Order 201 4

- 12

- 16

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 29 th day of December

, 201 4

Served: December 29

, 201 4

Joint Application of

ALITALIA

- COMPAGNIAAEREA ITALIANA S.P.A

and Docket DOT

- OST

- 201 4

- 0 210

ALITALIA

- SOCIET À AEREA ITALIANA S.P.A.

for an exemption under 49 U.S.C. §40109 and transfer of foreign air carrier permit under 49 U.S.C. §4130 3

In the Matter of

ALITALIA

- COMPAGNIAAEREA ITALIANA S.P.A

and

ALITALIA

- SOCIET À AEREA ITALIANA S.P.A.

and

A EROVÍAS DE M ÉXICO S.A. DE C.V.,

S OCIÉTÉ AIR FRANCE, S.A.

, D ELTA AIR LINES, INC.

and C

. A

. I

. First, S.p.A.

for statements of authorization to conduct certain

code

- share and/or wet lease operations D ocket s DOT

- OST

- 20 02

- 12482

DOT

- OST

- 2002

- 12896

DOT

- OST

- 2002

- 13985

DOT

- OST

- 2001

- 10417

Undocketed2

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By this order we (1) grant the request of Alitalia

– Società Aerea Italiana S.p.A. ( Alitalia Società) for an exemption under 49 U.S.C. §40109, subject to conditions; 1 (2) grant the request

of Alitalia Società for transfer and reissuance of statements of authorization previously granted

to Alitalia

– Compagnia Aerea Italiana S.p.A. (Alitalia) to conduct certain code

- share operations

with Aerovías de Mexico, S.A. de C.V. (Aeromexico)

, Soci été Air France, S.A. (Air France)

, and Delta Air Lines, Inc. (Delta) ; (3) grant the request of Alitalia Società for transfer and reissuance of the statement of authorization previously granted to Alitalia to engage in long

- term wet lease operations to Alitalia subsidiary C

. A

. I

. First, S.p.A. (C.A.I. First) ; and (4) tentatively grant the application of Alitalia and Alitalia Società (collectively the Joint Applicants) for the transfer of Alitalia’s foreign air carrier permit to Alitalia Società

.

Application

By application filed December 1 , 201 4 (as supplemented December 15, 2014

, and December 2 3

, 201 4 )

, the Joint Applicants

, foreign air carrier s of Italy

, request (i) exemption authority under 49 U.S.C §40109 for Alitalia Società to enable it to engage in the operations authorized by Alitalia ’s foreign air carrier permit pending transfer of such permit to Alitalia Società , and (ii) transfer and

reissuance of Alitalia’s foreign air carrier permit under 49 U.S.C. §4130 3 from Alitalia to
Alitalia Società

. 2 Alitalia’s current foreign air carrier permit authorizes it to engage in the following services :

a. Foreign scheduled and charter air transportation of persons

, property

, and mail from any point or points behind any Member State (s) 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 transpo rtation of persons

, property , and mail between any point or points in the United States and any point or points in any member of the European Common Aviation Area;

c. Foreign scheduled and charter cargo air transportation between any point or p oints in the

United States and any other point or points;

1 The conditions are attached as Appendix A.

2 The Joint Applicants state that, effective immediately upon completion of the transaction implementation agreement (the Transaction) between Alitalia and Etihad Airways P.J.S. C. (Etihad Airways), a foreign air carrier of

the United Arab Emirates

, most of Alitalia's assets and liabilities related to Alitalia's air transport services will be transferred to Alitalia Società through a contribution process under Italian law, which e ffectively entails the continuation by Alitalia Società of Alitalia' s business operations without interruption. The Joint Applicants further

state that u pon the closing of the Transaction, Alitalia, which is majority owned by EU Member State interests , w ill ultimately hold a 51% controlling equity stake in Alitalia Società. The Alitalia

- Etihad Airways T ransaction will close on or about December 31, 2014 , at which time Alitalia Società will assume Alitalia' s air transport services

.3

d. Other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations; and

e. T ransportation authorized by any additional route rights made available to European

Union carriers in the future.

The Joint Applicants also request transfer from Alitalia to Alitalia Società of the following

statements of authorization granted to Alit alia for code

- sharing operations with Aero mexico , Air France, and Delta

, 3 and wet lease operations with C.A.I. First:

• Statement of authorization for an indefinite duration to display the AM* designator code of Aeromexico on flights operated by Alitalia between (1) Rome and New York

, (2)

Rome and Miami

, and (3) Milan and New York

. See Department actions dated January 14, 2009 in Docket DOT

- O ST

- 2002

- 12 482 and DOT

- OST

- 2002

- 12896

.

• Blanket statement of authorization for an indefinite duration to display the AF* designator code of Air France on transatlantic flights operated by Alitalia. See Department action dated January 9, 2009

, in Docket OST

- 2002

- 13958

.

