DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Application of FEDERAL EXPRESS CORPORATION for an exemptionpursuantto 49 U.S.C. §40109 (U.S.-Brazil All-Cargo Service) ) ) ) Docket DOT-OST-1996-1196 ) ) )



## ___________________________________) APPLICATION OF FEDERAL EXPRESS CORPORATION FORAMENDMENT AND RENEWAL OF AN EXEMPTION
Communications withrespectto this document shouldbe sentto: Nancy S. Sparks ManagingDirector Regulatory Affairs FEDERALEXPRESS CORPORATION 1700 Pennsylvania Avenue, N.W. Suite 950 Washington, D.C. 20006 (202) 393-9286 (phone) (202) 628-0654 (fax) Email: nssparks@fedex.com

May24, 2012 CourtneyE. Felts Senior Attorney Regulatory Affairs FEDERALEXPRESS CORPORATION 3620 Hacks Cross Road Building B, 3rdFloor Memphis, Tennessee 38125 (901) 434-8632 (phone) (901) 434-8283 (fax) Email: cefelts@fedex.com Attorneys for FEDERALEXPRESS CORPORATIONDEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. Application of FEDERAL EXPRESS CORPORATION for an exemption pursuant to 49 U.S.C. §40109 (U.S.-Brazil All-Cargo Service) ) ) ) Docket DOT-OST-1996-1196 ) ) )



## _____________________________________)
APPLICATION OF FEDERAL EXPRESS CORPORATION FORAMENDMENT AND RENEWAL OF AN EXEMPTION
Pursuant to 49 U.S.C. § 40109, Federal Express Corporation ("FedEx Express") hereby applies for amendment and renewal ofits exemption authority to engage in scheduled foreign all-cargo air transportation between a point or points inthe United States, and certain namedpoints in Brazil, either directly or via intermediate points, and beyond Brazil to points inthird countries, with full traffic rights and operational flexibility such as unlimited changeof-gauge. FedEx Express requests that this authority be granted for a period ofat least two years. (See 1. Existing Authority, below.) In accordance with 14 C.F.R. § 302.303, FedEx Express submits the following information in suppmi ofthis Application: 1. Existing Authority. By Order 89-5-10, served May 2, 1989, the Depatiment granted FedEx Express an exemption authorizing 

### it to engage in scheduled foreign air transportation ofproperty and mail between apoint or points inthe United States and nine

### Application ofFedExExpress Docket DOT-OST-1996-1196 Page 2 of5
namedpoints1

### in Brazil, via intermediate points and, beyond Brazil, to Argentina, Chile, Paraguay, and Uruguay, with full traffic rights. The Department most recently renewed that authority by Notice ofAction Taken July 13, 2010, for two years, through July 13, 2012. The Department also granted FedEx Express authority to serve Vit6ria, Brazil, by Notice of Action Taken August 6, 2010 to run coextensively with the above-referenced exemption authority in this docket, through July 13, 2012. FedEx Express also holds an allocation of five U.S.-Brazil all-cargo frequencies. 2 

### The United States has worked to achieve a phased-in Open Skies Agreement with Brazil that includes, among other gains, an open route designation with Fifth Freedom rights and operational flexibility such as unlimited changeof-gauge. U.S.-Brazil Memorandum ofConsultations, signed March 18,2011. 2. Automatic Extension. FedEx Express hereby invokes and relies uponthe provisions of Section 558(c) of the Administrative Procedure Act, 5 U.S.C. § 

### 558(c), as implemented by Part 377 ofthe Department's Special Regulations, 14 C.F.R. Pmi 377, to continue its exemption to serve Brazil in effect until the Depmiment makes a final determination ofthis Application.3

Order 89-5-10 authorized FedEx Express to serve the following points in Brazil: Porto Alegre, Recife, Belo Horizonte, Salvador de Belem, Manaus, Brasilia, Rio de Janeiro, and Sao Paulo. 2 The most recent DOT allocation to FedExExpress was made in Docket OST-00-7559-38, November 14,2000. FedEx Express relinquished one fi·equency on December 30,2002 (Docket OST-00-7559-90). All five remaining frequencies are ofindefinite duration. 3 FedEx Express seeks a waiver ofthe requirement of 14 C.F.R. § 377.10(c) that this renewal application be filed more than sixty days before the exemption expires. This application is beingfiled fifty days in advance, due to health complications ofcounsel. This short delay in filing shouldnot inconvenience any party, as parties are afforded a month and a halfin which to respond. To expedite Departmentprocessing, FedExExpress will poll the carriers onthe service list and will reportthe results to the Department.

### Application ofFedExExpress Docket DOT-OST-1996-1196 Page 3 of5
3. Current U.S.-Brazil Service. FedEx Express provides expedited air express/cargo service linking every address in the United States with points in Brazil. Currently, FedEx Express provides five weekly frequencies between Memphis and Sao Paulo, Brazil, with onward service beyond Sao Paulo using MD11 or MD10-30 aircraft. The service changes gauge at Sao Paulo and continues beyond to Buenos Aires, Argentina and Santiago, Chile using Boeing 727-200 freighter equipment also operated by FedEx Express. In the southbound direction, all five frequencies are utilizedto operate nonstop service from Memphis to Sao Paulo; northbound, nonstop service from Sao Paulo to Memphis is operated four times per week, with the fifth frequency used to operate a Sao Paulo

- San Juan- Memphis routing. 4. 

