Order 20 1 1

- 3

- 29

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportati on on the 24 th d ay of March , 20 1 1

Served: March 24 , 20 1 1

Application of

ARIK AIR LIMITED Docket DOT

- OST

- 20 10

- 0 279

for an exemption under 49 U.S.C. § 4 0109 an d a foreign air carrier permit under 49 U.S.C. §41301

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By this order we (1) grant the application of the referenced foreign air carrier for an exemption

under 49 U.S.C. § 40109, subject to conditio ns; 1 and (2) tentatively find that it is in the public

interest to grant the applicant the foreign air carrier permit attached as Appendix B to this

order.

Background

On August 23 , 2005, the Department issued a Notice , in Docket DOT

- OST

- 2005

- 22228

,

annou ncing several steps designed to streamline our regulatory procedures for licensing U.S. and foreign air carriers. Among other things, the Notice stated that:

Assuming, based on the record and on the public interest/public convenience and necessity elemen ts germane to our licensing decisions, that we were in a position to

act favorab ly, we would proceed to issue a single order (1) granting the exemption request for whatever duration we would normally have imposed, or until certificate/permit authority beco mes effective, whichever is shorter, and (2) tentatively deciding ( i.e. , show

- cause) to award a corresponding certificate (or permit), again for the standard duration we would normally have imposed (such as,

1 The conditions are attached as Appendix A.2

in the case of certificates, five years for limi ted

- entry markets, indefinite for

open

- entry markets, and in the case of permits, five years for comity and reciprocity regimes, indefinite for agreement regimes).

Our action in this Order serves to implement these streamlined regulatory procedures for t he application involved in this proceeding.

Application

By application filed November 11 , 20 10

, A rik Air Limited ( A rik Air ), a foreign air carrier of Nigeria

, requests an exemption under 49 U.S.C. § 40109 and a foreign air carrier permit under

49 U.S.C. § 41301 to engage in scheduled foreign air transportation of persons, property, and mail from points behind Nigeria, via Nigeria and intermediate points, to a point or points in the United States and beyond

. 2

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to support its requests for authority.

Responsive Pleadings

On December 3, 2010, the City of Houston and the Greater Houston Partnership filed an answer in support of Arik Air’s request.

On February 24, 2 011, SH&E filed an ans wer to Arik Air’s application. 3 SH&E claimed that Arik Air’s corporate parent, Arik Air International Ltd. (Arik International), has failed to pay outstanding professional fees and expenses owed to SH&E , calling into question the fin ancial

fitness of Arik Air

. SH&E urged the Department to carefully scrutinize Arik Air’s financial

fitness and withhold grant ing authority.

On March 1, 2011, Arik Air filed a reply to the answer of SH&E. Arik Air stated that

SH&E ’s private contractual d ispute with Arik International has nothing to do with Arik Air, or its present request for authority. Arik Air urged the Department to follow its established precedent, and not involve itself in th is private commercial dispute.

Decision

We have decided, under assigned authority and consistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for exemption authority, subject to

2 Arik Air currently holds exemption authority to provide scheduled foreign air transportation of persons, property, and mail between Lagos, Nigeria and a specified U.S. point, using aircraft wet leased from an appropriately qualified U.S. or foreign carrier. See Notice of Action Taken, dated April 4, 2008, in Docket

DOT

- OST

- 2007

- 0029.

3 SH&E accompanied its answer with a motion for leave to file late. We grant the motion.3

conditions, and tentatively to grant, subject to show

- cause procedures, its request for a foreig n air carrier permit, also subject to conditions.

With respect to the applicant’s request for exemption authority, we find that grant of this authority is consistent with the public interest; that the applicant has demonstrated, based on the record, that it is financially and operationally qualified to perform the services authorized ; 4
and that it is substantially owned and effectively controlled by citizens of its claimed

homeland. 5

The authority sought by the applicant is encompassed by the Air Transp ort Agreement

between the United States and Nigeria . We also note that the applicant is properly licensed by its homeland to perform the proposed services.

In addition, on February 18 , 2011, the Federal Aviation Administration advised us that it

knew o f no reason why we should act unfavorably on the applicant’s requests. We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

With respect to the concerns raised by SH&E, we conclude that those concerns

, when viewed in the context of the totality of the record, provide no persuasive basis to withhold the requested authority. T his pri vate contractual matter is a type that we regard as properly

resolved in other for a.

We therefore fin d that grant of the requested exemption authority, for a two

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

Tentative Findings and Conclusions

-- Foreign Air Carrier Permit Application

We tenta tively find and conclude that the public interest warrants granting the applicant a foreign air carrier permit, in the form attached as Appendix B and subject to the conditions

attached. 6 In particular, w e tentatively find and conclude that the factors wh ich support our grant of exemption authority to the applicant also warrant granting the applicant the foreign air carrier permit it seeks

.

4 The applicant has requested confidential treatment of its revenue forecasts, under the provisions of 14 CFR 302.12. Good cause having been shown, we will grant this request.

