UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, DC


### Issued by the Department of Transportation on October 11 , 20 1 1

NOTICE OF ACTION TAKEN

-- DOCKET S DOT

- OST

- 1997

- 2653 DOT

- OST

- 1999

- 5031 DOT

- OST

- 2001

- 9314 DOT

- OST

- 2001

- 10172

_________________________________________________________________________________________________________ ____________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additiona l confirming order will be issued in this matter).

Joint Application of DELTA AIR LINES, INC. (Delta), SKYWEST AIRLINES, INC. (SkyWest), and CHINA SOUTHERN AIRLINES COMPANY LIMITED (China Southern) filed 9/7 /11 for:

XX Amended e xemption for China Southe rn for one year under 49 U.S.C. 40109 to provide the following services: Scheduled foreign air transportation of persons, property and mail between points in China and points in the United States (including authority to coterminalize U.S. points) via int ermediate points, and beyond, on a code

- share basis with an y authorized U.S. air carrier. 1

XX S tatement of authorization in order to engage in the following code

- share services: SkyWest requests a blanket s tatement of authorization under 14 CFR Part 21 2 to display the “ CZ ” designator code of China Southern on Delta Connection flights operated by SkyWest: ( a ) within the United States (in conjunction with China Southern’s services in foreign air transportation), and (b) between the United States and third countries. 2

XX Waiver of the 45

- day advance filing requirement under 14 CFR Part 212

Applicant rep s : Alexander Van der Bellen (202) 842

- 4184 ( Delta ) , Gerald F. Murphy (202) 624

- 2500 (SkyWest), and George U. Carneal (202) 637

- 6546 (China Southern)

DO T Analyst: Brett D. Kruger (202) 366

- 8025

DISPOSITION

1 China Southern’s current exemption authority pro vides for scheduled foreign air transportation of persons, property, and mail between points in China and points in the United States (including authority to coterminalize U.S. points) via intermediate points, and beyond, on a code

- share basis under separa te agreements with Continental Airlines, Inc. (Continental) and Delta ( see Notice of Action Taken dated December 5, 2008, in Dockets DOT

- OST

1999

- 5031 and DOT

- OST

- 2007

- 28732). China Southern seeks to amend that authority to permit it to also place its des ignator code on flights operated by SkyWest and any other authorized U.S. carrier. The joint applicants note that China Southern’s code

- share service with Continental has been discontinued.
2 The joint applicants also request that the code

- share authority granted here be administered jointly with the existing Delta/China Southern statement of authorization in these dockets and that any beyond U.S. gateway point notice given by Delta or SkyWest be deemed as notice given by either carrier. The joint applica nts also state that they will continue to rely on established practice whereby any notice for a beyond U.S. gateway point is deemed notice for that point via all authorized U.S. gateways. In this regard, the joint applicants incorporate by reference all p revious code

- share notices provided in the Delta/China Southern code

- share dockets.XX Approved request of China Southern for amended exemption authority (subject to conditions, specifically including the condition concerning coterminalization, see Remarks below).

XX Approved requ est of SkyWest for a blanket statement of authorization (subject to conditions, see below).

XX Approved waiver of 45

- day advance filing requirement under 14 CFR Part 212.

The above action granting exemption authority to China Southern is effective when taken : October 11 , 20 1 1 , through October 11 , 201 2

. The above action granting a statement of authorizat ion to SkyWest is effective: October 11 , 20 1 1 , and will remain in effect indefinitely, subject to c onditions.

The above action granting a waiver of the advance filing requirement under 14 CFR Part 212 is effective: October 11 , 2011

. Action taken by: Paul L. Gretch, Director Office of International Aviation

XX The authority granted is consistent with the Air Transport Agreem ent, as amended, between the United States and the People’s Republic of China

. Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations indicated: XX SkyWest’s certificates of public convenience an d necessity XX Standard foreign carrier exemption conditions (attached as Appendix A ) XX Conditions for Statement of Authorization (attached as Appendix B ) XX Statement s of authorization approving Delta/China Southern code

- share operat ions and applicable conditions

___________________________________________________________________________________ Remarks : The exemption authority granted to China Southern is limited to operations conducted only through its code

- share arrange ments with U.S. carriers holding statements of authorization, on flights operated by those U.S. carriers

