UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Issued by the Department of Transportation on March 7 , 2011



### NOTICE OF ACTION TAKEN

– DOCKET DOT

- OST

- 200 9

- 0156

________________________________________________________________________________________________ ________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional confirming order will be i ssued in this matter).

Joint Application of: DELTA AIR LINES, INC. (Delta) , VIRGIN BLUE INTERNATIONAL AIRLINES PTY LTD d/b/a V AUSTRALIA (V Australia), VIRGIN BLUE AIRLINES PTY L TD (Virgin Blue), PACIFIC BLUE AIRLINES (AUST) PTY LTD (PBA), and PACIFIC BLUE AIRLINES (NZ) LTD (PBNZ)

Date Filed: July 8, 2009

Relief requested: 1 Bla nket statements of authorization under 14 CFR Part 212 to permit V Australia, PBA, and PBNZ to engage in code

- sharing services to the full extent permitted by the U.S.

- Australia Open Skies Agreement and the Multilateral Agreement on the Liberalization of Inter national Air Transportation (MALIAT). Specifically, the carriers request authority to engage in reciprocal code

- share services : 1) between any point or points in the United States and any point or points in Australia or New Zealand (on a nonstop basis and via intermediate routings via any point or points in countries with which the United States has an Open Skies Agreement) ; 2) between U.S. points; 3) between points in Australia or New Zealand; 4) beyond Australia or New Zealand to any O pen S kies point or points; and 5) b eyond the United States to any Open S kies point or points. 2

D ate and citation of last action: September 1, 2009 , in this Docket.

Applicant representative s : Alexander Van der Bellen, 202

- 842

- 4184 (Delta) and Anita M. Mosner, 202

- 419

- 2604 (V Australia, Virgin Blue, PBA, and PBNZ)

DOT analyst: Robert J. Finamore, 202

- 366

- 2405

Responsive pleadings: American Airlines, Inc. (American) had filed a motion requesting the Department to consolidate into a single proceeding the instant application of the joint applicants together with the joint applicants’ application for antitrust immunity in Docket DOT

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- 2009

- 0155. American subsequently filed for leave to withdra w its motion to consolidate and we granted that request i n our September 1, 2009 action in this Docket

.
DISPOSITION

Action: Approved
, subject to conditions (See conditions and remarks below

. ) 3

Action date: March 7 , 2011

1 Our present action addresses the remaining portion of the joint applicants’ pending request in this Docket, on which the Depa rtment previously deferred action. By Notice of Action Taken in this Docket dated September 1, 2009, we granted the requests of De lta and Virgin Blue for blanket statements of authorization. At that time, code

- share safety audits had not yet been conducted by Delta and submitted to the Federal Aviation Administration (FAA) for V Australia, PBA, and PBNZ

. Delta has since conducted t he code

- share safety audits and the FAA has advised the Department that it has reviewed the relevant audit reports and found them to be acceptable; therefore, we are now granting the remainder of the joint applicants’ request.
2 See Appendix A for initial code

- share points and operating and marketing carriers. 3 We note that V Australia, PBA, and PBNZ hold the underlying economic authority required for the proposed code

- share operations. See Dockets DOT

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- 2007

- 28705 and DOT

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- 0157.Effective dates of authority granted: The statements of authorization granted to V Australia, PBA, and PBNZ are effective March 7 , 2011
, and shall remain in effect for an indefinite period , subject to conditions

. Basis for approval (bil ateral agreement/reciprocity): United States

- Australia Air Transport Agreement and the MALIAT.

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of the conditions noted immediately below and the attached code

- share conditions

. Special conditions/Remarks: We note that Delta has conducted code

- share safety audit s of V Australia, PBA, and PBNZ under the Department’s code

- share safety audit program and the FAA has advised the Department that it has reviewed the relevant audit repor t s and found them to be acceptable.

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

________________________________________________________________________________________________________ Under authority assigned by the D epartment in its regulations, 14 CFR Part 385, we found that (1) our action was consistent with 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 requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing a t 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 seven (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. govThe code

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

(a) The statements of authorization will remain in e ffect only as long as (i) Delta
, Virgin Blue , V Australia, PBA, and PBNZ continue to hold the necessary 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.
(b) Delta and/or Virgin Blue , V Australia, PBA, and PBNZ, as app ropriate, 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 identify the market(s) to be served, which carrier will be operating the aircraft in t he code

- share market added, and the date on which the service will begin. 1 Such notice should be filed in Docket DOT

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. (c) Delta and/or Virgin Blue , V Australia, PBA, and PBNZ, 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

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- 2001

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. 2

(d) The code

- shar ing 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 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 transp ortation ( 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) Any service provided shall be consistent with all applicable agreements between the United States and Australia and New Zealand, and all applicable agreements with other foreign countries involved. Furthermore, (i) nothing in the award of this blanket statement of authorization should be construed as conferring upon Delta rights (including code

- share, fifth

freedom intermediate and/or beyond rights) to serve markets where U.S. carrier rights are limited unless Delta notifies us of its intent to serve such 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; 3 and (ii) should there be a request by any carrier to use the limited

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

(f) The authority granted here is specifically conditioned so that neither Delta nor Virgin Blue , V Australia, PBA, or PBNZ shal l 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 Pursuant t o the Department’s Notice In the Matter of Blanket Notification of Code

- Share Service to Open Skies Partners and Points dated February 9, 2009, the joint applicants have provided blanket notification of their intent to engage in reciprocal code

- share servi ces between the Open Skies points as outlined in their application. The joint applicants state that they will provide the Department 30

- day notice before commencing code

- share services to or from non

- open skies countries and request that notice given by a ny one of V Australia, Virgin Blue, or the Pacific Blue carriers be deemed to constitute notice by all of them.
2 We expect this notification to be received within ten (10) days after such non

- effectiveness or of such decision. 3 The notice referenced in c ondition (b) above may be used for this notification.Appendix A