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News Release


Release No: 366-99
August 05, 1999


The Department of Defense and the Air Transport Association (ATA) today signed a memorandum of understanding that commits U. S. carriers represented by the ATA to assess the safety of all existing and proposed foreign code-share carriers within one year against a standard developed by DoD and the air carrier industry.

Code-sharing is a business arrangement between U. S. and foreign air carriers to optimize capacity utilization. Under code-sharing, although a potential passenger purchases a plane ticket on a U. S. airliner, that passenger's flight may be completed by a foreign air carrier partner.

The agreement states that after the initial safety assessment, foreign code-share carriers will be reviewed every two years, unless operational concerns dictate more frequent reviews. DoD will review the results of each assessment after the U. S. carrier evaluates a code-share partner, and also evaluate each U. S. carrier's assessment process during periodic inspections of the U. S. carrier. When the assessment results indicate substantive problems, the U. S. carrier is expected to work with the foreign carrier to resolve the problems. If problems are not resolved, DoD will consider nonuse of the code-share carrier for official DoD travel.

Assistant Deputy Under Secretary of Defense for Transportation Policy Mary Lou McHugh signed the memorandum of understanding for DoD. President and Chief Executive Officer of the ATA Carol Hallett signed on behalf of her organization. The genesis for the agreement stems from DoD's concern with the safety level of code-share arrangements. Addressing this concern, McHugh and seven major U. S. carriers--American, Continental, Delta, Northwest, TWA, United, and US Airways--formed a partnership in January 1999 to develop the safety review process. Throughout the joint effort, the ATA participated as the carriers' representative. The ATA was founded in 1936, and today is the airline industry's principal trade organization.

In addition to DoD and the ATA, senior officials from the Department of Transportation, including the Federal Aviation Administration, participated in executive reviews of the safety program during its development. Secretary of Transportation Rodney Slater formed a senior-level DoT team to review code-share safety issues and provide recommendations. The DoT team is evaluating the DoD-air carrier industry program as a foundation for its program.

Domestic air carriers continue to build global networks through the establishment of alliances and code-sharing agreements with air carriers outside the United States. Code-sharing agreements between U. S. and foreign carriers have grown from 61 in 1994 to 163 in 1999. Nearly 200,000 DoD passengers travel on foreign air carriers each year.

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