. By Notice of Action Taken dated April 15, 2010, in Docket DOT

- OST

- 2010

- 0047, we specifically limited new coterminalization of U.S. points by China So uthern for all

- cargo services. For the reasons explained there, we are continuing to impose the same condition here for all

- cargo services. 3 4

____________________________________________________________________________ ______ On the basis of data official ly noticeable under Rule 24(g) of the Department's regulations, we found the applicants 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

3 We have taken similar action limitin g new coterminalization of U.S. points for all

- cargo services by other carriers of the People’s Republic of China. See e.g. , Notice of Action Taken dated Se ptember 27, 2010, in Docket DOT

OST

- 2007

- 28655 (Great Wall); Notices of Action Taken dated January 7, 2011, and September 21, 2010, in Docket DOT

- OST

- 2010

- 0205 (Jade Cargo); and Notices of Action Taken dated January 21, 2011, and October 20, 2010, in Docke ts DOT

- OST

- 2006

- 24629 and DOT

- OST

- 2006

- 24630 (Yangtze).
4 To the extent China Southern is currently exercising coterminalized authority, nothing in the instant Notice of Action Taken is intended to restrict those operations. Furthermore, our action here d oes not preclude China Southern from exercising the Alaska coterminalization authority granted by Notice of Action Taken dated August 19, 2010, in Dockets DOT

- OST

- 2010

- 0200, DOT

- OST

- 1999

- 5035, and DOT

- OST

- 1996

- 1600.with Department policy; (2) grant of the authority was consistent with the publi c interest; and (3) grant of th e authority would not constitute a major federal action under the Energy Policy and Conservation Act of 1975.

To t he extent not granted, we denied all requests in the referenced Docket s

. 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 ac tion set forth in this Notice under the Department’s regulations, 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 Foreign Carrier Exemption Conditions

In the conduct of the op erations 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 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. Government requirements concerning security, the holder shall, before commencing any new service (including charter flights) from a foreign airport that would b e 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 plans and to find out whether the Transporta tion 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 un der 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 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 airworthiness and airman competency requireme nts 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 defens es; (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 agreed stopping place, or for which the contr act 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 authorized by the Department, originate or termina te 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 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 pres cribed 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 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.

12/2007

### Appendix B

The code

- share operations authorized here are subject to the following conditions:

(a) The statement of authorization granted will remain in effect only as long as (i) Delta, SkyWest , and China Southern continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the cod e

- share agreement providing for the code

- share operations remains in effect.

( b ) Delta, SkyWest , and/or China Southern , as appropriate, must notify the Department no later than 30 days before they begin any new code

- share service under the code

- share serv ices 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 s DOT

- OST

- 1997

- 26 53, DOT

- OST

- 1999

- 5031, DOT

- OST

- 2001

- 9314, and DOT

- OST

- 2001

- 10172

. 1

( c ) Delta, SkyWest , and/or China Southern

, 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 s DOT

- OST

- 1997

- 2653, DOT

- OST

- 1999

- 5031, DOT

- OST

- 2001

- 9314, and DOT

- OST

- 2001

- 10172

. 2

( d ) The code

- sharing operations con ducted 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 approval 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 transportation ( i.e., th e 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; and that the passenger liability of the operating carrier be unaffected.

( e ) Th e authority to operate to third countries is subject to the condition that any service provided under th is statement of authorization shall be consistent with all applicable agreements between the United States and the foreign countries involved. Furtherm ore, (i) nothing in the award of th is statement of authorization should be construed as conferring upon SkyWest rights (including code

- share, fifth freedom intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless SkyW est 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 rights; and (ii) should there be a request by any carrier to use the limited

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

( f

) The authority granted here is specifically conditioned so that neither D elta, SkyWest, nor China Southern s hall 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 time without hearing at our discretion.

1 See Appendix C for list of initial cod e

- share points. We grant the requests that notice given by Delta or SkyWest be deemed as notice given by either carrier, that notice given for a beyond U.S. gateway point be deemed notice for that point via all authorized U.S. gateways, and the incorporat ion by reference of all previous code

- share notices filed in the Delta/China Southern code

- share dockets.
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) abov e can be used for this notification.

### Appendix C

INITIAL LIST OF CODE

- SHARE POINTS

China Southern code on SkyWest flights

LAX to/from :

SLC Salt Lake City, Utah SAN San Diego, California LAS Las Vegas, Nevada SFO San Francisco, California