UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on July 19 , 20 1 2

NOTICE OF ACTION TAKEN

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_______________________________________________________________________________________________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional confirming

order will be issued in this matter).

Applicant : COMPANIA OPERADORA DE CORTO Y MEDIO RADIO IBERIA EXPRESS, S.A.U. ( Iberia Express )

Date Filed: Ju ly 12 , 2012.

Relief requested: E xemption under 49 USC §40109 to engage in foreign air transportation of persons and property to the extent necessary to display the AA* code of American Airlines, Inc. (American) on Iberia Express flights within the EU and between the

EU and third countries

.

Iberia Express also request s a statement of authorization under 14 CFR Part 212 to permit it to display the AA* designator code of

American on flights operated by Iberia Express within the EU and between the EU and third countries. Iberia Express further requests a waiver of the 45

- day advance filing requirement under 14 CFR Part 21 2. 1

Applicant representative : Don H. Hainbach 202

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- 3970 DOT analyst: Brett D. Kruger, 202

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Responsive pleadings: None.

DISPOSITION

Action: Approved

.

Action date: July 19 , 20 1 2 2

Effective dates of authority granted: The exemption authority granted is effective July 19 , 2012, through July 19 , 2014

.

The statement of authorization granted is effective July 19 , 2012 , for an indefinite period.

The waiver of the 45

- day advance filing requirement under 14 CFR Part 212 is effective July 19 , 2012.

Basis for approval (bil ateral agreement/reciprocity): U.S.

- EU Air Transport Agreement.

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our standard exemption conditions attached as Appendix A and to the code

- share conditions attached as Appendix B

.
Special conditions/Remarks: Based on the record in this case, we found that Iberia Express is operationally and financially qualified to conduct the proposed services, and that it is substantially owned and effectively controlled in a manner consistent wi th the provisions of the U.S.

- EU Agreement. 3 We also not e that the applicant is properly licensed by its homeland to perform the proposed

services.

We also note that American has conducted a safety audit of Iberia Express under the Department’s Code

- Shar e Safety Audit Program, and the FAA has advised us that it has reviewed the relevant audit report and found it to be acceptable.

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

1 Our description of the relief requested reflects both the contents of the application as well as clarification provided to us informally by the applicant.

2 We acted on this application without awaiting expiration of the 15

- day answer period with the cons ent of all parties served.

3 We make this finding based on Article 2 (Reciprocal Recognition of Regulatory Determinations with Regard to Airline Fitness and Citizenship) of the Protocol to amend the U.S.

- EU Air Transport Agreement, signed June 24, 2010.________________________________________________________________________________ _______ __________

Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent w ith Department policy; ( 2 ) grant of the authority was consistent with the public interest; and ( 3 ) grant of the authority would not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975. To the extent not granted/deferred/dismissed, we denied all requ ests in the referenced 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 Dep artment’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this Notice. This action was effec tive when taken, and the filing of a petition for review will not alter such effectiveness.

An electroni c version of this document is available on the World Wide Web at: http://www.regulations.govAppendix A 

### Foreign Air Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carrier applicant 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 Feder al 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 a ssure 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 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 plans and to find out whether the Transportation Security

Administration has determined that secur ity 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 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 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 requirements of its Government for international air services;

(6) Except as s pecifically 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 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 transport ation 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 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 tha t 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 terminate all flights to/from the United States in a Member State of the European Union;

(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 Departme nt'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 prescribed by the Department, with all applicable orders or regulat ions 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.

EU carrier 01/2008Appendix B

The code

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

(a) The statement of authorization will remain in effect only as long as (i) American and Iberia Express continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the code

- share agreement providing for the co de

- share operations remains in effect.

( b ) American and/or Iberia Express , as appropriate, must notify the Department no later than 30 days before they begin any new code

- share service under the code

- share services authorized here. Such notice shall iden tify the market(s) to

be served and the date on which the service will begin. Such notice should be filed in Docket DOT

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(c ) American and/or Iberia Express

, as appropriate, must promptly notify the Department if the code

- share agreement

pr oviding 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

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( d ) The code

- sharing operations 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 approval he re 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., 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 prohibition.

( e ) The authority granted here is specifically conditioned so that neither American nor Iberia Express 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 time without hearing at our discretion.

4 Iberia Express provided notice of its intent to engage in code

- share servi ces by displaying the AA* code between open

- skies points.

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

- effectiveness or of such decision.