1 Order 2011

- 1

- 3

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 6 th day of January , 20 11

Ser ved: January 6, 2011

Application of

IBERIA LÍNEAS AÉREAS DE ESPAÑA, S.A.

and IBERIA LÍNEAS AÉREAS DE ESPAÑA SOCIEDAD ANÓNIMA OPERADORA Docket DOT

- OST

- 2010

- 0283

for transfer of foreign air carrier permit under and related authorizations under 49 U.S.C. §41303

In the Matter of

AMERICAN AIRLINES, INC.

and

BRITISH AIRWAYS PLC Dockets DOT

- OST

- 2008

- 0044

DOT

- OST

- 2010

- 0248

for statements of authorization to conduct certain code

share operations

EXEMPTION AND ORDER TO SHOW CAUSE

Summary

By this order we (1) grant the request of Iberia Líneas Aéreas d e España Sociedad Anónima Operadora (Iberia Operadora) for an exemption under 49 U.S.C. §40109, subject to conditions; 1
(2) grant the request of Iberia Operadora for blanket statements of authorization to conduct code

share operations with American Airlines, Inc. (American) and British Airways PLC (British Airways); and ( 3 ) tentatively grant the application of Iberia Líneas Aéreas d e España, S.A.

1 The conditions are attached as Appendix A.2

(Iberia) and Iberia Operadora ( collectively the Joint Applicants ) for the transfer of Iberia’s foreign air carrier permit to Iberia Operadora.

Application

By application filed November 15, 20 10, as amended January 4, 2011, the Joint Applicants, foreign air carriers of Spain, request (i) exemption authority for Iberia Operadora to enable it to engage in the operations authorized by Iberia’s foreign air carrier permit pending transfer of such

pe rmit to Iberia Operadora and (ii) transfer of Iberia’s foreign air carrier permit to Iberia Operadora to be effective immediately upon completion of the Iberia

- British Airways

consolidation. 2 Iberia ’s current foreign air carrier permit 3 authorizes the carrier to engage in:

a. foreign scheduled and charter air transportation of persons, property, and mail from any point or points behind any Member State of the European Union, via any point or points in any Member State and via intermediate p oints to any point or points in the United States and beyond;

b. foreign scheduled and charter air transportation of persons, property, and mail between any point or points in any member of the European Common Aviation Area and any point or points in the Uni ted States;

c. foreign scheduled and charter all

- cargo air transportation between any point or points in the United States and any other point or points;

d. o ther charters pursuant to the prior approval requirements set forth in the Department’s regulations governing charters; and

e. transportation authorized by any additional rights made available to European Community (now European Union) carriers in the future. 4

The Joint Applicants also request transfer from Iberia to Iberia Operadora of the authorization granted to Iberia for blanket code sharing with American and British Airways. 5

No answers were filed to the application.

2 The Joint Applicants state that in early 2011, Iberia and British Airways will complete several contemporaneous transactions that will result in each airline becoming a part ially

- owned, indirect subsidiary of International Consolidated Airlines Group. S.A. (IAG), a holding company organized under the laws of Spain. The Joint Applicants further state that IAG will be essentially owned by then

- current British Airways and Iberia shareholders once the consolidation is completed.

3 See Order 2008

- 6

- 23.

4 The au thorization in paragraph e is subject to specific conditions set forth in the permit attached to Order 2008

- 6

- 23

. The same conditions would apply to this authority as transferred to Iberia Operadora.

5 See Department Action dated March 13, 2008, in Docket DOT

- OST

- 2008

- 0044 for American and Department Action dated October 21, 2010, in Docket DOT

- OST

- 2010

- 0248 for British Airways.3

Decision

We have decided to grant exemption authority and blanket statements of authorization, as described below and subject to conditions

, to Iberia Oper a dora and tentatively to grant, subject to

show

- cause procedures, transfer of Iberi a’s foreign air carrier permit to Iberia Operadora, as described below and subject to conditions.

