### Application of BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

NORTHERN AIR CARGO, INC. Docket DOT-OST -2014-

__ _ for an Exemption and Certificate of Public Convenience and Necessity

- Blanket Open Skies

APPLICATION OF NORTHERN AIR CARGO, INC. FOR AN EXEMPTION AND A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY Communications with respect to this document must be served upon:

Date: November 12, 2014 Anita M. Mosner Jennifer M. Nowak HOLLAND 

### & KNIGHT LLP 800 1

## ih Street, NW Suite 1100 Washington, D.C. 20006 (202) 419-2604 (202) 955-5564 (fax) anita.mosner@hklaw.com Attorneys for NORTHERN AIR CARGO, INC.

NOTICE: ANY PARTY MAY FILE AN ANSWER TO THIS APPLICATION. THE APPLICANT IS REQUESTING EXPEDITED RELIEF FROM THE DEPARTMENT AND WILL POLL ALL INTERESTED PARTIES.Application of BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

NORTHERN AIR CARGO, INC. Docket DOT-OST -2014-

__ _ for an Exemption and Certificate of Public Convenience and Necessity

- Blanket Open Skies

APPLICATION OF NORTHERN AIR CARGO, INC. FOR AN EXEMPTION AND A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY 

### Pursuant to 49 U.S.C. 

### § 41102, and 14 C.F.R. Part 302, Northern Air Cargo, Inc. ("NAC") hereby applies for a Blanket Open Skies Certificate of Public Convenience and Necessity that would allow NAC to provide scheduled foreign air transportation of property and mail between the United States and all countries with which the United States has entered into an open skies agreement, as well as any country with which the United States may in the future enter into such an agreement, once the agreement is being applied by both countries. 1


### Pursuant to 49 U.S.C. 

### § 40109 and the Department's streamlined licensing procedures, 2 

### NAC also requests on an expedited basis a corresponding exemption authorizing NAC to provide the services described herein pending issuance of a Certificate of Public Convenience and Necessity. 3 

### NAC requests that the Department expeditiously grant the exemption authority for a two-year period, or until the requested

1 This request includes countries that are signatories to the Multilateral Agreement on the Liberalization of International Air Transport. 2 Notice, Docket OST-2005-22228 (Aug. 23, 2005). 3 Northern Air Cargo will poll all interested carriers served with this Application.

### Northern Air Cargo, Inc. Application for Certificate and Exemption certificate authority becomes effective, whichever occurs first. NAC further requests that the Department approve the certificate authority for an indefinite term. In support of this Application, NAC states as follows:
1. NAC is a citizen of the United States, as that term is defined in the Federal Aviation Act. NAC is wholly owned by Northern Aviation Services, which in turn is wholly owned by Saltchuk Resources, Inc. Saltchuk Resources, Inc. has an eight-member Board of Directors. Each director is a U.S. citizen, except for Stein Kruse, who is a citizen of Norway. All shareholders and persons who have the power to influence the management of the Applicant, or other persons holding any voting interest in the Applicant, are U.S. citizens.
2. NAC is a corporation organized under the laws of the State of Alaska, with

a mailing address at 4510 Old International Airport Road, Anchorage, Alaska, 99502.
3. NAC operates a fleet of four aircraft, consisting of two Boeing 737-232 aircraft (both owned by NAC) and two Boeing 737-301 aircraft (one owned by NAC, and

one leased).
4. The Department has granted NAC a Domestic All-Cargo Certificate of Public Convenience and Necessity, 4 

### as well as a Certificate of Public Convenience and Necessity for Interstate and Overseas Transportation of Property and Mail and worldwide charter authority. 5 

### The Department also found NAC fit to provide foreign air transportation when it issued a Certificate of Public Convenience and Necessity to provide scheduled all-cargo service on a North Pacific routing between Anchorage, Alaska and Magadan and Khabarovsk, U.S.S.R. 6


### 5. NAC clearly is fit, willing, and able to provide the services at issue. NAC

4 CAB Order 1979-7-139 (July 19, 1979). 5 CAB Order 1982-12-60 (Dec. 15, 1982). By DOT Order 91-4-35 (Apr. 22, 1991), the Department reviewed and reaffirmed the fitness of Northern Air Cargo. 6 DOT Order 91-1-37 (Dec. 17, 1990).



