By this order the Department institutes the 2017 U.S.-Cuba Frequency Allocation Proceeding to allocate available frequencies for scheduled services between the United States and Havana, Cuba.1
Under the terms of the Memorandum of Understanding (MOU) between the United States and Cuba, signed February 16, 2016, U.S. carriers may operate up to twenty (20) daily combination or all-cargo scheduled round-trip frequencies between the United States and Havana, Cuba.2 By Order 2016-8-38, issued August 31, 2016, the Department allocated the 20 available U.S.-Havana daily frequencies as shown in the chart below (see link)
Having confirmed the availability of three daily U.S.-Havana frequencies, and recognizing that the applicants seek more frequencies to serve Havana than are now available, the Department must engage in carrier selection. To do so, the Department is instituting the 2017 U.S.-Cuba Frequency Allocation Proceeding.
In finalizing our initial Havana frequency allocations, we said, “Should any of the selected carriers not begin or maintain their proposed services, the Department believes that the public interest would be best served by allowing it to award those unused rights on the basis of a fresh record and in light of the circumstances presented at that time.”16 That is precisely the situation before us, and we see no persuasive basis to follow a different procedural course. While the Department is not indifferent to concerns about the efficient use of resources, we do not regard the 2016 case record as adequate for reaching a decision. For example, a record informed by developments in the market following our initial allocations, including the applicants’ own experience, would be highly beneficial to our decision-making.
As discussed above, the Department has decided to institute this proceeding to allocate the three available daily round-trip frequencies that may be used for scheduled combination or all-cargo services between the United States and Havana, Cuba. The proceeding will also consider whether, as to any Houston-Havana frequencies currently held by, or awarded in this proceeding to United, the public interest calls for approving the request of United and Mesa for operational flexibility to use United’s aircraft or Mesa’s aircraft, as conditions warrant.17
The Department’s principal objective in this proceeding will be to maximize public benefits. In this regard, the Department will consider which applicants will be most likely to offer and maintain the best service for the traveling and shipping public. The Department will also consider the effects of the applicants’ service proposals on the overall competitive environment, including effects on market structure and competition in the U.S.-Cuba market, and any other market(s) shown to be relevant. In addition, where relevant, the Department will consider other factors historically used for carrier selection.18
The Department expects to allocate the frequencies for an indefinite term, subject to a start-up condition and the Department’s standard 90-day dormancy condition. For any frequency not used for a period of 90 days, the allocation with respect to that frequency would expire automatically and revert to the Department for reallocation.
The Department believes that written, non-oral procedures under Part 302 of the Department’s regulations (14 CFR 302) are appropriate and that, by using these procedures, the Department can establish a complete evidentiary record and make timely awards with the least possible delay and without unnecessary costs to the applicants. In the interest of expediting the award of these valuable route rights, the Department may proceed directly to a final order where the record in this proceeding justifies such action. The Department finds no material issues of fact that would warrant an oral evidentiary hearing. The Department intends to resolve issues and award the subject authority on the basis of pleadings filed in this proceeding. If, however, upon review of the record, the Department determines that additional information is required and/or modified procedures are necessary for the adjudication of this case, the Department reserves the right to request additional information and/or to modify the procedures used in this matter.
The Department intends to conduct this proceeding in a manner that will facilitate the Department’s reaching a prompt final decision.
Except for procedural dates, applications should conform to Part 302, Subpart C of the Department’s regulations (14 CFR Part 302). All pleadings should be filed with the Department of Transportation, 1200 New Jersey Avenue, S.E., West Building Ground Floor, Room W12-140, Washington, D.C.