Exem ption No. 10254

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC 20591

In the matter of the petition of

CONTINENTAL AIRLINES Regulatory Docket No. FAA-2011-0166

for an exemption from § 121.163(a), (b), and (c) of Title 14, Code of Federal Regulations

DENIAL OF EXEMPTION

By letter dated February 16, 2011, Captai n Don Gunther, Staff VP Safety, Continental Airlines (Continental), P.O. Box 4607 HQSSY, Houston, Texas 77210-4607, petitioned the

Federal Aviation Adm inistration (FAA) on behalf of Continental for an exemption from § 121.163(a), (b), and (c) of Title 14, Code of Federal Regulations (14 CFR). The proposed exemption, if granted, would allow Continenta l to combine its operating certificate with United Air Lines’ (United) operating certificate without completing aircraft proving tests as prescribed by § 121.163.

The petitioner requests relief from the following regulation:

Section 121.163 Aircraft proving tests.

(a) Initial airplane proving tests. No person may operate an airplane not before proven for use in a kind of operation under this part or part 135 of this chapter unless an airplane of that type has had, in addition to the airplane certification tests, at least 100 hours of proving tests acceptable to the Administrator, including a representative number of flights into en route airports. The requirement for at least 100 hours of proving tests may be reduced by the

Administrator if the Administrator determines th at a satisfactory level of proficiency has been demonstrated to justify the reduction. At leas t 10 hours of proving flights must be flown at night; these tests are irreducible.

AFS-11-187-E2

(b) Proving tests for kinds of operations. Unless otherwise authorized by the Administrator, for each type of airplane, a certificate holder must conduct at least 50 hours of proving tests acceptable to the Administrator for each kind of operation it intends to conduct, including a representative number of flights into en route airports.

(c) Proving tests for materially altered airplanes. Unless otherwise authorized by the Administrator, for each type of airplane that is materially altered in design, a certificate holder must conduct at least 50 hours of proving tests acceptable to the Administrator for each kind of operation it intends to conduct with that airplane, including a representative number of flights into en route airports.

The petitioner supports its request with the following information:

The petitioner states that the Department of Transportation (DOT) has approved the purchase of Continental by United, and the sale has been completed. United and Continental have provided a transition plan which was accepted by the FAA and for which Operations Specification A502 has been issued.

The petitioner requests exemption approval to ensure a smooth transition to a single operating certificate (SOC). The petitioner notes that while the current plan is for the final operating certificate to be the current Continental air carrier certificate, the discussion provided in the petitioner’s request is applicable regardless of which certificate were to be the merged carrier’s certificate.

The petitioner contends that precedents exist for the America West and US Airways, TWA and American Airlines, as well as the Northwest and Delta Air Lines mergers. The petitioner stated the extent of relief sought is a one-time exemption approval from proving test requirements for all aircraft types which are not presently included on the final air carrier certificate. The petitioner provided a list of the affected aircraft types and approximate year of entry into service in a table attached to the petition.

The petitioner states that both carriers have extensive operating experience with these aircraft and that all city pairs which might be considered for proving runs are currently being operated in revenue service. The carrier’s flight deck and cabin crews will operate these aircraft types in accordance with the FAA-approved procedures in place at SOC issuance. Additionally, no crewmember movement between legacy carriers will occur until post-SOC and merging of all training programs has been completed for

the affected crewmembers.

The petitioner argues that expediting the transition to an SOC provides a reduced period of time maintaining two “parallel” certificates, including part 119 positions and separate individual carrier accountability and oversight by the FAA. Additionally, movement to an SOC allows a single operational control system to be in place. The petitioner contends this is essential to ensure the highest level of safety as the carrier moves forward to complete the remaining merger-related items. The petitioner also contends that the SOC provides increased operational flexibility with respect to the use3

of aircraft and serviced markets. This enables the adjustment of service to better ensure appropriate service levels to the public in all cities served.

