Order 2009-12-21

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 December, 2009

Served: December 23, 2009

ORDER TO SHOW CAUSE

Summary

By this Order, we have tentatively decided to further streamline our regulatory licensing procedures by removing point restrictions on existing economic authority held by U.S.

air carriers between the United States a nd those non-open-skies markets that are not entry- or frequency-limited, and by incorpor ating the newly broadened authority into consolidated certificates of public conveni ence and necessity in accordance with the streamlining initiative announced February 13, 2009 in this docket. 1

Background

In August 2005, we established Docket DOT-OST-2005-22228 for the implementation of a number of regulatory streamlining initiativ es. Most recently, we announced that, for those U.S. air carriers holding a blanket ope n-skies certificate, we would realign the balance of their economic authority, upon reque st and to the extent practicable, into

consolidated certificates of public convenience and necessity , in the following manner.

We stated that we would issue an indefinite duration certificate for markets that are not entry or frequency limited and a five-year cert ificate for limited entry/frequency markets

1 See Notice dated February 13, 2009, in the instant docket, Docket DOT-OST-2005-22228. In the Matter of Streamlining Regulatory Procedures for Licensing U.S. Air

Carriers Docket DOT-OST-2005-22228so that all of the authority held by a U.S. air carrier in restricted markets will have a common expiration date. We st ated that we would cover a carrier’s U.S.-Mexico citypair authority in a separate five-year certificate. We speci fied that the initiative would encompass operating authority already held by the carriers by certificate or exemption and that we would not act upon requests for ne w authority as part of the consolidation

exercise.

We received a number of consolidation requests in response to the February 13, 2009 Notice, and have begun issuing consolidated certificates. Severa l such requests have sought broader authority than that held by the requesting carrier in te rms of the U.S. or foreign points to be included in the new certi ficate. For example, where a carrier held economic authority to serve a foreign market from a named U.S. poi nt, the carrier listed its authority as covering all U. S. points. Similarly, in othe r instances, a carrier identified a foreign market as the entire country rather than the point listed in its existing economic authority. Because the February 13 Notice ex pressly stipulated that we would not act upon requests for new authority, we were not able to broa den the requesting carriers’ authority in issuing consolidated certificates. However, we recognize that in markets that are not entry- or frequency-limited, point restrictions may not be necessary under the applicable bilateral aviation agreement, a nd that we may, consistent with the public interest, relieve the air carrier of such restrictions. 2

Tentative Decision

We have tentatively decided that where a fo reign market is not entry- or frequencylimited, and where the air transport agreement or the state of the aviation relationship

does not limit U.S. carriers to service to or fr om named points, we may at the request of a

carrier remove the named U.S. and/or forei gn-market points from the carrier’s economic authority, and include all U.S. points and all po ints in the foreign market, as appropriate, and that we will do so as part of th e certificate consolidation initiative. 3 In doing so, we may also remove code-share-ser vice-only restrictions from a carrier’s economic authority upon the carrier’s request.

Under the proposed new procedures, a U.S. air carrier seeking consolidation of its economic authority may also request removal of point restrictions from the economic

2 We recognize that in some instances, economic authority held by a carrier names the specific points the carrier may serve not because of a restrictive bila teral aviation agreement, but because the applicant identified those points in its appli cation and received the economic auth ority it had requested. In other instances, points are no longer limited under a newly- liberalized aviation agreem ent. Regardless of the reason the points were named in the carrier’s economic authority in the first instance, we have tentatively decided that they may be removed if they are no t necessary under the applicable bilateral aviation agreement, and we have further tentatively dete rmined that certificate co nsolidation provides the opportunity for doing so. In this manner, all such authority may be broadened and realigned efficiently as part of a single order, rather than through a piecemeal approach. Generally, we would not anticipate that this change would be prejudicial to any interested part y. However, to ensure du e process, we will consider requests for point-broadening authority only after serv ice of the requests and an opportunity for comment.