• Blanket statement of authorization for an indefinite duration to display the DL* design ator code of Delta on flights operated by Alitalia between (1) any point or points in Italy and any point or points in the United States (either nonstop or via intermediate points), (2) any points in Italy, and (3) between any point or points in Italy or t he United States and any point or points in any third country. See Notice of Action Taken in

Docket OST

- 2001

- 10417 on December 23, 2008

.

• Undocketed statement of authorization previously issued by the Department on April 1 2, 2013, with an expiration date of April 16 , 2015 , which allows Alitalia to engage in a long

- term west lease of various aircraft to its subsidiary C.A.I. First for use in certain

code

- sharing operations with Delta. See Undocketed Department action 2013

- 148

.

The Joint Applicants state that Alitalia's wholly

- owned subsidiaries C.A.I. First and CityLiner, S.p.A. (CityLiner) will become wholly

- owned subsidiaries of Alitalia Società upon the closing of

the Transaction and ask that the underlying exemptions issued to C .A.I. First and CityLiner be permitted to continue in force and effect upon the closing of the Transaction

. 4

3 The Joint Applicants incorporate by reference all notices of additional code

- sharing previously filed in the captioned

dockets.

4 C.A.I. First holds an exemption under 49 U.S.C. §40109 to the extent necessary to permit it to display the DL* designator code of Delta on C.A.I. F irst flights within the E uropean Union

. See Notice of Action Taken in Docket

DOT

- OST

- 2001

- 10417 on April 10, 2013. CityLiner holds an exemption under 49 U.S.C. §40109 to the extent
necessary to permit it to display the DL* designator code on CityLiner fli ghts within the E uropean Union and

between the E uropean Union and points in third countries. See Notice of Action Taken in Docket DOT

- OST

- 2012

- 0038 on A pr il 9, 2014. C.A.I. First and CityLiner w ill continue to utilize these exemptions to the extent neces sary for the display of the DL* designator code on flights they operate upon closure of the Transaction. The Joint Applicants note that the exemption authority held by C.A.I. Second

, S.p.A. (C.A.I. Second), another Alitalia
subsidiary, expired on March 18 , 2013, and no action is requested with respect to C.A.I. Second at this time

.4

The Joint A pplicant s provided evidentiary materials required by 14 CFR Part 211 of our regulations to support their requests for authority. In their December 15 , 2014 supplemental filing

, the Joint Applicants provided the Department with Alitalia Società ’s draft homeland economic license and Air Operator’s Certificate , as well as clarification on its request for

transfer

. On December 2 3 , 2014 , the Joint Applicants provided Alitalia Società ’s final homeland economic license and Air Operator’s Certificate

.

We received no answers to the application. 5

Decision

We have decided to grant to Alitalia Società ’s requests for exemption authority and s tatements of

authorization , as described below and subject to conditions

. We have also tentatively decided to grant, subject to show

- cause procedures, transfer of Alitalia’s foreign air carrier permit to

Ali talia Società

, as described below and subject to conditions.

Specifically, we will grant Alitalia Società exemption authority for the services set forth in ordering paragraph 1 below. We will also grant Alitalia Società code

- share statements of authorization so that it may conduct its propo sed code

- share operations with Aeromexico , Air France, and Delta , subject to conditions. 6 We grant the request of Alitalia Società for transfer and reissuance of the statement of authorization previously granted to Alitalia to engage in long

term wet leas e operations to Alitalia subsidiary C.A.I. First. We will tentatively transfer and

reissue Alitalia ’s foreign air carrier permit to Alitalia Società , as discussed below.

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

- EU Agreement, authority to conduct scheduled and charter transportation authorized by any additional route rights made available to EU carriers in the future. We are gran ting the request of Alitalia Società f or this authority by exemption. We are requiring Alitalia Società

, 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 has already provided such evidence. 7

With respect to the applicant’s request for exemption authority, we find that grant of this authority, as conditioned, is consistent with the public interest. We also find that the applicant is financially and operationally 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 We also find that the authority sought by the applicant is enco mpassed by

the U.S.

- EU Agreement.

5 The Joint Applicants included in their application a motion for a shortened answer period of December 8, 2014. On December 5, 2014, the Department issued a Notice that shortened the answer period for this application to December 8, 2014, with replies to answers due December 11, 2014.

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 Citizenship) of the Protocol to amend the U.S.

- EU Air Transport Agreement, signed

June 24, 2010.5

Further, we note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, on December 24 , 201 4

, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the Joint A pplicants ’ requests. We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requi rements).

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 effective, whichever occurs earlier, is warranted.

