UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on December 20 , 20 11

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

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- 0154

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

Applicant : Austral Lineas Aer eas

– Cielos del Sur S.A. (Austral) Date Filed: August 15 , 2011

Relief requested : E xemption under 49 U.S.C. § 4 0109 to permit Austral to engage in scheduled foreign air transportation of persons, property and mail to the extent necessary to dis play Delta Air Lines , Inc.’s DL * designator code on flights that it operates between points in Argentina

. The applicant requests that the authority be granted for a period of at least one year. 1

Applicant representative : Charles F. Donley II (202) 626

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DOT analyst: Brett D. Kruger ( 202 ) 366

- 8025

Responsive pleadings: None.

DISPOSITION

Action: Approved

.

Action date: December 20 , 20 11

Effective dates of authority granted: December 20 , 2011 , through December 20 , 2012

. Basis for approval (bil ateral agreement/reciprocity): U.S.

- Argentina Air Transport Agreement

. Except to the extent exempted/waived, this authority is subject to the terms, condition s, and limitations of our standard exemption conditions (attached).

Special conditions/Remarks: We found that the applicant is operationally and financially qualified to conduct its proposed operations and is substantially owned and effectively controlle d by the Government and citizens of Argentina

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We also note that the applicant is properly licensed by its homeland to perform the propose d services.

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

________________________ ______________________________________________________________________ __________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent w ith Department policy; (2) the applicant was quali fied 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/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.

1 Under Section B(1) of Annex I to the Agreement, the United States may se lect four points in Argentina for direct

- U.S. carrier or

code

- share service, five points in Argentina for code

- share

- only service, and five points in Argentina for code

- share

- only service with a designated airline of Argentina. The United States has selec ted at this time, Buenos Aires and Cordoba as two of the four points for U.S. direct carrier or code

- share service; Bariloche, Iguazu, Mendoza, Rosario, and Ushuaia as points for service on a

code

- share

- only basis; and Comodoro Rivadavia, El Calafate, Rio Gallegos , and Rio Grande as four of five points for service on a

code

- share

- only basis with a designated carrier of Argentina.

2 Austral states that it has been controlled by the Government of Argentina since July 2008. The record indicates that, a lthough Interinvest S.A. is the nominal owner of 97.4% of Austral’s shares, all Austral shares nominally held by Interinvest S.A. are currently undergoing expropriation by the State of Argentina, and are accordingly controlle d by the Argentine Government

. Since Austral is controlled entirely by the Argentine Government and the shares held by Interinvest S.A. are currently undergoing expropriation, and given that all of Austral’s directors and key management officials are citizens of Argentina, we find that Austra l meets the ownership and control requirements of the U.S.

- Argentina bilateral agreement.Persons 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 ef fective when taken, and the filing of a petition for revi ew will not alter such effectiveness.

An electronic version of this document is available on the World Wide Web at:

http://www.regulations.gov

### Foreign Carrier Exemption Conditions

In the conduct of the opera tions 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) C omply 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 would be t he 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 I IR of its plans and to find out whether the Transportatio n 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 changes 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 airworthiness 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 Convention 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 other tribunal

in the United Sta tes 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 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 air transportation" means "int ernational 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 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 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 required by the public interest as may be prescri bed 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 co nditions imposed above. Moreover, this authority cannot be sold or otherwise transferred without explicit Department approval under Title 49 of the U.S. Code.

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