BEFOR E TH E DEPARTMEN TO F TRANSPORTATIO N

WASHINGTON , D.C . Applicatio n o f JA TAIRWAY S A.D . BELGRAD E fo r a n Exemptio n pursuan t t o 4 9 U.S.C . §4010 9 Docke t DOT-OST-2013 -

APPLICATIO N O F JA TAIRWAY S A.D . BELGRAD E FO R A N EXEMPTIO N Communication s wit h respec t t o thi s documen t shoul d b e sen t to : Anit a M . Mosne r Jennife rM . Nowa k HOLLAN D & KNIGH TLL P 80 0 17t h Street , N.W. , Suit e 110 0 Washington , D.C . 2000 6 Phone : (202)419-260 4 Fax : (202 ) 955-556 4 anita.mosner(5)hklaw.co m Attorney s fo r Ja t Airway s a.d . Belgrad e Dated : Septembe r19 , 201 3 NOTICE : TH E APPLICAN TI S REQUESTIN G EXPEDITE D APPROVA L FRO M TH E

DEPARTMEN TAN D WIL L POL L AL L INTERESTE D PARTIES .BEFOR E TH E DEPARTMEN TO F TRANSPORTATIO N

WASHINGTON , D.C . Applicatio n o f JA TAIRWAY S A.D . BELGRAD E fo r a n Exemptio n pursuan t t o 4 9 U.S.C . §4010 9 Docke t DOT-OST-2013 -

APPLICATIO N O F JA TAIRWAY S A.D . BELGRAD E FO R A N EXEMPTIO N Pursuan t t o 4 9 U.S.C . § 4010 9 an d Subpart C o f th e Department' s Rule s o f Practice , Ja t Airway s a.d . Belgrad e ("JAT" ) hereb yapplie s fo ra n exemptio n fro m 4 9 U.S.C . § 4130 1 tha t woul d enabl e i t t o provid e schedule d foreig n ai rtransportatio n o f persons , property , an d mai l betwee n Serbi a an d th e U.S . o n a codeshare-onl ybasis , a s describe d furthe rherein . I n support o f thi s application , JA Tstate s a s follows : 1 . JA Trequest s a n exemptio n t o th e exten t necessaryt o permi t i t hol d ou t servic e t o th e U.S . b yplacin g it s cod e o n flight s operate d t o th e U.S . bycurren t o rfutur e commercia l partner s whic h hol d th e appropriat e authorit yt o operat e servic e t o th e Unite d States , o rthroug h authorize d leas e arrangements . JA Tha s immediat e plan s t o offe rcodeshar e servic e t o th e U.S . o n flight s operate d byEtiha d Airway s P.J.S.C . ("Etihad") . Initially , JA T plan s t o plac e it s "JU* " cod e o n flight s operate d byEtiha d betwee n Ab u Dhab i (AUH ) o n th e on e hand , an d Ne wYor k (JFK) , Chicag o (ORD) , an d Washington , D C (IAD ) o n th e othe rhand , tha t connec t wit h JAT' s service s t o Belgrad eJA TAIRWAYS APPLICATIO N FO R EXEMPTIO N (BEG). 1 JA Tdoe s no t pla n o n operatin g flight s t o th e U.S . usin g it s ow n aircraf t at thi s time . 2 . JA Tacknowledge s tha t th e Republi co f Serbi a i s currentl yrate d a s "Category2 " unde rth e Federa l Aviatio n Administration' s Internationa l Safet y Assessmen t ("IASA" ) program . However , th e Departmen t routinel yapprove s application s byforeig n ai rcarrier s for m IAS ACategory2 countrie s whe n th e service s to/fro m th e U.S . wil l b e offere d strictl yo n a codesharin g o rwe t leas e arrangemen t wit h a dul yauthorize d ai rcarrier , a s i s th e cas e here . 3 . Becaus e th e Unite d State s an d th e Republi co f Serbi a d o no t currentl y hav e a bilatera l ai rservic e agreemen t i n place , JA Ti s requestin g thi s authorit ybase d o n principle s o f comit yan d reciprocity , an d submit s tha t th e circumstance s her e full y warran t a gran t o f authorit yt o JAT . U.S . carrier s Unite d Airline s an d U S Airway s currentl yhol d ou t servic e t o Belgrad e o n flight s operate d b ythir d countrycarriers , whic h woul d support a gran t o f simila rauthorit yt o JA Tt o hol d ou t servic e t o th e U.S . i n conjunctio n wit h it s ow n commercia l partners. 2 Moreover , th e Departmen t previousl y ha s foun d i t t o b e i n th e publi cinteres t t o gran t authorit yt o JA Tbase d o n reciprocit y wit h then-Serbi a an d Montenegro. 3

