Order 2011-9-7

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on the 13th day of September, 2011

Served: September 13, 2011

ORDER

Summary

By this Order, we grant the petition of Cent urion Air Cargo, Inc. (Centurion) for review of staff action with respect to the denial of its request for an additional start-up date extension, and on review affirm the action ta ken by the Director, Office of International

Aviation.

Background

By Notice of Action Taken dated August 5, 2008 , we allocated seven weekly frequencies

to Centurion for U.S.-Brazil scheduled all-ca rgo services. The allo cation was subject to our standard start-up condition which provide d that Centurion must begin its proposed services within 90 days of September 1, 2008, the date it had proposed to institute service. During the period of Decembe r 2008 through April 2011, Centurion requested, and the Department approved, 11 extensions of the start- up condition. Each extension allowed the carrier an additional 90-day pe riod in which to institute service.

In support of each of its requests, Centurion st ated that it was working to secure Brazilian Government (specifically, ANAC) authority to pr ovide scheduled service to Brazil. In its eighth extension request, filed July 22, 2010, Ce nturion stated that a new legal issue had arisen involving Challenge Air Cargo, Inc. (Challenge), a predecessor company to Centurion. In each subsequent extension reque st filed by Centurion, it stated that it was continuing to work through the Challenge-related legal issues. In the Matter of

Application of

CENTURION AIR CARGO, INC.

for an exemption from 49 U.S.C. §41101 andAllocation of Frequencies (U.S.-Brazil AllCargo Service) Docket DOT-OST-2008-02282 In approving Centurion’s eleventh start-up extension request, we placed the carrier on

notice that “there should be no expectation that an additiona l waiver request to further extend the start-up date will be granted” and that “in any application for subsequent extension we would expect to see specific ev idence that Centurion has taken all necessary steps to secure Brazilian Government a pproval, including submission of a complete application to the Brazilian G overnment (citing the specific da te it was filed).” Finally we expressly stated that “we reserve the ri ght to not further ex tend the start-up date

should Centurion fail to submit this evidence and all related supporti ng details.” See the April 13, 2011 Approval in the instant docket.

On July 1, 2011, Centurion again requested an additional 90-day extension of the start-up condition; however, Centurion failed to supply the specific evidence cited in the April 13, 2011 Approval. Under those circumstances, a nd on the basis of the entire record, we found that the public interest would be best served by not granting Centurion any further relief from the start-up condition and by, in stead, reassigning the frequencies to the unallocated pool. Accordingly, we denied Centurion’s request. See the July 12, 2011

Notice of Action Taken in the instant docket.

Petition for Review of Staff Action

Centurion filed a Petition for Review of Staff Action on July 21, 2011. Centurion argues that, through its various requests for extensi ons, it has given the Depa rtment a report on the status of the ANAC application, as well as the status of th e Challenge legal and financial issues. In support of its claim, Centurion submitted an excerpt from the Diario Oficial de Uniao dated July 21, 2009, which gave public notice that ANAC issued Centurion a Decision of Legal Functioning; however, Centurion states that before it can begin service it must also obtain a Decision of Operations. Centurion further states that the Decision of Operations is dependent upon Centurion first obtaining a Tax Clearance Certificate, which is dependent upon the resolu tion of the tax issues involving Challenge.

There were no answers file d to Centurion’s petition.

Decision

We have decided to grant Centurion’s petiti on for review, and, on review, to affirm the action of the staff. In reviewing the entire re cord before us, we find that the staff acted in a manner consistent with the public interest.

In approving Centurion’s eleventh start-up extension request, we expressly defined the precise information that Cent urion would need to submit for any further extension. However, Centurion did not provi de that evidence in its subs equent application of July 1, 2011. Nor did it provide it in its Petition fo r Review of Staff Action. Taking into account the record as a whole, we do not find that Centurion has met the evidentiary requirements we established. In any event, it is apparent from Centurion’s submissions that the carrier has yet to obtain Brazilian Government au thority, and still has several significant steps to take to do so, includi ng the resolution of tax issues involving3 Challenge. Under these circumstances, we find that the public interest is best served by retaining the frequencies in the unallocated pool rather than continuing to allow

Centurion to hold them.

When Centurion is in a position to institute U.S.-Brazil scheduled all-cargo service it may reapply for frequencies.

ACCORDINGLY,

1. We grant the petition of Centurion Air Car go, Inc. filed July 21, 2011, for review of staff action in denying the application of Centurion Air Cargo, Inc., in Docket DOTOST-2008-0228, as reflected in the Notice of Action Taken dated July 12, 2011;

2. We affirm, on review, the action of the Di rector, Office of International Aviation, denying the application of Centurion Air Cargo, Inc., described above; and

3. We will serve this order on Centurion Air Cargo, Inc., the Brazilian Ambassador to the United States in Washington, D.C., th e Federal Aviation Ad ministration, and the U.S. Department of State (O ffice of Aviation Negotiations).

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs (SEAL)

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