December 9, 2013

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Mr. Donald Bright

Director of Office of Airline Information

Bureau of Transportation Statistics

Department of Transportation, K-25

400 Seventh St., S.W.

Washington, DC 20590

Re: Motion of United Airlines, Inc.

For Confidential Treatment;

Schedule B-7, Airframe and Aircraft

Engine Acquisitions and Retirements

Dear Mr. Bright:

Enclosed are three copies of United Airlines' Motion to Withhold Information from Public Disclosure

for the period ended September 30,2013. The original of the Motion together with the information

requested is presently enroute to the Office of Aviation Information and Management today.

David B. Olaussen

Managing Counsel

Enclosures

233 South Wacker Drive, Chicago, IL 60606 A STAR ALLIANCE MEMBER .•::.
BEFORE THE

DEPARTMENT OF TRANSPORT AnON

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Motion of

UNITED AIRLINES, INC.

For Confidential Treatment

Under Section 302.39

Docket OST-95-675

MOTION OF UNITED AIRLINES, INC.

TO WITHHOLD INFORMA nON

FROM PUBLIC DISCLOSURE

Communications with respect to this document should be sent to:

DAVID B. OLAUSSEN

Managing Counsel

UNITED AIRLINES, INC.

233 South Wacker Drive

Chicago, IL 60601

872-825-8069

DATED: December 9, 2013
BEFORE THE

DEPARTMENT OF TRANSPORTA nON

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Motion of

UNITED AIRLINES, INC .

. For Confidential Treatment

Under Section 302.39

Docket OST.95.675

MOTION OF UNITED AIRLINES, INC.

TO WITHHOLD INFORMA nON

FROM PUBLIC DISCLOSURE

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

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

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

Schedule B-7 Airframe and Aircraft Engine Acquisitions and Retirements and delivered to the

Office of Aviation Transportation Management. This information is provided pursuant to Part

241 of the Department's Economic Regulations, 14CFR 241, and is part of Form 41 Schedule

B.7.

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 niunber, 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

1994erders, confidential treatmenHosimilar Schedule£='hmtlrfiledseparatelybyiJnited;-_.

American Airlines, Inc. ("American") and Delta Airlines, Inc. ("Delta").

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

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

by statute to be withheld. Exemption 3 provides that:
"(b) This section does not apply to matters

that are ...

* * * 111 *

(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 the 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 Transportation ... if

disclosure of such information would adversely affect the competitive

position of any air carrier in foreign air transportation."

United considers the requested information deleted from Schedule B.7 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

disposu1g 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 flI'oceeds realized on each sale of such equipment; tJnited is denied the benent oftlfese

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 competing carriers are foreign flag carriers, their equipment

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

commercially 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 flag competitors the fruits of their competitive

efforts with manufacturers tO,secure the best possible purchase price. See,~, Order 81.12.9.

The disclosure of United's purchases and disPositions of individual aircraft and

aircraft engines would allow competing foreign and domestic airlines, manufacturers of aircraft

and engines, and new and used aircraft ownerllessors to calculate and closely track United's

costs to inquire, modi/)', transfer or dispose of its various fleets of used models 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

ownerllessors 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 information

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

competitive position 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 data filed by United, (iv) an August

23, 1994 order concerning similar Schedule B-7 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 freeto obtain U.S. carrier information from

the Department. The Department there stated:

"this lack of reciprocal access, the Department believes, could substantially harm the

competitive position of American, resulting in the erosion of the U.S. international

airline industry."

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

exemption 4 from the Freedom oflnformation 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 or confidential; ..," United believes the requested information

deleted from Schedule B-7 clearly satis/)' 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

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private third parties; the infonnation was not obtained from any governmental entities. Third,

the disclosure of such infonnation would hann 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), Sterling Drug, Inc. v. Federal

Trade Cornm'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 F.Supp. 287, and Burke

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

Department's 1994 grants of confidentiality (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 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 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 with respect to the sealed Schedule B-7 attached hereto.

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

Rules of Practice and Exemptions 3 and 4 of the Freedom ofInfonnation Act, withhold from

public disclosure, the price infonnation contained in the Airframe and Aircraft Engine

Acquisition and Retirements items which have been deleted from columns 9, 10 and II of the

public filing of United's quarterly Fonn 41 Schedule B.7 report for a period of not less than ten

years.

Ri}~i~

David B. Olaussen

Managing Counsel

UNITED AIRLINES, INC.

DATED: December 9, 2013

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