UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC



### Issued by the Department of Transportation on February 15 , 20 1 2

NOTICE OF ACTION TAKEN

– DOCKET DOT

- OST

- 2011

- 0228

___ ______________________________________________________________________________________________________ ____________ 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 AMERICAN AIRLINES, INC . ( American) and HAINAN AIRLINES CO., LIMITED (Hainan)

filed 12 / 8 /11 for: 1

XX Exemption for American under 49 U.S.C. 40109 to provide the following services:

Scheduled foreign air transportation of persons, property and mail between Seattle and Beijing and to any point in

China on a code

- share basis with Hainan

, as authorized by the U.S.

- China Air Transport Agreement

, as amende d by

Article 5 of the U.S.

- China P rotocol signed on July 23, 2004.

XX E xemption for Hainan under 49 U.S.C. 40109 to provide the following services:

Scheduled foreign air transportation of persons, property and mail between points in China a nd points in the United

States o n a codeshare basis with American, as authorized by the U.S.

- China Air Transport Agreement, as amended by

Article 5 of the U.S.

- China Protocol signed on July 23, 2004.

XX Blanket statement of authorization under 14 CFR Part 212 to permit American to engage in the foll owing code

- share

services:

Display the ( HU* ) designator code of Hainan in conjunction with foreign air transportation of persons, property, and mail on flights operated by American between the U.S. and China and on flights operated by American within the U.S. beyond Hainan’s Seattle gateway.

XX Blanket s tatement of authorization under 14 CFR Part 212 to permit Ha in an to engage in the following code

- share services:

D isplay the ( AA* ) designator code of American in conjunction with foreign air transportation of persons, property, and mail of flight s operated by Hainan between the U.S. and China and on flights operated by Hainan within China beyond American’s Beijing and Shanghai gateways.

Joint Motion of American and Hainan filed 12/13/11 to shorten the answer date to their December 8, 2011 application.

Applicant rep s : Carl B. Nelson (202) 496

- 5647 (American) Josh Romanow (202 ) 663

- 8000 (Hainan)

DOT Analyst: Darren Jaffe (202) 366

- 2512

DISPOSITION

XX Granted ( requests for exemption authority and statements of authorization

, subject to conditions, see below)

XX Dismissed ( motion for shortened answer date ) 2

The above action granting e xemption authority to American is effective when taken : February 15 , 2012 , through February 15

, 2014

, subject to conditions

. The above action granting e xemption authority to Hainan is effective when

taken : February 15 , 2012 , through February 15 , 2013

, subject to conditions

. The above action granting blanket

statements of authorization to American and Hainan is effective: February 15 , 2012 , and will remain in effect

1 The joint applicants note that American is also applying on behalf of its affiliated carriers American Eagle Airlines, Inc. and

Executive Airl ines, Inc. d/b/a American Eagle.

2 The answer period to the joint application has expired, so we are dismissing the motion as moot.indefinitely, subject to conditions. The above action dismissing the motion for a shortened answer date is effective February 15 , 2012

.

Action taken by: Paul L. Gretch, Director

Office of International Aviation

XX The authority granted is consistent with the Air Transport Agreement, as amended, between the United States

and the People’s Republic of China

.

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

XX Holder ’s certificates of public convenience and necessity

XX Hainan’s foreign air carrier permit (Order 2009

- 12

- 10)

XX Standard U.S. carrier exemption conditions (attached as Appendix A)

XX Standard foreign carrier exemption conditions (attached as Appendix B )

XX Conditions for Statement s of Authorization (attached as Appendix C )

_________________________________________________________________________________________________ _ Special Conditions /Remarks : We note that American has conducted a safety audit of Hainan 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.

The exemption authority granted to Hainan is limited to operations conducted only throu gh its code

- share arrangement

with American on flights operated by American

.

____________________________________________________________________________ ______________________ 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 in this notice was consistent with Department policy; (2) grant of the authority was consistent with the publi c interest; and (3) grant of th e authority would not constitute a major federal action under the Energy Policy and Conservation Act of 1975.

To the extent not granted or dismissed , we denied all requests in the referenced Docket. We may amend, modify, or

revoke th e 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 wi thin sev en ( 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 : http://www.regulations.gov

### Appendix A 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 containe d 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 ch arter 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;

(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.

1/2008

### Appendix B

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 aut horization 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, but not l imited 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 IIR of its plans an d 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, prior to t he 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 t ermination 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 airworthi ness 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 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 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

"int ernational 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 b y 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 au thorized, 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 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 th e 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

### Appendix C

The code

- share operatio ns authorized here are subject to the following conditions:

(a) The statement s of authorization granted will remain in effect only as long as (i) American and Hainan 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 ) American , and/or Hainan , as appropriate, 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, which carrier will be operating the aircraft in the code

- share market added, and the date on which the service will begin. Such notice should be filed in Docket DOT

- OS T

- 2011

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( c ) American and/or Hainan

, as appropriate, must promptly notify the Department if the code

- 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 a pproved code

- share services. Such notice should be filed in Docket DOT

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- 2011

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. 2

( d ) The code

- sharing operations conducted under this authority must comply with 14 CFR 257 and with any amendments to the Department’s regulations concerning code

- sha re 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 holdi ng 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 journey 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 carried 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 ) The authority granted here is specifically conditioned so that neither American , nor Hainan s hall give any force or

effect to an y 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 See Appendix D for initial code

- share points.

2 We expect this notification to be received within ten (10) days after such non

- effectiveness or of such de cision.

### Appendix D

INITIAL LIST OF CODE

- SHARE POINTS