BEFOR E THE DEPARTMEN T O F TRANSPORTATIO N OFFIC E O F THE SECRETARY WASHINGTON , D.C .

Motio n o f UNITED AI

RLINES , INC . Fo r Confidentia

l Treatmen t Under Sectio n 302.3 9 Docke t OST-95-67 5

MOTIO N OF UNITE

D AI RLINES , INC . T O WITHHOLD INFORMATIO N FRO M PUBLI C DISCLOSUR E Communication s wit

h respec t to thi s documen t

shoul d b e sent

to : DAVID B . OLAUSSE

N Senio r Counse l UNITE D AI RLINES , INC . 7 7 W . Wacker Chicago , I L 6060 1 312-997-806 9 DATED : Apri l 30 , 201 0BEFOR E THE DEPARTMENT O F TRANSPORTATIO N OFFIC E O F THE SECRETARY WASHINGTON , D.C . Motio n o f UNITE D AI RLINES , INC . Fo r Confidentia

l Treatmen t Under Sectio n 302.3 9 Docket OST-95-67 5

MOTIO N OF UNITE

D AI RLINES , INC . T O WITHHOL

D INFORMATIO N FROM PUBLI C DISCLOSUR E Pursuan t t o Rul e 39(e ) o f

th e Department

o f Transportation , Offic e o f

th e Secretar y Procedural Rules , Unite d Ai r Lines , Inc . ("United" ) hereb y files thi s Motio n to Withhol d Fro mPubli c Disclosure th e informatio n containe d in aseale d envelop e and captione d Schedul e B- 7 Airfiram

e and Aircraf

t Engin e Acquisition s and Retirement s and delivere d t o th e Offic e o f Aviatio n Transportatio n Management . Thi s informatio n i s provide d pursuan t t o Par t 24 1 o f th e Department' s Economi c Regulations , 1 4 CF R241 , and i s par

t o f For m4 1 Schedul e B-7 . Th e informatio n sought t o b e withhel d fi-ompubli c disclosur e detail s United' s acquisitio n cos t

and sale s realizatio n amount s wit h respec t to new and use d aircraf

t an d aircraf t engines , eac h broke n dow n b y model , individual seria l number , and individua

l purchas e o r

sal e prices . Th e informatio n fo r whic h Unite d seek s confidentia l treatmen t

under thi s instan t Motio n i s simila

r to and consisten t

wit h tha t fo r whic h th e Department

granted , in 199 3 an d 1994 orders , confidentia

l treatmen t

to simila r Schedul e B- 7 dat afiled separatel y b y United , America n Airlines , Inc . ("American" ) and Delt aAi r Lines , Inc . ("Delta") . Th e informatio n sought

to b e withhel d fall 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 fi-omdisclosure informatio n require d b y statut e to b e withheld . Exemptio n 3 provide s that :

K.\Aircraf t - DOT\2010\B7DO T 201 0 IQTR.do c"(b ) Thi s sectio n doe s no t appl y to matter s that are.. .

provide s that : (3 ) specificall y exempte d fi"omdisclosur e b y statut e (other tha n sectio n 552(b ) o f thi s title) , provide d tha

t suc h statut e (A ) require s tha t th e matter s b e withhel d fi-omth e publi c in suc h amanner a s to leav e n o discretio n o n th e issue , o r

(B ) establishe s particula

r criteri afo

r withholdin g or

refer s to particula

r type s o f matter s to b e withheld; " Sectio n 110

4 o f th e Federa

l Aviatio n Ac t

o f 1958 , a s amende d (th e Act) , "Any perso n ma

y make writte n objectio n to th e publi c disclosur e o f informatio n containe d i n any application , report , o r document

filed pursuan t

to th e provision s o f thi s Act.. . statin g th e ground s fo r suc h objection . An y informatio n containe d in suc h application , report , o r document. . . shal l b e withhel d fi-om publi c disclosure b y th e .. . Secretar y o f Transportatio n . . . i f

