UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on January 26 , 2011



### NOTICE OF ACTION TAKEN

-- DOCKET OST

- 2010

- 0299

_________ _______________________________________________________________________________________________________________________ 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: SICHUAN AIRLINES CO

. , LTD. (Sichuan Airlines) Date Filed: December 22, 2010

Relief requested: E xemption under 49 USC § 4 0109 to engage in : 1) scheduled foreign air transportation of persons

, property, and mail between points in the People’s Republic of China (PRC), on the one hand, and Guam and the Commonwealth of the Northern Marianas Islands, on the other hand; 2) charter foreign air transportation of persons, property, and mail between the PRC and the United States; and 3) other charters pursuant to the prior approval requirements set forth in the Department’s regulations.

Applicant representative: George U. Carneal , 202

- 637

- 6546 DOT analyst: Robert J. Finamore, 202

- 366

- 2405

Responsi ve pleadings: None.

DISPOSITION

Action: Approved. Action date: January 26 , 2011

Effective dates of authority granted: January 26

, 2011 , through January 26 , 2012

.

Basis for approval: United States

- China Air Transport Services Agreement.

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our standard exemption conditions (attached).

Special conditions/Remarks: Based on the record in this case, we found that the applic ant is operationally and financially qualified to conduct its proposed operation s, 1 and that it is substantially owned and effectively controlled by citizens of its homeland

. 2 We also note that the applicant is properly licensed by its homeland to perform the proposed services. Furthermore, by memorandum dated January 20, 2011, the FAA advised us that it knows of no reason to withhold this authority.

I n accordance with 14 CFR §212.9(d) and (e) of our regulations, Sichuan Airlines must obtain prior Depa rtment approval in the form of statements of authorization before operating any charter trips to or from the United States.

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 consist ent with the public interest; and (4) grant of the authority would not constitute a major regulatory action under the Energy Poli c y 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.

1 The reco rd indicates that 40% of the applicant’s capital stock is held by the Sichuan Airlines Group , which itself is owned by the Sichuan provincial government. The record further indicates that China Southern Airli nes (China Southern) and China Eastern

Airlines (China Eastern) hold 39% and 10% of the applicant’s capital stock, respectively. Both China Southern and China Eastern are foreign air carriers of the People’s Republic of China and are substantially owned a nd effectively controlled by citizens of that

country. See Orders 2001

- 11

- 4 and 92

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- 7. The remainder of the applicant’s capital stock is held by the Chinese air carrier Shandong Airlines

– 10% and the Gingko Restaurant

– 1%. Th e applicant states that all of its Directors, officers, and key management personnel are citizens of the People’s Republic of China.

2 The applicant has requested confidential treatment of its traffic and financial forecasts , under the provisions of

14 CFR §30 2 .12. Good cause having been shown, we will grant this request.Persons en titled 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 effec tive

whe n 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.gov

### 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 Administration, the Transportation Security Administration, and with all applicable U.S. Government requirements concerning security, including, b ut 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 advise 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, pri or 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 t o, 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 airw orthiness 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 Warsa w 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 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

"inte rnational 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, conditions, and limitations requir ed 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 otherwise transferred without explicit Department approval

under Title 49 of the U.S. Code.

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