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. . .T| , •• ' DEPARTMEN T O FTRANSPORTATIO N ^ ^ • • > ' " ^ ' ' ^' ' OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C .

Motion o f UNITE D AI RLINES , INC . Fo r Confidentia l Treatmen t Unde r Sectio n 302.3 9 Docke t OST-95-67 5

MOTIO N O FUNITE D AIRLINES , INC . T O WITHHOL D INFORMATIO N FRO M PUBLI C DISCLOSUR E

Communication s wit

hrespec t to thi s documen t

shoul db e sen t

to ; DAVI D B . OLAUSSE N Senio r Counse l UNITE D AIRLINES , INC . 7 7 W . Wacke r Chicago , IL6060 1 312-997-806 9 DATED : Marc h10 , 201 1BEFOR E TH E DEPARTMEN T O FTRANSPORTATIO N OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C . Motion o f UNITE D AIRLINES , INC . Fo r Confidentia l Treatmen t Unde r Sectio n 302.3 9 Docke t OST-95-67 5

MOTIO N O FUNITE D AI RLINES , INC . T O WITHHOL D INFORMATIO N FRO M PUBLI C DISCLOSUR E Pursuan t t o Rul e 39(e ) o f

th e Departmen t

o f Transportation , Offic e o f th e Secretary Procedura l Rules , Unite dAi r Lines , Inc . ("United" ) hereb y file s this Motio n t o Withliol dFro mPubli c Disclosur e th e informatio n containe di n aseale denvelop e an dcaptione d Schedul e B-4 3 Inventory o f Airfram e an dAircraf

t Engine s an ddelivere dt o th e Offic e o f Aviatio n Transportatio n Management . Thi s infonnatio n i s provide dpursuan t t o Par t 24 1 o f th e Department' s Economi c Regulations , 1 4 CF R241 , an di s part o f For m4 1 Schedule s B- 7 an d B-43 . Th e informatio n sough t t o b e withhel dfro

mpubli c disclosur e detail s United' s acquisitio n cos t

an dsale s realizatio n amount s wit hrespec t t o ne w an duse daircraf

t andaircraf

t engines , eac hbroke n dow n b y model , individua l serial number , andindividua l purchas e o r sal e prices . Th e informatio n for whic hUnite dseek s confidentia l treatmen t unde r thi s instan t Motio n i s similar

t o an dconsisten t

withthat for whic hth e Departmen t

granted , i n 199 3 an d 199 4 orders , confidentia l treatmen t t o similar

Schedul e B-7/B-4 3 dat afiledseparatel y b y United , America n Aidines , Inc . ("American" ) an dDelt aAi r Lines , Inc . ("Delta") . Th e informafio n sough t

t o b e withhel dfall s withi n Exemptio n 3 o f th e Freedo m o f Informafio n Ac t

( 5 U.S.C . 552(b)(3)) , whic hexempt s fromdisclosur e informatio n require d b y statut e to b e withheld . Exemptio n 3 provide s that ;

k Aircia n - DO]'U01'U4 3 :IJ)( I B ? jn d B4 1 DO l i M ^iJS n E.K.' L"(b ) Thi s sectio n doe s no t appl y t o matter s tha t are . . .

**** * (3 ) specificall y exempte dfromdisclosur e b y statut e (othe r than sectio n 552(b ) o f this title) , provide dtha t

suc hstatut e (A ) require s tha t th e matter s b e withhel dfromth e publi c i n suc hamanne r a s t o leav e n o discretio n o n th e issue , o r (B ) establishe s particular criteri afor withholdin g o r

refer s t o particula r

type s o f matter s t o b e withheld; " Sectio n 1104 o f

tli e Federa l Aviatio n Ac t o f 1958 , a s amende d(th e Act) , provide s that : "An y perso n may mak e writte n objectio n t o th e publi c disclosur e o f informatio n containe di n an y application , report , o r documen t

filedpursuan t

t o th e provision s o f thi s Act . . . statin g th e ground s fo r suc hobjection . An y informatio n containe di n suc happlication , report , o r document . . . shal l b e withhel dfrom publi c disclosur e b y th e . . . Secretary o f Transportafio n . . . i f

disclosur e o f

suc h infonnatio n woul d. . . adversel y affec t th e competitiv e positio n o f an y ai r carrie r i n foreig n ai r

