Order 2011-4-25

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

 on the 29th day of April, 2011

Served: April 29, 2011

Application of

OPEN JOINT STOCK COMPANY TRANSAERO 

AIRLINES

Docket DOT-OST-2010-0093 

 

for a foreign air carrier permit under 49 U.S.C. §41301 

ORDER TO SHOW CAUSE

Summary

By this order we tentatively find that it is in the public interest to grant Open Joint Stock 

Company Transaero Airlines (Transaero) a foreign air carrier permit attached as Appendix A to 

this order.

Application

By application filed April 13, 2010, as amended June 28, 2010, and February 28, 2011, 

Transaero, a foreign air carrier of the Russian Federation, requests a foreign air carrier permit 

under 49 U.S.C. § 41301, to engage in (i) scheduled foreign air transportation of persons, 

property, and mail from any point or points behind the Russian Federation, via any point or 

points in the Russian Federation and intermediate points, to Los Angeles, California; New York, 

New York and Miami, Florida; (ii) charter foreign air transportation of persons, property, and 

mail between points in the Russian Federation and points in the United States; and (iii) other

charters pursuant to the prior approval requirements set forth in the Department’s regulations 

governing charters.

1

 1 Transaero currently holds exemption authority in this docket for (i) scheduled foreign transportation of persons, 

property, and mail from any point or points behind the Russian Federation, via any point or points in the 

Russian Federation and intermediate points, to Los Angeles, California; New York, New York and Miami, Florida; 

(ii) charter foreign transportation of persons, property, and mail between points in the Russian Federation and 

points in the United States; and (iii) other charters pursuant to the prior approval requirements set forth in the 

Department’s regulations governing charters. See Order 2010-6-11, as amended by Notices of Action Taken dated 

July 12, 2010, and March 25, 2011, in this Docket. 
2

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to 

support its request for a foreign air carrier permit.

No answers were filed to the application.

Tentative Findings and Conclusions

We tentatively find and conclude that the public interest warrants granting the applicant a foreign 

air carrier permit, in the form attached as Appendix A and subject to the conditions attached.2 

The authority sought by the applicant is encompassed by the 1994 U.S.-Russia Air Transport 

Agreement.3 We also note that the applicant is properly licensed by its homeland to perform the 

proposed services. In addition, the Federal Aviation Administration advised us that it knew of no 

reason why we should act unfavorably on the applicant’s request. We have verified the 

applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance 

requirements).

With respect to the ownership and control of the applicant, we note that Transaero states that it is 

privately owned and that the company’s shares are openly traded and registered with the Russian 

Federal Securities Market Commission. The applicant further states that 73.3% of the shares of 

the company can be identified as being held by citizens of the Russian Federation, through 

(a) direct ownership of shares, (b) LCC “Transaero-Finance,” and (c) Sky Stream Corporation.

The record shows that the remaining shares are held (a) by Prosperity Voskhod Fund Limited, an 

investment fund domiciled in the Channel Islands (5%) and (b) by individuals holding less than 

5% interest in the company (16.43%). 

In the circumstances presented, to the extent that a question may exist as to whether the applicant 

is substantially owned and effectively controlled by citizens of the Russian Federation, we 

tentatively find that a waiver of the ownership and control requirement is warranted, as there is 

no evidence on the record which would suggest that the ownership and control of the carrier 

would be inimical to U.S. aviation policy or interests.

Finally, we tentatively find that the authority sought by the applicant, if finalized, should be 

subject to the following conditions:

In the conduct of the charter services authorized herein, Transaero must adhere to (1) FAAapproved flight routings; and (2) the Air Transport Agreement between the United States and 

the Russian Federation, including its Annexes. In accordance with 14 CFR §212.9(d) and (e) 

of the Department’s rules Transaero shall not perform any charter(s) unless specific authority 

 2 The applicant’s request for a foreign air carrier permit was summarized in the Department’s published weekly list 

of applications filed. This notice described the authority sought and gave interested persons an opportunity to submit 

evidence and objections to the award of this foreign air carrier permit authority. 3 On February 13, 2009, the United States and the Russian Federation agreed, ad referendum, to revised Annexes to 

the U.S.-Russia Air Transport Agreement and stated that, pending their entry into force, their respective aeronautical 

authorities intend to implement the provisions of those Annexes on the basis of comity and reciprocity. 
3

in the form of a statement of authorization for such charter(s) has been granted by the 

Department. Applications for the statements of authorization required above shall be filed in 

accordance with the procedures set forth in 14 CFR §212.10.

