BEFORETHEDEPARTMENTOFTRANSPORTATIONOFFICEOFTHESECRETARYWASHINGTON,DCApplicationofLUFTHANSACITYLINEGMBHforaforeignaircarrierpermitpursuantto49U.S.C.§41301andforexemptionauthoritypursuantto49u.s.c.§40109(U.S.-EUScheduledandCharterAirTransportation))))))))))))DocketDOT-OST-2015---._____________________________)APPLICATIONOFLUFTHANSACITYLINEGMBHFORAFOREIGNAIRCARRIERPERMITANDFOREXEMPTIONAUTHORITYCommunicationswithrespecttothisdocumentshouldbeaddressedto:ArthurMolinsGeneralCounsel,theAmericasDeutscheLufthansaAG1640HempsteadTurnpikeEastMeadow,NY11554Telephone(516)296-9234E-mail:arthur.molins@dlh.deDATED:February9,2015DavidHeffernanCozenO'ConnorTheArmy&NavyClubBuilding1627IStreet,NWSuite1100Washington,DC20006Telephone(202)463-2537E-mail:dheffernan@cozen.comCounselforLUFTHANSACITYLINEGMBHNOTE:AnypersonmaysupportoropposethisApplicationbyfilingananswerandservingacopyoftheansweroncounselforLufthansaCityLineGmbHandallpersonslistedontheattachedservicelist.AnswerstotheexemptionapplicationaredueonorbeforeFebruary24,2015,andanswerstothepermitapplicationaredueonorbeforeMarch2,2015.BEFORETHEDEPARTMENTOFTRANSPORTATIONOFFICEOFTHESECRETARYWASHINGTON,DCApplicationofLUFTHANSACITYLINEGMBHforaforeignaircarrierpermitpursuantto49U.S.C.§41301andforexemptionauthoritypursuantto49U.S.C.§40109(U.S.-EUScheduledandCharterAirTransportation))))))))))))_____________________________)DATED:February9,2015DocketDOT-OST-2015-__APPLICATIONOFLUFTHANSACITYLINEGMBHFORAFOREIGNAIRCARRIERPERMITANDFOREXEMPTIONAUTHORITYPursuantto49U.S.C.§§40109and41301,Part211oftheDepartment'sEconomicRegulations(14C.F.R.Part211),Subparts8andCoftheDepartment'sRulesofPracticeinProceedings(14C.F.R.§§302.201and302.301,et.seq.),andtheprovisionsoftheU.S.-EUReciprocalRecognitionProcedures,LufthansaCitylineGmbH("Cityline")herebyappliesforaforeignaircarrierpermitgrantingitthefullrightsavailabletoEUMemberStateaircarrierspursuanttotheAirTransportAgreementbetweentheUnitedStatesofAmericaandtheEuropeanUnionanditsMemberStates.1Citylinealsorequests,pursuantto49U.S.C.§40109,thattheDepartmentgrantitanexemptionfrom49U.S.C.§41301totheextentnecessarytoprovidetheservices1AirTransportAgreementBetweentheUnitedStatesofAmericaandtheEuropeanCommunityanditsMemberStates,signedApril25and30,2007,asamendedbytheProtocoldatedJune24,2010(collectively"theU.S.-EUAgreement,asamended"').Application

of Lufthansa Cityline GmbH Page
2 of 5 covered by this application while Cityline's Application
for a foreign air carrier permit

is pending

. CityLine requests, pursuant

to the Notice and procedures
set forth in Docket OST -2005-22228, that the Department process this application under its streamlined regulatory procedures and issue
a single order: (1) granting the requested exemption authority for a two-year period or until the requested permit authority becomes effective, whichever occurs first, and (2) granting the corresponding foreign air carrier permit request under the "show cause

" procedures described

in the Notice dated August 23, 2005

. In support
of this application and in compliance with the Department's requirements under 14 C.F.R

. § 211

. 20 concerning

an application
for an initial foreign air carrier permit and the U.S.-EU Reciprocal Recognition Procedures, Cityline states as follows

: 1 . Cityline

is a private company organized and operating under the laws of the Federal Republic
of Germany with its principal office at Heinrich-Steinmann-Strasse, D-51147 Cologne, Germany

. It is wholly owned and controlled
by Deutsche Lufthansa AG ("Lufthansa") and is a member
of the Lufthansa Group. Both Lufthansa and Cityline are German-certificated

air carriers

. 2. Cityline's operations are regulated
by the Government

of the Federal Republic
of Germany

. Germany

is a contracting state to the Convention

on International Civil Aviation CChicago Convention

" ) and observes
all applicable ICAO standards

. Cityline

is licensed by and subject
to the jurisdiction

of the German Civil Aviation Authority located at:Application

of Lufthansa Cityline GmbH Page

3 of 5 Luftfahrt-Bundesamt Hermann-Bienk-Strasse

26 D-38108 Braunschweig Germany A copy of Cityline's Air Operator Certificate ("AOC") issued by the German Civil Aviation Authority will be provided
to the Department. The AOC will authorize Cityline to operate international and domestic air transportation services, including the international scheduled and charter air transportation services proposed

in this application

. 3 . As an air carrier of Germany and the European Union

, Cityline requests that the Department grant

it a foreign air carrier permit to authorize foreign air transportation consistent with the full scope of the U.S.-EU Agreement,

as amended. Under that Agreement,
EU Member State air carriers have the right to engage
in: • Foreign scheduled and charter air transportation

of persons, property and mail from any point or points behind any Member State of the European Union