### 2

### Northern Air Cargo, Inc. Application for Certificate and Exemption has been in operation since 1956 and serves as Alaska's largest all-cargo carrier. NAC provides scheduled service to 13 locations within Alaska, including service to Deadhorse, supporting all of the companies doing business on the North Slope. In late 2009, NAC began its "ad hoc" operations into the lower 48 states and currently flies ondemand charters to/from Laredo, Texas. NAC requests that the Department take official notice, pursuant to 14 C.F.R. 

### § 302.24(g), of the economic authorities and data on file that support Northern Air Cargo's fitness.
6. Granting the authority requested herein is in the public interest. New foreign scheduled all-cargo service will add competition in open skies markets, and provide additional shipping options for consumers. Further, NAG's application is consistent with the Open Skies Agreements between the United States and each of the countries included in the Department's List of Open Skies Agreements Currently Being Applied. 7


### 7. NAC holds insurance coverage which exceeds the Department's requirements. A copy of Northern Air Cargo's Certificate of Insurance is attached as Exhibit 

### A.
8. NAC has executed and filed in Docket OST-1995-236 a Warsaw Convention Liability Waiver (OST Form 4523), a copy of which is attached as Exhibit B.
9. Issuance of the requested authority will not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975, as defined in Part 313 of
the Department's regulations. The grant of this Application will result in an increase in fuel consumption of less than 10 million gallons. NAC has adequate fuel available for the services proposed.

7 See http://www.dot.gov/policy/aviation-policy/open-skies-agreements-being-applied.



### 3

### Northern Air Cargo, Inc. Application for Certificate and Exemption WHEREFORE, Northern Air Cargo respectfully requests that the Department issue an exemption on an expedited basis, and a Blanket Open Skies Certificate of Public Convenience and Necessity, consistent with the Department's streamlined licensing procedures. Northern Air Cargo further requests any further or different authority that the Department might deem necessary.

Anita M. Mesner Jennifer M. Nowak HOLLAND & KNIGHT LLP 

### Attorneys for NORTHERN AIR CARGO, INC.



### 4

### EXHIBIT A INSURANCE CERTIFICATEOffice of the Secretary of Transportation AGENCY DISPLAY OF ESTIMATED BURDEN The public reporting burden for this collection of information is estimated to average 30 minutes per response. If you wish to comment on the accuracy of the estimate or make sugges tions for reducing this burden, please direct your comments to: U.S. Department of Transportation, Office of Aviation Analysis, X-56, 400 7 th St., SW., Washington, D.C. 20590. According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. NOTE : For information on where to file completed copies of this form, see FILING INSTRUCTIONSbelow. OMB No. 2106-0030 Expires 9-30-2007 U.S. AIR CARRIERS - CERTIFICATE OF INSURANCE POLICIES OF INSURANCE FOR AIRCRAFT ACCIDENT BODILY INJURY AND PROPERTY DAMAGE LIABILITY FILING INSTRUCTIONS: File a signed original of this form with the Federal Aviation Administration, AFS-260, 800 Independence Ave., S.W., Washington, D.C. 20591. (See EXCEPTIONS 1 and 2 below.)

EXCEPTION 1 : If Block 2B on the reverse is filled in because the insured is a commuter air carrier, file a signed original of this form w ith the Department of Transportation, Air Ca rrier Fitness Division, X-56, 400 7 th St., SW, Washington, DC 20590.

EXCEPTION 2 : For any insured that is located in the State of Alaska (regardless as to whether Bl ock 2A, 2B, or 2C is filled in), file a s igned original of this form with the Federal Aviation Administration, Alaskan R egion Hq., AAL-230, 222 W. 7 th Ave., #14, Anchorage, Alaska 99513. (Please type information, except signatures.) THIS CERTIFIES THAT:

_SEE ATTACHED

__________________________________________________________________________________ (Name of Insurer) has issued a policy or policies of Aircraft Liability Insuranc e to _____Northern Air Cargo, Inc. ____________________

____________ _3900 Old International Airport Road, An chorage, AK 99502_______________________FAA Certificate Number__ NACA002A

