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Mr. Donald Bright Director ofOffice ofAirline Information Bureau ofTransportation Statistics Department ofTransportation, K-25 400 Seventh St, S.W. Washington, DC 20590

Re: Motion ofUnited Airlines, Inc.

Dear Mr. Bright: (as successorby merger of United Air Lines, Inc.) For Confidential Treatment; Schedule B-43, Inventory of Airframes and Aircraft EnginesApril 18, 2013

Enclosed are twelve copies ofUnited Airlines Inc.'s (as successor by merger ofUnited Air Lines, Inc., ("United")) Motion to Withhold Information from PublicDisclosure in reference to United's Schedule B-43 for the year ended December 31, 2012. The original ofthe Motion together with the information requested is presently enroute to the Office ofAviation Information and Managementtoday.

Enclosures

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# g_ David B. Olaussen Managing CounselMotion of BEFORETHE DEPARTMENT OFTRANSPORTATION OFFICE OFTHESECRETARY WASHINGTON, D.C.

UNITED AIRLINES, INC.

(as successorbymerger of United Air Lines, Inc.) For Confidential Treatment Docket OST-95-675

Under Section 302.39

MOTION OFUNITED AIRLINES, INC.. (as successorby merger of

United Air Lines, Inc.) TO WITHHOLD INFORMATION

FROM PUBLIC DISCLOSURE

Communications with respect to this document should be sent to: DAVID B. OLAUSSEN ManagingCounsel UNITED AIRLINES, INC. 233 SouthWacker Chicago, IL60601 312-997-8069

DATED: Aprill8, 2013Motion of BEFORETHE DEPARTMENTOFTRANSPORTATION OFFICE OFTHESECRETARY WASHINGTON, D.C.

UNITED AIRLINES, INC.

(as successorby merger of United Air Lines, Inc.) For Confidential Treatment Under Section 302.39 Docket OST-95-675

MOTION OFUNITED AIRLINES, INC. (as successorby merger of

United Air Lines, Inc.) TOWITHHOLD INFORMATION

FROM PUBLIC DISCLOSURE

Pursuant to Rule 39( e)ofthe Department ofTransportation, Office ofthe Secretary Procedural Rules, United Airlines, Inc. (as successorby merger ofUnited Air Lines, Inc. ("United")) hereby files this Motion to Withhold From Public Disclosure the information contained in a sealed envelope and captioned Schedule B-43 Inventory ofAirframe and Aircraft Engines and delivered to the Office ofAviation Transportation Management. Thi's information is provided pursuant to Part 241 ofthe Department'sEconomic Regulations, 14 CFR 241, and is part ofForm 41 Schedule 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 downby 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 B-43 data filed separately by United, American Airlines, Inc. ("American") and DeltaAir Lines, Inc. ("Delta"). The information sought to be withheld falls within Exemption 3 ofthe Freedom ofInformation Act (5 U.S.C. 552(b)(3)), which exempts from disclosure information required by statute to be withheld. Exemption 3provides that:

# UNITED •.

provides that: "(b) This section does not apply to**matt~rs** that are... 

### * * 

## * * * (3) specifically exempted from disclosure by statute (other than section 552(b) ofthis 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 particularcriteria for withholding or refers to particular types ofmatters to be withheld;" Section 1104 ofthe Federal Aviation Act of 1958, as amended (the Act),
"Anyperson may make written objection to the publicdisclosure ofinformation contained in any application, report, or document filed pursuant to the provisions ofthis Act

...stating the groundsfor such objection. Any information contained in such application, report, ordocument

... shall be withheld from public disclosure by the

... Secretary ofTransportation

... if disclosure ofsuch information would

...adversely affect the competitive position ofany aircarrier in foreign air transportation." United considers the requested information deleted from Schedule 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 doingbusiness for all certificated carriers. A carrier's ability to reduce its aircraft ownership costsrelative 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 tryingto reduce its aircraft ownership costs. This includes devoting substantial resources to trying to obtain airframes and engines at the lowest possible acquisition cost and disposingofthese 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 oflarge jetairframes and only three oflargejetengines. However, as longas 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 ofsuch equipment, United is denied the benefit ofthese

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 ofthese competingcarriers are foreign flag carriers, their equipment prices will neverbe reported to the Department, let alone be made public. It is not only · commercially damagingbutbasically unfair to United and all other U.S. carriers to require them to divulge to their non-reporting foreign flag competitors the fruits oftheir competitive efforts with manufacturers to secure the best possible purchase price.**See,~.** Order 81-12-9.

tThe disclosure ofUnited's ownership costs ofindividual aircraft and aircraft engineswould allow competingforeign and domestic airlines, manufacturers ofaircraft and engines, and new and used aircraft owner/lessors to calculate and closely track United's costs to reduce, transfer ordispose ofits various fleets ofused model aircraft and related used aircraft engines. It would adversely affect United's competitive position by strengtheningthe bargainingposition ofotherairlines, includingforeign airlines, and aircraft owner/lessors seekingto purchase aircraft equipment from manufacturers and others. They would be able to use their knowledge ofUnited'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, includingforeign competitors, being able to enjoy lower capital costs than otherwise the case, and to their being able to operate and competemore efficiently with United than otherwise. United submits that FOIAExemption 3 is applicable, as a result ofthe provision in Section 1104ofthe Act requiring the withholding from public disclosure ofany information contained in a report filed pursuant to the Act, ifsuch disclosure would "adversely affect the competitive position ofany 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 December 29, 1993 order concerning similar B-43 data filed by United, (ii) an August 23, 1994 order concerningsimilar B-43 data filed by Delta. The Department's grants of confidentiality were specifically made under Exemption 3 (and its 1993 grantswere made exclusively under Exemption 3)since Delta and American, like United, compete with foreign aircarriers who do not file such information yet are free to obtain U.S. carrier information from the Department. The Department there stated: "this lack ofreciprocal access, the Department believes, could substantially harm the competitive position ofAmerican, resulting in the erosion ofthe U.S. international airline industry." United also submits that the information sought to be withheld falls within exemption4 from the Freedom ofInformation 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 orconfidential;

..." United believes the requested information deleted from B-43 clearly satisfies 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, United established these prices through its negotiations with private third parties; the information was not obtained from any governmental entities. Third, the disclosure ofsuch 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 & ConservationAss'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. ofEnergy, 494 F.Supp. 287, and Burke Energy Corp. v. DepartmentofEnergy, 583 F.Supp. 507 (D. Kan. 1984). Finally, the Department's 1994 grants ofconfidentiality (i.e., its August 23, 1994 order concerningsimilar

-2-B-43 data filed by Delta, and its November 18, 1994order concerning similar B-43 data filed byUnited) 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 beginningon the date the information was required to be filed pursuant to 14 CFR 241.22(a). United deserves to be treated no less favorably with respect to the sealed B-43 attached hereto. WHEREFORE, United requests that the Department, pursuant to Rule 39ofits Rules ofPractice and Exemptions 3 and 4 ofthe Freedom ofInformation Act, withhold from public disclosure, (i) the items which have been deleted from the public filing ofUnited's annual Form 41 Schedule B-43 report, respectively, for a period ofnot less than ten years.

DATED: Apri118, 2013

-3- Respectfully submitted,

# ~ David B. Olaussen ManagingCounsel UNITED AIRLINES, INC.