In view of the foregoing and all facts of record, we tentatively find and conclude that:

1. It is in the public interest to issue the applicant a foreign air carrier permit in the form 

attached;

2. The applicant is fit, willing and able properly to perform the foreign air transportation 

described in the attached permit and to conform to the provisions of Title 49 of the U.S. Code, 

and to our rules, regulations, and requirements;

3. Waiver of our ownership and control requirement, to the extent necessary, is warranted in the 

circumstances presented, as there is no evidence on the record which would suggest that the 

ownership and control of the carrier would be inimical to U.S. aviation policy or interests; 

4. The public interest requires that the exercise of the privileges granted by the permit should be 

subject to the terms, conditions, and limitations contained in the attached permit, and to such 

other reasonable terms, conditions, and limitations required by the public interest as we may 

prescribe;

5. The issuance of this foreign air carrier permit will not constitute a major regulatory action 

under the Energy Policy and Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of our 

regulations;4

6. The public interest does not require an oral evidentiary hearing on the application; and

7. Our action with respect to this foreign air carrier permit should, unless disapproved by the 

President of the United States under § 41307 of Title 49 of the U.S. Code, become effective on 

the 61st day after its submission for § 41307 review, or upon the date of receipt of advice from 

the President or his designee under Executive Order 12597 and implementing regulations that he 

or she does not intend to disapprove this portion of the Department’s decision under that section, 

whichever occurs earlier.

In view of the above, and acting under authority assigned by the Department in its regulations, 

14 CFR Part 385, we tentatively find that our actions are consistent with Department policy. 

 4

 This finding is based on the fact that the grant of this permit will not result in a near-term net annual change in 

aircraft fuel consumption of 10 million gallons or more.
4

ACCORDINGLY,

1. We direct all interested persons to show cause why our tentative decision on the application of 

Open Joint Stock Company Transaero Airlines, set forth above, should not be made final;

2. Any interested person objecting to the issuance of an order making final our tentative findings 

and conclusions with respect to the applicant’s request for a foreign air carrier permit shall, no 

later than twenty-one (21) calendar days after the date of service of this order, file with the 

Department and serve on the parties to this proceeding, a statement of objections specifying the 

part or parts of the tentative findings and conclusions objected to, together with a summary of 

testimony, statistical data, and concrete evidence to be relied upon in support of the objections; if 

objections are filed, answers to objections are due no later than seven (7) calendar days 

thereafter;5

3. If timely and properly supported objections are filed, we will give further consideration to the 

matters and issues raised by the objections before we take further action;

4. In the event no objections are filed, all further procedural steps shall be deemed waived, and 

the Department will enter an order which will (subject to Presidential review under § 41307 of 

Title 49 of the U.S. Code) make final our tentative findings and conclusions set forth in this 

order; and

5. We will serve a copy of this order on Open Joint Stock Company Transaero Airlines; the 

Embassy of the Russian Federation in Washington, D.C.; the Department of State; and the 

Federal Aviation Administration.

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)

Appendix

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov

 5 Because we are providing for the filing of objections to our tentative decision in this order, we will not entertain 

petitions for review of this order.
Appendix A

Issued by

Order 2011-_-_

 UNITED STATES OF AMERICA 

 DEPARTMENT OF TRANSPORTATION 

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

----------------------------------------------------------------------------

PERMIT TO FOREIGN AIR CARRIER

-----------------------------------------------------------------------------

OPEN JOINT STOCK COMPANY TRANSAERO AIRLINES

A Foreign Air Carrier of the Russian Federation

is authorized, subject to the following provisions, the provisions of Title 49 of the U.S. Code, 

and the orders, rules, and regulations of the Department of Transportation, to engage in the 

following:

Scheduled foreign air transportation of persons, property, and mail from any point or 

points behind the Russian Federation, via any point or points in the Russian Federation 

and intermediate points, to Los Angeles, California; New York, New York and Miami, 

Florida; and charter foreign transportation of persons, property, and mail between points 

in the Russian Federation and points in the United States.

The holder shall also be authorized to engage in other cargo charter trips in foreign air 

transportation, subject to the terms, conditions, and limitations of the Department’s regulations 

governing charters.

