### : : ' ' T GP!:RATiOr: S BEFOR E TH E • . - ^

- ^ , , , . ^ DEPARTMENT O F TRANSPORTATIO N " '' ^ ^ ' ' ' ^ -J ' ^ OFFIC E O F THE SECRETARY WASHINGTON , D.C .

Motio n of CONTINENTA

L AIRLINES , INC . : Docke t OST-95-67 5 Fo r Confidentia

l Treatmen t Under Sectio n 302.3 9

MOTIO N O F CONTINENTAL AIRLINES , INC .

T O WITHHOLD INFORMATIO N FRO M PUBLI C DISCLOSUR E Communication s wit

h respec t to thi s documen t

shoul d b e sent

to : DAVID B . OLAUSSE

N Senio r Counse l CONTINENTA

L AIRLINES , INC . 7 7 Wes t Wacke r Driv e Chicago , I L 6060 1 312-997-806 9 DATED : Februar

y 10 , 201 2BEFOR E TH E DEPARTMENT O F TRANSPORTATIO N OFFIC E O F TH

E SECRETAR

Y WASHINGTON , D.C . Motio n o f : CONTINENTAL AIRLINES , INC . : Docket OST-95-67 5 For Confidentia

l Treatmen t Unde r Sectio n 302.3 9

MOTIO N O F CONTINENTA L AIRLINES , INC . T O WITHHOLD INFORMATIO N FRO M PUBLI C DISCLOSUR E Pursuant to Rul e 39(e ) of

th e Department

of Traasportation , Offic e of

th e Secretar y Procedura

l Rules , Continental Airlines , Inc . ("Continental" ) hereb y files thi s Motio n to Withhol d Fro mPubli c Disclosure th e informatio n containe d in aseale d envelop e an d captione d Schedul e B- 7 Airfram e an d Aircraf t Engin e Acquisition s an d Retirement s an d delivere d to th e Offic e of

Aviatio n Transportatio n Management . Thi s informatio n i s provide d pursuan t to Par t 24 1 of th e Department' s Economi c Regulations , 1 4 CF R 241 , an d i s par

t o f For m4 1 Schedul e B-7 .

Th e informatio n sought

to b e withhel d fro

mpubli c disclosure detail s Continental' s acquisitio n cos t and sale s realizatio n amount s wit h respec t t o ne w an d use d aircraf t and aircraf

t engines , eac h broke n dow n b y model , individua

l seria l number , an

d individua l purchas e or

sal e prices . Th e informatio n fo r whic h Continenta

l seek s confidential treatment unde r thi s instant

Motio n i s simila

r to an d consistent

wit h tha t fo r whic h th e Departmen

t granted , in 199 3 and 1994 orders , confidentia l treatment

to simila r Schedul e B- 7 dat afiled separatel y b y Unite d Ai r Lines , Inc . ("United") , America n Airlines , Inc . ("American" ) an

d Delt aAi r

Lines , Inc . ("Deha") . Th e informatio n sought

to b e withhel d fall s withi n Exemptio n 3 o f th e Freedo m of Informatio n Ac t

( 5 U.S.C . 552(b)(3)) , whic h exempt s fro mdisclosur e informatio n require d b y statut e t o b e withheld . Exemptio n 3 provide s that :"(b ) Thi s sectio n doe s no t appl y t o matter s tha t are.. .

**** *

provide s that : (3 ) specificall y exempte d fro mdisclosur e b y statut e (othe r tha n sectio n 552(b ) of thi s title) , provide d tha

t suc h statute (A ) require s tha t th e matter s b e withhel d fro

mth e publi c in suc h amanner a s t o leav e n o discretio n o

n th e issue , or

(B ) establishe s particula

r criteri afo

r witliholdin g o

r refer s t o particula

r type s of matter s to b e withheld; " Sectio n 110

4 of th e Federa

l Aviatio n Ac t

o f 1958 , a s amende d (th e Act) , "An y perso n ma

y mak e writte n objectio n t

o th e publi c disclosur e of

informatio n containe d i n an

y application , report , o r

documen t

filed pursuan t

t o th e provision s o f

thi s Act . . . statin g th e ground s fo r suc h objection . An

y informatio n containe d i n suc h application , report , o r document.. . shal l b e withhel d firompubli c disclosure b y th e . . . Secretar y o f Transportatio n .. . i

