\\DC - 039658/000001 - 4849461 v2 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.
Application of J OINT STOCK C OMPANY A IRCOMPANY “YAKUTIA” for an amended foreign air carrier permit pursuant to 49 U.S.C. § 41302 ) ) ) ) ) ) ) Docket DOT-OST-2012-0047

APPLICATION OF JOINT STOCK COMPANY AIRCOMPANY “YAKUTIA”

FOR AN AMENDED FOREIGN AIR CARRIER PERMIT

Communications with respect to this document should be addressed to: Sheryl R. Israel HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 Telephone: +1 202 637 8898 Facsimile: +1 866 728 1992 E-mail: sheryl.israel@hoganlovells.com Counsel for J OINT STOCK C OMPANY A IRCOMPANY “YAKUTIA”
August 15, 2013
NOTICE: Any person may support or oppose this application by filing an answer

and serving a copy of that answer on counsel for Joint Stock Company Aircompany “Yakutia” and all persons served wit h this application. Answers are due September 5, 2013.\\DC - 039658/000001 - 4849461 v2 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.
Application of J OINT STOCK C OMPANY A IRCOMPANY “YAKUTIA” for an amended foreign air carrier permit pursuant to 49 U.S.C. § 41302 ) ) ) ) ) ) ) Docket DOT-OST-2012-0047

August 15, 2013
APPLICATION OF JOINT STOCK COMPANY AIRCOMPANY “YAKUTIA”

FOR AN AMENDED FOREIGN AIR CARRIER PERMIT Joint Stock Company Aircompany “Yakutia” (“Yakutia” or the “Applicant”) hereby applies under 49 U.S.C. § 41302 and Subpart B of the Department’s Rules of Practice (14 C.F.R. § 302.201, et seq.), Part 211 of the Department’s Economic Regulations(14 C.F.R. Part 211), and the Department’s August 23, 2005 Notice in Docket DOTOST-2005-22228 (the “Streamlined Licensing Procedures Notice”) for an amended foreign air carrier permit adding authority for Yakutia to engage in scheduled foreign air transportation of persons, property, and mail between any point or points in the Russian Federation and Saipan, Commonwealth of the Northern Mariana Islands (CNMI), via intermediate points, and beyond. 1 Yakutia requests that its application be decided on the basis of written submissions pursuant to 14 C.F.R. § 302.207. Moreover, in accordance with the Streamlined Licensing Procedures Notice (fn. 2) and 14 C.F.R. § 302.210(a)(2), the Applicant requests that the Department proceed promptly and directly to a final decision issuing Yakutia an amended foreign air carrier permit adding the Russia-Saipan route

1 Yakutia acknowledges that service to points beyond Saipan would be limited to those points specified in the U.S.-Russia Air Transport Agreement being applied and to those points named by the Russian Federation thereunder.Application of Yakutia for an Amended Permit Page 2

\\DC - 039658/000001 - 4849461 v2 for a period of indefinite duration. Such processing would be appropriate given that (a) the Applicant has been designated to provide scheduled service to Saipan by the Russian Federation, (b) foreign air carriers holding effective Department authority for scheduled routes are already authorized to serve Saipan and other CNMI international airports by a blanket exemption granted by the Department, and (c) this application raises no material issues of fact that warrant further procedures for their resolution. In support of this application, Yakutia submits the following information:
1. Yakutia is a Russian Far East air carrier that obtained initial DOT economic authority last year. Pursuant to exemption authority granted by Order 2012-5-15 and a foreign air carrier permit subsequently issued by Order 2012-8-15, the Department authorized Yakutia to engage in (i) scheduled foreign air transportation of persons, property, and mail between any point or points in the Russian Federation and any point or points in Alaska, and (ii) charter foreign air transportation of persons, property, and mail between any point or points in the Russian Federation and any point or points in the United States. Under such authority, Yakutia introduced scheduled service between Petropavlovsk-Kamchatsky (PKC) and Anchorage (ANC) during the summer 2012 season and resumed summer service on that route this year. In addition, since March 31, 2013, Yakutia has operated weekly charter service between Khabarovsk (KHV) and Saipan (SPN). See Statement of Authorization #2013-091, approved February 14, 2013. 2. Based on the success of the KHV-SPN charter program, Yakutia intends to transition to scheduled service on this route as soon as all regulatory approvals have been secured. Yakutia is already authorized by DOT to serve this route on a scheduled basis by Order 2007-4-9 (“CNMI Expanded Air Services Order”), which grants, among other things, foreign air carriers that hold or may subsequently receive effectiveApplication of Yakutia for an Amended Permit Page 3

