with private third parties; the information was not obtained from any governmental entities. Third, the disclosure ofsuch information would harm United's competitive position. See Gulf& Western Indus., Inc. v. United States, 615 F.2d 527 (D.C. Cir. 1979), National Parks & ConservationAss'n v. Morton, 498 F.2d 765 (D.C. Cir. 1974), SterlingDrug. Inc. v. Federal Trade Comm'n, 450 F.2d 698 (D.C.Cir. 1971), The Tinken Co. v. U.S. Customs Service, 491 F.Supp. 557 (D.C. Cir. 1980), Braintree v. Dept. ofEnergy, 494 F.Supp. 287, and Burke Energy Corp. v. Department ofEnergy, 583 F.Supp. 507 (D. Kan. 1984). Finally, the Department's 1994 grants ofconfidentiality (i.e., its August 23, 1994 order concerningsimilar Schedule B-7 /B-43 data filed by Delta, and its November 18, 1994 orderconcerning similar Schedule B-7 data filed by United) were specifically made under both Exemptions 3 and 4. The Department, when deciding United's (and American's and Delta's respective) prior B-7 confidentiality motions, granted a ten-year confidential period beginning onthe date the information was required to be filed pursuant to 14 CFR 241.22(a). United deserves to be treated no less favorably with respect to the sealed Schedule B-7 attached hereto. WHEREFORE, United requests that the Department, pursuant to Rule 39 ofits Rules ofPractice and Exemptions 3 and 4 ofthe Freedom ofInformation Act, withhold from public disclosure, the price information contained in the Airframe and Aircraft Engine Acquisition and Retirements items which have been deleted from columns 9, 10 and 11 ofthe publicfiling ofUnited's quarterly Form 41 Schedule B-7 report for aperiod ofnot less than ten years.

DATED: April18, 2013

-5- Respectfully submitted,

David B. Olaussen Managing Counsel UNITED AIRLINES, INC.