UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on April 28

, 20 1 4



### N OTICE OF ACTION TAKEN

– DOCKET S DOT

- O ST

- 20 1 4

- 0 0 44, DOT

- OST

- 2012

- 0117, and
DOT

- OST

- 2010

- 0087

___ _____________________________________________________________________________________________________________________________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional
confi rming order will be issued in this matter).

Joint Applicant s : US AIRWAYS, INC., (US A irways ), 1 PIEDMONT AIRLINES , Inc. (P iedmont ), PSA AIRLINES
, Inc. (PSA)
, IBERIA L ÍNEAS A ÉREAS DE ESPAÑA SOCIEDAD AN ÓNIMA OPERADORA (I beria ), COMPANÍA OPERADORA DE CORTO Y MEDIO RADIO IBERIA EXPRESS, S.A.U. (I beria E xpress ), and
AIR NOSTRUM L Í NEAS A É REAS DEL MEDITERR Á NEO, S.A. (Air Nostrum)

Date Filed: March 28 , 201 4

Relief requested: Amendment of e xemption under 49 USC §40109 to permit Iberia Express to engage in foreign air transportation of persons and property to the extent necessary to display both the “ AA ” designator code of American Airlines, Inc. ( American) and the “ US ” designator code of US Airways on Iberia Express flights within the EU and
between the EU and third countries

. 2

Exemption under 49 USC § 4 0109 to permit Air Nostrum to engage in foreign air transportation of persons and property

to the extent necessary to permit Air Nostrum to display both the “ AA ” designator code of American and the “ US ”
des ignator code of US Airways on flights within the EU and between the EU and third countries pursuant to Iberia’s code

share agreement with American

. 3

The joint applicants also request statements of authorization under 14 CFR Part 212, as follows:

A. Blanket statements of authorization under 14 CFR Part 212 to permit US Airways and PSA to display the Iberia

“ IB ” designator code on flights operated by US Airways and PSA (i) between any point or points in the United States and any point or points in the EU (eit her non

- stop or via third country intermediate points); (ii) between any point or points in the EU and any point or points in third countries; (iii) between U.S. points; and (iv) between any point or points in the U.S. and any point or points in third coun tries

.

B. Blanket statement of authorization under 14 CFR Part 212 to permit Piedmont to display the Iberia “ IB ” designator code on flights Piedmont operates between points in the United States

.

C. Blanket statement of authorization under 14 CFR Part 212 to permit Iberia to display the US Airways “ US ” designator code on flights operated by Iberia (i) between any point or points in the United States and any point or points in the EU (either non

- stop or via third country intermediate points); (ii) between any p oint or points in the

1 The joint applicants state that, f ollowing the merger of US Airways and American on December 9, 2013, US Airways qualifies as an affiliate of American for the purposes of the existing codeshare agreement between American and Iberia , since under the American

– Iberia Code Share Agreement, “Affiliate” means, with respect to any person or entity, any other person or entity, directly or indirectly, Controlling, Controlled by, or under Common Control with such person or entity...” Joint application at 2

, note 2. Regarding our approval of the American

– Liberia code

- share , see Department action dated March 13, 2008, in Docket DOT

- OST

- 2008

- 0044.

2 Iberia Express currently holds exempt ion authority to engage in foreign air transportation of persons and property to the extent necessary to display the AA* code of American on Iberia Express flights within the EU and between the EU and third countries

. See Notice of Action Taken dated July 19, 2012, in Docket DOT

- OST

- 2012

- 0117.

3 Air Nostrum states that its exemption authority to permit it to display the (AA*) designator code of American Airlines, Inc. (American) on flights within Spain, and between Spain and third countries pursuant to the code

- share agreement between American and Iberia Lineas Aereas de Espana, S.A. (Iberia) expired due to an administrative oversight. In its instant request, Air Nostrum incorporates by reference the information provided in its original exemption applicati on and states that the information remains

accurate. See Notice of Action Taken dated May 24, 2010, in Doc ket DOT

- OST

- 2010

- 0087.United States and any point or points in third countries; (iii) between EU points; and (iv) between any point or points in the EU and any point or points in third countries

.

D. Blanket statement s of authorization under 14 CFR Part 212 to permit Iberia Express and Air Nostrum to display
the US Airways “ US ” designator code on flights operate d by Iberia Express and Air Nostrum between EU points, and beyond the EU to any poi nt or points in third countries

.

The Joint Applicants further requ est a waiver of the 45

- day advance filing requirement under 14 CFR Part 212.

Applicant representative s : Howard Kass

, Abigail Donovan , 202

- 326

- 5153

, and Robert A. Wirick, 817

- 963

- 0394 (US Airways) & Don H. Hainbach and Jason E. Maddux, 202

- 776

- 3970 (Iberi a, Iberia Express, and Air Nostrum)

DOT analyst: David R. Christofano , 202

- 366

- 0584

Responsive pleadings: None

DISPOSITION

Action: Approved

, subject to conditions Action date: April 28

, 20 1 4

Effective dates of authority granted: Iberia Exp ress ’ exemption authority is effective from April 28 , 20 1 4

, through April 28 , 2016

.