________ ____ (Name, address and FAA Certificate num ber of Insured U.S. Air Carrier) effective from 05/01/2014___ until ten (10) days after written notice from the insure r or carrier of the intent to terminate co verage is received by the Department of Transportation. NOTE: Part 205 of the Department’s Regul ations does not allow for a predetermined te rmination date, and a certificate showing such a date is unacceptable. 1. The Insurer (Check One) : is licensed to issue aircraft insurance policies in the United States;

is licensed or approved by the government of _______________________ to issue aircraft insurance policies; or is an approved surplus line insurer in the State(s) of _________WA__________ 2. The insurer assumes, under the policy or policies listed below , aircraft accident liability insu red to minimums at least equ al to the following during operation, maintenance, or use ofaircraft in “air transportation” as that term is defined in 49 U .S.C. 40102. (Complete applicable section( s) A, B, or C below): A. U.S. AIR TAXI OPERATORS (EXC LUDING U.S. COMMUTER AIR CARRIERS) WITH PART 298 AUTHORITY ONLY: The aircraft covered by this policy are SMALL AIRCRAFT (i.e., wi th 60 or fewer passenger seats or with a maximum payload capaci ty of 18,000 pounds or less). (Complete separate or combined coverage as appropriate) :

Separate Coverages: Minimum Limit Policy No. Type of Liability Each person Each Occurrence _________________________ Bodily Injury Liability (Excluding Passengers) $ 75,000 $300,000 _________________________ Passenger Bodily Injury $ 75,000 $ 75,000 x 75% of total number of passenger seats installed in aircraft _________________________ Property Damage $100,000

Combined Coverage: The amount of coverage set forth below is a single limit of liability for each occurrence at least equal t o the required minimums stated above for bodily injury (excl uding passengers), property damage, and passenger bodily injury. Policy No. __________________________________ Amount of Coverage_________________________________ This policy covers CARGO operations only and excludes passenger liability insurance.

OST Form 6410B. U.S. COMMUTER AIR CARRIERS OR CERTIFICATED AIR CARRIERS OPERATING SMALL AIRCRAFT The aircraft covered by this policy are SMALL AIRCRAFT (i.e., with 60 or fewer passenger seats or with a maximum payload capacity of 18,000 pounds or less). (Complete separate or combined coverage as appropriate) :

Separate Coverages: Minimum Limit Policy No. Type of Liability Each person Each Occurrence __________________ Combined Bodily Injury (Excluding Passengers other than cargo attendants) and Property Damage Liability $300,000 $2,000,000 __________________ Passenger Bodily Injury $300,000 $300,000 x 75% of total number of passenger seats installed in aircraft

Combined Coverage: The amount of coverage set forth below is a single limit of liability for each occurrence at least equal t o the required minimums stated above for bodily injury (excl uding passengers), property damage, and passenger bodily injury. Policy No. __________________________________ Amount of Coverage__________________________ This policy covers CARGO operations only and excludes passenger liability insurance.

______________________________________________________________________________________________________________________

_ C. U.S. CERTIFICATED AIR CARRIERS OPERATING LARGE AIRCRAFT The aircraft covered by this policy are LARGE AIRCRAFT (i.e., wi th more than 60 passenger seats or with a maximum payload capac ity of more than 18,000 pounds). (Complete separate or combined coverage as appropriate) :

Separate Coverages: Minimum Limit Policy No. Type of Liability Each person Each Occurrence __________________ Combined Bodily Injury (Excluding Passengers other than cargo attendants) and Property Dam age Liability $300,000 $20,000,000 __________________ Passenger Bodily Injury $300,000 $300,000 x 75% of total number of passenger seats installed in aircraft Combined Coverage: The amount of coverage set forth below is a single limit of liability for each occurrence at least equal t o the required minimums stated above for bodily injury (excl uding passengers), property damage, and passenger bodily injury. Policy Nos. SEE ATTACHED Amount of Coverage___$250,000,000_____________

This policy covers CARGO operations only and excludes passenger liability insurance.

