UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on February 10

, 2012



### N OTICE OF ACTION TAKEN

– DOCKET DOT

- O ST

- 2010

- 0171

_____________________________________________________________________________________________________________________________ ___ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional

co nfirming order will be issued in this matter).

Applicant: BLUE1 LTD. ( Blue1 ) Date Filed: February 2, 2012

Relief requested: Amend ed e xemption from 49 USC § 41301 and amended blanket s tatement of authorization under 14

CFR Part 212 to the extent necessary to permit Blue1 to display the (UA*) designator code of United Air Lines, Inc. (United) on flights operated by Blue1 in conjunction with foreign air transportation of persons, property, and mail : (i) between EU points; (ii) between points in Norway; (iii) between points in the EU and points in the European Common Aviation Area (ECAA) where an open skies agreement is being applied; (iv) between the EU or Norway, and any open skies point or points; and (v) beyond the EU or Norway to any point or points

. 1

Applicant representative s : Michael F. Goldman and L. Jeffrey Johnson , 202

- 944

- 3305

DOT analyst: Robert J. Finamore, 202

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- 2405

Responsive pleadings: None

DISPOSITION

Action: Approved

, subject to conditions Action date: February 10 , 2012 2

Effective dates of authority granted: The amended exemption authority granted to Blue1 is effective from February 10

, 2012

, through February 10 , 2014

. The amended blanket statement of authorization granted to Blue1 is effective February

10 , 2012 , and will remain in effect for an indefinite duration , subject to conditions

.
Basis 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 attached as Appendix A and code

- share conditions attached as Appendix B

.
Special conditions/Remarks: We note that a safety audit of Blue1 has been conducted under the Department’s

Code

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

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

_________________________________________________________ ___________________________________________________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent w i th Department policy; (2) the applicant w as qualified to perform its proposed operations; (3) grant of the authority was consistent with the public interest; and (4) grant of the authority would not constitute a major regulatory action under the Energy Policy an d Conservation Act of 1975. To the extent not granted/deferre d/dismissed, we denied all requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing at our discretion.

1 Blue1’s existing exemption and statement of authorization permit it to conduct the referenced code

- share services by placing the (CO*) designator code of Continental Airlines, Inc. (Continental) on flights operated by Blue1. See Notice of Action Taken da ted October 1, 2010 in Dockets DOT

- OST

- 2005

- 20122 and DOT

- OST

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- 0171. Blue1 states that its instant request will permit it to display the (UA*) designator code of United on those Blue1 services it currently conducts with Continental after United and

Co ntinental transition to a single passenger reservation system.

2 The Department is acting on the requests of Blue1 prior to the expiration of the applicable answer periods with the consent o f all parties served.Persons entitled to petition the Department for review of the action set for th in this Notice under the Department’s regulations, 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 su ch effectiveness.

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

Foreign Air Carrier Exemption Conditions

In the conduct of the operations authorized, the 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 wi th 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 holde r’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 chang es 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 airworth iness 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 Conven tion 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 ot her 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 pl ace, 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 a ir 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 (including 14 CFR Parts 212 and 380); and

(11) Comply with such other reasonable terms, conditions, and limitations requir ed 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.

EU carrier 01/2008Appendix B

The code

- share ope rations authorized here are subject to the following conditions:

(a) The s tatement of authorization will remain in effect only as long as (i) United and Blue1 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 remains in effect.

(b) United and/or Blue1, as appropriate, must notify the Departm ent 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 and the date on which the service will begin. 1 Such notice should be filed in Dock et s DOT

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OST

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.

(c) United and/or Blue1 , as appropriate, must promptly notify the Department if the code

- share agreement providing for

the code

- share operations is no longer effective or if the carriers decide to cease operat ing all or a portion of the approved

code

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

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- 2005

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(d) The code

- sharing operations conducted under this authority must comply with 14 CFR 257 and with any amendment s 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 tr ansportation 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 shown on the ticket) accept responsibility for the entirety of the c ode

- 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 carrier shall not perm it

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) The authority to operate to third countries is subject to the condition tha t any service provided under th is statement of authorization shall be consistent with all applicable agreements between the United States and the foreign countries involved. Furthermore, (i) nothing in the award of th is blanket statement of authorization should be construed as conferring upon United rights (including code

- share, fifth freedom intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless United notifies the Department of its intent to serve such a 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; and (ii) should there be a request by any carrier to use the limited

- entry route rights

th at are included in the authority of United by virtue of the blanket statement of authorization granted here, but that are not then being used by United , the holding of such authority will not be considered as providing any preference for United in a compet itive carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue. 3

(f) The authority granted here is specifically conditioned so that neither United nor Blue1 shall give any force or effect to
any contractu al provisions between themselves that are contrary to these conditions.

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

1 Pursuant to the Department’s Notice In th e Matter of Blanket Notification of Code

- Share Service to Open Skies Partners and Points dated February 9, 2009, Blue1 has provided notification of its intent to engage in open

- skies code

- share services as outlined in its application. Blue1 states that it will provide 30

- day notice to the Department before commencing any new code

- share services with

United to non

- open skies points.

2 We expect this notification to be received within ten (10) days after such non

- effectiveness or of such decision.

3 The noti ce in paragraph (b) above can be used for this notification.