This permit and the exercise of the privileges granted in it shall be subject to the terms, 

conditions and limitations in both the order issuing this permit and the attachment to this order, 

and to all applicable provisions of any treaty, convention or agreement affecting international air 

transportation now in effect, or that may become effective during the period this permit remains 

in effect, to which the United States and the holder’s homeland are or shall become parties.

This permit shall be effective on ____ __, 2011. Unless otherwise terminated at an earlier date 

pursuant to the terms of any applicable treaty, convention or agreement, this permit shall 

terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2) upon 

the effective date of any treaty, convention, or agreement or amendment, which shall have the 

effect of eliminating the bilateral right for the service authorized by this permit from the service 

which may be operated by airlines designated by the Government of the Russian Federation (or, 

if the right is partially eliminated, then the authority of this permit shall terminate in like part); 

(3) upon the effective date of any permit granted by the Department to any other carrier 

designated by the Government of the Russian Federation in lieu of the holder; or (4) upon the 

termination or expiration of the applicable air services agreement between the United States and 

the Russian Federation. However, clause (4) of this paragraph shall not apply if prior to such 

termination or expiration, the foreign air transportation authorized herein becomes the subject of 
another treaty, convention or agreement to which the United States and the Russian Federation

become parties.

The Department of Transportation has executed this permit and affixed its seal on 

_______ __, 2011.

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)
Foreign Air Carrier Permit Conditions

In the conduct of the operations authorized, the foreign carrier applicant shall:

(1) Not conduct any operations unless it holds a currently effective authorization from its homeland for 

such operations, and it has filed a copy of such authorization with the Department;

(2) Comply with all applicable requirements of the Federal Aviation Administration, the Transportation 

Security Administration, and with all applicable U.S. Government requirements concerning security, 

including, but not limited to, 14 CFR Parts 129, 91, and 36 and 49 CFR Part 1546 or 1550, as applicable. 

To assure compliance with all applicable U.S. Government requirements concerning security, the holder 

shall, before commencing any new service (including charter flights) from a foreign airport that would be 

the holder’s last point of departure for the United States, contact its International Industry Representative 

(IIR) (formerly referred to as International Principal Security Inspector) to advise the IIR of its plans and 

to find out whether the Transportation Security Administration has determined that security is adequate 

to allow such airport(s) to be served;

(3) Comply with the requirements for minimum insurance coverage contained in 14 CFR Part 205, and, 

prior to the commencement of any operations under this authority, file evidence of such coverage, in the 

form of a completed OST Form 6411, with the Federal Aviation Administration’s Program Management 

Branch (AFS-260), Flight Standards Service (any changes to, or termination of, insurance also shall be 

filed with that office);

(4) Not operate aircraft under this authority unless it complies with operational safety requirements at 

least equivalent to Annex 6 of the Chicago Convention;

(5) Conform to the airworthiness and airman competency requirements of its Government for 

international air services;

(6) Except as specifically exempted or otherwise provided for in a Department Order, comply with the 

requirements of 14 CFR Part 203, concerning waiver of Warsaw Convention liability limits and defenses;

(7) Agree that operations under this authority constitute a waiver of sovereign immunity, for the 

purposes of 28 U.S.C. 1605(a), but only with respect to those actions or proceedings instituted against it 

in any court or other tribunal in the United States that are: (a) based on its operations in international air 

transportation that, according to the contract of carriage, include a point in the United States as a point of 

origin, point of destination, or agreed stopping place, or for which the contract of carriage was purchased 

in the United States; or (b) based on a claim under any international agreement or treaty cognizable in 

any court or other tribunal of the United States. In this condition, the term "international air 

transportation" means "international transportation" as defined by the Warsaw Convention, except that 

all States shall be considered to be High Contracting Parties for the purpose of this definition;

(8) Except as specifically authorized by the Department, originate or terminate all flights to/from the 

United States in its homeland;

(9) Comply with the requirements of 14 CFR Part 217, concerning the reporting of scheduled, 

nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise provided in the applicable aviation 

agreement, comply with the Department's rules governing charters (including 14 CFR Parts 212 and 

380); and

(11) Comply with such other reasonable terms, conditions, and limitations required by the public interest 

as may be prescribed by the Department, with all applicable orders or regulations of other U.S. agencies 

and courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder is not in compliance with the 

conditions imposed above. Moreover, this authority cannot be sold or otherwise transferred without 

explicit Department approval under Title 49 of the U.S. Code.

1/2008