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DEPARTMENT OF TRANSPORTATION ^ ^ • •> ' "^ '' ^' ' 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Motion of 

UNITED AIR LINES, INC. 

For Confidential Treatment 

Under Section 302.39 

Docket OST-95-675 

MOTION OF UNITED AIR LINES, INC. 

TO WITHHOLD INFORMATION 

FROM PUBLIC DISCLOSURE 

Communications with respect to this document should be sent to; 

DAVID B. OLAUSSEN 

Senior Counsel 

UNITED AIR LINES, INC. 

77 W. Wacker 

Chicago, IL 60601 

312-997-8069 

DATED: March 10, 2011 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Motion of 

UNITED AIR LINES, INC. 

For Confidential Treatment 

Under Section 302.39 

Docket OST-95-675 

MOTION OF UNITED AIR LINES, INC. 

TO WITHHOLD INFORMATION 

FROM PUBLIC DISCLOSURE 

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

Secretary Procedural Rules, United Air Lines, Inc. ("United") hereby files this Motion to 

Withliold From Public Disclosure the information contained in a sealed envelope and captioned 

Schedule B-43 Inventory of Airframe and Aircraft Engines and delivered to the Office of 

Aviation Transportation Management. This infonnation is provided pursuant to Part 241 of the 

Department's Economic Regulations, 14 CFR 241, and is part of Form 41 Schedules B-7 and 

B-43. 

The information sought to be withheld from public disclosure details United'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 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/B-43 data filed separately by 

United, American Aidines, Inc. ("American") and Delta Air Lines, Inc. ("Delta"). 

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

of Informafion Act (5 U.S.C. 552(b)(3)), which exempts from disclosure information required 

by statute to be withheld. Exemption 3 provides that; 

k Aircian - DO]'U01'U43 :IJ)(I B ? jnd B41 DOl iM ^iJSn E.K.'L 
"(b) This section does not apply to matters 

that are. . . 

**** * 

(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 

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

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

provides that: 

"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 from 

public disclosure by the . . . Secretary of Transportafion . . . if disclosure of such 

infonnation would . . . adversely affect the competitive position of any air carrier 

in foreign air transportation." 

United considers the requested information deleted from Schedules B-7 and 

B-43 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 ownership 

costs relative 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 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 United's acquisition cost for each airframe and engine it acquires and the 

sales proceeds realized on each sale of such equipment. United is denied the benefit of these 

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 of these compefing carriers are foreign flag carriers, their equipment 

prices will never be reported to the Department, let alone be made public. It is not only 

cormnercially damaging but basically unfair to United and all other U.S. carriers to require 

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them to divulge to their non-reporting foreign fiag competitors the ftuits of their competitive 

efforts with majiufacturers to secure the best possible purchase price. See, e.g.. Order 81-12-9. 

The disclosure of United's ownership costs 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 United's costs to 

reduce, transfer or dispose of its various fleets of used model aircraft and related used aircraft 

engines. It would adversely affect United's competitive position by strengthening 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 United'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 United'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 United than otherwise. 

United 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 informafion 

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

compefifive posifion of any air carrier in foreign air transportation" (49 U.S.C. App. 1504). The 

information for which United 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/B-43 data filed by United, (iv) an August 23, 1994 order 

concerning similar Schedule B-7/B-43 data filed by Delta, and (v) a November 18, 1994 order 

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

competifive position of American, resuUing in the erosion of the U.S. international 

airline industry." 

United also submits that the informafion sought to be withheld falls within 

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 infonnation obtained 

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

deleted from Schedule B-7 and B-43 clearly satisfies all three elements required for protection 

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

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

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clearly financial or commercial in nature. Second, United established these prices through its 

negotiations with private third parties; the inftjrmation was not obtained from any governmental 

entities. Third, the disclosure of such 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 & Conservation Ass'n v. Morton. 498 F.2d 765 (D.C. Cir. 1974), Steriing Drug, hie, 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 RSupp. 287, and 

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

Department's 1994 grants of confidenfiality (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/B-43 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/B-43 confidentiality motions, granted a ten-year confidential period 

beginning on the date the infonnation was required to be filed pursuant to 14 CFR 241.22(a). 

United deserves to be treated no less favorably wifii respect to the sealed Schedule B-7 and B43 attached hereto. 

WHEREFORE, United requests that the Department, pursuant to Rule 39 of its 

Rules of Practice and Exempfions 3 and 4 of the Freedom of Information Act, withhold from 

public disclosure, (i) 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 United's quarterly Form 41 Schedule B-7 report, and (ii) the items which have 

been deleted from the public filing of United's annual Form 41 Schedule B-43 report, 

respectively, for a period of not less than ten years. 

Respectfully submitted. 

David B. Olaussen 

Senior Counsel 

UNITED AIR LINES, INC. 

DATED: March 10,2011 

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