GUAM GETS AIR SERVICES EXEMPTION FOR CARGO

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By Gerardo R. Partido

SAIPAN, CNMI (Marianas Variety, Aug. 7)–HAGÅTÑA — The U.S. Department of Transportation on Saturday approved Guam’s petition for expanded air services, but limited the coverage to just cargo exemptions.

The Guam International Airport Authority had also sought an exemption that would permit foreign air carriers to conduct passenger transfers at the Antonio B. Won Pat International Airport.

But the DoT did not grant this request, saying that passenger cabotage, as the practice is legally known, is not permitted at any U.S. location and that such cabotage authority has not been granted by any foreign country to U.S. airlines.

The air cargo exemption now allows foreign carriers to move cargo from a foreign city to one U.S. point of entry, then to another U.S. point of entry.

Specifically, the DoT order released Aug. 4 in Washington, D.C., proposes that the following authority be granted for qualifying foreign air carriers: (1) the ability to conduct expanded cargo transfer operations at Guam’s Antonio B. Won Pat International Airport; and (2) the ability to serve Guam and to co-terminalize Guam with other U.S. points.

DoT is also proposing to invite eligible foreign carriers to apply for authority to serve new U.S. points on an extra-bilateral basis, so long as these flights also serve Guam and provided that there is a "pro-competitive" agreement with the applicant’s home country.

The exemption excludes Japan, China and the United Kingdom, which are currently negotiating bilateral agreements with the United States.

The DoT, in its proposed ruling, stated that granting the cargo exemption for points of origin in Japan, China and the United Kingdom would impede in the progress of treaties.

The proposed ruling opens a 14-day period for interested parties to file objections with the DoT. If no objections are filed, the proposed ruling becomes final and goes in to effect. If an objection is filed, the DoT will review the objections.

"This is great news for Guam as we continue to seek ways to expand our growing economy. There is great potential here for growth and we want to work with our air carriers to continue growing the aviation industry for the benefit of all," Gov. Felix Camacho said in reaction to the DoT announcement.

GIAA filed a petition for expanded air service with the DoT on Feb. 9, 2006.

Congresswoman Madeleine Bordallo, who wrote to DoT in support of the government of Guam’s petition on Feb. 24, 2006, said the Guam cargo exemption follows the existing precedents for Hawaii and Alaska but stops short of the passenger exemption requested by GIAA.

"Expanded air cargo services at our airport, which the major U.S. airlines supported, should help increase business at GIAA," Bordallo said.

Earlier, the congresswoman had requested that Guam be granted authority consistent with that previously granted to carriers servicing Alaska and Hawaii.

In her letter, Bordallo urged the DoT to consider that Guam, Hawaii and Alaska have similar geographic, economic, and market conditions.

The DoT noted in their proposed ruling that Guam’s "geographic and economic situation warrants the grant of the same type of relief that we earlier granted for Alaska and Hawaii."

In addition, DoT noted in its review of the petition that "air service is vitally important to the territory of Guam, and that Guam, like Alaska and Hawaii, is geographically isolated and heavily dependent on air transportation as a vital element of its economy."

According to Bordallo, the DoT’s Guam ruling is consistent with previous decisions made regarding Alaska and Hawaii’s petitions that also denied a passenger exemption.

August 7, 2006

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