Document ID: DOT-OST-2004-19670-0005
Agency: dot
Document Type: Notice
Title: Notice of Action Taken re: Korean Air Lines Co., Ltd. And Northwest Airlines, Inc.
Posted Date: 2005-01-24T05:00Z

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on January 24, 2005

   NOTICE OF ACTION TAKEN -- DOCKET OST-2004-19670

________________________________________________________________________
_________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Joint Application of  Korean Air Lines Co., Ltd. And Northwest Airlines,
Inc. filed  11/15/04 for:

XX  Statement of authorization for Korean under 14 CFR Part 212 to:

Permit Korean to display the “NW” code of Northwest on flights
operated by Korean between 

(1) points in the Republic of Korea, (2) points in the Republic of Korea
and points in the United States (either nonstop or via intermediate
points in third countries), (3) points in the Republic of Korea and
points in third countries, and (4) points in the United States and
points in third 

countries. 

XX  Exemption for Northwest under 49 U.S.C. 40109 to provide the
following service:

Scheduled foreign air transportation of persons, property, and mail from
points behind the United States via the United States and intermediate
points to a point or points in the Republic of Korea and beyond, and to
integrate this authority with other existing certificate and exemption
authority held by Northwest.  Northwest intends to use this authority
pursuant to a code-share arrangement with Korean.

XX  Statement of authorization for Northwest under CFR Part 212 to:

Permit Northwest to display the “KE” code of Korean on flights
operated by Northwest between 

(1) points in the United States, (2) points in the Republic of Korea and
points in the United States (either nonstop or via intermediate points
in third countries),  (3) points in the United States and points in
third countries, and (4) points in the Republic of Korea and points in
third countries. 

Applicant reps: Ron P. Brower (202) 842-3193 (Northwest) DOT Analyst:
Sylvia Moore (202) 366-6519

	           William H. Callaway, Jr. (202) 298-8660 (Korean)

United Air Lines filed an answer stating that it does not oppose
Northwest’s application so long as the Department grants United’s
similar pending application  in Docket OST-2004-19148 before or
contemporaneously with its approval of Northwest’s application. 
Northwest filed a reply.

D I S P O S I T I O N

XX  Granted in part (subject to conditions, see below)

XX  Balance dismissed (see remarks below)

2

The above action with respect to Northwest’s exemption authority was
effective when taken:  January 24, 2005, through   January 24, 2007 

The authority awarded by the statements of authorization granted was
effective when taken:   January 24, 2005, and will remain in effect
indefinitely, subject to the conditions listed below.

Action taken by:   Paul L. Gretch, Director	

		    Office of International Aviation

XX  The authority granted is consistent with the aviation agreement
between the United States and Korea.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated:     XX  Northwest’s
certificates of public convenience and necessity 

      XX  Standard exemption conditions (Attachment B)

Conditions: The route integration authority granted is subject to the
condition that any service provided under this exemption shall be
consistent with all applicable agreements between the United States and
the foreign countries involved.  Furthermore, (a) nothing in the award
of the route integration authority requested should be construed as
conferring upon Northwest rights (including fifth-freedom intermediate
and/or beyond rights) to serve markets where U.S. carrier entry is
limited unless Northwest notifies the Department of its intent to serve
such a market and unless and until the Department has completed any
necessary carrier selection procedures to determine which carriers(s)
should be authorized to exercise such rights; and (b) should there be a
request by any carrier to use the limited-entry route rights that are
included in Northwest’s authority by virtue of the route integration
exemption granted here, but that are not then being used by Northwest
the holding of such authority by route integration will not be
considered as providing any preference for Northwest in a competitive
carrier selection proceeding to determine which carrier(s) should be
entitled to use the authority at issue.

Remarks:  We have decided to grant Northwest’s request.   With respect
to United’s comments, we note that we have contemporaneously issued a
notice granting United’s request.  (See Notice of Action Taken dated
January 24, 2005, in Docket OST-2004-19148.)

Finally, we dismiss Northwest’s application to the extent that it
requests authority from points behind the United States.  The authority
to conduct operations from points behind the United States is inherent
in the authority that we award U.S. carriers to perform foreign
transportation.

The statements of authorization granted are subject to the following
conditions:

(a)	The statements of authorization will remain in effect only as long
as (i) Northwest and Korean continue to hold the necessary underlying
authority to operate the code-share services at issue, and (ii) the
code-share agreement providing for the code-share operations remains in
effect.

(b)	Northwest and/or Korean must promptly notify the Department (Office
of International Aviation) if the code-share agreement providing for the
code-share operations is no longer effective or if the carriers decide
to cease operating all or a portion of the approved code-share services.
 Such notices should be filed in Docket OST-20043-18932.