\\DC - 039658/000001 - 4849461 v2 Department authority to engage in scheduled foreign air transportation exemption authority to serve the CNMI from authorized homeland points. See CNMI Expanded Air Services Order, ordering paragraph 3. The authority granted under the CNMI Expanded Air Services Order remains in effect under the automatic extension provisions of the Administrative Procedure Act, 5 U.S.C. § 558(c). See Application of the CNMI for Renewal and Amendment, dated April 2, 2009 (Docket DOT-OST-2006-25663), which remains pending. Thus, although Yakutia is already authorized to commence scheduled service on the KHV-SPN route by exemption, the Applicant is also seeking, in accordance with the Streamlined Licensing Procedures Notice ( see Notice, fn. 2), an amended foreign air carrier permit to add longer-term authority to serve Saipan to the full extent contemplated under the U.S.-Russia air transport agreement. 3. Yakutia is fit, willing, and able to provide the additional scheduled foreign air transportation described in this application. By application dated March 27, 2012 in Docket DOT-OST-2012-0047, Yakutia furnished information to the Department that supports a determination that it is operationally and financially qualified to engage in scheduled and charter foreign air transportation. Pursuant to 14 C.F.R. § 211.14, Yakutia hereby incorporates by reference the information in that application responsive to paragraphs (a), (b), (o), (r) and (s) of § 211.20, which, except as stated and supplemented below, is substantially unchanged. Yakutia requests, pursuant to Rule 24(g) of the Department’s Rules of Practice, that the Department take official notice of the relevant facts contained in Docket DOT-OST-2012-0047 and otherwise on file with the Department to support approval of this permit amendment application. 4. Updated and additional fitness information required under 14 C.F.R. § 211.21 establishing Yakutia’s qualifications for issuance of an amendedApplication of Yakutia for an Amended Permit Page 4

\\DC - 039658/000001 - 4849461 v2 foreign air carrier permit authorizing scheduled Russia-Saipan air transportation is as follows:§ 211.20(c) & (p) Statement of the additional authority requested, a description of the new services proposed, and an estimate showing the total traffic and financial results of the new services for the first full year of normal operations. Yakutia is seeking an amended foreign air carrier permit under the Department’s streamlining procedures to authorize Yakutia to provide -- in addition to the scheduled Russia-Alaska services and charter services authorized under its foreign air carrier permit issued by Order 2012-8-15 -- scheduled foreign air transportation of persons, property, and mail between any point or points in the Russian Federation and Saipan, CNMI, via intermediate points, and beyond. Such authority is available to Russian air carriers under the 1994 U.S.-Russia Air Transport Agreement, as amended, including the February 14, 2013 ad referendum agreement to revise the Annexes to the agreement, the provisions of which are being implemented on the basis of reciprocity and comity pending their entry into force. 2 Pursuant to the CNMI Expanded Air Services Order and the amendedpermit authority requested in this application, Yakutia plans to introduce yearround scheduled service between KHV and SPN using Boeing 737-700 or -800 aircraft seating up to 170 passengers. The scheduled services will initially be operated once a week on Sundays. Yakutia may make seasonal adjustments to

2 Under revised Annex I attached to the ad referendum agreement, rights for designated Russian airlines to provide scheduled service beyond Saipan and the other named U.S. points include an unlimited number of points on a code-share only basis without traffic rights, and are otherwise limited to Sao Paulo, Bogota, Quito and twelve additional points named by the Russian Federation. Yakutia proposes to exercise beyond rights under its amended permit only to the extent authorized by the air transport agreement being applied.Application of Yakutia for an Amended Permit Page 5

\\DC - 039658/000001 - 4849461 v2 the service frequency and may also introduce other scheduled services to Saipan in the future. For the winter season, the proposed KHV-SPN schedule is as follows (all times local):

Flight # Route A/C Type Departure Arrival R3549 KHV-SPN B737 12:45 17:35 R3550 SPN-KHV B737 18:55 01:45 / +1
Based on the load factors with respect to Yakutia’s current charter service on the KHV-SPN route, Yakutia reasonably projects generating gross operating revenues of approximately $4.3 million and an operating profit of approximately $130,000 for the first year of scheduled KHV-SPN passenger operations.

§ 211.20(d) & (e) Updated ownership and control information. Yakutia remains substantially owned and effectively controlled by Russian citizens. All of Yakutia’s shares remain held by the regional government of the Republic of Sakha (Yakutia), and Mr. Ivan A. Prostit, a Russian citizen and resident of the Republic of Sakha (Yakutia), remains Yakutia’s Director General. All other senior officers and key management personnel of Yakutia are Russian citizens and residents of the Republic of Sakha (Yakutia).