Specifically, we will grant Iberia Operadora exemption authority for the services set forth in ordering paragraph 1 below. We will also grant Iberia Operadora statements of authorizations so that it may conduct code

- share operations with American and British Airways, subject to

conditions

. 6 We will tentatively transfer and reissue Iberia’s foreign air carrier permit to Iberia Operadora , as discussed below.

As an additional matter, Iberia Operadora has requested that we grant it, in addition to authority currently contained in the U.S.

- EU Agreement, authority to conduct transportation authorized by any additional rights made available to European Community carriers in the future. We are granting Ib eria Operadora ’s request for this authority by exemption. We are, however, requiring Iberia Operadora , before it commences any new service under this authority, to provide us with evidence that it holds a homeland license for that new service, unless it h as already provided

such evidence. 7

With respect to Iberia Operadora’s request for exemption authority, we find that grant of this authority, as conditioned, is consistent with the public interest. We also find that Iberia Operadora is financially and op erationally qualified to perform the services authorized, and that it is substantially owned and effectively controlled in a manner consistent with the provisions of

the U.S.

- EU agreement. 8 9 We also find that the authority sought by the applicant is

enc ompassed by the U.S.

- EU Agreement. 10

B y memorandum dated December 20, 2010, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on Iberia Operadora’s request. We have

verified Iberia Operadora’s compli ance with 14 CFR Parts 203 (Warsaw liability waiver) and 205 (insurance requirements).

6 See Appendix B.

7 See Orders 2007

- 6

- 19 and 2007

- 10

- 1, and Orders 2007

- 7

- 13 and 2007

- 10

- 16, where we granted this authority to British Airways Plc. and Virgin Atlantic Airways Ltd., respectively.

8 We make this finding based on Article 2 (Reciprocal Recognition of Regulatory Determinations with Regard to

Airline Fitness and Citize nship) of the Protocol to amend the U.S.

- EU Air Transport Agreement, signed June 24, 2010.

9 The applicant requested confidential treatment of financial submissions it provided in this Docket. Good cause having been shown, we will grant the request.

10 The Government of Spain has not yet issued a homeland license to Iberia Operadora. The carrier advises that the Government of Spain will issue the license to be effective on the date of the inter

- corporation transaction noted in

footnote 2 above. In the cir cumstances presented, we will award the requested authority and will tentatively grant the requested permit transfer, subject to the condition that Iberia Operadora not conduct any of the operations specified in this order unless it holds a currently effec tive authorization from its homeland for such operations

, and it has filed a copy of such authorization with the Department ( see standard condition (1) in Appendix A)

.4

In view of the above, we find that grant of the requested exemption authority, as conditioned, for

a two

- year term, or until the requested permit authority becomes effe ctive, whichever occurs earlier, is warranted.

Tentative Findings and Conclusions

-- Foreign Air Carrier Permit Application

We tentatively find and conclude that the public interest warrants granting the Joint Applicants ’ request for transfer of Iberia’s foreign air carrier permit to Iberia Operadora, in the form attached as Appendi x C and subject to the conditions attached. 11

In view of the foregoing and all facts of record, and acting under authority assigned by the Department in its regulations, 14 CF R Part 385, we tentatively find and conclude that:

1. It is in the public interest to transfer the foreign air carrier permit of Iberia to Iberia Operadora in the form attached;

2. Iberia Operadora 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. Iberia Operadora is substantially owned and effectively controlled by citizens of Member States of the European Union ;

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 t erms, 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; 12

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 S tates 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.

11 The Joint Applicant s request for transfer of foreign air carrier permit and related authorizations 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. As discussed above, we received no objections.

12 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.5

In view of the above, and acting under authority assigned by the Department in its regulations, 14 CFR Part 385, we find that (1) our actions are consistent with Department policy; and (2) with respect to the exemption authority we are conferring on Iberia Operadora, it is qualified to perform those operations; and that grant of the exemption authority is consistent with the pub lic interest and would not constitute a major regulatory action under the Energy Policy and

Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Iberia Líneas Aéreas d e España Sociedad Anónima Operadora for an exemption under 49 U.S.C. §40109 for the services set forth below: 13 14

a. foreign scheduled and charter air transportation of persons, property, and mail from any point or points behind any Member State of the European Union, via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;

b. foreign scheduled and charter air transportation of persons, property, and mail between any point or points in any member of the European Common Aviati on Area and any point or points in the United States;

c. foreign scheduled and charter all

- cargo transportation between any point or points in the United States and any other point or points;

d. o ther charters pursuant to the prior approval requirements set forth in the Department’s regulations governing charters; and

e. transportation authorized by any additional rights made available to European Union carriers in the future;

2. Iberia Líneas Aéreas de España Sociedad Anónima Operadora shall , before it comm ences any new service under subparagraph (e) of ordering paragraph 1 above, provide the Department, in

Docke t DOT

- OST

- 2010

- 0283, wi th evidence that it holds a homeland license for that new service, unless it has already provided such evidence to the Depart ment;

3. The exercise of the privileges granted above is subject to compliance by Iberia Líneas Aéreas

d e España Sociedad Anónima Operadora with the conditions listed in Appendix A;

4. Our action granting the exemption authority described herein, subject to the provisions of ordering paragraphs 1 through 3 above and to footnote 13 , is effective immediately, for a period of two years from the issue date of this order, or until the attached permit becomes effective, whichever is earlier;

13 Iberia Oper adora may not conduct any of the operations specified in this order 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 ( see standard condition (1) in Appendix A)

. 14 We acted on the request for exemption authority prior to the expiration of the answer period with the consent of all parties served.6

5. We may a mend, modify, or revoke the exemption authority set forth herein at our discretion at any time and without hearing;

6. To the extent not acted upon above, we dismiss all requests for exemption authority in Docket

DOT

- OST

- 2010

- 0283;

7. We grant, subjec t to the conditions attached as Appendix B and to footnote 13 , blanket

statements of a uthorization under 14 CFR Part 212 for:

(a) the display of Iberia Líneas Aéreas de España Sociedad Anónima Operadora ’s designator

code on flights operated by American Airlines, Inc. (or its affiliates) between (1) points in the United States; (2) points in the United States and points in Spain (either nonstop or via intermediate points in third countries); (3) points in the United States and points in third countries; and (4) points in Spain and points in third countries ;

(b) the display of American Airlines, Inc.’s designator code on flights operated by Iberia Líneas Aéreas de España Sociedad Anónima Operadora between (1) points in Spain; (2) points in Spain and points in the United States (either nonsto p or via intermediate points

in third countries); (3) points in Spain and points in third countries; and (4) points in the United States and points in third cou ntries ;

( c ) the display of Iberia Líneas Aéreas de España Sociedad Anónima Operadora ’s designator

code on flights operated by British Airways PLC (1) from any point of points behind any member State of the European Union, via any point or points in any Me mber State and via intermediate points, to any point or points in the United States and beyond; and (2) between any point or points in the United States and any point or points any member of the European

Common Aviation Area ;

( d ) the display of British A irways PLC’s designator code on flights operated by Iberia Líneas Aéreas de España Sociedad Anónima Operadora (1) from any point of points behind any member State of the European Union, via any point or points in any Member State and via intermediate point s, to any point or points in the United States and beyond; and (2) between any point or points in the United States and any point or points any member of the European

Common Aviation Area ;

8

. With respect to the Joint Applicants ’ request for approval of the transfer of foreign air carrier permit held by Iberia Líneas Aéreas d e España, S.A. to Iberia Líneas Aéreas d e España Sociedad Anónima Operadora , we direct all interested persons to show cause why our tentative decision

on that application, set forth above, should not be made final;

9. Any interested person objecting to the issuance of an order making final our tentative findings and conclusions with respect to the Joint Applicants’ request for transfer of 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 co nclusions objected to, together with a summary of testimony, statistical data, and concrete evidence to be relied upon in support of the7

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

1 0 . 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;

1 1 . 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

1 2 . We will serve a copy of this or der on Iberia Líneas Aéreas d e España, S.A. ; Iberia Líneas Aéreas de España Sociedad Anónima Operadora ; American Airlines, Inc. ; British Airways PLC ; the Embassy of Spain in Washington, D.C. ; the Department of State ; and the Federal Aviation

Administration

.