3

(c)	Northwest and/or Korean must notify the Department no later than 30
days before they begin any new code-share service under the code-share
services authorized here.  Such notice shall identify the 

market(s) to be served, which carrier will be operating the aircraft in
the code-share market added, and the date on which the service will
begin.  (Such notice should be filed in this Docket.)

 

(d)	The code-sharing conducted under this authority must comply with
Part 257 and with any amendments to the Department’s regulations
concerning code-share arrangements that may be adopted.  
Notwithstanding any provisions in the contract between the carriers, our
approval here is expressly conditioned upon the requirements that the
subject foreign air transportation be sold in the name of the carrier
holding out such service in the computer reservation systems and
elsewhere; that the carrier selling such transportation (i.e., the
carrier shown on the ticket) accept responsibility for the entirety of
the code-share journey for all obligations established in its contract
of carriage with the passenger; and that the passenger liability of the
operating carrier be unaffected.  Further, the operating carrier shall
not permit the code of its U.S. air carrier code-sharing partner to be
carried on any flights that enter, depart, or transit the airspace of
any area for whose airspace the Federal Aviation Administration has
issued a flight prohibition.

(e)	The authority to operate to third countries is subject to the
condition that any service provided under the statement of authorization
shall be consistent with all applicable agreements between the United
States and the foreign countries involved.  Furthermore, (i) nothing in
the award of this blanket statement of authorization should be construed
as conferring upon Northwest rights (including code-share, fifth freedom
intermediate and/or beyond rights) to serve markets where U.S. carrier
entry is limited unless Northwest notifies the Department of its intent
to serve such a market and unless and until the Department has completed
any necessary carrier selection procedures to determine which carrier(s)
should be authorized to exercise such rights; and (ii) should there be a
request by any carrier to use the limited-entry route rights that are
included in Northwest’s authority by virtue of the blanket statement
of authorization granted here, but that are not then being used by
Northwest, the holding of such authority will not be considered as
providing any preference for Northwest in a competitive carrier
selection proceeding to determine which carrier(s) should be entitled to
use the authority at issue.

(f)	The authority granted here is specifically conditioned so that
neither Northest nor Korean shall give any force or effect to any
contractual provisions between themselves that are contrary to these
conditions.

________________________________________________________________________
______________

On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found the carriers qualified to provide the
exemption services authorized.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the authority was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy, Policy and Conservation Act of 1975.
 To the extent not granted or deferred, we denied all requests in the
referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

  HYPERLINK "http://dms.dot.gov//reports/reports_aviation.asp" 
http://dms.dot.gov//reports/reports_aviation.asp 

										Attachment A

Proposed Initial Routes

“KE” code on flights operated by Northwest

	Passenger

	Chicago – Memphis

	Cargo

	Anchorage – Chicago*

 - Cincinnati*

Seoul -           Anchorage

	

“NW” code on flights operated by Korean

	Passenger

	Pusan	-     Osaka

	Cargo

	Seoul	-   Anchorage

		     Atlanta

		     Chicago

     		     Dallas/Ft. Worth

		     San Francisco

*No local traffic will be transported under the KE code on these
flights.

										Attachment B

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier
applicant(s) shall:

(1)  Hold at all times effective operating authority from the government
of each country served;

(2)  Comply with applicable requirements concerning oversales contained
in 14 CFR 250 (for scheduled operations, if authorized);

(3)  Comply with the requirements for reporting data contained in 14 CFR
241;

(4)  Comply with requirements for minimum insurance coverage, and for
certifying that coverage to the Department, contained in 14 CFR 205;

(5)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR 203, concerning
waiver of Warsaw Convention liability limits and defenses;

(6)  Comply with all applicable requirements of the Federal Aviation
Administration and with all applicable U.S. Government requirements
concerning security, including, but not limited to, 49 CFR Part 1544. 
To assure compliance with all applicable U.S. Government requirements
concerning security, the holder shall, before commencing any new service
(including charter flights) to or from a foreign airport, contact its
International Principal Security Inspector (IPSI) to advise the IPSI of
its plans and to find out whether the Transportation Security
Administration has determined that security is adequate to allow such
airport(s) to be served; and

(7)  Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department of Transportation, with all applicable orders and regulations
of other U.S. agencies and courts, and with all applicable laws of the
United States.

The authority granted shall be effective only during the period when the
holder is in compliance with the conditions imposed above.

										  05/2004

 See Attachment A for the routes Korean and Northwest initially propose
to serve.

 Id.

 We expect this notification to be received within 10 days of such
non-effectiveness or of such decision.

 The notice in paragraph (c) above can be used for this notification.