______________________________________________________________________________________________________________________ _3. The policy or policies listed in this certificate insure(s) (Check One) : Make and Model FAA or Foreign Flag Registration No. Operations conducted with all aircraft operated by the insured

Operations conducted with the following types of aircraft: Operations with the following airc raft: (Use additional page if necessary)

______________________________________________________________________________________________________________________ _4. Each policy listed in this ce rtificate meets or exceeds the requirements in 14 CFR Part 205.
SEE ATTACHED ____ Caledonian Insurance Group, Inc.____ (Name of Insurer) (Name of Broker, if applicable) _________c/o 100 Colony Square, 1175 Peachtree St. NE, Ste 1000 ______P.O. Box 60____________________

_______ (Address) (Address) Atlanta, GA 30361______________________________ ______Mercer Island, WA 98040

_____________ (City, State, Zip Code) (City, State, Zip Code) ________Brian Donnelly

____________________________________ ______Anthony Cowan, President _____________ Contact (person who can verify the effectiveness of the coverage) (Officer or authorized representative) _____(404) 249-1800_______/__(404) 249-1917____________________

_ ______(206) 232-9870 / (206) 232-9515________ (Area Code, Phone Number) (Area Code, Fax Numbe r) (Ar ea Code, Phone Number) (Area Code, Fax Number)

___________________________________________________________ _____________________________________________ (Signature, if app licable) (Signature)

___________________________________ ________________ April 30, 2014 (Date) (Date)

### Named Insured: Saltchuk Resources, Inc.; Northern Aviation Services, Inc.; Aeko Kula, Inc. dba Aloha Air Cargo; Northern Air Cargo, Inc. dba Northern Air Cargo Policy Period: May 1, 2014 through May 1, 2015
SCHEDULE OF INSURERS:

I NSURANCE 

### C OMPANY 

### P OLICY 

### N UMBER 

### % P ARTICIPATION

National Union Fire Insurance Company of Pittsburgh, PA through AIG Aerospace Insurance Services 100 Colony Square 1175 Peachtree Street NE, Suite 1000 Atlanta, GA 30361 AI ‐ 1859883

‐ 07 20.00

Underwriters at Lloyd’s of London and Various Foreign Insurance Companies through Aon Limited 8 Devonshire Square London EC2M 4PL AM1403971 25.50

One or More Member Companies of Global Aerospace 1 Sylvan Way Parsippany, NJ 07054 337090 17.50

Houston Casualty Company A subsidiary of HCC Insurance Holdings, Inc. 13403 Northwest Freeway Houston, TX 77040 014988

‐ 016 12.50

StarNet Insurance Company through Berkley Aviation, LLC 1101 Anacapa Street, Suite 200 Santa Barbara, CA 93101 BA

‐ 14

‐ 05

‐ 00031 12.50

Starr Surplus Lines Insurance Company and Ironshore Specialty Insurance Company through Starr Aviation Agency, Inc. 3353 Peachtree Road N.E., Suite 1000 Atlanta, GA 30326 TBA 12.00

### EXHIBIT B WARSAW FORMDavid W. Karp, President & CEO 11/11/2014

N orthern Air Cargo, Inc. 4510 Old International Airport Road, Anchorage, AK 99502 

# e--

U.S. Department of Transportation Office of the Secretary of Transportation AGREEMENT

The undersigned carriers (hereinafter referred to as "the Carriers") hereby agree as follows: Docket OST 95-236