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov1 APPENDIX A

Foreign Air Carrier Exemption 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 3 6 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 Transportati on 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 thi s 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 file d 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 Govern ment 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 operat ions 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 purchas ed 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 a Member State of the European Union;

(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 applic able 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.

EU carrier 01/20081 APPENDIX B

Blanket Statements of Authorization to American and Iberia Operadora to permit:

( A ) American to display the designator code of Iberia Operadora in conjunction with foreign air transportation of persons, property, and mail on flights operated by Americ an or its affiliates between (1) points in the United States; (2) points in the United States and points in Spain (either nonstop or via intermediate points in third countries); (3) points in the United States and points in third countries; and (4) point s in Spain and points in third countries.

(B) Iberia Operadora to display the designator code of American in conjunction with foreign air transportation of persons, property, and mail on flights operated by Iberia between (1) points in Spain; (2) points in Spain and points in the United States (either nonstop or via intermediate points in third countries); (3) points in Spain and points in third countries; and (4) points in the United States and points in third

countries.

The statements of authorization are subject to the following conditions:

(a) The statements of authorization will remain in effect only as long as (i) American and Iberia Operadora continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the code

- share agreement providing for the code

- share operations remains in effect;

(b) American and/or Iberia Operadora must notify the Department no later than 30 days before they begin any new

code

- share service under the code

- share services authoriz ed here. Such notice shall identify the market(s) to be served, which carrier will be operating the aircraft in the code

- share market added, and the date on which the service will begin. Such notices should be filed in Docket DOT

- OST

- 2008

- 0044;

(c) American and Iberia Operadora must notify the Department immediately if the code

- share agreement under which

these code

- share services are operated is no longer in effect or if the carriers decide to cease operating all or a portion of the approved code

- sh are services. Such notices should be filed in Docket DOT

- OST

- 2008

- 0044; 1

(d) The code

- sharing operations conducted under this authority must comply with 14 CFR Part 257 and with any amendments to the Department's regulations concerning code

- share arran gements that may be adopted. Notwithstanding any provisions in the contract between the carriers, our approval here is expressly conditioned upon the requirements that the subject foreign air transportation be sold in the name of the carrier holding out s uch service in computer reservation systems and elsewhere; that the carrier selling such transportation (i.e., the carrier shown on the ticket) accept responsibility for the entirety of the code share journey for all obligations established in its contract of carriage with the passenger; and that the passenger liability of the operating carrier be unaffected;

(e) Any service provided shall be consistent with the provisions of the U.S.

- EU agreement, and all applicable agreements with other foreign countrie s involved. Furthermore, (i) nothing in the award of the blanket statement of authorization to American should be construed as conferring upon American rights (including code

- share, fifth

freedom intermediate and/or beyond rights) to serve markets where U .S. carrier rights are limited unless American notifies us of its intent to serve such market and unless and until the Department has completed any necessary carrier selection procedures to determine which carrier(s) should be authorized to exercise such r ights; 2 and (ii) should there be a request by any carrier to use the limited

- entry route rights that are included in American’s authority by virtue of the blanket statement of authorization granted here, but that are not being used by American, the holding of such authority will not be considered as providing any preference for American in a carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue.

1 We expect this notification to be received within 10 days of such non

- effecti veness or of such decision.

2 The notice referenced in condition (b) above may be used for this notification.2 (f) The authority granted here is specifically conditio ned so that neither American nor Iberia Operadora shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions; and

(g) We may amend, modify, or revoke the authority granted at any time wi thout hear ing at our discretion.3

Blanket statements of authorization to permit British Airways to display the designator code of Iberia Operadora on flights operated by British Airways and Iberia Operadora to display the designator code of British Airways on flights operated by Iberia Operadora: (1) from any point of points behind any member State of the European Union, via any point or points in any Member State and via intermediate points, to any point or points in the United States and beyond; and (2) betwe en any point or points in the United States and any

point or points any member of the European Common Aviation Area.

