Order 2012

- 6

- 22
Served: June 25 , 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25 th day of June , 201 2

Application of

MIAMI AIR INTERNATIONAL, INC.

for an exemption pursuant to 49 U.S.C. § 40109 fro m the provisions of 49 U.S.C. § 41104( c ) and 14 CFR § 212.3(l) DOCKET DOT

- OST

- 2012

- 0082

ORDER GRANTING EXEMPTION

Summary

By this order, we grant an exemption from 49 U.S.C. § 41104(c ) and 14 CFR § 212.3(l) to Miami Air International, Inc. (“ Miami Air ”)

, to the extent necessary to permit it to engage in single

- entity charter air transportation of persons and proper ty between certain points within the State of Alaska

, subject to conditions

.

Background

By application dated May 18, 2012

, Miami Air requested an exemption from the provisions of

49 U.S.C. § 41104(c ) and 14 CFR § 212.3(l) to the extent necessary to perm it it to conduct single

- entity charter air transportation of persons and property on behalf of Shell Offshore, Inc. (“Shell”), between certain points within the State of Alaska for the duration of a charter contract from July 1, 2012

, to October 31, 2012

. 1

Miami Air i s a U.S. certificated air carrier with authority to conduct passenger charter operations in

all states of the United States, except for charters flights between points within the State of Alaska, a restriction imposed by 49 U.S.C. § 41104( c ) and implemented by 14 CFR § 212.3(l). 2

1 Miami Air styled its exemption application as a request for an “emergency exemption.” However, rather than treat the application properly submitted within the purview of section 302.311 of our regulations, we have instead chosen to consider it as a normal exemption application, for which the applicant, citing an approaching start

- up date and a desire to begin service preparations, has reques ted expedited treatment.

2 See Order 91

- 10

- 50 , issued September 25, 1999

. Paragraph 2 of Miami Air’s certificate explicitly states that “the holder of is not authorized to engage in air transportation between points in the State of Alaska.”

U N I T E D S

T A T E S O F A

M E R I C A D E P A R T M E N T O F T R A N S P O R T A T

I O N2

The applicant states that in the summer of 2012, Shell will be engaged in oil exploration ac tivities at remote offshore sites in the North Slope of n orthern Alaska. In order to engage in these activities

, Shell nee ds to transport workers between Anchorage, Alaska; Deadhorse , Alaska; and Barrow, Alaska, where these workers will then travel by connecting helicopter services to their actual worksites. The applicant further explains that Shell requires dedicated air tr ansport ation services that can be offered on a flexible basis to accommodate irregular work schedules, weather changes,

and other factors.

According to t he applicant

, when assessing its upcoming transportation needs, Shell contacted all of

the Alaskan air carriers that could perform these services without requiring an exemption , as well as other passenger air carrier s, informing them of Shell’s need for transportation services and Shell’s proposed requirements. T he applicant states that Shell requested ap proximately four charter flights per week between the previously mentioned Alaskan points . However, such flights would need to be conducted using dedicated jet aircraft based in Anchorage, Alaska, for the duration of the

contract. The contracted air carr ier would provide a minimum of two complete crews based in Alaska for the duration of the contract, including pilots, flight attendants, and mechanics. Further,

the contracted air carrier would remain “on

- call” 24

- hours a day. Lastly, the crew would have to be trained in accordance with Shell’s own safety program.

Miami Air states that given the highly specialized nature of the operation, no other Alaskan air carrier was able to meet Shell’s specific requirements. However, the applicant indicates that if granted the relief requested, it intends to provide the transportation services desired by Shell as a single

- entity charter. Under the proposed arrangement, Northern Aviation Services, Inc. (“NAS”)

, an affiliate of Northern Air Cargo, Inc., a U.S. cer tificated cargo air carrier based in Alaska, would function as agent for Shell in this transaction. NAS would provide to Shell certain ancillary services such as ground handling, landing fees, fuel, catering, crew per diem, crew lodging, taxes,

etc. Addi tionally , the duration of this charter flight arrangement would be limited to 3

- 4 months

. Although it is anticipated that the flights will be conducted July 1, 2012 through October 31, 2012, the applicant notes that they may be extended to November 30, 2012, depending on weather

conditions. Lastly, the applicant maintains that granting the requested relief is consistent with the public interest.