f disclosur e o f

suc h informatio n woul d .. . adversel y affect th e competitiv e positio n o f

any ai r carrier i n foreig n air

transportation. " Continental consider s th e requeste d informatio n delete d fromSchedul e B- 7 t o b e highl y sensitiv e an d confidential . Th e ai r transportatio n industry , bot h domesticall y an d internationally , ha s become highl y competitive . Aircraf t ownershi p cost s ar

e amajo r cos t of doin g busines s fo

r al l certificate d carriers . A carrier' s abilit y t o reduc e it s aircraf

t ovmershi p cost s relativ e t

o it s competitor s can , therefore , provid e acarrier asignificant

competitiv e advantage . I

n a n effor t t o secure suc h a

n advantage . Continental applie s considerabl e managemen

t resource s to tryin g t o reduc e it s aircraf t ownershi p costs . Thi s include s devotin g substantia l resource s to tryin g t

o obtai n airframe s an d engine s a t th e lowes t

possibl e acquisitio n cos t an d disposin g o

f thes e asset s a

t th e highes t

possibl e sale s price . Moreover , th e negotiation s fo

r new equipment

ar e made mor

e difficult b y th e fac

t tha t there ar e onl y thre e manufacturer s o

f larg e je t airframe s an d onl y thre e o f larg e je t engines . However , as lon g as th e Departmen

t make s availabl e t o th e publi c Continental' s acquisitio n cos t fo r eac h airfram

e an d engin e i t acquire s an d th e sale s proceed s realize d o n eac h sal e of suc h equipment . Continenta

l i s denie d th e benefit

o f thes e efforts , harmin g Continental commercially . Onc e Continental' s cost s ar e divulged . Continental' s competitor s ca n us e thes e cos t datato negotiat

e contrac t pric e adjustment s fromth e sam e supplier s Continental i s usin g o r fro mcompetin g suppliers . Sinc e man y o f thes e competin g carrier s are foreig n flag carriers , their equipment

price s wil l never

b e reporte d to th e Department , le t alon e b e mad e public . I

t i s no t onl y commerciall y damagin g bu t basicall y unfai

r t o Continental an

d al l othe r U.S . carrier s t o requir e themto divulg e t

o thei r non-reportin g foreig n flag competitor s th e fiiiits of thei rcompetitiv e effort s wid i manufacturer s t

o secure th e bes t

possibl e purchas e price . See , e.g. . Order 81-12-9 . Th e disclosur e o

f Continental' s purchase s and disposition s o f individual aircraf

t an d aircraf t engine s woul d allo w competin g foreig n an d domesti c airlines , manufacturer s o f aircraf t an d engines , and new and use d aircraf t owner/lessor s to calculate an d closel y trac k Continental' s cost s t o inquire , modify , transfe r o r dispos e o f it s variou s fleets of

use d model s aircraf t (an d relate d use d aircraf

t engines) . I

t woul d adversel y affect

Continental' s competitiv e positio n b y strengtlienin g th e bargainin g positio n of other airlines , includin g foreig n airlines , an d aircraf t owner/lessor s seekin g to purchas e aircraf t equipment

fro mmanufacturer s an d others . The y woul d b e abl e to us e thei r knowledg e of

Continental' s confidentia

l purchas e an d sal e arrangement s a s startin g point s in thei r ow n negotiations , an

d thu s improv e thei r

ability t o obtai n equa

l or more favorabl e prices . Thi s woul d lead t o Continental' s competitors , includin g foreig n competitors , bein g abl e to enjoy lower capita l cost s tha n otherwis e th e case , an d t o thei r bein g abl e t o operate an d compete mor e efficiently wit

h Continental tha

n otherwise . Continental submit s tha

t FOIA Exemptio n 3 i s applicable , a s aresul t o f th e provisio n i n Sectio n 110

4 of th e Ac t requirin g th e withholdin g fro mpubli c disclosur e of

any informatio n containe d i n arepor t filed pursuan t

t o th e Act , i

f such disclosure woul d "adversel y affect th e competitiv e positio n o f an y air carrie r i n foreig n ai r