disclosur e o f

suc h informatio n woul d .. . adversel y affect th e competitiv e positio n o f any ai r carrier i n foreig n ai r

transportation. " Unite d consider s th e requeste d informatio n delete d fi-omSchedul e B- 7 to b e highl y sensitiv e and confidential . Th e ai r transportatio n industry , bot h domesticall y an d internationally , ha s becom e highl y competitive . Aircraf t ownershi p cost s are amajor cos t o f doin g busines s fo

r all certificate d carriers . A carrier' s abilit y to reduc e it s aircraf

t ownershi p cost s relativ e to it s competitor s can , therefore , provid e acarrie r asignificant

competitiv e advantage . I

n a n effor t t o secure suc h a

n advantage . Unite d applie s considerabl e management resource s t

o tryin g to reduc e it s aircraf t ownershi p costs . Thi s include s devotin g substantial resource s to tryin g to obtai n airfi-ame s and engine s a t th e lowes t

possibl e acquisitio n cos t

and 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 new equipment are mad e more difficult

b y th e fac

t tha t ther e are onl y thre e manufacturer s o f larg e je t airfi-ame s and onl 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 to th e publi c United' s acquisitio n cos t fo r eac h airfi-am

e and engin e i t

acquire s and th e sale s proceed s realize d o n eac h sal e o f suc h equipment . Unite d i s denie d th e benefi t o f thes e efforts , harmin g Unite d commercially .

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

dat ato negotiate contrac t

pric e adjustment s fi-omth e same supplier s Unite d i s usin g o r firomcompetin g suppliers . Sinc e many o f

thes e competin g carrier s are foreig n flag carriers , thei r equipmen t price s wil l never

b e reporte d to 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 unfair

to Unite d and ^ othe r

U.S . carrier s to require

-2 - K:\Aircraf t - DOT\2010\B7DO T 201 0 IQTR.do cthemt o divulg e to thei r non-reportin g foreig n flag competitor s th e fioiits o f thei r competitiv e effort s wit h manufacturer s t o secure th e bes t possibl e purchas e price . See , e.g. . Order 81-12-9 . Th e disclosur e o f

United' s purchase s and disposition s o f individual aircraf

t an d aircraf t engine s woul d allo w competin g foreig n and domesti c airlines , manufacturer s o f aircraf t an d engines , an d ne w an d use d aircraf t owner/lessor s t o calculate and closel y trac k United' s cost s t o inquire , modify , transfer o r dispos e o f

it s variou s fleets o f

use d model s aircraf

t (an d relate d use d aircraf

t engines) . I

t woul d adversel y affect

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 , and aircraf t owner/lessor s seekin g to purchas e aircraf t equipment

fi-ommanufacturer s an d others . They woul d b e abl e t o us e thei r

knowledg e o f

United' s confidentia

l purchas e an d sal e arrangement s a s startin g point s i n thei r

ow n negotiations , an d thu s improv e thei r abilit y t o obtai n equa

l or mor e favorabl e prices . Thi s woul d lead to United' s competitors , includin g foreig n competitors , bein g abl e t o enjoy lower

capital cost s than otherwis e th e case , and to thei r bein g abl e t o operat e and compet e more efficientl y wit h Unite d tha

n otherwise . Unite d submit 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 fi-ompubli c disclosure o f an y informatio n containe d i n arepor

t filed pursuan t

t o th e Act , i f

suc h disclosure woul d "adversel y affect th e competitiv e positio n o f

an y ai r carrier i n foreig n ai r

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

r whic h Unite d seek s confidentia l treatmen t

under thi s instan t

Motio n i s simila

r to an d consisten t

wit h tha t fo r whic h th e Departmen t

grante d confidentia

l treatment , in (i ) a Marc h 29 , 199 3 orde r

concernin g simila

r Schedul e B- 7 dat afiled b y Delta , (ii ) aNovember 1 , 199 3 order concernin g simila

r Schedul e B- 7 dat afiled b y American , (iii ) aDecember 29 , 199 3 order concernin g simila

r Schedul e B- 7 dat afiled b y United , (iv ) a n Augus t 23 , 199 4 order concernin g simila

r Schedul e B- 7 dat afiled b y Delta , and (v ) aNovember 18 , 199 4 order concernin g simila

r Schedul e B- 7 dat afiled b y United . Th e Department' s grant s o f confidentialit

y were specificall y mad e under Exemptio n 3 (an d it s 199 3 grant s were mad e exclusivel y unde r