The petitioner states that failure to obtain this exemption would result in extensive disruption to the carrier’s operations as aircraft and crews are pulled from current line operations to support proving run activities, thereby imposing a potential negative impact on the traveling public. Additionally, disruption to ramp operations may occur as additional proving flights must be accommodated as though they were revenue flights. The petitioner contends this may result in disruption to revenue flights, with a negative impact on the traveling public. Finally, the petitioner argues that significant additional workload for the FAA would be required to supervise and conduct such proving tests.

The petitioner states that based upon each legacy carrier’s extensive experience in operating these aircraft types and the high level of crew expertise, such an exercise would not have any increase in the level of safety of the merged carrier’s operation.

The FAA has determined that good cause exists for waiving the requirement for Federal Register publication because any delay in acting on this petition would be detrimental to

Continental.

The FAA’s analysis is as follows:

To grant an exemption, the FAA must find that such an exemption from the specific section would not adversely affect safety and be in the public interest. The petitioner’s unique interest is not the same as public interest. Additionally, the petitioner should give particular attention to the reasons why granting the request will be in the public interest and how actions by the petitioner will provide an equivalent level of safety. The FAA has considered the petitioner’s request for relief from § 121.163(a), (b), and (c) and finds that the petitioner has not shown how an equivalent level of safety would be provided if proving runs were not conducted.

The FAA is unable to verify the petitioner’s statement regarding grants of exemption to the other carriers stated above in those merger situations and can find no evidence that any similar exemptions were granted to these carriers in past mergers.

The petitioner asserts that both carriers (Continental and United) have extensive operating experience on the city pair routes that would be considered for the proving flights and are already being operated in revenue service. The FAA believes that the

fact that two separate carriers have operated similar equipment on similar or identical

routes is not material.

The petitioner asserts that cockpit and cabin crews will operate the aircraft in accordance with currently approved FAA procedures in place at the time of SOC4

issuance. The FAA believes this to be an obvious assertion, as crews are required to operate with currently approved policies and procedures.

The petitioner states that no crewmember movement between carriers will occur until after the SOC is issued, all training programs have been completed, and training provided to all affected crewmembers. The petitioner, however, has not included any description or detailed plan for how these training programs and revised procedures will be implemented in its petition.

The petitioner states that implementation of a single operational control system would ensure the highest level of safety. The FAA does not see the relationship between establishment of a single operational control system and reduction in proving flight requirements. Proving flights are designe d to test, among other things, the single operational control system. To exempt the petitioner from proving flights without validating the single operational control system would allow the single operational control system to go untested prior to revenue flights.

The petitioner asserts that failure to obtain this exemption would have a negative impact on the traveling public. Aircraft and crews would be unavailable for revenue operations because these assets were being utilized in proving runs. The unavailability of aircraft and crews could negatively imp act the flight schedule and, therefore, the traveling public. The FAA contends that this situation amounts to a company staffing and scheduling issue. The fact that the petitioner does not have the needed number of aircraft, crews, or ramp space to perform the proving flights is not a valid argument for issuance of an exemption.

Finally, the FAA agrees that this merger is being performed under Operations Specification A502. Section one of the Oper ations Specification states, “Inherent in the implementation of the United-Continental Bridging Manual and Transition Plan is the air carriers’ responsibility to ensure regulatory compliance and provide the public with the highest possible level of safety in air transportation.” Reducing the proving flights without any approved plan does not pr ovide the public with the highest possible level of safety in air transportation and is, therefore, not in the public interest.5

The FAA’s Decision:

In consideration of the foregoing, I find that a grant of exem ption would not be in the public interest. Therefore, pursuant to the authority contained in 49 U.S.C. §§ 40113 and 44701, delegated to me by the Administrator, the petition of Continental Airlines for an exemption from 14 CFR § 121.163(a), (b), and (c) is hereby denied.

Issued in Washington, D.C., on May 2, 2011.

/s/ .

John W. McGraw Acting Director, Flight Standards

Service