BEFORE THE
U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

_____________________________________________ ) Application of ) ) YANGTZE RIVER EXPRESS AIRLINES CO., LTD. ) ) Docket No. OST-2006-24629 For exemption authority under 49 U.S.C. §40109 ) OST-2006-24630 ) (China-U.S. Scheduled Cargo Service) ) _____________________________________________)

APPLICATION OF YANGTZE RIVER EXPRESS AIRLINES CO., LTD.
FOR AMENDED EXEMPTION AUTHORITY

Communications with respect to this document should be addressed to:

June 19, 2012 Josh Romanow
Justin Bintrim
PILLSBURY WINTHROP
SHAW PITTMAN LLP 2300 N Street, N.W. Washington, D.C. 20037 Tel: (202) 663-8000 Fax: (202) 663-8007 E-mail: romanow@pillsburylaw.com justin.bintrim@pillsburylaw.com

Counsel for Yangtze River Express Airlines Co., Ltd.

NOTE: Any person who wishes to support or oppose this App lication may file an answer
and serve that answer on counsel identified above and all persons served with a copy of this application. Answers to the exemption application are due on July 5, 2012.BEFORE THE
U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

_____________________________________________ ) Application of ) ) YANGTZE RIVER EXPRESS AIRLINES CO., LTD. ) ) Docket No. OST-2006-24629 For exemption authority under 49 U.S.C. §40109 ) OST-2006-24630 ) (China-U.S. Scheduled Cargo Service) ) _____________________________________________)

APPLICATION OF YANGTZE RIVER EXPRESS AIRLINES CO., LTD.
FOR AMENDED EXEMPTION AUTHORITY

Pursuant to 49 U.S.C. §40109roma, Part 211 of the Department’s economic

regulations, and the Department’s rules of pr actice, Yangtze River Express Airlines Co.,

Ltd. (“Yangtze”), a cargo air carrier of the Pe ople’s Republic of China, respectfully

requests that the Department amend Yangtze’ s exemption authority granted previously

via a Notice of Action Taken dated November 4, 2011 in this docket to authorize it to

engage in scheduled foreign air transportation of propert y and mail on a Shanghai (PVG)

– Anchorage (Ferry) – Chicago 1 (ORD) – Los Angeles 2 (LAX) – Shanghai (PVG)

routing.

1 Yangtze holds exemption authority to conduct scheduled air transportation of property and mail on the following routes: 1) Shanghai - Dallas/Fort Worth; 2) Shanghai – Chicago; and (3) Shanghai – San Francisco. Notice of Action Taken dated November 4, 2011.

2 By Order 2008-4-27 (Apr. 27, 2008), the Department issued a foreign air carrier permit to Yangtze authorizing it to engage in scheduled foreign air transportation of property and mail between Shanghai, People’s Republic of China, and the coterminal po ints Anchorage, Alaska; Boston, Massachusetts; Los Angeles, California; and New York, New York.2 In support of this Application, Yangtze states as follows:

1. Yangtze seeks to begin scheduled all- cargo operations on a PVG-ANC (Ferry)-

ORD-LAX-PVG routing in July of 2012, as soon as the Department grants this

amended exemption authority. Yangtze wi ll operate these flights using B747-F

aircraft, and proposes to in itially operate seven flights per week on this route.

2. Yangtze currently holds authority from th e Department to service Los Angeles

and Chicago individually fr om Shanghai, but the Depa rtment has declined to

authorize new coterminal operations by Chinese cargo carriers, citing lack of

reciprocity as a key reason. However, th e Civil Aviation Administration of China

(“CAAC”) has recently granted new co terminal rights to a U.S. carrier

substantially similar to those requested by Yangtze in this Application. See

CAAC coterminalization approval for Evergr een International Airlines for a three

year period dated May 25, 2012, attach ed hereto as Exhibit A. Yangtze

respectfully submits that the CAAC’s recent action establishes the reciprocity

necessary to make approval of th e present Application appropriate.

3. Yangtze is not seeking broa d coterminal authority but simply reciprocal

coterminal authorization on a single U.S. route (PVG-ORD-LAX-PVG), similar

to the recent CAAC award for Evergreen for Shanghai-Chongqing

coterminalization, two of the largest cities in China.