1 Etihad wil l be filin g a separat e reques t fo ra Statemen t o

f Authorizatio n to displa

yth e JU * airlin e designato rcod e o n its U.S.-UA E flights . 2 Unite d place s its cod e o n flight s operate d b ySwis s Internationa l Airline s betwee n Zuric h (ZUR) an d BEG , o n flight s operate d b yLufthans a betwee n Frankfur t (FRA)/Munic h (MUC) an d BEG , an d o n flight s operate d b yAustria n Airline s betwee n Vienn a (VIE ) an d BEG . U S Airways place s its cod e o n flight s operate d b yLufthans a betwee n FR

Aan d BEG . 3 See Notice o

f Actio n Take n i n Docke

t OST-1996-1182 (Oct . 2 , 2003) ; Notice o f Actio n Take n i n Docket OST-1996-118 3 (Feb . 23 , 2005) .JA TAIRWAYS APPLICATIO N FO R EXEMPTIO N 4 . JA Ti s a n ai rcarrie rorganize d an d registere d unde rth e law s o f th e Republi co f Serbia , wit h it s headquarter s locate d at Buleva rumetnost i 16A , 1100 0 Belgrade , Serbia . 5 . JA Twa s founde d i n 194 7 an d operate s schedule d service s t o 5 0 destination s i n Europe , Australi a an d th e Middl e East . JA Tpreviousl yoperate d t o th e U.S . a s a Yugoslavia n ai rcarrier , beginnin g ai rcharte rservic e t o th e U.S . i n 197 0 an d schedule d servic e i n 1977. 4 JA Toperate d nonsto p dail yservic e betwee n point s i n then Yugoslavi a an d Ne wYor k (JFK ) an d Chicag o (ORD ) unti l 199 2 whe n servic e wa s halte d o n foreig n polic ygrounds . Ful l diplomati crelation s betwee n th e Federa l Republi co f Yugoslavi a an d th e U.S . wer e re-establishe d i n 2000, 5 an d JA Tbriefl yresume d schedule d servic e t o th e U.S . o n a codeshar e basi s wit h Uzbekista n Airway s fro m 2003 - 2004. 6 6 . Th e Civi l Aviatio n Directorat e o f th e Republi co f Serbi a ha s regulatory authorit yjurisdictio n ove rJAT . Th e Directorate' s addres s i s Buleva rZoran a Djindjic a 144 , 1107 0 Ne wBelgrade , Serbia . 7 . JA Thold s a n Ai rOperato rCertificat e ("AOC" ) issue d byth e Civi l Aviatio n Directorat e o f th e Republi co f Serbia . Th e AO C wil l expir e May5 , 2014 . JA Twil l submi t a timel yapplicatio n fo rrenewa l o f th e authorit ybefor e it s expiration . Exhibi t Acontain s a cop yo f JAT' s AOC .