§ 211.20(i) Evidence of the Applicant’s homeland operating authority. Attached as Exhibit A is Air Operator Certificate No. 464 issued by the Ministry of Transportation of the Russian Federation to Aircompany “Yakutia” on May 28, 2012, which remains in force until revoked or suspended. The Applicant will obtain necessary amendments to the Operations Specifications associated with this AOC in order to provide the proposed services to Saipan.Application of Yakutia for an Amended Permit Page 6

\\DC - 039658/000001 - 4849461 v2 § 211.20(l) Updated aircraft maintenance information. Yakutia’s maintenance program continues to comply with ICAO pilots and airmen annexes 1, 6 (Part 1) and 7.

§ 211.20(n) Updated financial data summaries. Exhibit B contains Yakutia’s financial data summaries for 2011 and 2012.

§ 211.20(q) Authorization under the air transport agreement between the

United States and Russia. The Russia-Saipan scheduled service proposed by Yakutia is consistent with the 1994 U.S.-Russia Air Transport Agreement, as amended. Annex I, Section 2.B., attached to the February 14, 2013 ad referendum agreement lists the scheduled routes for airlines designated by the Government of the Russian Federation, including “[f]rom a point or points in the Russian Federation via intermediate points to...Saipan...and beyond....” By Diplomatic Note No. 3321/dsa dated June 15, 2013, the Russian Ministry of Foreign Affairs has designated Yakutia for scheduled service to Saipan under Article 3 of the Air Transport Agreement and revised Annex I.
§ 211.20(s) Updated information concerning safety or tariff violations or any

fatal accidents. Since filing its March 27, 2012 application in this docket, Yakutia has not been involved in any fatal accidents or any tariff or safety violations.

5. The introduction of the weekly scheduled KHV-SPN services contemplated by Yakutia in lieu of existing charter services on this route is already authorized under the CNMI Expanded Air Services Order and, in any event, will notApplication of Yakutia for an Amended Permit Page 7

\\DC - 039658/000001 - 4849461 v2 involve a near-term net annual change in aircraft fuel consumption exceeding 10 million gallons, meaning approval of this application would not constitute a “major regulatory action” under the Energy Policy and Conservation Act, as implemented by 14 C.F.R. Part 313. Yakutia does not anticipate encountering any difficulty in obtaining adequate supplies of fuel for its proposed services from existing sources. 6. Prompt approval of this application is in the public interest. Issuing Yakutia indefinite permit authority to provide scheduled service to Saipan to the full extent contemplated by the U.S.-Russia Air Transport Agreement, as amended, will helpencourage and maximize the Applicant’s long-term service commitment in the RussiaSaipan market. Yakutia’s scheduled service between Russian points and Saipan will promote foreign travel and tourism to the CNMI. As the Department is well aware, air transportation plays a crucial role in the CNMI’s economy. See Order 2007-2-23 at 7 (“[w]e recognize that air service is vitally important to the CNMI, and that the CNMI...is geographically isolated and heavily dependent on air transportation as a vital element of its economy.”) Yakutia’s scheduled flights between Khabarovsk and Saipan will help meet and stimulate demand for passenger air transportation between the Russian Federation and the CNMI, to the benefit of the CNMI’s economy. The Department should promptly issue Yakutia amended permit authority to include Russia-Saipan routes so that these valuable services may commence and continue without disruption and, if warranted, expand in the future. 7. In conclusion, Yakutia is eager and well-qualified to introduce valuable and convenient scheduled air transportation between Russia and Saipan that is consistent with the U.S.-Russia Air Transport Agreement, as amended, constituting prima facie evidence that approval of this application is in the public interest. Approval of this application would also be consistent with the Streamlined Licensing ProceduresApplication of Yakutia for an Amended Permit Page 8

\\DC - 039658/000001 - 4849461 v2 Notice, the Department’s and the CNMI’s efforts to promote expanded air transportation service to the CNMI under the CNMI Expanded Air Services Order, and the Department’s standards for issuance of amended permit authority to foreign air carriers. WHEREFORE, Joint Stock Company Aircompany “Yakutia” respectfully requests that the Department promptly issue an amended foreign air carrier permit to Yakutia adding authority for Yakutia to engage in scheduled foreign air transportation of persons, property, and mail between any point or points in the Russian Federation and Saipan, Commonwealth of the Northern Mariana Islands, via intermediate points, and beyond, and grant such further and additional relief as the public interest may require. 3
Respectfully submitted,