Air Nostrum’s exemption authority is effective from April 28 2014 , through April 28 , 20 1 6

.

The statement s of authorization granted to the joint applicants are effect ive April 28 , 20 1 4 , and will remain in effect for an
indefinite duration , subject to conditions

.

Our action granting the joint applicants’ request for waiver of the 45

- day advance filing requirement under 14 CFR Part 212 is effective April 28 , 2014.

Ba sis for approval (bilateral agreement/reciprocity): U.S.

- EU Air Transport Agreement.

Except to the extent exempted/waive d , this authority is subject to the terms, conditions, and limitations of our standard foreign air carrier exemption conditions attache d as Appendix A and codeshare conditions attached as Appendix B

. Special conditions/Remarks: W e note that Air Nostrum is operationally and financially qualified to conduct the proposed services, and that it is substantially owned and effectively controll ed in a manner consistent with the provisions of the
U.S.

- EU Agreement

. 4 We also note that US Airways ha s conducted safety audit s of Iberia, Iberia Express, and Air
Nostrum under the Department’s Code

- Share Safety Audit Program, and the FAA has advised us that it has reviewed the relevant audit report s and found them to be acceptable.

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

_________________________________________________________ _____________________________________ ______________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent w ith Department policy; (2) the applicant s were qualified to perform their proposed operations; (3) grant of the auth ority was consistent with the public interest; and (4) grant of the authority would not constitute a major regulatory action under the Energy Poli cy and Conservation Act of 1975. To the extent not granted, we denied all requests in the referenced Docket s

. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing at 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.gov

4 We make this finding based on Article 2 (Reciprocal Recognition of Regulatory Determinations with Regard to Airline Fitness and Citizenship) of the Protocol to amend the U.S.

- EU Air Transport Agreement, signed June 24, 2010.Appendix A



### F oreign Air Carrier Exemption Conditions

In the conduct of the operations authorized, each foreign carrier applicant 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, t he 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

app licable 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 Internati onal 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 complie s 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 otherwis e 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 purp oses 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 con tract 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

agreemen t 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 a Member State of the European Union;

(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 (i ncluding 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 wi thout explicit Department approval under Title
49 of the U.S. Code.

EU carrier 01/2008Appendix B

The code

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

(a) The statement s of authorization will remain in effect only as long as (i) American , US Airways, Piedmont, PSA, Iberia, Iberia Express, and Air Nostrum 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 r emains in effect.

(b) American , US Airways, Piedmont, PSA, Iberia, Iberia Express, and /or Air Nostrum must promptly notify the Department (Office of International Aviation) if the c ode

- share agreement providing for the code

- share operations is no longer e ffective or if the carriers decide to cease operating all or a portion of the approved code

- share services.
Such notices should be filed in Docket s DOT

- OST

- 2014

- 0044, DOT

- OST

- 2012

- 0117, and DOT

- OST

- 20 10

- 0087

. 1

(c) American, US Airways, Piedmont, PSA, Ibe ria, Iberia Express, and /or Air Nostrum 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 the code

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

- OST

- 2014

- 0044,
DOT

- OST

- 2012

- 0117, and DOT

- OST

- 20 10

- 0087. 2

(d) The code

- sharing 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 transportation ( i.e., the carrier sho wn 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 c arrier 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 servic e provided shall be consistent with the provisions of the U.S.

- EU agreement, and all applicable agreements with other foreign countries involved. Furthermore, (i) nothing in the award of the blanket statement s of authorization
should be construed as confe rring upon American

, US Airways , Piedmont, or PSA rights (including code

- share, fifth

freedom intermediate and/or beyond rights) to serve markets where U.S. carrier rights are limited unless American, US Airways, Piedmont, and PSA notifies us of their inte nt 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 l imited

- entry route rights that are included in American, US Airways, Piedmont, or PSA’s authority by virtue of the blanket statement s of authorization granted here, but that are not being used by American, US Airways, Piedmont, or PSA , the holding of such authority will not be considered as providing any preference for American, US Airways, Piedmont, or PSA 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 spe cifically conditioned so that neither American, US Airways, Piedmont, PSA nor Iberia, Iberia Express, and Air Nostrum shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions.

We may amend, modi fy, or revoke the authority granted at any time without hearing at our discretion

.

1 We expect this notification to be received within 10 days of such non

- effectiveness or of such decision.

2 The applicants provided notice of their inten t to engage in in reciprocal codeshare services i) between points in the United States and points in the EU (both nonstop and intermediate routings via open skies points); ii) between points in the United States and points in the European Common Aviation A rea where open skies applies; iii) between points in the United States; iv) between points in the EU; v) beyond the EU to open skies points; and vi) beyond the United States to open skies points.

3 The notice referenced in condition (c) above may be used f or this notification.