UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, DC

Issued by the Department of Transportation on November 5, 2010

 NOTICE OF ACTION TAKEN -- DOCKET DOT-OST-2010-0266 

_________________________________________________________________________________________________________

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 Application of AIR MICRONESIA, INC. (Air Micronesia), CONTINENTAL AIRLINES, 

INC. (Continental), AND UNITED AIR LINES, INC. (United) filed 10/22/10, for: 

XX Exemption for Air Micronesia from certificate conditions, pursuant to 49 U.S.C. § 40109, as follows:

An exemption from (1) the condition in Air Micronesia’s certificate of public convenience and 

necessity for interstate and overseas air transportation and (2) the condition in Air Micronesia’s 

certificate of public convenience and necessity for Route 170, that limit Air Micronesia to flight 

operations conducted under the direction, control, and responsibility of Continental Micronesia, 

Inc. d/b/a Continental/Air Micronesia to permit Air Micronesia flights to be operated by 

Continental and United.1

XX Exemption for Continental and United, pursuant to 49 U.S.C. § 40109:

To the extent necessary to permit Continental and United to transport persons, property, and mail 

on (1) Air Micronesia’s interstate routes; (2) Air Micronesia’s routes between Saipan, Guam, Palau 

(Belau) and a point or points in the Philippines (Route 170); and (3) all of Continental Micronesia’s 

routes.

Applicant reps: R. Bruce Keiner (Air Micronesia and Continental) (202) 624-2500, 

Bruce H. Rabinovitz (United) (202) 663-6960 DOT Analyst: Linda L. Lundell (202) 366-2336 

 

D I S P O S I T I O N

1. We grant Air Micronesia an exemption from the condition in its certificate for interstate and overseas 

air transportation that limits Air Micronesia to flight operations conducted under the direction, control, 

and responsibility of Continental Micronesia, Inc. d/b/a Continental/Air Micronesia, to the extent 

necessary, to permit Air Micronesia’s flight operations also to be conducted by Continental (subject to 

conditions, see below);

2. We grant Air Micronesia an exemption from the condition in its certificate for Route 170 that limits Air 

Micronesia to flight operations conducted under the direction, control, and responsibility of Continental 

Micronesia, Inc. d/b/a Continental/Air Micronesia, to the extent necessary, to permit Air Micronesia’s 

flight operations also to be conducted by Continental (subject to conditions, see below);

3. We grant exemption authority to Continental, to the extent necessary, to permit Continental to operate

flights pursuant to Air Micronesia’s certificate of public convenience and necessity for interstate and 

overseas air transportation (subject to conditions, see below);

 

1

 The Joint Applicants also state that Air Micronesia’s certificates should be amended to permit such operations.
2

4. We grant exemption authority to Continental, to the extent necessary, to permit Continental to operate 

flights pursuant to Air Micronesia’s certificate of public convenience and necessity for Route 170, 

between Saipan, Guam, Palau (Belau) and a point or points in the Philippines (subject to conditions, see 

below);

5. We grant exemption authority to Continental, to the extent necessary, to permit Continental to 

transport persons, property, and mail on all of Continental Micronesia’s routes as described in Attachment 

A in Order 2010-8-15 (pages 11-14) (subject to conditions, see below);

6. The exemption authority granted in paragraphs 1 through 5, above, is effective immediately and shall 

remain in effect until the Department has ruled on the applicants’ de facto route transfer application filed

in Docket DOT-OST-2010-0163 (subject to conditions, see below); and

7. We defer action on the remainder of the captioned application regarding requests for authority 

involving United (see remarks, below).2

Action taken by: Paul L. Gretch, Director

 Office of International Aviation

XX The authority granted is consistent with the Compact of Free Association between the 

Government of the United States and the Government of Palau. The authority involving the 

Philippines is granted on an extrabilateral basis, but is consistent with the overall state of aviation 

relations between the United States and the Philippines.

Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations 

indicated:

XX The holders’ certificates of public convenience and necessity

XX Standard exemption conditions (attached)

Background: On June 24, 2010, Continental, Continental Micronesia, Air Micronesia, and United (Joint 

Applicants) filed an application pursuant to 49 U.S.C. § 41105, requesting the Department to, among 

other things, (1) approve the de facto transfer of the economic authorities held by Continental, 

Continental Micronesia, and Air Micronesia to the same carriers under common ownership with United; 

(2) reissue the economic authorities held by Continental, Continental Micronesia, and Air Micronesia to 

Continental and/or United; and (3) reissue the economic authorities held by United to United and/or

Continental, Continental Micronesia and Air Micronesia. That application remains pending in Docket 

DOT-OST-2010-0163.

