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DOT TENTATIVELY SELECTS NASHVILLE, RALEIGH/DURHAM AS LONDON GATEWAYS

 WASHINGTON, Nov. 5 /PRNewswire/ -- The Department of Transportation (DOT) today tentatively selected Nashville, Tenn., and Raleigh/Durham, N.C., as new gateways for air service to London. Both routes will be served by American Airlines.
 Delta was selected for backup authority to serve London from Salt Lake City. The selection of all route authorities is contingent upon a review of public comments and the issuance of a final decision. Consistent with American Airlines' applications and the current U.S.- U.K. bilateral aviation agreement, the order tentatively finds that these awards, if made final, be subject to an April 1 startup condition.
 "Expanded air routes are important catalysts in growing local and regional economies -- we are pushing hard around the world to provide more direct international service to more U.S. cities," said Secretary of Transportation Federico Pena. "The benefits go far beyond jobs for airline personnel, tourist industry workers and others who directly service travelers and cargo. There will be new business deals made that would never have been conceived -- new trade, new economic development that would not have occurred without increased air service."
 The order tentatively finds that the "Nashville and Raleigh/Durham services will offer more public benefits, as each will serve a more populous catchment area than would Delta at Salt Lake City" and would provide for "new non-stop, U.S.-flag London service to two of the four largest states that would otherwise lack such service." It notes that "from the perspective of competition with foreign carriers, American's two proposals would clearly afford far more benefits that either one in conjunction with Delta's."
 The order also notes that unlike Utah, North Carolina and Tennessee have a significantly larger number of European-owned businesses that "provide a substantial source of traffic to support non-stop London service that is less subject to the vagaries of discretionary travel." The order cites statistics that show the number of European-owned businesses at each point: North Carolina, 510; Tennessee, 172; and Utah, 26.
 While awarding American authority to serve the Nashville-London route, the department's show-cause order denies an application that would result in the city of Nashville purchasing one of the routes. The department said that international route authority should be awarded based on the public interest, not a city's ability to pay for a route. "We are not prepared to endorse an auction process that could rapidly come to represent a widespread mechanism for reallocating these national assets on the basis of the deepest civic pockets," the show-cause order said.
 The routes became available when USAir agreed to relinquish its three U.S.-London services as part of the carrier's investment agreement with British Airways, which DOT approved last March 15. USAir operated the two services out of its Charlotte, N.C., and Baltimore gateways, which under the U.S.-U.K. bilateral aviation agreement can be moved to other cities. A third USAir route for Philadelphia-London service was awarded to American Airlines on July 2 by the department. American was the only applicant for the Philadelphia route, which under the bilateral agreement cannot be moved to another city.
 "While this action enables us to continue to exercise our current rights, we recognize that the U.S.-U.K. bilateral aviation agreement does not offer our airlines sufficient access to British and European markets," Pena said. "For this reason, the administration has been engaged in talks with the United Kingdom aimed at achieving an `open skies' agreement by early next year. These talks are only a part of our greater effort to liberalize access to aviation markets throughout the world."
 A new round of talks between the United States and United Kingdom are scheduled for Dec. 7-9 in London.
 Comments on the show-cause order are due Nov. 15, with replies due Nov. 22.
 -0- 11/5/93
 /CONTACT: Bill Mosley of the U.S. Department of Transportation, 202-366-5571/


CO: U.S. Department of Transportation; USAir; American Airlines ST: District of Columbia IN: TRN AIR SU: EXE

IH-KD -- DC123 -- 1322 11/05/93 15:29 EST
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Date:Nov 5, 1993
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