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BEFORE THE • .- ^ - ^ , , ,. ^ 

DEPARTMENT OF TRANSPORTATION " ''^ ^ ' ' '^ -J' ^ 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Motion of 

CONTINENTAL AIRLINES, INC. : Docket OST-95-675 

For Confidential Treatment 

Under Section 302.39 

MOTION OF CONTINENTAL AIRLINES, INC. 

TO WITHHOLD INFORMATION 

FROM PUBLIC DISCLOSURE 

Communications with respect to this document should be sent to: 

DAVID B. OLAUSSEN 

Senior Counsel 

CONTINENTAL AIRLINES, INC. 

77 West Wacker Drive 

Chicago, IL 60601 

312-997-8069 

DATED: February 10, 2012 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Motion of : 

CONTINENTAL AIRLINES, INC. : Docket OST-95-675 

For Confidential Treatment 

Under Section 302.39 

MOTION OF CONTINENTAL AIRLINES, INC. 

TO WITHHOLD INFORMATION 

FROM PUBLIC DISCLOSURE 

Pursuant to Rule 39(e) of the Department of Traasportation, Office of the 

Secretary Procedural Rules, Continental Airlines, Inc. ("Continental") hereby files this Motion 

to Withhold From Public Disclosure 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 of the Department's Economic Regulations, 14 CFR 241, and is part of 

Form 41 Schedule B-7. 

The information sought to be withheld from public disclosure details 

Continental's acquisition cost and sales realization amounts with respect to new and used 

aircraft and aircraft engines, each broken down by model, individual serial number, and 

individual purchase or sale prices. The information for which Continental 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 Air Lines, Inc. ("United"), American Airlines, Inc. 

("American") and Delta Air Lines, Inc. ("Deha"). 

The information sought to be withheld falls within Exemption 3 of the Freedom 

of Information 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... 

**** * 

provides that: 

(3) specifically exempted from disclosure by statute (other than section 

552(b) of this title), provided that such statute (A) requires that the 

matters be withheld from the public in such a manner as to leave no 

discretion on the issue, or (B) establishes particular criteria for 

witliholding or refers to particular types of matters to be withheld;" 

Section 1104 of the Federal Aviation Act of 1958, as amended (the Act), 

"Any person may make written objection to the public disclosure of information 

contained in any application, report, or document filed pursuant to the 

provisions of this Act. .. stating the grounds for such objection. Any 

information contained in such application, report, or document... shall be 

withheld firom public disclosure by the . .. Secretary of Transportation .. . if 

disclosure of such information would .. . adversely affect the competitive 

position of any air carrier in foreign air transportation." 

Continental considers the 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 ownership costs are a major cost of 

doing business for all certificated carriers. A carrier's ability to reduce its aircraft ovmership 

costs relative to its competitors can, therefore, provide a carrier a significant competitive 

advantage. In an effort to secure such an advantage. Continental applies considerable 

management resources to trying to reduce its aircraft ownership costs. This includes devoting 

substantial resources to trying to obtain airframes and engines at the lowest possible acquisition 

cost and disposing of these assets at the highest possible sales price. Moreover, the 

negotiations for new equipment are made more difficult by the fact that there are only three 

manufacturers of large jet airframes and only three of large jet engines. However, as long as 

the Department makes available to the public Continental's acquisition cost for each airframe 

and engine it acquires and the sales proceeds realized on each sale of such equipment. 

Continental is denied the benefit of these efforts, harming Continental commercially. 

Once Continental's costs are divulged. Continental's competitors can use these 

cost data to negotiate contract price adjustments from the same suppliers Continental is using or 

from competing suppliers. Since many of these competing carriers are foreign flag carriers, 

their equipment prices will never be reported to the Department, let alone be made public. It is 

not only commercially damaging but basically unfair to Continental and all other U.S. carriers 

to require them to divulge to their non-reporting foreign flag competitors the fiiiits of their 
competitive efforts widi manufacturers to secure the best possible purchase price. See, e.g.. 

Order 81-12-9. 

