BEFOR E TH E ."i z ^^E; : ? i A ^i

- 5 DEPARTMEN T O FTRANSPORTATIO N OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C .

Motio n 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 AI RLINES , INC . T O WITHHOL D INFORMATIO N FRO M PUBLI C DISCLOSUR E

Communication s wit

h respec t t o thi s documen t

shoul db e sen t

to : DAVI D B . OLAUSSE N Senio r Counse l UNITE D AI RLINES , INC . 7 7 Wes t Wacke r Driv e Chicago , IL 6060 1 312-997-806 9 DATED : Januar y 23 , 201 2BEFOR E TH E DEPARTMEN T O FTRANSPORTATIO N OFFIC E O FTH E SECRETAR Y WASHINGTON , D.C . Motio n 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 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 thi s Motion t o Withhol dFro mPubli c Disclosur e th e informatio n containe di n aseale denvelop e an dcaptione d Schedul e B- 7 Airfram e an dAircraf t Engin e Acquisition s an dRetirement s an ddelivere dt o th e Offic e o f Aviatio n Transportatio n Management . Thi s informatio n i s provide dpursuan t t o Par t 24 1 o f th e Department' s Economi c Regulations , 1 4 CFR241 , an di s part o f Form4 1 Schedul e B-7 . 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 h respec t t o ne w an duse daircraf

t an daircraf

t engines , eac h broke n dow n b y model , individua l serial number , an dindividua l purchas e o r sal e prices . Th e informatio n for whic h Unite dseek s confidentia l treatmen t unde r thi s instan t Motio n i s simila

r t o an dconsisten t

wit h tha t for whic h th e Departmen t

granted , i n 199 3 an d 199 4 orders , confidentia l treatmen t to simila r Schedul e B- 7 dat afile dseparatel y b y United , American Airlines , Inc . ("American" ) an dDelt aAi r Lines , Inc . ("Delta") . Th e informatio n sough t

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

( 5 U.S.C . 552(b)(3)) , whic h exempt s fro mdisclosur e informatio n require d b y statut e t o b e withheld . Exemptio n 3 provide s that :"(b ) Thi s sectio n doe s no t appl y t o matter s tha t are.. .

**** *

provide s that ; (3 ) specificall y exempte dfro mdisclosur e b y statut e (othe r tha n sectio n 552(b ) of thi s title) , provide dtha t

suc h statut e (A ) require s that th e matter s b e withhel dfro mth e publi c i n suc h amanne r a s t o leav e n o discretio n o n th e issue , o r (B ) establishe s particular criteri afo

r withholdin g o r

refer s t o particular

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

th e Federa l Aviatio n Ac t of 1958 , a s amende d(th e Act) , "An y perso n ma y 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

file dpursuan t

t o di e provision s of

thi s Act. . . statin g th e ground s fo r suc h objection . An y informatio n containe di n suc h application , report , o r document.. . shal l b e withhel dfro mpubli c disclosur e b y th e . . . Secretar y o f Transportatio n .. . i

f disclosur e o f

suc h informatio 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 dfro mSchedul e B- 7 t o b e highl y sensitiv e an dconfidential . Th e ai r transportatio n industry , both domesticall y an d internationally , 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 . In a

n effor t t o secur e suc h an 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 t o 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 diftlcul t

b y th e fac t

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 for eac h airfram e an dengin e it acquire s an dth e sale s proceed s realize do n eac h sal e o f suc h equipment . Unite di s denie dth e benefi t o f thes e efforts , harmin g Unite dcommercially .

