Order 2013

- 9

- 22

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30 th day of September , 20 13

Served: September 30

, 20 13

Application of

FLY JAMAICA AIRWAYS LIMITED Docket DOT

- OST

- 2013

- 0136

for an exemption under 49 U.S.C. §4 0109

Application of

CARIBBEAN AIRLINES LIMITED Docket DOT

- OST

- 2013

- 0140

for an exemption under 49 U.S.C. §4 0109

ORDER DENYING EXEMPTION S Summary

By this order we deny the request s of (1) Fly Jamaica Airways Limited (Fly Jamaica), a foreign air carrier of Jamaica, and (2) Caribbean Airlines Limited (CAL), a foreign air carrier of Trinidad and Tobago, for exemption s under 49 U.S.C. §4 0109 for extrabilateral authority to conduct seventh

- freedom combination

turnaround services between New York, New York (JFK), and Georgetown, Guyana.

Application s

By application filed July 16, 2013, Fly Jamaica requests an exemption under 49 U.S.C. §40109 for a period of one year to engage in scheduled foreign air transportation of persons, property, and mail between New York (JFK), and George town, Guyana. Fly Jamaica states that it is a flag carrier of Jamaica that hold s a foreign air carri er permit issued by Order 2013

- 2

- 25, authorizing it to engage in scheduled foreign air transportation of persons and property from a point or points behind Jamaica via Jamaica and intermediate points, to a point or points in the United States and beyond. Fly Jamaica states that it currently provides scheduled combination services between New York (JFK) and K ingston, Jamaica, using B

- 757 aircraft.Fly Jamaica states that comity and reciprocity between Jamaica and the United States supports approval of

its New York (JFK)

- Georgetown service request

, even though such service is not provided for under the

U.S.

- Jamaica O pen S kies agreement. Fly Jamaica asserts that there is sufficient demand for New York

Guyana services and that no U.S. carrier currently serves the New York

- Georgetown market. Fly Jamaica also asserts that it has been designated as a flag carrie r of Guyana, and submitted as part of its application a letter from the Government of Guyana confirming its claim

.

By application filed July 18, 2013, CAL requests an exemption under 49 U.S.C. §40109 for a period of one

year to engage in scheduled foreig n air transportation of persons, property, and mail between New York, New York (JFK), and Georgetown, Guyana. CAL states that it is a flag carrier of the Republic of Trinidad and Tobago and notes that it holds from the Department exemption authority autho rizing it to conduct various services between Trinidad and Tobago and Jamaica, on the one hand, and various U.S. points, on

the other hand.

CAL acknowledges that its instant application is extrabilateral in nature because it is beyond the scope of the services provided for in the U.S.

- Trinidad and Tobago Air Transport Agreement, and it makes a number

of claims to support its extrabilateral request . Its primary assertion is that there is a compelling need for it

to initiate direct transportation between New York and Georgetown. CAL states that it is the only carrier currently providing New York

- Georgetown service (with Georgetown as an authorized intermediate/behind point) on two flights, with the first flight a B767 operating four times weekly over a Port of Spain

Georgetown

- New York routing, and the second a B737 operating daily over a Georgetown

- Port of Spain

New York routing. CAL cites its market share and load factors on its current flights and contends that, if permitted to operate seventh

- freedom turnaround New York

- Georgetown services, it can eliminate the unproductive Port of Spain

- Georgetown segment, allowing it to increase its frequency, market share, and load factors, while pot entially reduc ing fares on the New York

- Georgetown route. CAL further asserts that it has been granted flag

- carrier status from the Republic of Guyana and submitted as part of its application a letter from the Government of Guyana confirming its claim. C AL also states that its request is limited in scope and duration, and that its proposed service would not impact U.S. carriers

, as there is currently no U.S. carrier providing service in the city

- pair market at issue.

Responsive Pleadings

The Air Line Pilots Association (ALPA) and Airlines for America (A4A) each filed consolidated objections to the applications of Fly Jamaica and CAL . Fly Jamaica and CAL filed replies

.

ALPA asserts that the requests of Fly Jamaica and CA L are extra bilater al, and that the Department should deny the applications. ALPA further asserts that CAL’s operations are being subsidized by the government of Trinidad and Tobago. In this regard, ALPA cites a press article in which Trinidad and Tobago’s Finance

Minister is reported to have acknowledged a $40 million fuel subsidy paid to CAL in 2012. 1 ALPA asserts that a foreign subsidy of the alleged type would impede the ability of U.S. carriers to compete.

A4A states that CAL’s seventh

- freedom operations and allege d fuel subsidies negatively impact U.S

. carriers’ ability to compete. A4A argues that instead of granting CAL or Fly Jamaica extra bilateral

seventh

- freedom exemption authority, the Department should focus on the resolution of various doing

business issues that affect U.S. carriers in the Caribbean region.

