BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

) 

) 

) 

) 

) 

) 

) 

 ) 

Application of 

Norwegian Air International Limited 

for an exemption under 49 U.S.C. § 40109 

and a foreign air carrier permit pursuant 

to 49 U.S.C. § 41301 

Docket DOT-OST2013-0204 

ANSWER OF FEDERAL EXPRESS CORPORATION 

TO NOTICE SERVED AUGUST 4, 2014 

Communications with respect to this document should be sent to: 

Nancy S. Sparks 

Managing Director 

Regulatory Affairs 

FEDERAL EXPRESS CORPORATION 

1700 Pennsylvania Avenue, N.W. 

Suite 950 

Washington, D.C. 20006 

(202) 393-9286 (phone) 

(202) 628-0654 (fax) 

Email: nssparks@fedex.com 

M. Rush O'Keefe, Jr. 

Senior Vice President & General Counsel 

Steven H. Taylor 

Vice President — Regulatory Affairs 

Courtney E. Felts 

Senior Counsel — Regulatory Affairs 

FEDERAL EXPRESS CORPORATION 

3620 Hacks Cross Road 

Building B, 3rd Floor 

Memphis, Tennessee 38125 

(901) 434-8632 (phone) 

(901) 434-8283 (fax) 

Email -cefelts@fedex.com 

Attorneys for 

FEDERAL EXPRESS CORPORATION 

Dated: August 18, 2014 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

Application of ) 

) 

Norwegian Air International Limited ) 

) 

for an exemption under 49 U.S.C. § 40109 ) 

and a foreign air carrier permit pursuant ) 

to 49 U.S.C. § 41301 ) 

) 

Docket DOT-OST2013-0204 

ANSWER OF FEDERAL EXPRESS CORPORATION 

TO NOTICE SERVED AUGUST 4, 2014 

Federal Express Corporation ("FedEx") files this Answer to the Notice, 

served August 4, 2014 (the "Notice"), by the Department of Transportation (the 

"Department") in the docket relating to the Application of Norwegian Air 

International Limited ("NAI") for a foreign air carrier permit. The Notice contains 

information regarding the interpretation of the U.S.-European Union Air Services 

Agreement (the "Agreement") by the European Commission ("EC") and its 

applicability to the Application filed in this docket by NAI (the "Application"). 

The Application has been pending for many months now, and this docket is 

filled with a number of pleadings and letters urging the Department to reject the 

Application based on the business and employment models of NAI and the choice of 

its principal place of business. NAI has received an air operator's certificate from the 

Irish regulator, and that regulator has defended itself eloquently in the public record. 
FedEx does not see any reason for the Department to further delay the granting of 

this Application and finds in the Notice a very powerful reason — possible retaliation 

— for the Department to end this public debate forthwith and move forward with the 

Application. 

The parties to the Agreement directly addressed whether each side should 

probe deeply into the determinations of the regulators on the other side in deciding 

whether a carrier should receive the benefits of an air carrier under the Agreement. 

This was set against a backdrop of European carrier distrust of sometimes lengthy 

reviews by the U.S. of foreign air carrier permit applications, with some alleging that 

the intent was to slow European carrier expansion into the U.S. market. In a move to 

underscore the truly liberalizing intent of the Agreement, the parties therefore agreed 

to limit the bases for review of applications and require mutual recognition of the 

national regulatory decisions. This consensus, achieved after lengthy negotiations, 

was set forth in Article 6bis, which mandated reciprocal recognition for licensing 

determinations for carriers covered by the Agreement. Additionally, the Department 

formally incorporated that special treatment into its procedures by adopting an 

abbreviated application format for applications under the Agreement. 

The only exceptions which would permit either side to question a national 

regulatory decision under Article 6bis were set forth in the conditions of Article 4. 

In the process of negotiations, each side determined that satisfaction of these factors 

would comply with their law. The U.S. "side" included the Department, armed with 

extensive expertise since it is charged with interpreting and implementing U.S. law 

relating to foreign air carriers. In the Memorandum of Consultation that 

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accompanied the Agreement, the parties specifically noted that the normal law 

applicable to the factors set forth in Article 4 was not intended to be modified.' Most 

importantly, the parties did not add any other factor to Article 4 upon which a 

unilateral rejection could be based. Therefore, it is clear that the Agreement 

provides that satisfaction of the Article 4 provisions is all that is required to invoke 

the reciprocal recognition requirement of Article 6bis. However, opponents of the 

NAI application want the Department to go beyond the Article 4 exceptions and 

examine NAI' s labor and business practices, under the purported authority of Article 

17bis. 

