UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC



### Issued by the Department of Transportation on April 23 , 20 10

NOTICE OF ACTION TAKEN

-- DOCKET S DOT

- OST

- 200 9

- 0 344 , DOT

- OST

- 2003

- 16102,

and DOT

- OST

- 2003

- 15479

_ ________________________________________________________________________________________________________ ____________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional confirming ord er will be issued in this matter).

1. Docket DOT

- OST

- 2009

- 0344

Application of CONTINENTAL AIRLINES, INC. ( CONTINENTAL ) filed 3 / 12 / 10 for:

XX Amendment of e xemption under 49 U.S.C. 40109 to provide the following services:

Scheduled foreign air transpo rtation of persons, property and mail between a point or points in the United States and a point or points in Japan and a point or points beyond Japan, either nonstop or via an intermediate point or points in third countries, by code

- sharing on flights ope rated by Air Japan Co., Ltd. (Air Japan) and IBEX Airlines Co., Ltd. (IBEX)

. 1 2

2. Docket DOT

- OST

- 2003

- 16102

Application of AIR JAPAN filed 3 / 12 / 10 for:

XX Blanket s tatem ent of authorization in order to engage in the following code

- share services :

A ir Japan requests a b lanket statement of authorization to display Continental ’s “ CO ” designator code on flights operated by Air Japan between : (i) a point or points in Japan and a point or points in the United States, either nonstop or via an intermediate point or points in third countries; ( ii ) any points in Japan, limited to Continental traffic originating or terminating outside Japan; (iii) a point or points in the United States and a point or points beyond the United States; and (iv) a point or points i n Japan and a point or points beyond Japan on a blind sector basis. 3

3. Docket DOT

- OST

- 2003

- 15479

Application of IBEX filed 3 /12/10 for:

XX Amendment of exemption under 49 U.S.C. 40109 to provide the following services:

Scheduled foreign air transport ation of persons, property and mail between any point or points in Japan and any point or points in the United States in connection with a code

- share arrangement with

Continental. 4

1 Continental seeks amended exemption authority to include points in third countries for which Continental does not otherwise hold authority by exemption or certificate

. 2 Air Japan and IBEX will not be placing their codes on flights operated by Continental, but Continental will be placing its code on flights operated by Air Japan and IBEX.

3 Air Japan currently holds a statement of authorization for mail

- only code

- share services with Continental. Air Japan seeks to broaden its authority to cover foreign air transportation of persons, property, and mail on a blanket

basis.

4 IBEX requests that its exemption authority be granted for a period of two years.XX Amendment of statement of authorization in order to engage in the fol lowing code

- share services:

IBEX requests an a mended s tatement of authorization under 14 CFR Part 212 to display the designator code of Continental on flights operated by IBEX between points in Japan

, limited to the carriage of

Continental’s (or Continent al Micronesia’s) U.S.

- Japan traffic

. 5

Applicant rep s : Lorraine B. Halloway , (202) 624

- 2538 (Continental) and

DOT Analyst: Charles J. Simpson (202) 973

- 7926 ( Air Japan and IBEX )

Brett D. Kruger (202) 366

- 8025

DISPOSITION

XX Approved amendment of Con tinental’s exemption authority (subject to conditions, see below).

XX Approved blanket statement of authorization to Air Japan (subject to conditions, see below).

XX Approved in part, amendmen t of IBEX’s exemption authority; remainder (request for long er

term authority) dismissed. 6 (subject to conditions, see below).

XX Approved amendment of IBEX’s statement of authorization (subject to conditions, see below)

. 7

The above action granting amended exemption authority to Continental is effective when ta ken : April 23

, 20 10 , through January 19 , 201 2

. 8 The above action granting amended exemption authority to IBEX is

effective when taken: April 23 , 20 10 , through April 23 , 201 1

. The above action s granting statements of

authorizat ion to the referenced carriers are effective: April 23 , 20 10 , and will remain in effect indefinitely, subject to conditions.

Action taken by: Paul L. Gretch, Director

Office of International Aviation

XX The authority granted is consistent with the 1998 U. S.

- Japan Memorandum of Understanding,

as amended

.

Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations

indicated:

XX Continental’s certificates of public convenience and necessity

XX Standa rd U.S. exemption conditions (attached as Appendix A )

XX Standard foreign carrier exemption conditions (attached as Appendix B )

XX

____________________________________________________________________________ ______ Conditions for Statements of Authorization (attached as Appendix C )

5 IBEX currently holds a statement of authorization permitting it to display the designator code of United Air Lines, Inc. (United) on flights operated by IBEX between points in Japan (limited to the carriage of United’s U.S.

- Japan traffic), using small aircraft. IBEX re quests amendment of its statement of authorization to include code

- share operations with Continental . In addition, IBEX requests remov al of the small aircraft limitation since it intends to display the designator codes of United and Continental on flights using its 70

- seat CRJ700 aircraft.

6 The one

- year duration of the authority we granted to IBEX is consistent with our usual policy of granting exemption authority in the circumstances presented. We therefore, dismissed the application to the extent that it sought authority for a longer period.