Tentative Findings and Conclu sions

-- Foreign Air Carrier Permit Transfer

We tentatively find and conclude that the public interest warrants granting the Joint A pplicant s’ request for transfer of Alitalia’s foreign air carrier permit to Alitalia Società , in the form attached as Appendi x C and subject to the conditions attached. 9 In particular, we tentatively find and conclude that the factors which support our grant of exemption authority to Alitalia Società , as discussed above, also warrant granting the transfer of Alitalia’s foreign air carrier permit to
Alitalia Società

.

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

1. It is in the public int erest to transfer the foreign air carrier permit of Alitalia to Alitalia Società

in the form attached;

2. Alitalia Società is fit, willing and able properly to perform the foreign air transportation described in the attached permit and to conform to th e provisions of Title 49 of the U.S. Code, and to our rules, regulations, and requirements;

3. Alitalia Società is substantially owned and effectively controlled in a manner consistent with the provisions of the U.S.

- EU Agreement;

4. The public intere st 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 inter est 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; 10

9 The Joint Applicants’ 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 transfer of this foreign air carrier permit authority. As discussed above, we received no objections.

10 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.6

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 o f 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 find that 1) our actions are consistent with Department policy; and 2) with respect to the exemption authority we are conferring on Alitalia Società

, it is qualified to perform those operations, and that grant of the exemption authority is consistent with the public 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 Alitalia

– Società Aerea Italiana S.p.A. for an exemption under 49 U.S.C. §40109 for the services set forth below: 11

a. Foreign scheduled and charter ai r 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 the United States and any point or points in any member of the European Common Aviation Area;

c. Foreign scheduled and charter cargo air transport ation between any point or points in the United States and any other point or points;

d. Other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s economic regulations governing charters; and

e. T ransportation authorized by any additional route rights made available to European

Union carriers in the future.

2

. Alitalia

– Società Aerea Italiana S.p.A. shall, before it commences any new service under subparagraph ( e ) of ordering paragraph 1 above, provide the Department in Docket DOT

- OST

201 4

- 0 210 with evidence that it holds a homeland license for that new service, unless it has already provided such evidence to the Department;

11 We acted on the request for exemption authority prior to the expiration of the answer period with the consent of all parties served.7

3 . The exercise of the privileges granted above is subject to compliance by Alital ia

– Società Aerea Italiana S.p.A. w ith the conditions listed in Appendix A;

4 . Our action granting the exemption authority described herein, subject to the provisions of the ordering paragraphs above, 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;

5 . We may amend, 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 the referenced docket (DOT

- OST

- 201 4

- 0 210 );

7

. We grant Alitalia

– Società Aerea Italiana S.p.A. , subject to the conditions attached as Appendix B, statements of authorization under 14 CFR Part 212 to permit :

(a) t he display of the AM* designator code of Aerovías de Mexico, S.A. de C.V. for an

indefinite duration on flights operated by Alitalia

– S ocietà Aerea Italiana S.p.A. b etween (1) Rome and New York, (2) Rome and Miami, and (3) Milan and New York ;

(b) the display of the AF* designator code of Soci é t é Air France, S.A. for an indefinite

duration on transatlantic flights operated by Alitalia

– Società Aerea Italiana S.p.A. ;

(c) the display of the DL* designator code of Delta Air Lines, Inc. for an indefinite duration

on flights operated by Alitalia

– Società Aerea Italiana S.p.A. b etween (1) any point or points in Italy and any point or points in the United States (either nonstop or via intermediate points), (2) any points in Italy, and (3) any point or points in Italy or the United States and any point

or points in any third country ; and

(d) the long

- term west lease of various aircraft to its subsidiary C.A.I. First , S.p.A. for use in

certain code

- sharing operations with Delta Air Lines, Inc. , effective through April 16 , 2015 ;

8. W ith respect to the Joint A pplicants ’ request for a pproval of the transfer of the foreign air carrier perm it held by Alitalia

– Compagnia Aerea Italiana S.p.A. to Alitalia

– Società Aerea Italiana S.p.A. in this proceeding, 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 A pplicants ’ request for transfer of the 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 tes timony, 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;8

10

. If timely and properly supported objections are f iled, 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 orde r 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 order on Alitalia

– Compagnia Aerea Italiana S.p.A. ; Al italia

– Società Aerea Italiana S.p.A. ; Aerovías de Mexico, S.A. de C.V., Société Air France, S.A., Delta Air Lines, Inc .; the Embassy of Italy 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.govForeign Air Carrier Exemption Conditions Appendix A

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 Internat ional 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 o f 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 o f 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 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 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 01/2008Appendix B

S tatement of a uthorization to permit Alitalia Società to display the AM* designator code of Aero mexico on flights operated by Alitalia Società between (1) Rome and New York, (2) Rome and Miami, (3) Milan and

New York , and (4) Milan and Miami

.