transportation. " Unite dconsider s th e requeste dinformatio n delete dfromSchedule s B- 7 and B-4 3 t o b e highl y sensitiv e an dconfidential . Th e ai r transportatio n industry , bothdomesticall y an dinternationally , ha s becom e highl y competitive . Aircraf t ownershi p cost s ar e amajo r cos t o f doin g busines s for

al l certificate dcarriers . A carrier' s ability t o reduc e it s aircraf t ownershi p cost s relativ e t o it s competitor s can , therefore , provid e acarrie r asignifican t

competitiv e advantage . I

n a n effor t t o secur e suc ha

n advantage . Unite dapplie s considerabl e managemen t resource s t o 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 dengine 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 ne w equipmen t

ar e mad e mor e difficul t

b y th e fact

tha t ther e ar e onl y thre e manufacturer s o f larg e je t airframe s an donl y thre e o f larg e je t engines . However , a s lon g a s th e Departmen t make s availabl e t o th e publi c United' s acquisitio n cos t fo r eac hairfram e an dengin e i t acquire s an dth e sale s proceed s realize do n eac hsal e o f suc hequipment . Unite di s denie dth e benefi t o f thes e efforts , harmin g Unite dcommercially .

Onc e United' s cost s ar e divulged , United' s competitor s ca n us e thes e cos t

dat at o negotiat e contrac t

pric e adjustment s fromth e sam e supplier s Unite di s usin g o r fromcompetin g suppliers . Sinc e man y o f thes e compefin g carrier s ar e foreig n flag carriers , thei r equipmen t price s wil l neve r

b e reporte dt o th e Department , le t alon e b e mad e public . I t i s no t onl y cormnerciall y damagin g bu t basicall y unfai r

t o Unite dan dal l othe r

U.S . carrier s t o requir e

- 2 - K : Aiivnf i - DorDO T B4_ t :iil O B 7 aiu i B4. * OJ T i) 4 :i)HI.DO Cthe mt o divulg e t o thei r non-reportin g foreig n fiag competitor s th e ftuits o f thei r competitiv e effort s wit

hmajiufacturer s t o secur e th e bes t possibl e purchas e price . See , e.g. . Orde r 81-12-9 . Th e disclosur e o f

United' s ownershi p cost s o f individua l aircraf

t an daircraf

t engine s woul dallo w competin g foreig n an ddomesti c airlines , manufacturer s o f aircraf t and engines , an dne w an duse daircraf t owner/lessor s t o calculat e an dclosel y trac k United' s cost s t o reduce , transfe r

o r dispos e o f

it s variou s fleets o f

use dmode l aircraf

t an drelate duse daircraf

t engines . I

t woul dadversel y affec t

United' s competitiv e positio n b y strengthenin g th e bargainin g positio n o f

othe r airlines , includin g foreig n airlines , an daircraf t owner/lessor s seekin g t o purchas e aircraf t equipmen t

frommanufacturer s an dothers . The y woul db e abl e t o us e thei r knowledg e o f

United' s confidentia l purchas e an dsal e arrangement s a s startin g point s i n thei r ow n negotiations , an dthu s improv e thei r ability t o obtai n equal o r mor e favorabl e prices . Thi s woul dleadt o United' s competitors , includin g foreig n competitors , bein g abl e t o enjo y lowe r

capita l cost s than otherwis e th e case , an dt o thei r bein g abl e t o operat e an dcompet e mor e efficientl y withUnite dtha n otherwise .

Unite dsubmit s tha t

FOI A Exemptio n 3 i s applicable , a s aresul t o f th e provisio n i n Sectio n 110 4 o f

th e Ac t requirin g th e withholdin g frompubli c disclosur e o f any informafio n containe di n areport

filedpursuan t

to th e Act , i f

suc hdisclosur e woul d"adversel y affec t th e compefifiv e posifio n o f

an y ai r carrie r i n foreig n ai r

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

whic hUnite dseek s confidentia l treatmen t unde r this instan t

Motio n i s similar t o an dconsisten t

withtha t fo r whic hth e Departmen t

grante dconfidential treatment , i n (i ) a Marc h29 , 199 3 orde r

concernin g similar

Schedul e B- 7 dat afiledb y Delta , (ii ) aNovembe r 1 , 199 3 orde r

concernin g similar

Schedul e B- 7 dat afiledb y American , (iii ) aDecembe r 29 , 199 3 orde r concernin g similar

Schedul e B-7/B-4 3 dat afiledb y United , (iv ) a n Augus t 23 , 199 4 orde r concernin g similar

Schedul e B-7/B-4 3 dat afiledb y Delta , an d(v ) aNovembe r 18 , 199 4 orde r concernin g similar

