Order 2013-9-16

 UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation

 on the 23rd day of September, 2013

Served: September 23, 2013

Application of

8165343 CANADA INC. D/B/A AIR CANADA ROUGE Docket DOT-OST-2013-0087 

 

a foreign air carrier permit under 49 U.S.C. §413011 

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 to this order.

Application

By application filed April 26, 2013, 8165343 Canada Inc. d/b/a Air Canada rouge (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 transportation 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 this 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 with 14 

CFR Part 212 of the Department’s regulations. 

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations 

to support its request for authority.

No answers were filed to AC rouge’s application.

Tentative Findings and 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, we tentatively 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 effectively 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 perform 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 request. We have verified the applicant’s compliance with 14 CFR Parts 

203 (Warsaw liability waiver), and 205 (insurance requirements).

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

list of applications filed. This 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 Orders 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 provisions 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 this foreign air carrier permit will not constitute a major regulatory action 

under the Energy Policy and Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of 

our regulations;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 §41307 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, whichever 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 rouge, set forth above, should not be 

made final; 

2. Any interested person objecting 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 

with 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 permit 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 be 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 matters 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 

§41307 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 Aviation 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

Director

Office of International Aviation

(SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov
Appendix

Issued by

Order 2013-

 UNITED STATES OF AMERICA 

 DEPARTMENT OF TRANSPORTATION 

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

--------------------------------------------------------

PERMIT TO FOREIGN AIR CARRIER

---------------------------------------------------------

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

A Foreign 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 point 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 between Canada and the United States.

The holder shall also be authorized to engage in other charter 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 limitations 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 this 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 applicable treaty, convention or agreement, this permit shall

terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2) upon 
the effective date of any treaty, convention, or agreement or amendment, which shall have the 

effect 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 terminate 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 which 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 Carrier 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, 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 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 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 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 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 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 "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 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 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 

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 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