, via any point or points
in any Member State and via intermediate points

, to any point or points
in the United States and beyond

; • Foreign scheduled and charter air transportation

of persons, property and mail between any point or points
in the United States and any point or points
in any member
of the European Common Aviation Area; • Foreign scheduled and charter air transportation

of cargo between any point or points
in the United States and any other point or points; • Other charters pursuant

to the prior approval requirements
set forth in 14 C. F. R. Part 212 of the Department's Economic Regulations; and • Transportation authorized

by any additional route rights made available

to European Union carriers under the U

. S.-EU Air Transport Agreement

in the future

. 4 . In the interim, while its application
for a foreign air carrier permit
is pending, Cityline requests that
it be granted an exemption from 49 U

. S

. C
. § 41301 toApplication

of Lufthansa Cityline GmbH Page

4 of 5 the extent necessary

to allow

it to provide the services described above for a two-year period or until the requested permit authority becomes effective, whichever occurs first. 5. Cityline currently holds exemption authority issued by the Department under 49 U.S.C.

§ 40109 allowing Cityline
to conduct scheduled foreign air transportation

of persons, property and mail by displaying the code of any duly authorized U.S. air carrier on flights

it operates
on behalf of Lufthansa between any point or points
in any Member State of the European Union and beyond the European Union to any point or points? Cityline plans to begin operating scheduled
air service between

a point or points
in Germany and a point or points
in the United States on or about September 25, 2015. Cityline will operate these services on behalf of its affiliate Lufthansa pursuant

to a wet lease agreement.

3 6. Cityline's insurance coverage meets the liability limits of 14 C.F.R. Part 205

. A copy of the carrier's Foreign Air Carrier Certificate

of Insurance (OST Form 6411) will be provided
to the Department and filed with the Federal Aviation Administration.

7 . Cityline currently has on file with the Department

an executed waiver of liability limits under the Warsaw Convention (OST Form 4523)
in Docket DOT-OST2 Not

i ce of Act

i on Taken dated September

16

, 2013 (Docket DOT-OST-2003-15485)

. Cityline also holds a statement

of authorization issued by the Department under 14 C.F

. R. Part 212 allowing Cityline

to d

i splay United
A

i rlines

' des

i gnator code on flights operated
by Cityline wholly within Germany, and between po

i nts

i n Germany and points
in third count

ri es Not

i ce of Action Taken dated July 15

, 2003 (Docket DOT

- OST

- 2003

- 15485)

. C

i tyline has submitted
an application

to amend that statement

of autho

ri zat

i on so that C

i tyline may
d

i splay Un

1 ted

' s designator code on flights operated
by Cityline pursuant
to the author

i ty request

e d herein

. 3 C t ty U ne has subm

i tted an app lic at

i on for a statement
of author

i zation (pursuant

to Part 212 of the Department's regu

l ations, 14 C

. F

. R. Part 212) to engage

i n wet leasing on beha

l f of Lufthansa.Application

of Lufthansa Cityline GmbH Page

5 of 5 1995-236

. 4 Cityline will file a family assistance plan in Docket DOT-OST-1998-3304 and with the National Transportation Safety Board. 8. Issuance
of this authority will not constitute

a major regulatory action under the Energy Policy and Conservation
Act of 1975, as defined

in Part 313 of the Department's regulations. WHEREFORE, CityLine respectfully requests that the Department grant its request for a foreign air carrier permit and corresponding exemption authorizing

it to exercise the full rights available

to EU Member State air carriers pursuant
to the Air Transport Agreement between the United States of America and the European Union and its Member States, and such other and further relief as the Department deems appropriate. DATED

: February

9, 2015 Respectfully submitted, David Heffernan Cozen O'Connor The Army
& Navy Club Building 1627

I Street

, NW Suite 1100 Washington,
DC 20006 Telephone (202) 463-2537 E-mail

: dheffernan@cozen

. com Counsel for LUFTHANSA CITYLINE GMBH 4 See also Application

of Lufthansa Citylme GmbH for Exempt

i on and Statement

of Authorization, Exhibit CLH-5, June 20, 2003 (Docket DOT-OST-2003-15485)

.CERTIFICATE
OF SERVICE I hereby certify that

I have this date served

a copy of the foregoing Application

of Lufthansa Cityline GmbH for a Foreign Air Carrier Permit and Exemption
by electronic mail upon the following

: ABX Air and Air Transport lnt'l: Alaska Airlines

: American Airlines

: Amerijet lnt'l: Atlas Air: Delta Air Lines

: Envoy Air

: Federal Express

: JetBiue Airways

: Kalitta Air

: Polar Air Cargo

: Southern Air

: Spirit Airlines

: Sun Country Airlines

: United Airlines

: UPS

: FAA

: DATED

: February

9 , 20
1 5 rsilverberg@sgbdc

. com jeremy

. ross@alaskaair

. com howard

. kass@aa

. com robert. wirick@aa. com jean ny@amerijet. com rpommer@atlasair

. com sascha

. vanderbellen@delta

. com francis

. heil@aa

. com nssparks@fedex

. com cefelts@fedex

. com jhill@cooley

. com psanderlin@kalittaair.com kevin. montgomery@polaraircargo

. com agoerlich@ggh-airlaw

. com jyoung@yklaw

. com thomas

. ting@suncountry

. com gmurphy@crowell

. com dan

. weiss@united

. com steve

. morrissey@ united

. com anita

. mosner@hklaw

. com john

. s

. duncan@faa.gov Kenneth

C
. Hines