UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on October 10

, 20 1 4



### N OTICE OF ACTION TAKEN

– DOCKET DOT

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____________________________________________ ____________________________________________________________________________________ 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: JET STAR JAPAN CO., LTD. ( Jet star Japan )

Date Filed: October 1 , 201 4

Relief requested:

E xemption for two years under 49 USC §40109 and a blanket statement of authorization under 14 CFR Part 212 to permit

Jet star Japan to displa y the AA* designator code of American Airlines , Inc. (American) on flights operated by Jet star Japan from any point or points behind Japan, between points in Japan, via any point or points in Japan and intermediate points ; for the purpose of transporting c ode

- share traffic of American connecting from flights operated by American or

other carrier s authorized to display the AA* designator code on those routes

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Jet star Japan further request s a waiver of the 45

- day advance filing requirement under 14 CFR Pa rt 212.

Applicant representative: Moffet B. Roller

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DOT analyst: David R. Christofano , 202

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Responsive pleadings: None

DISPOSITION

Action: Approved

, subject to conditions Action date: October 10

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Effective dates of authority granted: The e xemption authority granted to Jet star Japan is effective from October 10 , 20 1 4

, through October 10

, 2016

.

The statement of authorization granted to Jet star Japan is effective October 10 , 20 1 4 , and will remain in effect for a n indefinite duration , subject to conditions

.

Our action granting Jet star Japan’s request for waiver of the 45

- day advance filing requirement under 14 CFR Part 212 is

e ffective October 10 , 2014.

Basis for approval (bilateral agreement/reciprocity): Th e 2010 Memorandum of Understanding between the United States and Japan

.

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

- sh are conditions ( attached as Appendix B )

.

1 Jet star Japan states that it is providing notice of its intent to d isplay the AA* designator code on f lights operated by Jetstar Japan from any point or points behind Japan, between points in Japan, via any point or points i n Japan and intermediate points. Jetstar Japan specifically states that it intends to conducts its code

- share services between Narita and Fukuoka, Kagoshima, Kumamoto, Matsuyama, Nagoya, Oita, Okinawa, Osaka/Kansai, Sapporo, and Takamatsu

. 2 The Department is acting on Jetstar Japan’s application prior to the expiration of the exemption and statement of authorizati on answer periods with the consent of all parties served.Special conditions/Remarks: We note that Jetstar Japan is operationally and financially qualified to conduct the proposed

services. 3 The record indicates that 66.7% of the applicant’s shares are held by citizens or entities of Japan. Of the remaining shares of the applicant, 33.3% are held by Qantas Airways Limited, a licensed foreign air carrier of Australia. (See Order 2008

- 8

- 17). The record further indicates that Jetstar Japan’s CEO and four of its six dire ctors are Japanese citizens, with the two remaining directors citizens of the United States and New Zealand. Its remaining key management personnel consist of citizens of Japan, New Zealand, and Australia. To the extent a question may exist as to the

own ership and control of the applicant, we find that a waiver of our ownership and control policy is warranted in the circumstances presented, as there is nothing in the ownership and control of the applicant that would be inimical to U.S. aviation policy or interests. We also note that the applicant is properly licensed by its homeland to perform the proposed

services. We further note that American ha s conducted a safety audit of Jet star Japan 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 w ith Department policy; (2) the applicant was qualified 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, we denied all requests in the referenc ed 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 on s, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this Notice. This action was effective when taken, and the filing of a petition for review will not alter such effectiveness.

An electronic version of this do cument is available on the World Wide Web at: http://www.regulations.gov

3 The applicant has requested confidential treatment of its financial sub missions, under the provisions of 14 CFR§302.12. Good cause having been shown, we will grant this request.Appendix 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 has filed a copy of such authorization with the Department;

(2) Comply with all applicable requirements of the Federal Aviation A dministration, 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 complia nce 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, conta ct 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 Transportation Security Administration has determined that security is adequa te 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 aut hority 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 s pecifically 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 States that are: (a) based on its operations in international air transp ortation 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 cla im 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 "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 go verning 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 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 effective during any period when the holder is not in compliance with the conditions imposed above. Moreover, this authority cannot be sold or other wise 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 of authorization will remain in e ffect only as long as (i) Jet star Japan and American 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) Jet star Japan and American must promptly notify the Department if the c ode

- 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 noti ces should be filed in Docket DOT

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(c) Jet star Japan and American must notify 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 and the date on which the service will begin. Such notices 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 Dep artment’s regulations concerning code

- share arrangements that may be adopted. Notwithstanding 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 reservation 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 jo urney for all obligations established in its contract of carriage with the passenger; 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 carri ed on any flight that enters, departs, or transits the airspace of any area for whose airspace the Federal Aviation Administration has issued a flight prohibition.

(e) Any service provided shall be consistent with all applicable agreements between the Un ited States and the foreign

countries involv e d . Furthermore, (i) nothing in the award of the blanket statement of authorization should be construed as conferring upon American rights (including code

- share, fifth

- freedom intermediate and/or beyond rights) to serve markets where U.S. carrier rights are limited unless American notifies us of its intent to serve such a market and unless and until the Department has completed any necessary carrier selection procedures to determine which carrier(s)

should be aut horized to exercise such rights; 3 and (ii) should there be a request by any carrier to use the limited

- entry route rights that are included in the authority of American by virtue of the blanket statement of authorization granted here, but that are not bein g used by American , the holding of such authority will not be considered as providing any preference for American in a carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue

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(f) The authority granted here is specifically conditioned so that neither Jet star Japan nor American shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions.

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

.

1 We expect this notification to be received within 10 days of such non

- effectiveness or of such decision.

2 Jet star Japan provides notice of its intent to display the AA* code as described in its application. We note that Jetstar Japan must provide 30

- day notice b efore commencing any code

- share services beyond those indicated in its application

. 3 The notice referenced in condition (c) above may b e used for this notification.