4 JA Toriginall ywa s issue d a foreig n ai rcarrie rpermi t unde rOrde r1976-6-16 5 (Jun . 21 , 1976) . 5 Serbi a i s th e successo rstat e to th e Federa l Republi co f Yugoslavia , whic h was re-name d Serbi a an d Montenegr

o i n 2003 . Montenegr

o brok e of f fro m Serbi a i n 2006 . Se e Notice of Actio n Take n i n Docket OST-1996-1182 (Oct . 2 , 2003) .JA TAIRWAYS APPLICATIO N FO R EXEMPTIO N 8 . JA Ti s owne d an d controlle d bySerbia n citizens . JA Ti s a join t stoc k compan yfo rai rtransportatio n owne d b yth e Serbia n Government. 7 Th e member s o f it s Boar d o f Director s ar e Serbia n citizens . Se e Exhibi t B fo rlis t o f th e name s an d citizenshi p o f th e directors . 9 . JA Tha s a n experience d an d capabl e managemen t team . Th e names , titles , an d citizenshi p o f thes e individual s ar e se t fort h i n Exhibi t C . 10 . JA Ti s financiall yqualifie d t o provid e th e service s at issu e here . Detail s abou t JAT' s finance s ar e bein g submitte d unde rsea l (Exhibi t D) . Thes e material s establis h tha t JA Tmeet s an d exceed s th e Department' s financia l fitnes s criteria . A s th e financial s fo rth e airlin e ar e no t disclose d t o thir d parties , JA Ti s submittin g thi s informatio n alon g wit h a Motio n fo rConfidentia l Treatment . 11 . JA Tdoe s no t hol d an yinteres t i n an yU.S . carrie ro ri n an yothe rforeign carrier . Othe rtha n th e arrangements note d i n thi s application , , JA Ti s no t a part yt o an y agreement s o rcooperativ e workin g arrangement s wit h an yU.S . o rforeig n ai rcarrie rtha t woul d affec t th e propose d service s t o th e Unite d States . 12 . Th e Republi co f Serbi a i s a signatoryo f th e Internationa l Conventio n o n Civi l Aviatio n (ICAO) , an d JAT' s maintenanc e an d trainin g program s compl ywit h al l relevan t ICA O annexes . 13 . JAT' s insuranc e coverag e meet s o rexceed s th e liabilit ylimit s o f 1 4 C.F.R . Par

t 205 . Exhibi t E contain s a cop yo f JAT' s Certificat e o f Insurance .

7 Pleas e note that JA

Tcurrentl yi s i n negotiation s wit h Etiha d Airways P.J.S.C . ("Etihad" ) regardin g Etihad' s propose d purchas e o f a 49 % stak

e i n JAT . I f th e purchas e dea l i s finalized , JA Twil l remai n substantiall yowne d an d effectivel ycontrolle d b ySerbia n citizens .JA TAIRWAYS APPLICATIO N FO R EXEMPTIO N 14 . JA Tha s execute d a Warsa wConventio n Liabilit yWaive r(OS TFor m 4523) . Se e Exhibi t F . 15 . JA Tha s ha d n o fata l accident s o rtarif f violation s i n th e pas t fiv e years . 16 . Th e requeste d authorit ywil l no t resul t i n additiona l annua l aircraf t fue l consumptio n exceedin g 1 0 millio n gallons . Gran t o f th e requeste d exemptio n woul d no t constitut e a majo rregulatoryactio n unde rth e Energ yan d Conservatio n Ac t o f 1975 , a s defined i n 1 4 C.F.R . § 313.4 . 17 . JA Tdoe s no t inten d t o operat e flight s t o th e U.S . usin g it s ow n aircraf t a t thi s time , an d thu s wil l no t b e filin g a famil ysupport pla n a s require d by4 9 U.S.C . § 4131 3 o ra passenge rmanifes t statemen t a s require d by1 4 C.F.R . Par t 243 . Shoul d JA Tbegi n t o operat e servic e t o th e U.S. , i t wil l fil e a famil ysupport pla n an d a passenge r manifes t statemen t at tha t time . WHEREFORE , fo rth e foregoin g reasons , JA Trespectfull yrequest s tha t th e Departmen t gran t it s applicatio n fo ra n exemptio n s o tha t th e carrie rma yconduc t foreig n ai rtransportatio n o f persons , property , cargo , an d mai l a s provide d fo rbyth e principle s o f comit yan d reciprocity . JA Tfurthe rrequest s an ydifferen t o radditiona l relie f tha t th e Departmen t ma ydee m necessary .JA TAIRWAYS APPLICATIO N FO R EXEMPTIO N Respectfull ysubmitted ,