The statement of authorization granted is subject to the following conditions:

(a) The statement of authorizatio n will remain in effect only as long as (i) Alitalia Società and Aero mexico 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 ) Alitalia Società /or Aero mexico 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 s DOT

- OST

- 20 02

- 12482 and

DOT

- OST

- 2002

- 12896. 1

( c ) 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 al l obligations established in its contract of carriage with the passenger; and that the passenger liability of the operating carrier be unaffected;

( d ) The authority granted here is specifically conditioned so that neither Alitalia Società nor Aero mexico shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions; and

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

.

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

- effectiveness or of such decision.Blanket stateme nt of authorization to permit Alitalia Società to display the AF* designator code of Air France on transatlantic flights operated by Alitalia Società

.

The statement of authorization granted is subject to the following conditions:

(a) The statement of au thorization will remain in effect only as long as (i) Alitalia Società and Air France 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 operatio ns remains in effect;

(b) Alitalia Società and/or Air France 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

serve d, which carrier will 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

- 2002

- 1 3958

.

(c) Alitalia Società and /or Air France 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

- 2002

- 13958

. 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 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; t hat 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 liab ility of the operating carrier be unaffected;

(e) The authority granted here is specifically conditioned so that neither Alitalia Società nor Air France shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions; and

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

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

- effectiveness or of such decision.Blanket statement of authorization to permit Alitalia Società to display the DL* designator code of Delta on flights operated by Alitalia Società between (1) any point or points in Italy and any point or points in the United States (either nonstop or via intermediate points), (2) any points in Italy, and (3) between any point or points in Italy or the United States and any point or points in any third
country

.

The statement of authorization is subject to the following conditions:

(a) The statement of authorization will remain in effect only as long as (i) Alitalia Società and Delta continue t o 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) Alitalia Società and/or Delta must notify the Department no later tha n 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 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

- 200 1

- 10417 ;

(c) Alitalia Società and Delta must notify the Department immediately if the code

- share agreement under which

these code

- share services are operated is no longer in effec t 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

- 200 1

- 10417 ; 1

(d) The code

- sharing operations conducted under this authority must comply with 14 CFR Part 2 57 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 th e 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 t he entirety of the code share journey for all obligations established in its contract of carriage with the passenger; that the passenger liability of the operating carrier be unaffected; and that the operating carrier shall not permit the code of its U.S. code

- sharing partner to be carried on any flight that enters, departs, or transits the airspace of any area for whose airspace the Federal Aviation Administration has issued a flight prohibition.

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

- EU agreement, and all applicable agreements with other foreign countries involved. Furthermore, (i) nothing in the award of the blanket statement of

authorization to Delta should be construed as conferring upon Delta rights (including co de

- share, fifth

- freedom intermediate and/or beyond rights) to serve markets where U.S. carrier rights are limited unless Delta 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 rights; 2 and (ii) should there be a request by any carrier to use the limited

- entry route rights that are included in Delta ’s authority by virtue of the

blanket statement of a uthorization granted here, but that are not being used by Delta the holding of such authority will not be considered as providing any preference for Delta in a carrier selection proceeding to determine which carrier(s) should be entitled to use the authori ty at issue.

(f) The authority granted here is specifically conditioned so that neither Alitalia Società nor Delta 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 without hearing at our discretion.

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

- effectiveness or of such decision.

2 The notice referenced in condition (b) above may be used for this notification.Appendix C

Issued by

Order 201 4

- X

- XX

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

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

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

ALITALIA

- SOCIETÀ AEREA ITALIANA S.P.A.

A Foreign Air Carrier of Italy

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:

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;

Foreign scheduled and charter air transportation of p ersons , property , and mail between any point or points in the United States and any point or points in any member of the European Common Aviation Area;

Foreign scheduled and charter cargo air transportation between any point or points in the

United State s and any other point or points;

Other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s economic regulations governing charters; and

T ransportation authorized by any additional route 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

- 201 4

- 0 210

.

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

Thi s permit shall be effective on Month XX, 2014 . Unless otherwise terminated at an earlier date pursuant to the terms of any applicable treaty, convention or agreeme nt, this permit shall terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2) upon the effective date of anytreaty, convention, or agreement or amendment, which shall have the effect of eliminating the right for the

serv ice authorized by this permit from the service which may be operated by airlines of the European Union 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 termina tion or expiration of the applicable air services agreement between the United States and the European Union and its Member States. However, clause (3) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transport ation authorized herein becomes the subject of another treaty, convention or agreement to which the United States and the European Union and its Member States become parties.

The Department of Transportation has executed this permit and affixed its seal o n Month XX, 2014.

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 compl iance 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,

con tact 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 adeq uate 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 o f 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) Excep t 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 ai r 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

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 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 1/2008