UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on June 6 , 20 1 2

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 201 2

- 00 8 4

_______________________________________________________________________________________________ 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).

Joint Applicant s : US AIRWAYS, INC. (US Airways) 1 and CROATIA AIRLINES

Date Filed: Ma y 23 , 2012 , as supplemented May 31 , 2012.

Relief requested: E xemption under 49 USC §40109 to permit Croatia Airlines to engage in foreign air transportation of persons, property, and mail to the extent necessary to display the designator code of US Airways and any other duly authorized U.S. air carrier on flights operated by Croatia Airlines within Croatia and between points in Croatia and points in third countries.

Blanket statement of authorization under 14 CFR Part 212 to permit US Airways to display Croatia Airlines’ “OU” designator co de on flights operated by US Airways (1) between any points in the United States and any points in Croatia (either non

- stop or via open

skies 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 States; and (3) betwe en any points in the United States and any points in third

countries.

Blanket statement of authorization under 14 CFR Part 212 to permit Croatia Airlines to display US Airways’ “US” designator code on flights operated by Croatia Airlines (1) between any p oints in the United States and any points in Croatia (either non

- stop or via open skies third

- country intermediate points ); (2) between any points within Croatia, in conjunction with services held out by US Airways between the United States and Croatia; an d (3) between any points in Croatia and any points in third countries.

The Joint Applicants further request a waiver of the 45

- day advance filing requirement under 14 CFR Part 212. 2

Applicant representative s : David Heffernan 202

- 663

- 6360 (Croatia Airlines) and Howard Kass 202

- 326

- 5153 (US Airways) DOT analyst: Brett D. Kruger 202

- 366

- 8025

Responsive pleadings: None.

DISPOSITION

Action: Approved in part (exemption authority to Croatia Airlines; statement of authorization for US Airway s; and statement of authorization for Croatia Airlines to transport US Airways code

- share traffic on flights operated by Croatia Airlines between points within Croatia and between points in Croatia and any points in third countries), subject to conditions, remainder (statement of authorization for Croatia Airlines to transport US Airways code

- share traffic on flights operated by Croatia Airlines between the United States and Croatia) deferred. (See conditions and remarks below.)

Action date: June 6 , 20 1 2 3

Effective dates of authority granted: The exemption authority granted to Croatia Airlines is effective June 6 , 2012, through June 6

, 2014

.

The statement s of authorization granted to Croatia Airlines and US Airways are effective June 6 , 2012

, for an indefinite period.

1 US Airways states that it is also applying on behalf of its affiliated carriers Piedmont Airlines, Inc. (Piedmont) and PSA Airlines, Inc. (PSA).

2 The Joint Applicants filed a motion requesting confidential treatment of their unredacted Code Share Agreement under 14 CFR §301.12. We will grant the motion.

3 We acted on this application without awaiting expiration of the answer period with the consent of all parties served.Basis for approval (bil ateral agreement/reciprocity): U.S.

- Croatia Air Transport Agreement.

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our standard exemption conditions attached as Appendix A and to the code

- share conditions attached as Appendix B

.

Special conditions/Remarks: We note that Croatia Ai rlines does not hold DOT authority to operate to/from the United States with its own aircraft and crews. Accordingly, we are deferring action on the portion of Croatia Airlines’ request for a statement of authorization to transport US Airways code

- share passengers on flights operated by Croatia Airlines between the United States and Croatia until such time that Croatia has received the underlying DOT authority to engage in those U.S. services.

We also note that US Airways has conducted a safety audit of Croatia Airlines under the Department’s Code

- Share Safety Audit Program, and the FAA has advised us that it has reviewed the relevant audit report and found it to be acceptable.

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 with Department policy; (2) the applicant s are qualified to perform their 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 Ener gy 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.

Persons entitled to petition the Department for review of the action set forth in this Notice under the Department’s regulati ons, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this Notice. This action was eff ective 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.govAppendix A 

### Foreign Carrier Exemption Conditions

In the conduct of the 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 ha s 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 secu rity, 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 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 advi se the I IR of its plans and to find out whether the Transportation 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

Ser vice (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 i nstituted against it in any court or other tribunal in the United 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, poin t 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 t his condition, the term "international air transportation" means "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 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, conditio ns, 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 effecti ve 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.

12/2007Appendix B

The code

- share operations authorized here are subject to the following conditions:

(a) The statement s of authorization will remain in effect only as long as (i) US Airways and Croatia Airlines continue to hold the necessary underlying authority to operate the code

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

- share agreement providing for the code

- share operations remains in effect.

( b ) US Airways and/or Croatia Airlines , as appropriate, must not ify 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, which carrier will be operating the aircraft in the code

- share mark et added, and the date on which the service will begin. Such notice should be filed in Docket DOT

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. 4

(c ) US Airways and/or Croatia Airlines

, as appropriate, must promptly notify the Department if the code

- share agreement providing for the code

- share operations is no longer effective or if the carriers decide to cease operating all or a portion of the approved code

- share services. Such notice should be filed in Docket DOT

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( d ) The code

- sharing operations conducted under this authority must comply with 14 CFR 257 and with any amendments to the Department’s regulations concerning code

- share arrangements that may be adopted.

Notw ithstanding 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 service in the computer reserv ation systems and elsewhere; that the carrier selling such transportation ( i.e., the carrier shown on the ticket) accept responsibility for the entirety of the code

- share journey for all obligations established in its contract of carriage with the passenge r; that the passenger liability of the operating carrier be unaffected; and that the operating carrier shall not permit 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 who se airspace the Federal Aviation Administration has issued a flight prohibition.

(e) The authority to operate to third countries is subject to the condition that any service provided under the statement of authorization shall be consistent with all applic able agreements between the United States and the foreign countries involved. Furthermore, (i) nothing in the award of this statement of authorization should be construed as conferring upon US Airways rights (including code

- share, fifth freedom intermedia te and/or beyond rights) to serve markets where U.S. carrier entry is limited unless US Airways notifies the Department of its intent to serve such a market and unless and until the Department has completed any necessary carrier selection procedures to det ermine which carrier(s) should be authorized to exercise such rights; and (ii) should there be a request by any carrier to use the limited

- entry route rights that are included in the authority of US Airways by virtue of the statement of authorization grant ed here, but that are not then being used by US Airways, the holding of such authority will not be considered as providing any preference for US Airways in a competitive carrier selection proceeding to determine which carrier(s) should be

entitled to use t he authority at issue. 6

( f

) The authority granted here is specifically conditioned so that neither US Airways nor Croatia Airlines shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions.

We m ay amend, modify, or revoke the authority granted at any time without hearing at our discretion.

4 See Appendix C for a list of initial code

- share points.

5 We expect this notification to be received within ten (10) days aft er such non

- effectiveness or of such decision.

6 The notice in paragraph (b) above can be used for this notification.Appendix C