Order 20 13

- 9

- 16

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transporta tion

on the 23 rd day of September

, 20 13

S erved: September 23

, 20 13

Application of

8165343 CANADA INC. D/B/A AIR CANADA ROUGE Docket DOT

- OST

- 20 13

- 00 87

a foreign air carrier permit under 49 U.S.C. §41301 1

ORDER TO SHOW CAUSE

Summary

By this order we tentatively find that it is in the public interest to grant the applicant the foreign air carrier permit attached as the Appendix t o this order.

Ap plication

By application filed April 26 , 20 13

, 8165343 Canada Inc. d/b/a Air Canada r ouge (AC rouge)

, a foreign air carrier of Canada

, requests a foreign air carrier permit under 49 U.S.C. § 41301, to engage in scheduled and charter foreign air transportat ion of persons, property, and mail

between the United States and Canada as provided for in the U.S.

- Canada Air Transport Agreement as follows: 2

1 We note that in th is same application AC rouge requested exemption authority to conduct its proposed services, and we previously acted on that portion of its request. See Notice of Action Taken dated May 22, 2013, in the

above

- referenced Docket.

2 The applicant states that it will operate its flights on behalf of Air Canada pursuant to a capacity purchase agreement, and that Air Canada will remain the entity marketing, offering, and selling the service under the (AC*) designator code.(1) Scheduled foreign air transportation of persons, property, and mail from points behind Canada, via Canada and intermediate points, to a point or points in the United States and beyond;

(2) Scheduled and charter foreign air transportation of property and mail between any point or points in the United States and any other point or points;

(3) Charter foreign air transportation of persons, property, and mail between any point or points in the United States and any point or points in a third country or countries, provided that, except with respect to cargo charters, such service constitutes part of a continuous operation, with or without a change of aircraft, that includes service to Canada for the purpose of carrying local traffic between Canada and the United States; and

(4) Other charter trips in foreign air transportation and other charters in accordance wi th 14 CFR Part 212 of the Department’s regulations.

The applicant provided evidentiary materials required by 14 CFR Part 211 of our reg ulations to support its request for authority.

No answers were filed to AC rouge’s application.

Tentative Findings a nd Conclusions

We tentatively find and conclude that the public interest warrants granting the applicant a foreign air carrier permit, in the form attached as the Appendix to this order, and subject to the

conditions attached. 3 In particular, w e tentativ ely find that grant of this authority is in the public interest; that the applicant has demonstrated, based on the record, that it is financially and operationally qualified to perform the services authorized; and that it is substantially

owned and effecti vely controlled by citizens of its claimed homeland. 4

The authority sought by the applicant is encompassed by the Air Transport Agreement

between the United States and Canada

. We also note that the applicant is properly licensed by

its homeland to perf orm the proposed services. In addition, on August 14 , 2013, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the applicant’s reque st

. We have verified the applicant’s compliance with 14 CFR Parts

2 03 (Warsaw liability waiver), and 205 (insurance requirements).

3 The applicant’s request for a fore ign air carrier permit was summarized in the Department’s published weekly

list of applications filed. Th is notice described the authority sought and gave interested persons an opportunity to submit evidence and objections to the award of this foreign air carrier permit authority. As noted above, no answers to the application were filed.

4 AC rouge states that it is a wholly

- owned subsidiary of Air Canada, a foreign air carrier of Canada that is substantially owned and effectively controlled by citizens of Canada. See Order s 2008

- 6

- 39 and 2008

- 9

- 23. The record indicates that AC rouge’s President/Chief Executive Officer, Board Members, and key management personnel are all citizens of Canada.In view of the foregoing and all facts of record, and acting under authority assigned by the Department in its regulations, 14 CFR Part 385, we tentatively find and conclude that:

1. It is in the public interest to issue the applicant a foreign air carrier permit in the form

attached ;

2. The applicant is fit, willing and able properly to perform the foreign air transportation described in the attached permit and to conform to the provision s of Title 49 of the U.S. Code

, and to our rules, regulations, and requirements;

3. The applicant is substantially owned and effectively controlled by citizens of its claimed homeland;

4 . The public interest requires that the exercise of the privileges granted by the permit should be subject to the terms, conditions, and limitations contained in the attached permit, and to such other reasonable terms, conditions, and limitations required by the public interest as we may prescribe;

5 . The issuance of t his foreign air carrier permit will not constitute a major regulatory action under the Energy Policy and Conservati on Act of 1975, as defined in 14 CFR §313.4(a)(1) of

our r egulations; 5

6 . The public interest does not require an oral evidentiary hearing on the application ; and

7 . Our action with respect to this foreign air carrier permit should, unless disapproved by the President of the United States under §41307 of Title 49 of the U.S. Code, become effective on the 61st day after its submission for §4 1307 review, or upon the date of receipt of advice from the President or his designee under Executive Order 12597 and implementing regulations that he or she does not intend to disapprove this portion of the Department’s decision under that section, whiche ver occurs earlier.