The disclosure of Continental's purchases and dispositions of individual aircraft 

and aircraft engines would allow competing foreign and domestic airlines, manufacturers of 

aircraft and engines, and new and used aircraft owner/lessors to calculate and closely track 

Continental's costs to inquire, modify, transfer or dispose of its various fleets of used models 

aircraft (and related used aircraft engines). It would adversely affect Continental's competitive 

position by strengtliening the bargaining position of other airlines, including foreign airlines, 

and aircraft owner/lessors seeking to purchase aircraft equipment from manufacturers and 

others. They would be able to use their knowledge of Continental's confidential purchase and 

sale arrangements as starting points in their own negotiations, and thus improve their ability to 

obtain equal or more favorable prices. This would lead to Continental's competitors, including 

foreign competitors, being able to enjoy lower capital costs than otherwise the case, and to their 

being able to operate and compete more efficiently with Continental than otherwise. 

Continental submits that FOIA Exemption 3 is applicable, as a result of the 

provision in Section 1104 of the Act requiring the withholding from public disclosure of any 

information contained in a report filed pursuant to the Act, if such disclosure would "adversely 

affect the competitive position of any air carrier in foreign air transportation" (49 U.S.C. App. 

1504). The information for which Continental seeks confidential treatment under this instant 

Motion is similar to and consistent with that for which the Department granted confidential 

treatment, in (i) a March 29, 1993 order concerning similar Schedule B-7 data filed by Delta, 

(ii) a November 1, 1993 order concerning similar Schedule B-7 data filed by American, (iii) a 

December 29, 1993 order concerning similar Schedule B-7 data filed by Continental, (iv) an 

August 23, 1994 order concerning similar Schedule B-7 data filed by Delta, and (v) a 

November 18, 1994 order concerning similar Schedule B-7 data filed by Continental. 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 Continental, 

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 lack of reciprocal access, the Department believes, could substantially harm the 

competitive position of American, resulting in the erosion of the U.S. international 

airline industry." 

Continental also submits that the information sought to be withheld falls widiin 

exemption 4 from the Freedom of Information Act, 5 U.S.C. 552(b)(4), which provides 

protection from disclosure for "trade secrets and commercial or financial information obtained 

from a person and privileged or confidential;..." Continental believes the requested information 

deleted from Schedule B-7 clearly satisfy all three elements required for protection under 

Exemption 4. First, the acquisition cost and sales realization amounts reported are substantially 

the same as negotiated between the parties, which purchase and sale prices are clearly financial 

or commercial in nature. Second, Continental established these prices through its negotiations 
with private third parties; the information was not obtained from any governmental entities. 

Third, the disclosure of such information would harm Continental's competitive position. See 

Gulf & Western Indus.. Inc. v. United States. 615 F.2d 527 (D.C. Cir. 1979), National Parks & 

Conservation Ass'n v. Morton. 498 F.2d 765 (D.C. Cir. 1974), Sterling Drug. 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. of Energy. 494 F.Supp. 287, and Burke 

Energy Corp. v. Department of Energy. 583 F.Supp. 507 (D. Kan. 1984). Finally, the 

Department's 1994 grants of confidentiality (i.e., its August 23, 1994 order concerning similar 

Schedule B-7/B-43 data filed by Delta, and its November 18, 1994 order concerning similar 

Schedule B-7 data filed by United) were specifically made under both Exemptions 3 and 4. 

The Department, when deciding prior B-7 confidentiality motions, granted a tenyear confidential period beginning on the date die information was required to be filed pursuant 

to 14 CFR 241.22(a). Continental deserves to be treated no less favorably with respect to the 

sealed Schedule B-7 attached hereto. 

WHEREFORE, Continental requests that the Department, pursuant to Rule 39 

of its Rules of Practice and Exemptions 3 and 4 of the Freedom of Information Act, withhold 

from public disclosiu-e, the price information contained in the Airframe and Aircraft Engine 

Acquisition and Retirements items which have been deleted from columns 9, 10 and 11 of the 

public filing of Continental's quaiterly Form 41 Schedule B-7 report for a period of not less 

than ten years. 

Respectfully submitted, 

David B. Olaussen 

Senior Coimsel 

CONTINENTAL AIRLINES, INC. 

DATED: February 10, 2012 

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