The Joint Applicants concurrently filed a separate application, in Docket DOT-OST-2010-0165, for an 

interim exemption from the requirements of 49 U.S.C. § 41105 to the extent necessary to permit the 

carriers to operate under the common ownership of United, pending the Department’s action on the de 

facto transfer application described above, in Docket DOT-OST-2010-0163. By Order 2010-8-15, the 

Department granted the Joint Applicants’ request for an interim exemption in this matter, subject to the 

condition that United and Continental remain separate entities and continue to be independently operated 

until a ruling has been made in the underlying de facto transfer case. Subsequently, on October 1, 2010, 

Continental, Continental Micronesia, and Air Micronesia came under the common ownership of United. 

 

2

 We will handle, separately, the Joint Applicants’ request to amend Air Micronesia’s certificates to permit its 

operations also to be conducted by Continental and United. 
3

In the instant proceeding, the carriers state that they seek the requested exemptions, to the extent 

necessary, to permit Continental and United to conduct the operations of Air Micronesia and Continental 

Micronesia, pending the Department’s final action on the Joint Applicants’ route transfer application in 

Docket DOT-OST-2010-0163. 

Decision: We reviewed the requests of the Joint Applicants in the captioned docket and determined that 

there is no basis to withhold the authority involving the exemption requests of Continental and Air 

Micronesia in this matter. We recognize that Continental, Air Micronesia, and Continental Micronesia 

were related entities prior to coming under common ownership with United and, as such, the Department 

would not have prohibited these related carriers from integrating their services. Therefore, we have 

granted the requested exemption authorities to Continental and Air Micronesia as described above. We 

have deferred action on that portion of the captioned application that involves United – an airline that was 

not related to the other carriers prior to the ownership transaction on October 1, 2010. Based on the 

nature of the requests involving United, along with the terms of the pendente lite exemption granted to the 

Joint Applicants by Order 2010-8-15, we believe that the requests for economic authority involving 

United should be considered in the pending route transfer proceeding, in Docket DOT-OST2010-0163. 

Remarks: We acted on this application without awaiting expiration of the 15-day answer period with the 

consent of all parties served with a copy of the application.

Conditions: Any air transportation services operated by Air Micronesia and/or Continental pursuant to 

the exemption authority granted here must be operated in a manner consistent with the provisions of the 

exemption authority granted to the Joint Applicants by Order 2010-8-15, in Docket DOT-OST-2010-

0165, and the terms and conditions of this Notice.

The exemption authority granted here (1) to allow Continental to operate flights pursuant to Air 

Micronesia’s certificates and (2) to allow Continental to operate flights on Continental Micronesia’s 

routes shall not be construed as additional U.S. air carrier authority in limited-entry markets. With regard 

to limited-entry markets involving Continental Micronesia’s routes, either Continental Micronesia or 

Continental, but not both, shall be authorized by this Notice to operate in these markets.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found the 

applicants qualified to provide the exemption services authorized.

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) grant of the authority was consistent with the public 

interest; and (3) grant of the authority would not constitute a major regulatory action under the Energy

Policy and Conservation Act of 1975. To the extent not granted or deferred, 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 regulations, 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 document is available on the World Wide Web at:

www.regulations.gov
ATTACHMENT

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating authority from the government of each country served;

(2) Comply with applicable requirements concerning oversales contained in 14 CFR 250 (for scheduled 

operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insurance coverage, and for certifying that coverage to the 

Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a Department Order, comply with the 

requirements of 14 CFR 203, concerning waiver of Warsaw Convention liability limits and defenses;

(6) Comply 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, 49 CFR Part 1544. To assure compliance with all applicable U.S. 

Government requirements concerning security, the holder shall, before commencing any new service 

(including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to 

advise the PSI 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; and

(7) Comply with such other reasonable terms, conditions, and limitations required by the public interest 

as may be prescribed by the Department of Transportation, with all applicable orders and regulations of 

other U.S. agencies and courts, and with all applicable laws of the United States.

The authority granted shall be effective only during the period when the holder is in compliance with the 

conditions imposed above.

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