4. Granting Yangtze’s request for an amended exemption is fully consistent with the

Agreement between the Government of the United States of America and the

People’s Republic of China Relating to Civil Air Transport, which authorizes3 designated airlines to operate cargo servic es from any point or points in the

People’s Republic of China to any point or points in the United States of America

open to scheduled international operations.

5. A translated copy of Yangtze’s operati ng authority issued by the CAAC to

conduct the proposed scheduled flights is attached hereto as Exhibit B.

6. An estimate showing the total traffic a nd the financial results of the proposed

PVG-ANC-ORD-LAX-PVG scheduled servic e for the first full year of normal

operations is attached as Exhibit C.

7. Grant of the authority sought herein will not result in a near term increase in fuel

consumption of ten million gallons or mo re, and therefore will not comprise a

“major regulatory action” under the Ener gy Policy and Conservation Act of 1975,

as defined at 14 C.F.R. § 313(a)(1).

8. The verification required by 14 C.F.R. 302.4(b) is attached hereto as Exhibit D.

For the reasons set forth above, Yangtze is fully qualified to ope rate the services

for which authority is herein requested, and grant of the authority will serve the public

interest. Yangtze asks that the requested exemption remain in place for one year.WHEREFORE, based upon the foregoing information, Yangtze respectfully

requests that it be granted an exemption to engage in sche duled foreign air transportation

of property and mail as more fully described above.

Respectfully submitted,

Josh Romanow
Justin Bintrim
PILLSBURY WINTHROP
SHAW PITTMAN LLP 2300 N Street, NW Washington, DC 20037 Phone: (202) 663-8000 Fax: (202) 663-8007
Email: romanow@pillsburylaw.com justin.bintrim@pillsburylaw.com

June 19, 2012 Counsel for Yangtze River Express Airlines Co., Ltd.

45 CERTIFICATE OF SERVICE

I hereby certify that a copy of th e foregoing application of Yangtze River Express Airlines Co.,
Ltd. for an amended foreign air carrier permit an d exemption has been served this the 19 th day of June, 2012, upon each of the parties below by electronic mail.

David Henthorn International Aviation Safety Inspector
Federal Aviation Administration david.e.henthorn@faa.gov

Sascha Vanderbellen Delta Air Lines, Inc. 1275 K St., NW Washington, D.C. 20005
sascha.vanderbellen@delta.com

Carl B. Nelson, Jr.
Robert Wirick American Airlines, Inc. 1101 Seventeenth Street, N.W.
Suite 600 Washington, D.C. 20036
Carl.nelson@aa.com
Robert.wirick@aa.com

Bailey Leopard Federal Express Corporation 1101 Pennsylvania Avenue, N.W., Suite 600 Washington, D.C. 20004 gbleopard@fedex.com Kevin P. Montgomery Polar Air Cargo, Inc. 1747 Pennsylvania Avenue, N.W.
Suite 875 Washington, DC 20006 Kevin.montgomergy@polaraircargo.com

Russell E. Pommer
Associate General Counsel & Sr. Director Regulatory Affairs
Atlas Air Inc. 1747 Pennsylvania Avenue, NW, Suite 875 Washington, D.C. 20006 rpommer@atlasair.com

Sam White Ranjit Seth Evergreen International Airlines, Inc. 1401 New York Avenue, NW, Suite 530 Washington, DC 20005-2147 sam.white@evergreenairlines.com ranjit.seth@evergreenairlines.com

Anita Mosner
Counsel for United Parcel Service Co Holland & Knight 2099 Pennsylvania Avenue, N.W.
Suite 100 Washington, DC 20006
anita.mosner@hklaw.com

Malcolm L. Benge
Counsel for North American Airlines/World Airways Zuckert Scoutt & Rasenberger, L.L.P.
888 17 th Street, N.W., Suite 700 Washington, D.C., 2006-3309 mlbenge@zsrlaw.comDan Weiss
Continental Airlines 1600 Smith Street, Ste. HQSGV Houston, TX 77002
dan.weiss@coair.com

Steve Morrissey
Counsel for United Air Lines steve.morrissey@united.com

Howard Kass U.S. Airways 1401 H Street, NW, Suite 1075 Washington, DC 20005 howard.kass@usairways.com

Robert Silverberg Counsel for ABX Air, Inc. Silverberg, Goldman & Bikoff, LLP
1101 30 th Street, NW, Suite 120 Washington, DC 20007 rsilverberg@sgbdc.com