FedEx agrees with the conclusion of the EC that "Article 17bis does not 

provide a legal basis for unilaterally denying an application under Article 4." 

Notice,at 2. Article 17bis was also the subject of lengthy negotiations. Despite the 

fact that certain interests wanted to use this Agreement as a springboard to a transAtlantic labor standard, that was not the result. Instead, the parties agreed that the 

Agreement was "not intended to undermine labour standards or the labour-related 

rights and principles contained in the Parties' respectivelaws." Article 17bis(1) 

(emphasis added). FedEx asserts that the inclusion of the word "respective" means 

that each participating nation would retain and enforce its own laws on its own 

carriers, rather than creating a new standard to which all parties would adhere. 

Therefore, FedEx agrees with the view expressed by the EC that "Article 17bis itself 

1"The delegation affirmed that the procedures for reciprocal recognition of regulatory determinations 

with regard to airline fitness and citizenship in the new Article 6bis are not intended to modify the 

conditions prescribed under the laws and regulations normally applied by the Parties to the operation 

of international air transportation referred to in Article 4 of the Agreement." MOC, paragraph 5 

(emphasis added). 

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does not formulate a legal rule that can be applied unilaterally by one party." Notice, 

at 2. 

According to the Notice, the representative of the EC "reiterated ...that any 

unilateral decision to deny an application using Article 17bis runs against the letter 

and spirit of the Agreement." Notice,at 4. At the time of signing the Agreement, 

both parties recognized that at some point, one party might "take measures contrary 

to the Agreement." MOC,at paragraph 20. In that case, "the other Party may avail 

itself of any appropriate and proportional measures in accordance with international 

law, including the Agreement." If the U.S. denies the application of NAI, the EC 

representative has already made his view clear that such an action would indeed be 

contrary to the Agreement. While the EC has not specified which retaliatory 

measures it might employ, it can be assumed that valuable and liberal rights could be 

subject to limitation, a potentially disastrous result which the Department must 

avoid. 

It is not in the best interests of the U.S. travelling and shipping public, U.S. 

airlines, or U.S. airline employees for this matter to escalate to a situation of 

retaliatory measures. Air transport rights across the Atlantic were liberalized under 

this Agreement specifically to benefit those groups. A limitation of air rights could 

disrupt the marketplace and cause some U.S. carrier operations to be curtailed or 

even halted. Too much rests upon this critical trade relationship with the European 

Union to have this Agreement, a model of progressive U.S. international aviation 

policy, to become the basis for such a harmful and dangerous dispute. 

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Respectfully submitted, 

FEDERAL EXPRESS CORPORATION 

/s/ Nancy S. Sparks 

Nancy S. Sparks 

Managing Director 

Regulatory Affairs 

August 18, 2014 

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CERTIFICATE OF SERVICE 

A copy of the foregoing Reply has been served, this 18 th day of August 2014, 

upon the following persons via email: 

romanow@pillsburylaw.com 

peter.nelson@pillsburylaw.com 

russell.bailey@alpa.org 

steve.morrissey@united.com 

dan.weiss@united.com 

sascha.vanderbellen@delta.com 

howard.kass@aa.com 

robert.wirick@aa.com 

francis.heil@aa.com 

robert.land@jetblue.com 

rpommer@atlasair.com 

anita.mosner@hklaw.com 

jennifer.nowak@hklaw.com 

mlbenge@zsrlaw.com 

dberg@airlines.org 

jcasey@airlines.org 

kglatz@airlines.org 

cbethke@airlines.org 

edw@ttd.org 

ejames@jamhoff.com 

elytle@portoakland.com 

kgeorge@broward.org 

mrichardson@swapa.org 

sshur@traveltech.org 

pbrown@goaa.org 

leo@washingtonairports.com 

keith@washingtonairports.com 

jesse.elliot@faa.gov 

douglas.schwab@faa.gov 

nicholas.tsokris@faa.gov 

john.allen@faa.gov 

paul.gretch@dot.gov 

brian.hedberg@dot.gov 

reese.davidson@dot.gov 

esta.rosenberg@dot.gov 

brett.kruger@dot.gov 

englets@state.gov 

Cristinasa@state.gov 

eugene.alford@trade.gov 

info@airlineinfo.com 

Is/ Courtney E. Felts 

Courtney E. Felts 

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