transportation " (4 9 U.S.C . App . 1504) . Th e informatio n fo

r whic h Continental seek s confidentia l treatment

under thi s instan t Motio n i s simila

r to and consisten t

wit h tha t fo r whic h th e Department

grante d confidential treatment , i

n (i ) aMarc h 29 , 199 3 order concernin g simila

r Schedul e B- 7 dat afile d b y Delta , (ii ) aNovembe

r 1 , 199 3 order

concernin g simila

r Schedul e B- 7 dat afiled b y American , (iii ) a December 29 , 199 3 order

concernin g simila

r Schedul e B- 7 dat afiled b y Continental , (iv ) a n Augus t 23 , 1994 order

concernin g simila

r Schedul e B- 7 dat afile d b y Delta , an d (v ) a November

18 , 199 4 orde r

concernin g simila

r Schedul e B- 7 dat afiled b y Continental . Th e Department' s grant s of

confidentialit

y wer e specificall y made unde

r Exemptio n 3 (an d it s 199 3 grant s wer e mad e exclusivel y under

Exemptio n 3 ) sinc e Delt aan d American , lik e Continental , compete wit

h foreig n ai r

carrier s wh o d o no t

file suc h informatio n ye

t ar e fre e t o obtai n U.S . carrier informatio n fro

mth e Department . Th e Department ther e stated : "thi s lack of reciprocal access , th e Department believes , coul d substantiall y har mth e competitiv e positio n o f

American , resultin g i

n th e erosio n of

th e U.S . international airlin e industry. " Continenta

l als o submit s tha

t th e informatio n sough

t t o b e withhel d fall s widii n exemptio n 4 fro

mth e Freedo mo f

Informatio n Act , 5 U.S.C . 552(b)(4) , whic h provide s protectio n fromdisclosur e fo r "trade secret s an d commercia l o r financial informatio n obtaine d fromaperso n an

d privilege d o r

confidential;... " Continenta l believe s th e requeste d informatio n delete d fro mSchedul e B- 7 clearl y satisf y al l thre e element s require d fo r protectio n under Exemptio n 4 . First , th e acquisitio n cos t an d sale s realizatio n amount s reporte d ar e substantiall y th e same a s negotiate d betwee n th e parties , whic h purchas e an d sal e price s are clearl y financial or commercia

l i n nature . Second , Continental establishe d thes e price s throug h it s negotiation swit

h private thir

d parties ; th e informatio n wa s no t obtaine d fro

many governmental entities . Third , th e disclosure o

f suc h informatio n woul d har mContinental' s competitiv e position . Se e Gulf & Wester n Indus. . Inc . v . Unite d States . 61 5 F.2 d 52 7 (D.C . Cir . 1979) , Nationa l Park s & Conservatio n Ass' n v . Morton . 49 8 F.2 d 76 5 (D.C . Cir . 1974) , Sterlin g Drug . Inc . v . Federa l Trad e Comm'n . 45 0 F.2 d 69 8 (D.C.Cir . 1971) , Th e Tinke n Co . v . U.S . Custom s Service . 49 1 F.Supp . 55 7 (D.C . Cir . 1980) , Braintre e v . Dept . o f Energy . 49 4 F.Supp . 287 , an d Burk e Energ y Corp . v . Departmen t o f Energy . 58 3 F.Supp . 50 7 (D . Kan . 1984) . Finally , th e Department' s 1994 grant s o f confidentialit

y (i.e. , it s Augus t

23 , 199 4 orde r

concernin g simila

r Schedul e B-7/B-4 3 dat afile d b y Delta , an

d it s November

18 , 199 4 order

concernin g simila

r Schedul e B- 7 datafiled b y United ) wer e specificall y made under

bot h Exemption s 3 an d 4 . Th e Department , when decidin g prio r B- 7 confidentialit

y motions , grante d aten yea r confidentia

l perio d beginnin g o

n th e date di e informatio n wa s require d t o b e filed pursuan t t o 1 4 CF R 241.22(a) . Continental deserve s t o b e treate d n o les s favorabl y wit h respec t t o th e seale d Schedul e B- 7 attache d hereto .

WHEREFORE , Continental request s tha t th e Department , pursuan t

t o Rul e 3 9 of it s Rule s of

Practic e and Exemption s 3 an d 4 of th e Freedo mof

Informatio n Act , withhol d fro mpubli c disclosiu-e , th e pric e informatio n containe d in th e Airframe and Aircraf t Engin e Acquisitio n an

d Retirement s item s whic h hav e bee n delete d fro mcolumn s 9 , 1 0 and 1 1 o f th e publi c filin g o

f Continental' s quaiterl y For m4 1 Schedul e B- 7 repor

t fo r aperio d of

no t les s tha n ten years . Respectfull y submitted ,

Davi d B . Olausse n Senio r Coimsel CONTINENTAL AIRLINES , INC . DATED : Februar

y 10 , 201 2

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