5 The record indicates th at Sir J.I.A. Arumemi

- Ikhide and his wife, Mrs. M. Arumemi

- Ikhide, both citizens of Nigeria, own ninety

- five percent (95%) of the stock of Arik Air; and that Mr. David Mablaku, also a citizen of Nigeria, owns the remaining five percent (5%). The record fu rther indicates that of the four directors identified by Arik Air in its application, three are citizens of Nigeria.

6 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.4

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 f oreign 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. The applicant is substantially owned and effectively controlled by citizens of its claimed homeland;

4 . The public interest requires that the exercise of the privileges granted by th e 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 public interest does not re quire an oral evidentiary hearing on the application ; and

6 . 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 61 st 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 d ecision under that section, whichever occurs earlier.

In view of the above, an d acting under authority assigned by the De partment 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 the applicant, the applicant is qualified to perform those operation s

. 7

ACCORDINGLY,

1. We grant the request of Arik Air Limited for an exemption under 49 U.S.C. §40109 to permit it to engage in schedul ed foreign air transportation of persons, property, and mail f rom points behind Nigeria

, via Nigeria and intermediate points

, to a point or points in the United States and beyond ;

7 The applicant states that the introduction of its services will result in a near

- term annual change in fuel consumption exceeding 10 million gallons. Under the provisions of the Energy Policy and Conservation Act of 1975 and 14 CFR Part 313 of our rules, we have considered the matter of Arik Air’s anticipated fuel consumption a long with the other public interest factors we consider in taking action in a proceeding of this kind. We find, in the circumstances presented, that in view of our obligations under 49 U.S.C. 40105 to act consistently with international agreements (in thi s case the U.S.

- Nigeria Air Transport Agreement), and the public benefits that will be derived from Arik Air’s services, approval of the request notwithstanding the anticipated level of fuel consumption is warranted.5

2

. The exercise of the privileges granted above is subject to compliance by Arik Air Limited

with the conditions listed in Appendix A and to the condition that, in the conduct of the services authorized herein, Arik Air Limited must adhere to the provisions of the Air Transport Agreement between the United States and Nigeria ;

3. We grant the motion of Arik Air Limited for confidential treatment of its projected revenue forecasts, consistent with the provisions of 14 CFR §302.12;

4

. Our action granting the exemption authority described herein is effective immediately, for

a period of two year s 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 in ordering paragraph 1 at our discretion at any time and w ithout hearing;

6

. To the extent not acted upon above, we dismiss the applicant’s request for exemption authority in Docket DOT

- OST

- 2010

- 0 279 ;

7

. With respect to the applicant’s request for a foreign air carrier permit in this proceeding,

w e direct all interested persons to show cause why our tentative decision on that application,

set forth above

, should not be made final;

8

. Any interested person objecting to the issuance of an order making final our tentative findings and conclusions with respect t o 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 specifyin g 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;

9

. 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;

10

. In the event no objecti ons 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 1

. We will serve a copy of this order on Arik Air Limited

, the City of Houston and the Greater Houston Partnership, SH&E, the Embassy of Nigeria in Washington, D.C., the Department of State, and the Federal Aviation Administration

.6

Perso ns entitled to petition the Department for review of this order under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of

issuance of this order . Our action with respect to the applicant’s request for exemption authority under 49 U.S.C. § 40109 is effective immediately , and the filing of a petition for

review will not alter such effectiveness.

By:

PAUL L. GRETCH

Director

Office of International A viation

(SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govForeign Carrier Exemption Conditions Appendix A

In the conduct of the operations authorized, the foreign carrie r applicant(s) 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 appl icable. 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 fo r the United States, contact its International Industry Representative (IIR) (formerly referred to as International Principal Security Inspector) to advise the I IR of its plans and to find out whether the Transportation Security Administration has determin ed 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 opera te 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 aut hority 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 i n 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 Sta tes; 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 h omeland;

(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 orde rs 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 authori ty cannot be sold or otherwise transferred without explicit Department approval under Title 49 of the U.S. Code.

12/2007Appendix B

Issued by

Order 20 1 1

-

_ -

_

UNIT ED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



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



### ---------------------------------------------------------



### Arik Air Limited

A Foreign Air Carrier of Nigeria

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

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

Scheduled foreign air transportation of persons, property, and mail from points behind Nigeria, via Nigeria and intermediate points, to a point or points in the United States and beyond.

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 tre aty, 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 per mit shall be effective on

_____________ . 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 w as 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 designa ted by the Government of Nigeria (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

Governme nt of Nigeria in lieu of the holder; or (4) upon the termination or expiration of the applicable air services agreement between the United States and Nigeria . 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 Nigeria become parties.9

The Department of Transportation has executed this permit and affixed its seal on , 201 1

.

By:

PAUL L. GRETCH

Director

Office of International Aviation 

### (SEAL)Foreign Carrier Permit Conditions

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

(1) Not conduct any operations unles s 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. Gove rnment 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 Rep resentative (IIR) (formerly referred to as International Principal Security Inspector ) to advise the I IR 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 th e 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 op erational 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 p urposes 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 c ontract 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 agreem ent 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 consider ed 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 2 17, 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 CF R 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 wi th 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 2 / 2007