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

dat at o negotiat e contrac t

pric e adjustment s fro mth e sam e supplier s Unite di s usin g o r fromcompetin g suppliers . Sinc e man y o f

thes e competin g carrier s are 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 commerciall y damagin g bu t basicall y unfai r

t o Unite dan dal l othe r

U.S . carrier s t o requir ethe mt o divulg e t o diei r non-reportin g foreig n fla g competitor s th e fruit s o f thei r competitiv e effort s wit

h manufacturer 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 purchase s an ddisposition s o f individua l aircraf

t an d aircraf t engine s woul dallo w competin g foreig n an ddomesti c airlines , manufacturer s o f aircraf t an dengines , 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 inquire , modify , transfe r o r dispos e o f

it s variou s fleet s o f

use dmodel s aircraf

t (an d relate duse daircraf

t engines) . It

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 abilit y t o obtai n equa l o r mor e favorabl e prices . Thi s woul dlea dt 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 wit h Unite dthan otherwise . Unite dsubmit s that

FOI A Exemptio n 3 i s applicable , a s aresul t o f th e provisio n in Sectio n 1104 o f

th e Ac t requirin g th e withholdin g fro mpubli c disclosur e o f an y informatio n containe di n areport

file dpursuan t

t o th e Act , i

f suc h disclosur e woul d"adversel y affec t th e competitiv e positio n of

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 h Unite dseek s confidential treatmen t unde r thi s instan t

Motio n i s similar t o an dconsisten t

wit h that fo r whic h th e Departmen t

grante dconfidentia l treatment , i n (i ) aMarc h 29 , 199 3 orde r concernin g similar

Schedul e B- 7 dat afile db y Delta , (ii ) a Novembe r

1 , 199 3 orde r

concernin g similar

Schedul e B- 7 dat afile db y American , (iii ) a Decembe r

29 , 199 3 orde r

concernin g similar

Schedul e B- 7 dat afiledb y United , (iv ) an Augus t 23 , 199 4 orde r

concernin g similar

Schedul e B- 7 dat afile db y Delta , an d(v ) aNovembe r 18 , 199 4 orde r

concernin g similar

Schedul e B- 7 dat afile db 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 , lik e United , compet e wit h foreig n ai r carrier s wh o d o no t

file suc h informatio n yet ar e fre e t o obtai n U.S . carrie r informatio n fro m 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 harmth e competitiv e positio n o f

American , resultin 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 informatio 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 h provide s protectio n fro mdisclosur e for "trad e secret s an dcommercia l o r financial informatio n obtaine d fro maperso n andprivilege do r confidential;... " Unite dbelieve s th e requeste dinformatio n delete dfro mSchedul e B- 7 clearl y satisf y al l thre e element s require dfor protectio n unde r Exemptio n 4 . First , th e acquisitio n cos t an dsale s realizatio n amount s reporte dare substantiall y th e sam e a s negotiate dbetwee n th e parties , whic h purchas e an dsal e price s ar e clearl y financial o r commercia l i n nature . Second , Unite destablishe dthes e price s throug h it s negotiation s wit hprivat e thir dparties ; th e informatio n wa s no t obtaine dfro man y governmenta l entities . Third , th e disclosur e o f

suc h informatio n woul dharmUnited' s competitiv e position . Se e Gul f & Western 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 , bic . 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 . Dent , o f Energy . 49 4 F.Supp . 287 , an dBurk e Energ y Corp . v . Departmen t o f Energy . 58 3 F.Supp . 50 7 (D . Kan . 1984) . Finally , th e Department' s 199 4 grant s o f confidentiality (i.e. , it s Augus t 23 , 199 4 orde r

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

concernin g similar Schedul e B- 7 dat afile db y United ) wer e specificall y mad e unde r bot h Exemption s 3 an d4 . Th e Department , whe n decidin g United' s (an dAmerican' s an dDelta' s respective ) prio r

B- 7 confidentiality motions , grante daten-year confidentia l perio dbeginnin g o n th e dat e th e informatio n wa s require dt o b e filedpursuan t t o 1 4 CF R241.22(a) . Unite d deserve s t o b e treate dn o les s favorabl y wit h respec t t o th e seale dSchedul e B- 7 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 dExemption s 3 an d4 o f th e Freedo mo f

Informatio n Act , withhol dfro m publi c disclosure , 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 h hav e bee n delete dfro mcolumn s 9,1 0 an d1 1 o f th e publi c filin g o f

United' s quarterl y For

m4 1 Schedul e B- 7 report for aperio do f

not les s tha n te n years . Respectfull y submitted .

Davi dB . Olausse n Senio r Counse l UNITE D AI RLINES , INC . DATED : January 23 , 201 2