________________________________ Sheryl R. Israel HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, DC 20004 Telephone: +1 202 637 8898 Facsimile: +1 866 728 1992 E-mail: sheryl.israel@hoganlovells.com Counsel for J OINT STOCK C OMPANY A IRCOMPANY “YAKUTIA”

3 Effective July 1, 2013, flights in U.S. territorial airspace by Russian air carriers that maintain Part 129 operations specifications, including scheduled and charter flights operated by Yakutia, are no longer subject to prior flight routing authorizations from the FAA’s System Operations Support Center. Accordingly, Yakutia requests that the conditions associated with its amended foreign air carrier permit be modified appropriately to reflect this change in policy concerning FAA-approved flight routing requirements applicable to Russian air carriers serving the United States.\\DC - 039658/000001 - 4849461 v2 CERTIFICATE OF SERVICE I certify that a copy of the foregoing Application of Joint Stock Company Aircompany “Yakutia” for an Amended Foreign Air Carrier Permit has been served this 15th day of August, 2013, upon the following addressees: marshall.sinick@squiresanders.com robert.wirick@aa.com; francis.heil@aa.com sascha.vanderbellen@delta.com; chris.walker@delta.com dan.weiss@united.com; steve.morrissey@united.com; jonathan.linde@united.com howard_kass@usairways.com ranjit.seth@evergeenairlines.com cefelts@fedex.com; sllunsford@fedex.com kevin.montgomery@polaraircargo.com enisson@nac.aero william.s.schweizer@faa.gov; patrick.crowley@faa.gov; herb.herzog@faa.gov john.allen@faa.gov urskr@state.gov ptenorio@mymarianas.com

Jonathan EchmalianApplication of Yakutia for an Amended Permit

\\DC - 039658/000001 - 4849461 v2 EXHIBIT LIST

Exhibit A Air Operator Certificate No. 464 B Financial Data Summaries C Verification Required by § 211.11Application of Yakutia for an Amended Permit

\\DC - 039658/000001 - 4849461 v2 Exhibit A Air Operator Certificate No. 464Application of Yakutia for an Amended Permit

\\DC - 039658/000001 - 4849461 v2 Exhibit B Financial Data Summaries. oтIqьIтoe aкциoнеpнoе oбщecтвo 

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### Mаy08' 2013

Тo Whom It May Goncern Re: Summaryof FinаnсiаlStаtements ofYakutiа

Air 

## 27t 23в

DearSir/Madаm' Heгewith, we enс|ose

the Profit & Loss Summary

ofthe FinanсiaI

Statement

ofopen Joint Stoсk Company

Yakutia Air forthe

fisca| years o,f 2011-2012.
2011 2012 2011 

### 2012 line сodе RF inthousand RUB in thousand USD
тotaI аir trаnsport operatinq

revenues: 2110 10970944 11960806 340754 з93801 Passenqer

transpoгtation 9зз3570 10426934 289897 з43300 сarqotranspoгtation 320458 З41227 9953 112З5 Other revenues 1з.l6916 1192645 40903 SYZO I 

### тotаI air transpoЁ operating

expenses: 

### 2120 11199503 

### 12248292 34785з 40З266 oрeratinqresult 2100 226Эc3 

### 287486 7099 9465 Non-operatinq

items: 2350 519767 415292 16144 1З673 Profit and loss after inсome taxes 2400 80з0 

### 20З 264



### сurrent аssets 1200 3241305 4з20960 100674 1422в5 Flight equipment

(after deрreсiation) З42756 243252 10646 8009 

### othеr assеts: 720757 778648 22388 25636 тotaI assets 1600 4304858 53428в0 1з3707 175910 сurrent IiabiIities 1500 2537644 4137З27 78818 136219 otheг |iаbiIities 15208 58846 I SZUO 

### 1828 2410 Lonotеrm

dеbt 1400 1342993 т74589 41713 2550з CapitaI stoсk 1з{ 0 402в37 402837 12512 1З263 Rеtained earnings (baIanсe inс|udinq сapitaI surpIus): {300 

### 424221 430944 13176 14189 Totа| Iiаbi|ities

аnd еquity 1700 4304858 5342860 133707 175910

### Acсording to provision

ru|es ofaссounting

of Russian

Federation

. As a|| theaсcounting

is donein Russian

Roubles, sums in US Do|Iars

arestated

as per exсhange

rate for period

mentioned. Herewith I a|so certify that these stаtements

areсomp|ete

andaосurate. Sinсerely'

-l 

# ffi

P,R\VI ' /1!/.fl;J

ё.Application of Yakutia for an Amended Permit

\\DC - 039658/000001 - 4849461 v2 Exhibit C Verification Required by § 211.11