### Applicable Bilateral Agreement. On March 18, 2011, the United States and Brazil signed a Memorandum ofConsultations (MOC) that will culminate in Open Skies by 2015. Prior to that time, designated U.S. carriers have increased opportunities for U.S.- Brazil service. Pursuant to the MOC, these new opportunities are immediately available and include an open route schedule with Fifth Freedom rights and operational flexibility along with unlimited change-of-gauge. The amendment and renewal of the exemption authority requested above is consistent with this recent agreement. 

### 5. Energy Statement. Grant of this Application will not result in increased annual fuel consumption constituting a "major regulatory action" requiring an energy statement pursuantto 14 C.F.R. § 313.6.Application ofFedExExpress Docket DOT-OST-1996-1196 Page 4 of5
6. Fitness and Public Interest. FedEx Express is fit, willing, and able to provide international air cargo services, as required by 49 U.S.C. § 41102(b)(1). FedEx Express is an air carrier ofproperty and mail in scheduled air transportation, operating such services within the United States pursuant to an all-cargo air service cetiificate issued under 49 U.S.C. §41103. In international markets, FedEx Express operates under a cetiificate of public convenience and necessity issued under 49 U.S.C. § 41102, and specific grants of exemption authoritypursuantto U.S.C. 

### § 40109. FedEx Express requests thatthe Department take official notice, pursuant to 14 C.F.R. § 302.24(g), ofthe extensive data on file with the Department that establish conclusively the fitness of FedEx Express to operate under the requested authority.4 Granting the amendment and renewal ofthe exemption authority requested would be consistent with the public interest and Department precedent. FedEx Express has used its current U.S.-Brazil exemption authority to provide the highest quality of efficient, convenient, and reliable air express/cargo service between the United States, numerous points inBrazil, and points beyond Brazil. 7. Duration ofExemption Authority. FedEx Express requests that the amendment and renewal ofthe exemption authority at issue granted for at least two years. Grant ofa two-year te1m would be consistent with the policy and practice ofthe Department inrenewing temporary authorizations to serve limited-entry international markets.

4 See, e.g., 2005/2006 U.S-ChinaAirServices Case (Docket OST-2004-19077).Application ofFedExExpress Docket DOT-OST-1996-1196 Page 5 of5 WHEREFORE, FedEx Express respectfully requests that the Department amend and
renew its exemption authority to engage in scheduled foreign all-cargo air transportation between a point or points in the United States, and certain named points in Brazil, either directly or via intermediate points, and beyond Brazil to points in third countries, with full traffic rights and operational flexibility such as unlimited change-of-gauge, and that this authority be granted for a period ofat least two years, and for other, futiher, different, and additional reliefthat the Depatiment deemsjust and proper. Respectfully submitted, FEDERAL EXPRESS CORPORATION

# b~L~/ Cominey E. F ts SeniorAttorney Regulatory Affairs

### Certificate of Service

I hereby certify that on May 24, 2012, I served a copy of the foregoing Application of Federal Express Corporation for Amendment and Renewal of an Exemption, by email upon the persons listed below.

__________________________________

Carl B. Nelson Jr. Associate General Counsel American Airlines, Inc. via e
-mail to: carl.nelson@aa.com
Pierre Murphy Attorney for Arrow Air, Inc. via e
-mail to: pmurphy@lopmurphy.com

Russell E. Pommer Associate General Counsel and Senior Director of Regulatory Affairs Atlas Air, Inc. via e
-mail to: rpommer@atlasair.com Kevin Montgomery Vice President
– Government Affairs Polar Air Cargo Worldwide, Inc. kevin.montgomery@polaraircargo.com
Stephen Morrissey Managing Director, International and Regulatory Affairs United Air Lines, Inc. via e
-mail to: steve.morrissey@united.com

Anita M. Mosner and Jennifer M. Nowak Holland & Knight, LLP Counsel for United Parcel Service Co. via e
-mail to: anita.mosner@hklaw.com andDan Weiss

Managing Director, International Policy and Regulatory Affairs Continental Airlines, Inc. via e
-mail to: dan.weiss@coair.com

Alexander Van der Bellen Managing Director, Government Affairs And Associate General Counsel Delta Air Lines, Inc. via e
-mail to: sascha.vanderbellen@delta.com jennifer.nowak@hklaw.com
Larry D. Cox, A.A.E. President & CEO Memphis
-Shelby County Airport Authority via e
-mail to: larryc@mscaa.com
Benjamin T. Slocum Director and Assistant General Counsel US Airways, Inc. via e
-mail to: benjamin.slocum@usairways.com

William C. Evans John R. Mietus, Jr. Counsel for Centurion Air Cargo, Inc. via e
-mail to: bill@mietuslaw.com and john@mietuslaw.com