*EPF206 09/04/01
Text: Transportation Department Release on Hong Kong Cargo Services
(Polar Air Cargo tentatively chosen as U.S. carrier) (550)

The U.S. Department of Transportation (DOT) issued a press release August 31 announcing it has tentatively selected Polar Air Cargo to provide all-cargo services to and from Hong Kong, via South Korea.

If the DOT decision is finalized, Polar Air Cargo would become the first U.S. carrier to serve the Hong Kong-Korea market.

Following is the text of the press release:

(begin text)

Friday, August 31, 2001
Contact: Bill Mosley
Tel.: (202) 366-5571
DOT 88-01

DOT Tentatively Selects Polar for Hong Kong Air Cargo Service

The U.S. Department of Transportation (DOT) today tentatively selected Polar Air Cargo to provide all-cargo services to and from Hong Kong.

Polar would operate three weekly flights between Hong Kong and Seoul, Korea, with service continuing on to the United States. Polar would be the first U.S. carrier to hold traffic rights for the Hong Kong-Seoul segment, introducing U.S.-carrier competition in a market now exclusively served by foreign carriers.

The 1995 U.S.-Hong Kong air services agreement allows U.S. carriers to operate up to eight weekly round-trip all-cargo flights between Hong Kong and cities in third countries, an operation known as "fifth-freedom" rights. The United States gained the right to choose two cities from among points in the Philippines, Thailand or South Korea, with no more than five weekly flights from any one of these cities.

In 1996, DOT awarded five of the available round-trip flights to Federal Express for service between Hong Kong and Subic Bay, Philippines, and three to Air Micronesia for service between Hong Kong and Manila. Air Micronesia subsequently ceased its service in the market, making its three weekly flights available for reallocation.

The department received applications from Polar as well as Northwest Airlines, Evergreen International Airlines, United Parcel Service (UPS) and Federal Express for the flights. Northwest and Evergreen, as did Polar, proposed service from Seoul. Northwest and Evergreen now serve the U.S.-Korea market and proposed additional transpacific flights in conjunction with their proposed fifth-freedom Hong Kong-Seoul flights. Polar, which does not now serve Korea, proposed to institute a news transpacific service. Federal Express and UPS proposed service between Hong Kong and the Philippines. All of the applicants sought three weekly flights except Federal Express, which asked for one.

In its tentative decision, the department noted that Polar would serve the Hong Kong-Korea market, one that is not currently served by any U.S. carrier, as well as provide a new U.S.-carrier service option in the U.S.-Korea market. Polar proposes to operate its flights over a New York-Chicago-Anchorage, AK-Seoul-Hong Kong routing. No other applicant offered as great a combination of public benefits, the department tentatively concluded.

Today's tentative decision allows interested parties to file objections before the decision is made final. Objections are due in 10 days, and answers to objections are due five days afterward. After this comment period, the department will issue a final decision.

The show-cause order, carrier applications and other documents in this case may be obtained via the Internet at http://dms.dot.gov, docket number OST-95-764.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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