Anit a M . Mosne r Jennife rM . Nowa k HOLLAN D & KNIGH TLL P 80 0 17 t h Street , N.W. , Suit e 110 0 Washington , D.C . 2000 6 Phone : (202)419-260 4 Fax : (202 ) 955-556 4 anita.mosner@hklaw.co m Attorney s fo r Ja t Airway s a.d . Belgrad eJA TAIRWAYS APPLICATIO N FO R EXEMPTIO N TABL E O F EXHIBIT S Exhibi t AJA TAi rOperato rCertificat e Exhibi t B Boar d o f Director s Exhibi t C Managemen t Tea m Exhibi t D Financia l Statement s Exhibi t E Certificat e o f Insuranc e Exhibi t F Warsa wConventio n Liabilit yWaive rEXHIBIT A AIR OPERATOR CERTIFICATEEXHIBIT B BOARD OF DIRECTORS Name Citizenship Dane Kondi ć(President of the Board) Serbian/Australian Dobrivoje Glavoni ćSerbian Ana Jovi ćSerbian Gmitar Dugali ćSerbian Miroslav Stanojevi ćSerbian Velibor Slavuj Serbian Dragan Djokovi ćSerbian Slobodan Živkovi ćSerbian Stevica Spaji ćSerbian Mihailo Jovanovi ćSerbianEXHIBIT C JAT AIRWAYS OFFICERS AND KEY MANAGEMENT PERSONNEL Name Title Citizenship Dane Kondi ćChief Executive Officer Serbian/Australian Siniša Grbi ćSecurity Manager Serbian Svetislav Vrani ćSafety Manager Serbian Velibor Slavuj Chief Operating Officer Serbian Aleksandra Matkovi ćDirector of Ground Operations Serbian Slavoljub Djordjevi ć Director of Continuing Airworthiness Management Serbian Zoran Raki ćDirector of Flight Operations Serbian Jovan Gliši ćChief Pilot Serbian Gmitar Dugali ćChief Commercial Officer Serbian Miroslav Stanojevi ćChief Corporate Affairs Officer Serbian Ana Jovi ćChief Financial Officer SerbianEXHIBIT D JAT AIRWAYS FINANCIAL STATEMENTS FILED UNDER SEAL WITH MOTION FOR CONFIDENTIAL TREATMENTEXHIBIT E INSURANCE CERTIFICATEEXHIBIT F WARSAW FORMDocket OST 95-236

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: 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 Carriershall avail itself of the limitation of liability provided in the Convention forthe Unification of Certain Rules Relating to lnternational 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 liabili$ 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 I, 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 LIABILIry 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 f [(name of carrier) and certain other] celrriers parties to such special contracts for death of or personal injury to passengers is limited in most cases to proven damages notto 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 liabilig under the Warsaw Convention or such special contracts of carriage. For further information please consult your airline or insuranee 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.l 4. This Agreement may be signed in any number of counterparts, all of which shall constitute one Agreement. Any Canier may become a party to this Agreement by signing a counterpart hereof and depositing it with DOT. 5. Any Carrier party hereto may withdraw from this Agreement by giving twelve (12) months' written notice of withdrawal to DOT and the other Carriers parties to the Agreement. €-itn"r. "lternaiiiEiay b" 

### ,sed. - (Signature and Da!q) 

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### ilih D"FE:E""*tive Director for sales & Marketing 

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OST Form 4523 (Formerly CAB Form 263) (Name and Address of Carrier) JatAirways, Bulevar umetnosti 16A, 11070 Belgrade, Serbia