1. Each of the Carriers shall, effective May 16, 1966, include the following in its conditions of carriage, including tariffs embodying conditions of carriage filed by it with any government: "The Carrier shall avail itself of the limitation of liability provided in the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw October 12th, 1929, or provided in the said Convention as amended by the Protocol signed at The Hague September 28th, 1955. However, in accordance with Article 22(1) of said Convention, or said Convention as amended by said Protocol, the Carrier agrees that, as to all international transportation by the Carrier as defined in the said Convention or said Convention as amended by said Protocol, which, according to the contract of Carriage, includes a point in the United States of America as a point of origin, point of destination, or agreed stopping place (1) The limit of liability for each passenger for death, wounding, or other bodily injury shall be the sum of US $75,000 inclusive of legal fees and costs, except that, in case of a claim brought in a State where provision is made for separate award of legal fees and costs, the limit shall be the sum of US $58,000 exclusive of legal fees and costs. (2) The Carrier shall not, with respect to any claim arising out of the death, wounding, or other bodily injury of a passenger, avail itself of any defense under Article 20(1) of said Convention or said Convention as amended by said Protocol. Nothing herein shall be deemed to affect the rights and liabilities of the Carrier with regard to any claim brought by, on behalf of, or in respect of any person who has willfully caused damage which resulted in death, wounding, or other bodily injury of a passenger." 2. Each Carrier shall, at the time of delivery of the ticket, furnish to each passenger whose transportation is governed by the Convention, or the Convention as amended by the Hague Protocol, and by the special contract described in paragraph 1, the following notice, which shall be printed in type at least as large as 10 point modern type and in ink contrasting with the stock on (i) each ticket; (ii) a piece of paper either placed in the ticket envelope with the ticket or attached to the ticket; or (iii) on the ticket envelope: "ADVICE TO INTERNATIONAL PASSENGER ON LIMITATION OF LIABILITY Passengers on a journey involving an ultimate destination or a stop in a country other than the country of origin are advised that the provisions of a treaty known as the Warsaw Convention may be applicable to the entire journey, including any portion entirely within the country of origin or destination. For such passengers on a journey to, from, or with an agreed stopping place in the United States of America, the Convention and special contracts of carriage embodied in applicable tariffs provide that the liability of [certain ]* [(name of carrier) and certain other] carriers parties to such special contracts for death of or personal injury to passengers is limited in most cases to proven damages not to exceed US $75,000 per passenger, and that this liability up to such limit shall not depend on negligence on the part of the carrier. For such passengers traveling by a carrier not a party to such special contracts or on a journey not to, from, or having an agreed stopping place in the United States of America, liability of the carrier for death or personal injury to passengers is limited in most cases to approximately US $10,000 or US $20,000. The names of Carriers parties to such special contracts are available at all ticket offices of such carriers and may be examined on request. Additional protection can usually be obtained by purchasing insurance from a private company. Such insurance is not affected by any limitation of the carrier's liability under the Warsaw Convention or such special contracts of carriage. For further information please consult your airline or insurance company representative." 3. [This Agreement was filed with the Civil Aeronautics Board of the United States. The Board approved it by Order E-23680, adopted May 13, 1966. The Agreement (Agreement 18900) became effective May 16, 1966. On January 1, 1985, this Agreement became the responsibility of the Department of Transportation (DOT) by operation of law.] 4. This Agreement may be signed in any number of counterparts, all of which shall constitute one Agreement. Any Carrier may become a party to this Agreement by signing a counterpart hereof and depositing it 1th OT. 5. Any Carrier party hereto may withdraw from this Agreement by giving twel and the other Carriers parties to the Agreement.
*Either alternative may be used. (Printed Name and Title)

-------------------- (Name and Address of Carrier)

------------------- OST Form 4523 (Formerly CAB Form 263)

### CERTIFICATE OF SERVICE
I hereby certify that I have this date served the foregoing document on the persons identified below by causing a copy to be sent by electronic mail. robert.wirick@aa.com howard. kass@aa. com sharon. pasley@fedex. com sllunsford@fedex.com cefelts@fedex. com dan. weiss@united. com sascha. vanderbellen@delta. com matwood@cozen.com (Counsel for Kalitta) jcanny@amerijet.com jrichardson@johnlrichardson.com (Counsel for Amerijet) rpommer@atlasair.com kevin. montgomery@polaraircargo. com anita.mosner@hklaw.com (Counsel for United Parcel Service) jennifer.nowak@hklaw.com (Counsel for United Parcel Service) rsilverberg@sgbdc.com (Counsel for ABX) jjohnson@sgbdc.com (Counsel for ABX) marshall.sinick@squirepb.com (Counsel for Alaska and Florida West) john@mietuslaw.com (Counsel for Centurion) jhill@cooley.com (Counsel for Hawaiian and Jetblue) perkmann@cooley.com (Counsel for Hawaiian and Jetblue) jyoung@yklaw.com (Counsel for Spirit) dkirstein@yklaw.com (Counsel for Spirit) bob.kneisely@wnco.com leslie. abbott@wnco. com thomas. ting@suncountry. com john.s.duncan@faa.gov cristinasa@state.gov

#33892457_vl 

### Peter Ormerod November 12, 2014