Mark W. Atwood
Counsel for Kalitta Air
Cozen O’Connor 1627 I Street, NW
Suite 1100 Washington, D.C. 20006
matwood@cozen.com

/s/

Melinda A. Hernandez

403534296v2

### TABLE OF EXHIBITS

Exhibit A Evergreen International Air lines Operating Authority from CAAC

Exhibit B Operating Authority from CAAC

Exhibit C Traffic Projections and Financial Forecast

Exhibit D Verification

### Exhibit A

Evergreen International Airlines Operating Authority from CAAC

[Attached](The translation of the approval from CAAC will be listed as follow)


## Operation Permission

CAAC foreign permission no. [2012] 48

Evergreen International Airlines,

Civil Aviation Administration of China has considered your applicat ion of operating all cargo scheduled flight between New York and Chongqing.

According to the Agreement between the Go vernment of People’s Republic of China and United States of America Relating to Civil Air Transport, and route, aircraft types, and frequency which approves be CAAC, CAAC agrees your company to operate all cargo scheduled flights on the following route: Route: any point or points in United States of America, via any intermediate point to Chongqing and Shanghai, and beyond to any poi nt outside of Peop le’s Republic of China. It is not allowed to carr y cargo from Chongqing to Shanghai.

Your company must insure the availability of the Standard Airwor thiness Certificate, Insurance Certificate, and others certificates.

Your company has to finish the followi ng matters before operat ing above route: 1. According to the Examination Rules of Fo reign Air Operator Operating Qualification (CCAR-129), your company has to apply to Easter Brach of CAAC for the Operation Specification of Foreign Air Carrier. Your company can operate flights in China after you obtaining approval of t he Operation Specification of Foreign Air Carrier. 2. Please send specific route and SLOT applic ation to the Traffic Control Department of CAAC. 3. Please send application of air cargo rates to the Development and Planning Department of CAAC. 4. Please file seasonal flight schedule and send freight volume information to relative department of CAAC on time according to the Rules of Oper ation Permission of Foreign Air Carrier (CAAR-287) which was published on 11 th of June, 2008.

This permission is effective from the date which is issued, and becomes invalid on 31 st of March, 2015, or further notice by CAAC. The application to extend the term of validity of this permission has to be applied thirty da ys before this permission becomes invalid.(Seal of CAAC)
25 th of May, 2012

CC. to: the Ministry of Foreign Affairs , Ministry of Public Security, Customs head office, State Administration for I ndustry and Commerce, State Administration of Quality Supervision, Inspection and Quaranti ne, Air Force, the Governmental of Chongqing, Department of Developmen t and Planning, Department of International Affairs, Air Traffic Mana gement Bureau, CAAC East China Branch, CAAC West-South China Branch, and Chongqing Airpor t

### Exhibit B

Operating Authority from CAACThe translation of the approval from CAAC will be listed as follow:



### Civil Aviation Administration of China (Stamp of CAAC) Approved by SHI Boli Urgent CAAC NO. [2012] 1689 

### Permission for Yangtze River Ex press Airlines Scheduled Flight Adjustment Yangtze River Express Airlines, Civil Aviation Administration of China has discussed your application of becoming to the designated carrier of PVG-ANC-ORD-LAX-PV G. Your adjusted schedu led flight route and flight schedule are approved as below: Flight number: Y8-7477/8 Flight route: PVG-ANC-ORD-LAX-PVG Frequency: 7 flights per week A/C type: B747-400F, A330-200F Operation date: 1 st of July, 2012 – 27 th of October, 2012

Please apply the flight schedule to Air Tra ffic Management Bureau, and report to related department and authorities. Pleas e prepare for these flights and make sure the flight safety.

Department of Air Transport of CAAC May 30, 2012

CC. to: Department of International Affa irs, Air Traffic Management Bureau, CAAC East China Branch Traffic Control Department of CAAC, Phone: 64091902

### Exhibit C

Traffic Projections and Financial Forecast

Flight Route Flight Leg Cargoweight

(KG) Rates (All-in)

(US$) Income (single flight) (US$000) Income (year)

(US $ 000) Profit/loss (year)

US$000)

PVG-ORD 40,000 3.8
PVG-LAX 60,000 4.12 LAX-PVG 30,000 0.8 PVG-ORD-LAX-PVG (7 flights per week)

ORD-PVG 20,000 0.7 437.2 153,020 2,079

### Exhibit D

Verification