The statements of authorization granted are subject to the following conditions:

(a) The statements of authorization will remain in effect only as long as (i) British Airways and Iberia Operadora continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the code

- share agreement providing for the code

- share operations remains in effect;

( b) British Airways and/or Iberia Operadora must notify the Department no later than 30 days before they begin any

new code

- share service under the code

- share services authorized here. Such notice shall identify the market(s) to be served, which carrier wi ll be operating the aircraft in the added code

- share market, and the date on which the service will begin. Such notice should be filed in Docket DOT

- OST

- 2010

- 00 43. 1

( c ) British Airways and/or Iberia Operadora must notify the Department immediately if the code

- share agreement

under which these code

- share services are operated is no longer in effect or if the carriers decide to cease operating all or a portion of the approved code

- share services. Such notices should be filed in Docket DOT

- OST

- 2010

- 0043. 2

( d ) The code

- sharing operations conducted under this authority must comply with 14 CFR Part 257 and with any amendments to the Department's regulations concerning code

- share arrangements that may be adopted. Notwithstanding any provisions in the contract between the carriers, our approval here is expressly conditioned upon the requirements that the subject foreign air transportation be sold in the name of the carrier holding out such service in computer reservation systems and elsewhere; that the carrier selling such transportation (i.e., the carrier shown on the ticket) accept responsibility for the entirety of the code share journey for all obligations established in its contract of carriage with the passenger; and that the passenger liability of the ope rating carrier be unaffected;

( e ) The authority granted here is specifically conditioned so that neither British Airways nor Iberia Operadora shall give any force or effect to any contractual provisions between themselves that are contrary to these condi tions; and

( f ) We may amend, modify, or revoke the authority granted at any time without hearing at our discretion.

1 The Joint Applicants provided notice of their intent to engage in code

- share services to open skies points. The Joint Applicants will provide th e Department with 30

- day notice before commencing code

- share services to non

- open skies points.

2 We expect this notification to be received within 10 days of such non

- effectiveness or of such decision.1 APPENDIX C

Issued by

Order 20 11

- X

- X

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



### -------------------------------------------------------- PERMIT TO FOREIGN AIR CARRIER



### --------------------------------------------------------- IBERIA LÍNEAS AÉREAS DE ESPAÑA SOCIEDAD ANÓNIMA OPERADORA

A Foreign Air Carrier of Spain

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:

F oreign scheduled and charter air transportation of persons, property, and mail from any point or points behind any Member State of the European Union, via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;

F oreign s cheduled and charter air transportation of persons, property, and mail between any point or points in any member of the European Common Aviation Area and any point or points in the United States;

F oreign scheduled and charter all

- cargo transportation bet ween any point or points in the United States and any other points;

Other charters pursuant to the prior approval requirements set forth in the Department’s regulations governing charters; and

Transportation authorized by any additional rights made avai lable to European Union carriers in the future; provided , that the holder shall, before it commences any new service under such additional route rights, provide the Department with evidence that it holds a homeland license for that new service (unless it h as already provided such evidence to the Department). Such

evidence shall be filed in Docket DOT

- OST

- 2010

- 0283.

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

limitations in both the order issui ng 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 Month XX, 20 11. Unless otherwise terminated at an earlier date pursuant to the terms of any applicable treaty, convention or agreement, t his 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,2 convention, or agreement or amendment, which shall have the effect of eliminating the right for the service

a uthorized by this permit from the service which may be operated by airlines of the European Community and its Member States (or, if the right is partially eliminated, then the authority of this permit shall terminate in like part); or (3) upon the terminat ion or expiration of the applicable air services agreement between the United States and the European Community and its Member States. However, clause (3) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transp ortation authorized herein becomes the subject of another treaty, convention or agreement to which the United States and the European Community and its Member States become parties.

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

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)3 Foreign Air Carrier Permit Conditions

In the conduct of the operations aut horized, 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 3 6 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 Transportati on 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 thi s 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 file d 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 p urchased 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 transpor tation" 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 a Member State of the European Union;

(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 b y 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 conditi ons imposed above. Moreover, this authority cannot be sold or otherwise transferred without explicit Department approval

under Title 49 of the U.S. Code.

EU carrier 01/2008