Exemptio n 3 ) sinc e Delt aan d American , like United , compete wit h foreig n ai r carrier s who d o no t

file suc h informatio n yet

are fi-ee to obtai n U.S . carrie r informatio n fi-om th e Department . Th e Department ther e stated : "thi s lack o f reciprocal access , th e Departmen t believes , coul d substantiall y har mth e competitiv e positio n o f

American , resultin g in th e erosio n o f th e U.S . international airlin e industry. " Unite d als o submit s tha

t th e informatio n sough

t to b e withhel d fall 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 fromdisclosur e fo r "trad e secret s and commercia l or financial informatio n obtaine d fromaperso n and privilege d o r confidential;... " Unite d believe s th e requeste d informatio n delete d fromSchedul e B- 7 clearl y satisf y all thre e element s require d fo r protectio n under Exemptio n 4 . First , th e acquisitio n cos t and sale s realizatio n amount s reporte d are substantiall y th e same a s negotiate d betwee n th e parties , whic h purchas e and sal e price s ar e clearl y financial

K:\Aircraf t - DOTi2010\B7DO T 201 0 IQTR.do co r

commercia

l i n nature . Second , Unite d establishe d thes e price s throug h it s negotiation s wit h privat e third parties ; th e informatio n wa s no t obtaine d fromany governmental entities . Third , th e disclosur e o f

suc h informatio n woul d har mUnited' s competitiv e position . Se e Gul f & Wester n hidus. . Inc . v . Unite d States . 61 5 F.2 d 52 7 (D.C . Cir . 1979) , National Park s & Conservatio n Ass' n v . Morton . 49 8 F.2 d 76 5 (D.C . Cir . 1974) , Sterlin g Drug . Inc . v . Federa l Trad e Comm'n . 45 0 F.2 d 69 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 F.Supp . 287 , an d Burke Energ v Corp . V . Department

o f Energv . 58 3 F.Supp . 50 7 (D . Kan . 1984) . Finally , th e Department' s 1994 grant s o f

confidentialit

y (i.e. , it s Augus t

23 , 1994 orde r

concernin g simila

r Schedul e B-7/B-4 3 dat afiled b y Delta , and it s November 18 , 199 4 order

concernin g simila

r Schedul e B- 7 dat afiled b y United ) were specificall y mad e under bot h Exemption s 3 an d 4 . Th e Department , when decidin g United' s (an d American' s an d Delta' s respective ) prio r

B- 7 confidentialit

y motions , grante d aten-yea r confidentia

l perio d beginnin g o n th e dat e th e informatio n wa s require d t o b e filed pursuan t to 1 4 CFR241.22(a) . Unite d deserve s to b e treate d n o les s favorabl y wit h respec t to th e seale d Schedul e B- 7 attache d hereto . WHEREFORE , Unite d request s tha t th e Department , pursuan t t o Rul e 3 9 o f

it s Rule s o f Practic e an d Exemption s 3 an d 4 o f th e Freedo mo f

Informatio n Act , withhol d from publi c disclosure , th e pric e informatio n containe d i n th e Airframe and Aircraf t Engin e Acquisitio n and Retirement s item s whic h hav e bee n delete d fromcolumn s 9 , 1 0 and 1 1 o f th e publi c filin g o f

United' s quarterl y For

m4 1 Schedul e B- 7 repor

t fo r aperio d o f

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

Davi d B . Olausse n Senio r Counse l UNITED AI

RLINES , INC . DATED : Apri l 30 , 201 0

-4

- K:\Aircraft-DOTa010\B7DOT201 0 IQTR.do c