Order 2010-4-18

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 30 th day of April, 2010

Served April 30, 2010

Application of

JETSTAR AIRWAYS PTY. LIMITED Docket DOT-OST-2006-24922

DOT-OST-2006-24923

for a renewed and amended exemption under 49 U.S.C. §40109 and a foreign air carrier permit under 49 U.S.C. §41301

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By this order we (1) grant the application of the referenced foreign air carrier for a renewed and amended exemption under 49 U.S.C. §40109, subject to conditions; 1 and (2) tentatively find that it is in the public interest to grant the applicant a foreign air carrier permit attached as Appendix

B to this order.

Background

On August 23, 2005, the Department issued a Notice, in Docket OST-2005-22228, announcing several steps designed to streamline our regulator y procedures for licensing U.S. and foreign air carriers. Among other things, the Notice stated that:

Assuming, based on the record and on the public interest/public convenience and necessity elements germane to our licensing decisions, that we were in a position to act favorably, we would proceed to issue a single order (1) granting the exemption request for whatever duration we would normally have imposed, or until certificate/permit authority becomes effective, whichever is shorter, and (2) tentatively deciding ( i.e.

, show-cause) to award a corresponding certificate (or permit), again for the standard

1 The conditions are attached at Appendix A.2

duration we would normally have imposed (such as, in the case of certificates, five years for limited-entry markets, indefinite for open-entry markets, and in the case of permits, five years for comity and reciprocity regimes, indefinite for agreement regimes).

Our action in this Order serves to implement these streamlined regulatory procedures for the application involved in this proceeding.

Applications

By application filed August 29, 2008, in Docket DOT-OST-2006-24923, Jetstar Airways Pty. Limited (Jetstar), a foreign air carrier of Australia requests a renewal and amendment of its current exemption under 49 U.S.C. § 40109 to engage in: 2

a. Foreign scheduled and charter air transportation of persons, property and mail from points behind Australia via Australia and intermediate points to a point or points in the United States and beyond;

b. Foreign scheduled and charter transportation of property between any point or points in the United States and any other point or points; and

c. Other charters pursuant to 14 CFR Part 212 of the Department’s Regulations.

On that date, Jetstar also amended its pending application in Docket DOT-OST-2006-24922, for a foreign air carrier permit, to conduct the operations described above.

Responsive Pleadings

On June 12, 2006, United Air Lines, Inc. (United) filed an answer in response to Jetstar’s original applications in the referenced Dockets. On June 21, 2006, Jetstar filed a reply. United withdrew its answer on September 8, 2008.

The Hawaii Tourism Authority filed an answer in support of Jetstar’s request.

Decision

We have decided, under assigned authority and consistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for exemption authority, subject to conditions, and tentatively to grant, subject to show-cause procedures, its request for a foreign air carrier permit, also subject to conditions.

2 By Notice of Action Taken dated August 14, 2006, in Docket DOT-OST-2006-24923 and renewed by Notice of Action Taken dated August 30, 2007, the Department granted Jetstar authority to engage in (1) scheduled foreign air transportation of persons, property, and mail betw een Honolulu, Hawaii, on the one hand, and Sydney and Melbourne, Australia, on the other hand; (2) charter forei gn air transportation of persons, property and mail between the United States and Australia; and (3 ) other charters in accordance with Pa rt 212 of the Department’s rules.3

With respect to the applicant’s request for renewed and amended exemption authority, we find that grant of this authority is consistent with the public interest; that the applicant has demonstrated, based on the record, that it is financially and operationally qualified to perform the services authorized, and that it is substantially owned and effectively controlled by citizens of its

claimed homeland. 3 We also find that the authority sought by the applicant is encompassed by the United States-Australia Air Transport Agreement. We therefore find that grant of the requested exemption authority, for a two-year term, or until the requested permit authority becomes effective, whichever occurs earlier, is warranted.

We also note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, by memorandum dated September 24, 2008, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the applicant’s requests. We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

Tentative Findings and Conclusions--Fo reign Air Carrier Permit Application

We tentatively find and conclude that the public interest warrants granting the applicant a foreign air carrier permit, in the form attached as Appendix B and subject to the conditions attached. 4 In particular, we tentatively find and conclude that the factors which support our grant of renewed and amended exemption authority to the applicant also warrant granting the applicant the foreign air carrier permit it seeks.