No answers opposing Miami Air’s application were filed and no special issues regarding the applicant have co me to our attention. Under these circumstances, we propose to decide the issue of the applicant’s requested exemption from certain statutory and regulation requirements on the basis

of the written record.

Decision

After careful consideration, we have decided to grant Miami Air the requested exemption from

49 U.S.C. § 41104(c) and 14 CFR § 212.3(l) to the extent necessary to enable it to engage in the transportation services and operating arrangements described in th is order.

49 U.S.C. § 41104(c) provides that a n air carrier holding a certificate issued under 49 U.S.C. § 41102 may provide charter air transportation between places in Alaska only to the extent the Secretary decides the transportation is required by pu blic convenience and necessity

. This statute is implemented by 14 CFR § 212.3(l), which states that a certificated air carrier may not perform any charter in interstate commerce within the State of Alaska. Thus, in order for Miami Air to3

conduct the pro posed operations on behalf of Shell, the air carrier would require relief from the provisions of the S tatute as well as the Department’s rules.

We have carefully reviewed the facts of this matter and find that a grant of exemption is in the public interes t. The circumstances presented here are extremely unique. First, according to the applicant, the prospective single

- entity charter customer , Shell, has solicited air transportation services from air carriers that could perform the proposed services witho ut an ex emption and none of them are interested in conducting the charter flights. 3 Second, the flights would be conducted on behalf of a single entity and not held out to the public as a whole , thus, Miami Air would not be competing against other Alaskan certificated air carriers in the large aircraft charter market in open competition. Thus, we find that a grant of exemption would not adversely affect competition. Third, the exemption would be limited to t he duration of the contract which is not expect ed to extend beyond November 30, 2012. Lastly, without the exemption, Shell may not be able to adequately meet its transportation needs , which may adversely affect i t s offshore exploration efforts during 2012 and possibly impac t the U.S. economy . In ligh t of the above, we will grant the requested relief.

ACCORDINGLY:

1. We grant Miami Air International, Inc., an exemption from 49 U.S.C. § 41104(c) and 14 CFR § 212.3(l) to the extent necessary to permit it to conduct single

- entity charter air transportation of persons and property for Shell Offshore, Inc., between points within the State of Alaska.

2. We reserve the right to amend, modify, or revoke this authority at any time, in the public

in terest, without notice or hearing.

3. This exemption expires November 30, 2012.

4. We will serve a copy of this order on the persons listed in Attachment A.

BY:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

An electro nic version of this document is available at: http://www.regulations.gov

3 Importantly, we note that all of the air carriers that could perform the flights without an exemption were served with a copy of the application and no objections to the application we re received

.Attachment A

SERVICE LIST FOR MIAMI AIR CHARTER, INC.

JAMES PROIA

CHIEF EXECUTIVE OFFICER

MIAMI AIR INTERNATIONAL INC

PO BOX 660880

MIAMI FL 3266

- 0880 MR PETER LYNCH AGC

- 300

ASST CHIEF COUNSEL FOR ENFORCEMENT

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

JAMES W TELLO

LAW OFFICES OF JAMES W TELL O

1025 CONNECTICUT AVENUE NW

SUITE 1000

WASHINGTON DC 20036 MR WILLIAM J WEBER

CERTIFICATION SECTION MANAGER

FAA AFS

- 900

45005 AVIATION DRIVE SUITE 131

DULLES VA 20166

EDWARD W SAUER

COUNSEL FOR ALASKA AIRLINES INC SQUIR E SANDERS LLP

1200 19TH STREET NW

SUITE 300

WASHINGTON DC 20036 OFFICE OF AIRLINE INFORMATION

DOT/RITA/BTS

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590