7 Our approval includes removal of the small aircraft limitation.

8 Continental requests that its amended exemption authority be granted through January 19, 2012, coextensive with its existing exemption authority in Docket DOT

- OST

- 2009

- 0344.Remarks: We note that Continental has conducted safety audits of Air Japan and IBEX under the Department ’ s Code

- Share Safety Audit Program, and the FAA has advised us that it has reviewed the

relevan t audit reports and found them to be acceptable.

__________________________________________________________________________________ On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found

Continental qualified to provide the exemption services authorized. Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action in this notice was consistent with Department policy; (2) grant of the exemption authority to Contin ental was consistent with the publi c interest; and (3) grant of that authority would not constitute a major federal action under the Energy Policy and Conservation Act of 1975.

To the extent not granted or dismissed , we denied all requests in the refere nced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set forth in this Notice under the Department’s regulati ons, 14 CFR §385.30, may file their petitions within sev en ( 7 ) days after the date of issuance of this Notice. This action was effective when taken, and the filing of a petition for review will

not alter such effectiveness.

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

### Appendix A

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating authority from the government of each country served;

(2) Comply with applicable requirements concerning oversales contained in 14 CFR 250 (for scheduled operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insurance coverage, and for certifying that coverage to the Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a De partment Order, comply with the requirements of 14 CFR 203, concerning waiver of Warsaw Convention liability limits and defenses;

(6) Comply with all applicable requirements of the Federal Aviation Administration, the Transportation Security Administrati on, and with all applicable U.S. Government requirements concerning security, including, but not limited to, 49 CFR Part 1544. To assure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing a ny new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security Administration has determined that security is adequa te to allow such airport(s) to be served ;

(7) Comply with such other reasonable terms, conditions, and limitations required by the public interest as may be prescribed by the Department of Transportation, with all applicable orders and regulations of oth er U.S. agencies and courts, and with all applicable laws of the United States.

The authority granted shall be effective only during the period when the holder is in compliance with the conditions imposed above.

1/2008

### Appendix B Foreign Carrier Exe mption Conditions

In the conduct of the operations authorized, the foreign carrier 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 s uch 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, bu t 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 f lights) from a foreign airport that would be the holder’s last point of departure for the United States, contact its International Industry Representative (IIR) (formerly referred to as International Principal Security Inspector) to advise the IIR of its p lans 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, pri or 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 t o, 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 ai rworthiness 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 Wa rsaw Convention liability limits and defenses;

(7) Agree that operations under this authority constitute a waiver of sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with respect to those actions or proceedings instituted against it in any court or other tribunal in the United States that are: (a) based on its operations in international air transportation that, according to the contract of carriage, include a point in the United States as a point of origin, point of destination, or ag reed 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 authori zed 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 217, concerning the reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations a re 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 req uired 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 wh en 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.

12/2007

### Appendix C

The code

- share ope rations authorized here are subject to the following conditions:

(a) The statement of authorization granted to Air Japan will remain in effect only as long as (i) C ontinental and Air Japan continue to hold the necessary underlying authority to operate th e code

share services at issue, and (ii) the code

- share agreement providing for the code

- share operations remains

in effect.

(b) The statement of authorization granted to IBEX will remain in effect only as long as (i) Continental

and IBEX continue to hold the 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;

(c ) Continental, Air Japan, and/or IBEX , as appropriate, must notify the Department no late r than 30 days before they begin any new code

- share service under the code

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

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

OST

- 200 3

- 16102 and/or DOT

- OST

- 2003

- 15479

. 1

(d ) Continental, Air Japan, and/or IBEX , as appropriate, must promptly notify the Department if the code

share agreement providing for the code

- share operations is no longer effective or if the carriers decide to cease operating all or a portion of the approved code

- share services. Such notice should be filed in

Docket DOT

- OST

- 200 3

- 16102 and/or DOT

- OST

- 2003

- 15479

. 2

(e ) The code

- sharing ope rations conducted under this authority must comply with 14 CFR 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 app roval 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 the computer reservation systems and elsewhere; that the carrier selling such transportatio n ( 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; 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 proh ibition.

(f

) The authority to operate to third countries is subject to the condition that any service provided under

the se statement s of authorization shall be consistent with all applicable agreements between the United States and the foreign countries i nvolved. Furthermore, (i) nothing in the award of th ese statement s of authorization should be construed as conferring upon Continental rights (including code

- share, fifth freedom intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless

Continental notifies the Department of its intent to serve such a 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 ri ghts; and (ii) should there be a request by any carrier to use the

limited

- entry route rights that are included in the authority of Continental by virtue of the statement s of authorization granted here, but that are not then being used by Continental , the holding of such authority will not be considered as providing any preference for Continental in a competitive carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue. 3

(g ) The authority granted here is s pecifically conditioned so that neither Continental , Air Japan nor IBEX shall give any force or effect to any contractual provisions between themselves that are contrary to these

conditions.

We may amend, modify, or revoke the authority granted at any tim e without hearing at our discretion.

1 See Appendix D for list of initial code

- share points.

2 We expect this notification to be received within ten (10) days after such non

- effectiveness or of such decision.

3 The notice in paragraph (c) above can be used for this notification.

### Appendix D

INITIAL LIST OF CODE

- SHARE POINTS