UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on March 22, 2010



### NOTICE OF ACTION TAKEN

-- DOCKET S DOT

- OST

- 20 0 7

- 28896 & 2007

- 28897

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

Applicant 

### : Croatia Airlines Date Filed: July 31, 2007, as amended February 26, 2010

Relief requested:

Croatia Airlines (Docket DOT

- OST

- 2007

- 28896)

-- E xemption from 49 U.S. C. § 41301 to engage in scheduled foreign air transportation of persons, property and mail from points behind Croatia, via Croatia and any intermediate points, to any point or points in the United States and beyond, pursuant to a code

- share agreement with United Air Lines, Inc. (United).

United (Docket DOT

- OST

- 2007

- 28897)

— Blanket s tatement of authorization under 14 CFR Part 212 to the extent
necessary to permit United to display Croatia Airlines OU* designator code on flights operated by United (1) between any point in the United States and any point in Croatia (either non

- stop or via third

- country intermediate points); (2) between any points within the United States in conjunction with services held out by Croatia Airlines between Croatia

and the United St ates (either non

- stop or via third

- country intermediate points); and (3) between any point in the United States or Croatia and any point in any third country.

If renewal, date and citation of last action: New authority

Applicant representative: David Heffernan (202) 663

- 6360 DOT Analyst: Shelita A. Johnson (202) 366

- 1226

Responsive pleadings: None filed

DISPOSITION

Action: Approved in part, deferred in part 1 A ction date : March 22

, 2010

Effective dates of exemption authority granted Croatia Airlines : March 22, 2010

– March 22, 2011 Effective dates of statement of authorization authority granted United: March 22, 2010

– and will remain in effect indefinitely, subject to the condit ion s below.

Basis for approval (bilateral agreement/reciprocity)

. Comity and Reciprocity

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations indicated:

X Standard exemption conditions (attached ) Foreign air carrier permit ( Order )

Special conditions/Partial grant/Denial basis/Remarks: We find that grant of this authority is consistent with the pubic interest and that the applicant has demonstrated, based on the record , that it is substantially owned and effectively controlled by citizens of Croatia, 2 and that it is financially and operationally qualified to perform the services authorized.

The code

- share operations authorized here are subject to the following conditio ns :

1 By letter dated February 26, 2010, and filed in this docket Croatia Airlines requests that the Department grant its exemption authority and defer action on its request for a statement of authorization until such FAA completes a safety assessment of the Republic of Croatia under the FAA’s International Aviation Safety Assessment Program.

2 With respect to the ownership and control of the applicant, the record indicates 94% of Croatia Airlines’ shares are held by the Republic of Croatia, with the remainder held by private companies and individuals. In addition, all of Croatia Airlines mana ge ment
team and all members of its Board of Directors are citizens of Croatia.a) The statement of authorization will remain in effect only as long as (i) Croatia Airlines and United continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the code

- share agreement providing

for t he code

- share operations remains in effect.

(b) Croatia Airlines and/or United must promptly notify the Department (Office of International Aviation) if the code

share agreement providing for the code

- share operations is no longer effective or the carrie rs decide to cease operating any or all of the approved code

- share services. We expect this notification to be received within 10 days of such non

effectiveness or of such decision. Such notice should be filed in Docket DOT

- OST

- 200 7

- 2 8897

.

(c) Croatia Airlines and United 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 and the date

on which the service will begin. Such notices should be filed in Docket DOT

- OST

- 200 7

- 28897

.

(d) The codesharing operations conducted under this authority must comply with 14 CFR Part 257 and with any amendments to the Department’s regulations concerning codeshare arrangements t hat 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 servi ce in 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 codeshare journey for all obligations established in its contract of carria ge 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; and

(e) The authority granted here is specifically conditioned so that neither Croatia Airlines nor United hall give any force or effect to any contrac tual 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.

Action taken by: Paul L. Gretch, Director

Office of International Aviat ion

_____________________________________________________________________________________________________________________________ ___ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) the applicant is qualifi ed to perform the proposed operations; (2) our action was consistent with Department policy; (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 and Conservation Act of 1975. To the extent not granted/deferred/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.

Pers ons entitled to petition the Department for review of the action set forth 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 effect ive 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.gov12/2007 Foreign Carrier Exemption Conditions

In the conduct of th e operations authorized, the foreign carrier applicant(s) 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, 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 wou ld be the holder’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 Transp ortation 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 operation s 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 sh all 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 airworthiness and airman competency requi rements 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 Convention liability limits and de fenses;

(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 other tribunal in the Uni ted 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 place, or for which the c ontract 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 air transportation" mea ns "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 ter minate all flights to/from the United States in its homeland;

(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 prov ided 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 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 without explicit Department approval under Title 49 of the U.S. Code.