BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of National Air Cargo Group, Inc. d/b/a National Airlines for an exemption pursuantto 49 U.S.C. 

### § 40109 and an amended certificate of public convenience and necessity pursuantto49 U.S.C. 

### § 41102 (foreign scheduled airtransportation ofpersons, property and mail) ) ) ) ) ) ) ) ) ) ) ) Docket OST-2012-0204



# __________________________________)

REPLY OF NATIONALAIRLINES TO ANSWERS OF DELTAAIR LINES, AIRLINES FORAMERICA AND THE AIRLINE PILOTS ASSOCIATION Correspondencewith respect to this document should be addressed to:

September9, 2013 MarkW. Atwood Elizabeth J. Wadsworth Cozen O'Connor The Army & Navy Club Building 1627 I Street, N.W. Washington, D.C. 20006 Tel.: (202) 463-2513 Counsel for NationalAirlinesBEFORETHE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of 

### NationalAirCargo Group, Inc. d/b/a NationalAirlines for an exemption pursuantto 49 U.S.C. 

### §40109 and an amended certificate ofpublic convenience and necessity pursuantto 49 U.S.C. 

### §41102 (foreign scheduled airtransportation ofpersons, property and mail) ) ) ) ) ) ) ) ) ) ) ) 

# __________________________________) Docket OST-2012-0204

REPLYOF NATIONALAIRLINES TO ANSWERS OF DELTA AIR LINES, AIRLINES FORAMERICA AND THE AIRLINE PILOTS ASSOCIATION United Airlines has now elicited support for its campaign to undermine National Airlines' plans to offer U.S.-United Arab Emirates-Afghanistan scheduled passenger service, in conjunction with its codeshare partner Emirates. United's objections have been joined by the other industry colossus, Delta, and the organization that represents them, Airlines for America ("A4A"). The Air Line Pilots Association ("ALPA") has also entered thefray, though it limited its argumentto the FlyAmerica Act issue. 1 National is reluctant to take any more of the Department's time in dealing with these objections to its tentative findings in Order 2013-4-12. The clock is rapidly running down, a pointthat is certainly not lost on the Intervenors (in fact, that is 

### exactly their point). However, National does not wish to leave the impression that the addition

1These parties, togetherwith United, will be referred to collectively as "the Intervenors."

LEGAL\17216717\1of responses by three new parties lends any legitimacy to the tissue-thin arguments proffered by United in its August 29 objections. Rather, they simply compound United's errors, and make its anticompetitive motive all the more apparent. The answer of Delta - itself the recipient of 1,640 routes under the GSA's City Pair Contract award of August 16 - simply summarizes the points made by United. Nothing further need be said beyond what National has alreadywritten in its September 4Answerto United. The answer ofA4Atakes a slightly differenttack, voicing concern forthe integrity ofthe Department's processes. Its charge effectively is that National has acted with a lack of integrity, deliberately misleading the Department. National unequivocally denies this insinuation. It hid nothing from the Department. As National pointed out in its September 4 answer, at the time of the December 11, 2012 application, Washington Dulles was the only U.S. point it was considering for codesharing service. That changed subsequently dueto the GAO contract proposal. However, it did notamend its application because acting as the marketing carrierat other U.S. pointswas irrelevantto the authority it was requesting or the factors being considered by the Department in determining its fitness. (SeeAnswerof National at4.) National would remind the Intervenors that this is not a carrier selection proceeding, in which the Department compares full service proposals and evaluates which best suit the public interest. Nor is it a pre-1993 application requiring a full "illustrative service proposal." (It is questionable whether even under the pre-1993 regulations addition ofcodeshare points would have much relevance to the application.) Rather, this proceeding concerns National's fitness to operate scheduled passenger

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### service, and the information required to support this request pertains to the resources needed to operate the carrier's own flights, which National intends to do between Dubai and Afghanistan. Thus, when National decided it wished to serve Camp Bastion, Afghanistan, it amended its application to so reflect, since that would involve actual operations bythe carrier, and therefore is relevantto adetermination ofitsfitness. The purpose of public notice and comment for an application such as National's is most definitely not

### to give competitors advance warning of proposed new entry, but ratherto allow parties with information relevant to the question at hand to come forward and present it to the Department. United claims that National is unfit to act as a marketing carrier on codeshares to the UAE. It should have made those arguments on April 18, when it had the chance. If National is unfit with regard to seven U.S. codeshare points, it would also have been unfitfor one. The fact that National is now a greatercompetitive threatthan was initially perceived may be relevantto United, but not tothe question before the Department. Putting National's code on Emirates flights at other U.S. points would make only minimal demands on the carrier's resources. However, DOT reversal of its tentative decision - the result sought by the Intervenors -- would only be possible if the Department decided that it likely would have found National unfit 

### had it proposed to market codeshare flights at six other U.S. points. It is farfetched to imagine such a conclusion. While United, Delta and A4A purport to be motivated by high-minded concerns about the Department's procedures, their real point may be stated much more bluntly: they don't think that a tiny, upstart carrier like National (a motif that is threaded



### 3 LEGAL\17216717\1

### throughout their pleadings) has any business playing in "their" sandbox. National just isn't in their league. United wants National excluded because United wants to operate 1,736 City Pair routes, ratherthan only 1,730. Were the Departmentto buy into the Intervenors' logic, it would send an ominous message to the many who have serious concerns about the possibility of competition and newentry in an industry nowdominated by mega-carriers. Itwould also deprivethe American public of access to single-U.S. carrier service all the way from the United States to Afghanistan. That country now has no 

### U.S. carrier service, requiring U.S. servicemen, government employees and contractors to fly on local airlines of questionable quality. There is aserious public need forwhat National has to offer. Finally, with respect to ALPA's arguments that the Fly America Act does not permitwhat National is proposing, National would simply make two points: (1) thattrain left the station a long time ago; and (2) this is notthe right forum in which to argue for a change in policy. As noted extensively in National's Answer, the National/Emirates arrangement is fully consistent with precedent that has been well-settled since 1991, and was codified in the FederalTravel Regulation in 1998. Ifthe Intervenors believethe GovernmentAccountability Office should reconsider its policy, they are entitled to make that argument; indeed, United is attempting to do so in its bid protest proceeding before the GAO at this moment. It would thus be inappropriate for the Department to try to change a policy adopted by another agency.

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### ACCORDINGLY, National Airlines once again requests that the Department reject the arguments advanced by the Intervenors, and proceed without delay to issue the Final Orderaffirming its tentativedecision in Order2013-4-12.

Dated: September9, 2013



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### MarkW. Atwood Elizabeth J. Wadsworth Joshua P. Stein Cozen O'Connor 

### TheArmy

### &NavyClub Bldg

. 1627 I Street, N.W

. Washington, D.C

.20006 Counselfor NationalAirlinesCERTIFICATE OF SERVICE I certifythat I have served theforegoing document on the following persons on this gth day ofSeptember, 2013, in accordance with the Department's Rules of Practice: francis.heil@aa.com robert.wirick@aa.com jrichardson@johnlrichardson.com russell.pommer@atlasair.com sascha.vanderbellen@delta.com sametta.c.barnett@delta.com esauer@ssd.com charters@evergreenairlines.com kevin.montgomery@polaraircargo.com gmurphy@crowell.com dberg@airlines.org agoerlich@ggh-airlaw.com anita.mosner@hklaw.com jennifer.nowak@hklaw.com howard.kass@usairways.com Benjamin.slocum@usairways.com
mbenge@zsrlaw.com psanderlin@kalittaair.com john.allen@faa.gov lhalloway@crowell.com**~,** Russell.bailey@alpa.org //'

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