In view of the foregoing and all facts of r ecord, we tentatively find and conclude that:

1. It is in the public interest to issue the applicant a foreign air carrier permit in the form attached,

2. The applicant is fit, willing and able properly to perform the foreign air transportation described in the attached permit and to conform to the provisions of Title 49 of the U.S. Code, and to our rules, regulations, and requirements;

3. The applicant is substantially owned and effectively controlled by citizens of its claimed homeland;

4. The public interest requires that the exercise of the privileges granted by the permit should be subject to the terms, conditions, and limitations contained in the attached permit, and to such other reasonable terms, conditions, and limitations required by the public interest as we may prescribe;

3 The applicant states that Jetstar is wholly owned by Qant as Airways Limited, and that Qantas in turn continues to be owned and controlled by citizens of Australia. In a ddition, all of Jetstar’s executive management team are

citizens of Australia.

4 The applicant’s request for a forei gn air carrier permit was summarized in the Department’s published weekly list of applications filed. This notice described the author ity sought and gave interested persons an opportunity to submit evidence and objections to the award of this foreign air carrier permit authority.4

5. The issuance of this foreign air carrier permit will not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of our regulations; 5

6. The public interest does not require an oral evidentiary hearing on the application; and

7. Our action with respect to this foreign air carrier permit should, unless disapproved by the President of the United States under §41307 of Title 49 of the U.S. Code, become effective on the 61st day after its submission for §41307 review, or upon the date of receipt of advice from the President or his designee under Executive Order 12597 and implementing regulations that he or she does not intend to disapprove this portion of the Department’s decision under that section,

whichever occurs earlier.

In view of the above, and acting under authority assigned by the Department in its regulations, 14 CFR Part 385, we find that (1) our actions are consistent with Department policy; and (2) with respect to the exemption authority we ar e conferring on the applicant, the applicant is qualified to perform those operations; and that grant of the exemption authority is consistent with the public interest and would not constitute a major regulatory action under the Energy Policy

and Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Jetstar Airways Pty. Limited, for a renewed and amended exemption under 49 U.S.C. §40109 to engage in

a. Foreign scheduled and charter air transportation of persons, property and mail from points behind Australia via Australia and intermediate points to a point or points in the United States and beyond;

b. Foreign scheduled and charter transportation of property between any point or points in the United States and any other point or points; and

c. Other charters pursuant to 14 CFR Part 212 of the Department’s Regulations.

2. The exercise of the privileges granted above is subject to compliance by Jetstar Airways Pty. Limited with the conditions listed in Appendix A;

3. Our action granting the exemption authority described herein is effective immediately, for a period of two years from the issue date of this order, or until the attached permit becomes effective, whichever is earlier;

4. We may amend, modify, or revoke the exemption authority set forth herein at our discretion at any time and without hearing;

5 This finding is based on the fact that the grant of this permit will not result in a near-term net annual change in aircraft fuel consumption of 10 million gallons or more.5

5. To the extent not acted upon above, we dismiss the applicant’s request for exemption authority in this docket (DOT-OST-2006-24923);

6. With respect to the applicant’s request for a foreign air carrier permit in this proceeding, we direct all interested persons to show cause why our tentative decision on that application, set forth above, should not be made final;

7. Any interested person objecting to the issuance of an order making final our tentative findings and conclusions with respect to the applicant’s request for a foreign air carrier permit shall, no later than twenty-one (21) calendar days after the date of service of this order, file with the Department and serve on the parties to this proceeding, a statement of objections specifying the part or parts of the tentative findings and conc lusions objected to, together with a summary of testimony, statistical data, and concrete evidence to be relied upon in support of the objections; if objections are filed, answers to objections are due no later than seven (7) calendar days thereafter;

8. If timely and properly supported objections are filed, we will give further consideration to the matters and issues raised by the objections before we take further action;

9. In the event no objections are filed, all further procedural steps shall be deemed waived, and the Department will enter an order which will (subject to Presidential review under §41307 of Title 49 of the U.S. Code) make final our tentative findings and conclusions set forth in this order; and

10. We will serve a copy of this order on Jetstar Airways Pty. Limited, United Air Lines, Inc., the Embassy of Australia in Washington, D.C., the Department of State, and the Federal

Aviation Administration.

Persons entitled to petition the Department for review of this order under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this order. Our action with respect to the applicant’s request for exemption authority under 49 U.S.C. §40109 is effective immediately, and the filing of a petition for review will not

alter such effectiveness.