3 U.S.-Mexico operating authority remains limited in terms of the number of U.S. air carriers that may be designated to provide serv ice in any city-pair market. Accordi ngly, U.S.-Mexico economic authority would not be affected under this proposal.authority it holds to serve ma rkets that are not entry- orfrequency-limited, or pointlimited. 4 The carrier must identify specifically the authority it seeks to have broadened (in terms of the U.S. or foreign points or both) and do so by identifying the order in which the authority was grante d (for previously-issued cer tificate authority) and the docket in which it was granted (for exempti on authority). Carriers are reminded that, for consolidation of all non-open-sk ies authority, the carrier must also indicate whether its authority is limited to code-share services only and, as part of the initiative proposed here, the carrier may request to have that limitation removed. 5 We will require each U.S. air carrier seeking broadened authority as described in this or der through certificate

consolidation to serve its re quest upon all U.S. air carrier s operating large aircraft. Answers to requests will be due within fifteen calendar days of the date of service. Assuming no issues arise making it impractical to broaden and combine currently-held authority into consolidated certificates, we will draft a self-executing final order designed to issue eligible carriers the consolidated certificates desc ribed herein upon completion of the 49 USC 41307 Presidential review process. 6

We reiterate that this latest tentative streamlining decision involves only economic authority to serve markets that, while not open skies, are not limited as to entry or frequency. Unless a change has been discu ssed above, we would re tain the certificate consolidation procedures explained in the February 13, 2009 Notice.

ACCORDINGLY,

1. We tentatively decide to adopt the regul atory streamlining measures described in this order under which point restrict ions may be removed from a carrier's economic authority to serve between the Un ited States and a foreign market that is not entry- or frequenc y-limited, or point-limited, as part of the certificate

consolidation initiative described in th e February 13, 2009 Notice in this docket;

2. We direct all interested parties objecting to the tentative decisions described in this order to file their objections with the Department, Dockets, in Docket DOTOST-2005-22228, U.S. Department of Tran sportation, Docket Operations, M-30, West Building Ground Floor, Room W 12-140, 1200 New Jersey Avenue, SE, Washington, DC 20590, no later than 15 days from the date of service of this order. Answers to objections shall be filed no later than 5 calendar days thereafter; 7

4 Consistent with the February 13, 2009 Notice, should a carrier find it preferable to leave certain pointspecific route authority out of the streamlining initiative offered in this Notice, it may do so. We will leave

it to each carrier’s discretion to determine which of its eligible authority it would like broadened by removal of named points when it requests that its au thority be realigned in the consolidated certificates.

5 We will entertain requests for removal of code-share- only restrictions on a carrier’s economic authority to serve non-open-skies markets that are not entry- or frequency- limited, or point-limited.

6 We remind carriers that all final decisions to awar d a new certificate still need to undergo Presidential review under 49 USC 41307, even though the point-speci fic authority is already held by a carrier under an existing certificate.

7 The original filing should be on 81⁄2" x 11" white paper using dark ink (not green) and be unbound without tabs, which will expedite use of our docket imaging syst em. In the alternative, parties are encouraged to use the electronic submission capability availa ble through the Federal eRulemaking Portal3. If timely and properly supported objections are filed, we will accord full

consideration to the matters or issues raised by the objections before we take further action; 8

4. In the event that no objections are filed, we will deem all further procedural steps

to be waived and we will enter an orde r finalizing our tentat ive decision; and

5. We will serve a copy of this order on all U. S. air carriers operating large aircraft.

By:

Susan L. Kurland Assistant Secretary for Aviation

and International Affairs

(SEAL)

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

( http://www.regulations.gov ) and follow the online instructions for filing submissions. Additionally, service by facsimile or electronic mail is authorized . Parties should include their fax numbers and email

addresses on their submissions and should indicate the method(s) of service used on their certificates of service. Parties should also provide courtesy e-ma il copies of their submissions to the U.S. Carrier Licensing Division at: Esta.Rosenberg@dot.gov

8 We will not entertain petitions for reconsideration of th e tentative procedures set forth in this order as we are providing for objections and answers.