ACCORDINGLY,

1. We direct all interested persons to show cause why our tentative decision on the application of 8165343 Canada Inc. d/b/a Air Canada r ouge
, set forth above, should not be made final;

2

. Any interested person objec ting to the issuance of an order making final our tentative findings and conclusions with respect to the applicant’s request for a foreign air carrier permit shall, no later than twenty

- one (21) calendar days after the date of service of this order, file

w ith the Department and serve on the parties to this proceeding , a statement of objections specifying the part or parts of the tentative findings and conclusions objected to, together with

5 This finding is based on the fact that the grant of this pe rmit will not result in a near

- term net annual change in aircraft fuel consumption of 10 million gallons or more.a summary of testimony, statistical data, and concrete evidence to b e relied upon in support of the objections; if objections are filed, answers to objections are due no later than seven (7) calendar days thereafter;

3

. If timely and properly supported objections are filed, we will give further consideration to

the matte rs and issues raised by the objections before we take further action;

4

. In the event no objections are filed, all further procedural steps shall be deemed waived, and the Department will enter an order which will (subject to Presidential review under §4 1307 of Title 49 of the U.S. Code) make final our tentative findings and conclusions set forth in this order;

5

. We will serve a copy of this order on the applicant

, the Embassy of Canada in Washington, D.C., the Department of State, and the Federal Avi ation Administration

.

Persons entitled to petition the Department for review of this order under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of

issuance of this order.

By:

PAUL L. GRETCH

D irector

Office of International A viation

(SEAL)

Appendices

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

Issued by

Order 20 13

-

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



### -------------------------------------------------------- PERMIT TO FOREIGN AIR CARRIER



### ---------------------------------------------------------



### 8165343 C ANADA I NC

. D / B / A A IR C ANADA R OUGE

A F oreign Air Carrier of Canada

is authorized, subject to the following provisions, the provisions of Title 49 of the U.S. Code, and the orders, rules, and regulations of the Department of Transportation, to engage in :

Scheduled foreign air transportation of persons, property, and mail from points behind Canada, via Canada and intermediate points, to a point or points in the United States and beyond;

Scheduled and charter foreign air transportation of property and mail between any point or points in the United States and any other poin t or points; and

Charter foreign air transportation of persons, property, and mail between any point or points in the United States and any point or points in a third country or countries, provided that, except with respect to cargo charters, such service constitutes part of a continuous operation, with or without a change of aircraft, that includes service to Canada for the purpose of carrying local traffic betwee n Canada and the United States.

The holder shall also be authorized to engage in other chart er trips in foreign air transportation, subject to the terms, conditions, and limitations of the Department’s regulations governing

charters.

This permit and the exercise of the privileges granted in it shall be subject to the terms,

conditions and limita tions in both the order issuing this permit and the attachment to this order, and to all applicable provisions of any treaty, convention or agreement affecting international air transportation now in effect, or that may become effective during the period t his permit remains in effect, to which the United States and the holder’s homeland are or shall become parties.

This permit shall be effective on . Unless otherwise terminated at an earlier date pursuant to the terms of any ap plicable treaty, convention or agreement, this permit shall terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2) uponthe effective date of any treaty, convention, or agreement or amendment, which shall have the

effe ct of eliminating the bilateral right for the service authorized by this permit from the service which may be operated by airlines designated by the Government of Canada (or, if the right is partially eliminated, then the authority of this permit shall ter minate in like part); (3) upon the effective date of any permit granted by the Department to any other carrier designated by the

Government of Canada in lieu of the holder; or (4) upon the termination or expiration of the applicable air services agreement between the United States and Canada . However, clause (4) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transportation authorized herein becomes the subject of another treaty, convention or agreement

to whi ch the United States and Canada become parties.

The Department of Transportation has executed this permit and affixed its seal on Month XX,

2013.

By:

PAUL L. GRETCH

Director

Office of International Aviation 

### (SEAL)Foreign Air Carri er Permit 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 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, b ut 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 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 I IR of its plans 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 airw orthiness 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 Warsa w 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 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 "inte rnational 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 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 are autho rized, 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 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 when the h older 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.

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