1 ALPA Answer , at 5 and Exhibit B.In its reply to A4A , CAL essentially restates the reasons it provided in its application supporting its contention that grant of its request would be in the public interest. In its reply to ALPA, CAL compares its current request with the Department’s grant of extrabilateral exemption authority for CAL to serve between

New York an d Grenada. 2 CAL asserts that since it is the only carrier serving the Georgetown

- New York route, that there is a compelling need for CAL to continue and expand its services.

Fly Jamaica asserts that denial of its application would result in the continuat ion of anti

- competitive

conditions whereby CAL is the only carrier providing nonstop service in the New York (JFK)

- Georgetown market. Fly Jamaica further asserts that the majority of the arguments raised by ALPA and A4A pertain exclusively to the applicat ion of CAL and to the government of Trinidad and Tobago.

Decision

We have decided to deny the request s of CAL and Fly Jamaica for extrabilateral seventh

- freedom

combination turnaround exemption authority to serve between Georgetown and New York.

I n considering foreign air carrier requests for extrabilateral authority, the Departmen t weighs various criteria specific to the type of extrabilateral request

, as well as any other factors that are germane to a particular case. With respect specifically to requests for extrabilateral seventh

- freedom turnaround service, we have historically view ed such requests as extraordinary and have granted such authority only when the circumstances presented on the record in individual cases show compelling public intere st considerations. In this regard

, we have established several criteria to determine whether such authority would be in the public interest in a given case . Specifically, we must conclude that (1) a demonstrable need for the service exists, (2) there woul d be a negligible impact on U.S. flag carriers, and (3) the proposed operation is limited in scope.

Against that background, we have reviewed t he applications of CAL and Fly Jamaica and determined that we cannot make the necessary public interest finding. In this case, the Op en

- Skies Agreements that we have in place both with Jamaica and with Trinidad and Tobago provide rights for licensed carriers of both

countries to conduct fifth

- freedom services with full traffic rights on all segments. 3 Indeed, such rights are currently being exercised by CAL to transport Georgetown

- New York traffic on its existing two flights

referenced above. 4 Furthermore, Fly Jamaica has begun serving the Georgetown

- New York market on a

one

- stop basis via Kingston, Jamaica. In light of these existing Georgetown

- New York services and the lack of a showing by the applicants on the record that there is a truly demonstrable need for additional Georgetown

- New York servic es , we are unable to find that the CAL and Fly Jama ica seventh freedom turnaround proposals satisfy our public interest test for the type of extraordinary authority at issue

. 5 6 We will, therefore, deny the applications of CAL and Fly Jamaica

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2 See Notice of Action Taken dated February 10, 2011, in Docket DOT

- OST

- 2010

- 0232.

3 While we note that CAL and Fly Jamaica cite the support and designations of the Government of Guyana, we do not find that those circumstances change the fundamental nature of the proposed operations in such a way that we would regard them as other

than se venth freedom turnaround services for the applicant carriers

. 4 We view the Grenada

- New York case cited by CAL as inapposite. In that case

, t he Gre nada

- New York market stood to l ose substantial service w ith the cessation of Air Jamaica . In granting the a uthority to CAL , the Department noted, among other things, that permitting CAL to serve the route would facilitate a seamless transition from Air Jamaica to CAL and would minimize disruption to the travel plans of passengers and shippers.

5 Because we do not find that FlyJamaica and CAL have established that there is a demonstrable need for the service s , we need not reach the question of whether the CAL and Fly Jamaica requests satisfy the additional criteria referenced above.Our action is being taken under assigned authority (14 CFR §385.13). Persons entitled to petition the Department for review of this action under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven days of the date of this action. This action is effective immediately, and the f iling of a petition for review will not alter its effectiveness.

ACCORDINGLY,

1. We deny the request of Fly Jamaica Airways Limited for an exemption under 49 U.S.C. §40109, to engage in scheduled foreign air transportation of persons, property

, and mail , on a seventh

- freedom turnaround basis, between New York, New York and Georgetown, Guyana ;

2. We deny the request of Caribbean Airlines Limited for an exemption under 49 U.S.C. §40109

, to engage
in scheduled foreign air transportation of persons, proper ty

, and mail , on a se venth

- freedom turnaround basis, between New York, New York and Georgetown, Guyana ; and

3

. We will serve a copy of this order on Fly Jamaica Airways Limited; Caribbean Airlines Limited; Airlines for America; the Air Line Pilots Association; the Embassy of Jamaica in Washington, D.C.; the Embassy of the Republic of Trinidad and Tobago in Washington, D.C.; the Department of State ; and the

Federal Aviation Administration.

By:

PAUL L. GRE TCH

Director

Office of International Aviation

(SEAL)

Appendix

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

6 We acknowledge the concern s raised by ALPA and A4A pertaining to fuel subsidies paid to CAL; however, we have been advised through diplomatic channels that those subsidies have already ceased or will soon cease . We will continue to monitor

this situation.

7 Nothing in our present action will preclude CAL from continuing its current services o ver Port of Spain

- Georgetown

- New

York and Georgetown

- Port of Spain

- New York routings. Nor will this action preclude Fly Jamaica from continuing its Georgetown

- Kingston

- New York services.