Schedul e B- 7 dat afiledb y United . Th e Department' s grant s o f confidentiality wer e specificall y mad e unde r Exemptio n 3 (an dit s 199 3 grant s wer e mad e exclusivel y unde r

Exemptio n 3 ) sinc e Delt aan dAmerican , like United , compet e wit hforeig n ai r carrier s wh o d o no t

file suc hinformatio n ye t ar e free t o obtai n U.S . carrie r informatio n from th e Department . Th e Departmen t ther e stated : "thi s lac k o f reciproca l access , th e Departmen t believes , coul dsubstantiall y har mth e competifiv e positio n o f

American , resuUin g i

n th e erosio n o f

th e U.S . internationa l airlin e industry. " Unite dals o submit s tha

t th e informafio n sough t

t o b e withhel dfall s withi n exemptio n 4 fromth e Freedo mo f Informatio n Act , 5 U.S.C . 552(b)(4) , whic hprovide s protectio n fromdisclosur e fo r "trad e secret s an dcommercia l o r financial infonnatio n obtaine d fromaperso n an dprivilege do r confidential;... " Unite dbelieve s th e requeste dinformatio n delete dfromSchedul e B- 7 an dB-4 3 clearl y satisfie s al l thre e element s require dfor protection unde r Exemptio n 4 . First , th e acquisitio n cos t an dsale s realizatio n amount s reporte dar e substanfiall y th e sam e a s negotiate dbetwee n th e parties , whic hpurchas e an dsal e price s ar e

- 3 - K .Aiiviaf i - DOr'DOTB4 3 30li- i B 7 uii dB4 3 DO T ( M :fiK i LXK "clearl y financial o r commercia l i n nature . Second , Unite destablishe dthes e price s throug hit s negotiation s withprivat e thir dparties ; th e inftjrmatio n wa s no t obtaine dfroman y governmenta l entities . Third , th e disclosur e o f suc hinformatio n woul dharmUnited' s competitiv e position . Se e Gul f & Wester n Indus. . Inc . v . Unite dStates . 61 5 F.2 d52 7 (D.C . Cir . 1979) , Nationa l Park s & Conservatio n Ass' n v . Morton . 49 8 F.2 d76 5 (D.C . Cir . 1974) , Steriin g Drug , hie , v . Federa l Trad e Comm'n , 45 0 F.2 d69 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 RSupp . 287 , an d Burk e Energ y Corp . v . Departmen t o f Energv . 58 3 F.Supp . 50 7 (D . Kan . 1984) . Finally , th e Department' s 199 4 grant s o f confidenfiality (i.e. , it s Augus t 23 , 199 4 orde r

concernin g similar Schedul e B-7/B-4 3 dat afiledb y Delta , an dit s Novembe r 18 , 199 4 orde r

concernin g similar Schedul e B-7/B-4 3 dat afiledb y United ) wer e specificall y mad e unde r bot hExemption s 3 and 4 . Th e Department , whe n decidin g United' s (an dAmerican' s an dDelta' s respective ) prior

B-7/B-4 3 confidentiality motions , grante daten-year confidentia l perio d beginnin g o n th e dat e th e infonnatio n wa s require dt o b e filedpursuan t t o 1 4 CF R241.22(a) . Unite ddeserve s t o b e treate dn o les s favorabl y wifii respec t t o th e seale dSchedul e B- 7 an dB

4 3 attache dhereto .

WHEREFORE , Unite drequest s that th e Department , pursuan t t o Rul e 3 9 o f

it s Rule s o f Practic e an dExempfion s 3 an d4 o f th e Freedo mo f

Informatio n Act , withhol dfrom publi c disclosure , (i ) th e pric e informatio n containe di n th e Airfram e an dAircraf t Engin e Acquisitio n an dRetirement s item s whic hhav e bee n delete dfromcolumn s 9 , 1 0 an d1 1 o f th e publi c filing o f

United' s quarterl y For

m4 1 Schedul e B- 7 report , an d(ii ) th e item s whic hhav e bee n delete dfromth e publi c filing o f United' s annual For

m4 1 Schedul e B-4 3 report , respectively , for

aperio do f

no t les s tha n te n years . Respectfull y submitted .

Davi dB . Olausse n Senio r Counse l UNITE D AIRLINES , INC . DATED : Marc h10,201 1

- 4 - K . AiiLTai i - DOr,DOPR4. 1 ZIHUB T .m d B4 3 IXi T 0 4 ^uIn.DO C