By:

PAUL L. GRETCH

Director

Office of International Aviation (SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations,govForeign Air Carrier Exemption Conditions Appendix A

In the conduct of the operations authorized, the foreign carrier applicant shall:

(1) Not conduct any operations unless it holds a currently e ffective authorization from its homeland for such operations, and it has filed a copy of su ch authorization with the Department;

(2) Comply with all applicable requirements of the Federa l Aviation Administration, the Transportation Security Administration, and with all applicable U.S. Govern ment 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 concerni ng 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 Repr esentative (IIR) (formerly referred to as International Principal Security Inspector) to advise the IIR of its pl ans and to find out whether the Transportation Security Administration has determined that security is ade quate to allow such airport(s) to be served;

(3) Comply with the requirements for minimum insurance cove rage contained in 14 CFR Part 205, and, prior to the commencement of any operations under this authority, file ev idence of such coverage, in the form of a completed OST Form 6411, with the Federal Aviation Administra tion’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 re quirements 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 War saw Convention liability limits and defenses;

(7) Agree that operations under this authority constitute a waiv er 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 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" mean s "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, origin ate or terminate all flights to/from the United States in its homeland;

(9) Comply with the requirements of 14 CFR Part 217, c oncerning the reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise pr ovided in the applicable aviation agreement, comply with the Department's rules governing char ters (including 14 CFR Parts 212 and 380); and

(11) Comply with such other reasonable terms, conditions, a nd 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 wh en 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

Issued by

Order



### UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

-------------------------------------------------------- PERMIT TO FOREIGN AIR CARRIER



### --------------------------------------------------------- JETSTAR AIRWAYS PTY. LIMITED

A Foreign Air Carrier of Australia

is authorized, subject to the following provisions, th e provisions of Title 49 of the U.S. Code, and the orders, rules, and regulations of the Department of Transportation, to engage in:

Foreign scheduled and charter air transportation of persons, property and mail from points behind Australia via Australia and intermediate poin ts to a point or points in the United States and beyond;

Foreign scheduled and charter transportation of property between any point or points in the United States and any other point or points.

The holder shall also be authorized to engage in other charter trips in foreign air transportation, subject to the terms, conditions, and limitations of the Department’s regulations governing charters.

This permit and the exercise of the privileges granted in it shall be subject to the terms, conditions and limitations in both the order issuing this permit and the attachment to this order, and to all applicable provisions of any treaty, convention or agreement affecti ng international air transportation now in effect, or that may become effective during the period this permit remains in effect, to which the United States and the holder’s homeland are or shall become parties.

This permit shall be effective on . Unless otherwise terminated at an earlier date pursuant to the terms of any applicable treaty, convention or agreement, this permit shall terminate (1) upon the dissolution or liquidation of the holder to whom it wa s issued; (2) upon the effective date of any treaty, convention, or agreement or amendment, which shall have the effect of eliminating the right for the service authorized by this permit from the service which may be operated by airlines designated by the Government of Australia (or, if the right is partially eliminated, then the authority of this permit shall terminate in like part); (3) upon the effective date of any permit granted by the Department to any other carrier designated by the Government of Australia, in lieu of the holder; or (4) upon the termination or expiration of the applicable air services agreement to which the United States and Australia are parties. However, clause (4) of this paragraph shall not apply if prior to such termination or expiration, the foreignair transportation authorized herein becomes the s ubject of another treaty, convention or agreement to which the United States and Australia become parties.

The Department of Transportation has executed this permit and affixed its seal on

By:

PAUL L. GRETCH

Director

Office of International Aviation



### (SEAL)Foreign Air Carrier Permit Conditions

In the conduct of the operations authorized, the foreign carrier applicant shall:

1) Not conduct any operations unless it holds a currently e ffective authorization from its homeland for such operations, and it has filed a copy of su ch authorization with the Department;

2) Comply with all applicable requirements of the Federa l Aviation Administration, the Transportation Security Administration, and with all applicable U.S. Govern ment 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 con cerning 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 Re presentative (IIR) (formerly referred to as International Principal Security Inspector) to advise the IIR of its pl ans and to find out whether the Transportation Security Administration has determined that security is ade quate to allow such airport(s) to be served;

3) Comply with the requirements for minimum insurance cove rage contained in 14 CFR Part 205, and, prior to the commencement of any operations under this authority, file ev idence of such coverage, in the form of a completed OST Form 6411, with the Federal Aviation Administra tion’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 co mplies with operational safety requirements at least equivalent to Annex 6 of the Chicago Convention;

5) Conform to the airworthiness and airman competency re quirements 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 Wa rsaw 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 ope rations in international air transportation that, according to the contract of carriage, include a point in the United St ates 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 "international transportation" as defined by the Warsaw Convention, except that all States shall be consid ered to be High Contracting Parties for the purpose of this definition;

8) Except as specifically authorized by the Department, origin ate or terminate all flights to/from the United States in its homeland;

9) Comply with the requirements of 14 CFR Part 217, c oncerning the reporting of scheduled, nonscheduled, and charter data;

10) If charter operations are authorized, except as otherwise pr ovided in the applicable aviation agreement, comply with the Department's rules governing char ters (including 14 CFR Parts 212 and 380); and

11) Comply with such other reasonable terms, conditions, a nd 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 wh en 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.

12/2007