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ANSWER OF JOHN P.T. GILMORE

Re: Application of AirOne Ventures Limited For An Exemption 

Under 49 U.S.C. § 40109(c) (U.S.- Barbados) Docket DOT-OST2010-0134

I, John P.T. Gilmore, am an interested party with respect to the 

subject Application. This is my Answer to that Application.

1. AirOne Ventures Limited (“Applicant” or “AirOne”) in this 

Application “seeks an exemption under 49 U.S.C. § 40109(c) and 

Subpart C of the Department’s procedural regulations from the 

requirements of 49 USC § 41301 and § 41302 that it obtain a foreign 

air carrier permit to the extent necessary to allow it to provided 

scheduled foreign air transportation between the United States and 

Barbados.”(“Permit Exemption”).

2. Also “to the extent necessary, AirOne requests a waiver of the 

Department’s homeland ownership and control policy.” (“Waiver 

Application”.

3. The Permit Exemption

In the Foreign Air Carrier Information Packet issued by the Department 

of Transportation, Office of International Aviation, Foreign Air Carrier 

Licensing Division (“Department”) in September, 2000 (“InfoPak”) the 

Department states :

“Because under our procedural rules the processing time for foreign air 

carrier permit request can be lengthy, most foreign air carrier 

applicants also request, at the time they file their applications for 

permit authority, an exemption from the permit requirement. Such an 

exemption allows them to commence operations while the Department 

is processing the permit request.3

3 It is important to note that while the exemption process typically allows the 

Department to act more quickly than the permit process, the public interest 

standards for approval are the same.”

The InfoPak states that “the same evidentiary information is required 

of foreign carriers seeking exemption authority” as for those seeking a 

foreign air carrier permit; namely those prescribed in 14 CFR §211.20.
2

Given that the same standards and the same evidentiary requirement 

apply to both permit applications and permit exemptions, the rationale 

for the latter seems to be its relative speed over the former. As such it 

would seem more reasonably applicable to permits by operational

airlines rather than start ups; the latter requiring the in depth 

assessment of pro forma evidence of fitness and capacity whereas the

former have the actual operational evidence of such fitness / capacity. 

There is however no legislative limitation on such permit exemptions 

other than that they be consistent with the public interest and 

exemptions, as a result, have become the standard procedure in 

foreign air carrier applications for economic authority.

The applicant proposes to commence the operations for which it seeks 

its exemption authority on February 1, 2011 and requests that the 

exemption authority be effective on or before October 1, 2010.

Since in the case of AirOne the time period between the filing of the 

application and the proposed start up date is eight and a half months 

(and four and a half months before the requested effective date of the 

authority) there would seem to be no requirement in this case for the 

„fast track‟ exemption procedure.

It is worth highlighting that there is no similar fast track procedure 

available for United States (“US”) applicants seeking a certificate for 

foreign air transportation authority under 49 USC § 41102 whether for 

an existing certificated airline or a start up carrier.

Since the normal fast track rationale for an exemption is absent in this 

instance and no other justification for the exemption procedure has 

been offered by the applicant, the application for the exemption should 

be denied and the 49 USC § 41102 permit procedure followed in this 

case.

The applicant has indicated in its application that the provisional 

authority requested is “critical to securing all necessary financing” for 

its proposed operations; a reason that in my submission should not be 

a factor in the Department‟s consideration of this application or indeed 

of any subsequent application it might make for a foreign air carrier 

permit.
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4. The Waiver Application

AirOne in this Application “seeks an exemption under 49 U.S.C. § 

40109(c) and Subpart C of the Department’s procedural regulations 

from the requirements of 49 USC § 41301 and 49 USC § 41302 that it 

obtain a foreign air carrier permit to the extent necessary to allow it to 

provide scheduled foreign air transportation between the United States

and Barbados.”.

Also “to the extent necessary, AirOne requests a waiver of the 

Department’s homeland ownership and control policy.”.

49 U.S.C. § 40109(c). Authority to exempt provides, in its relevant 

parts, as follows:

“(c) Other Economic Regulation.— Except as provided in this section, 

the Secretary may exempt to the extent the Secretary considers 

necessary a person or class of persons from a provision of ..., chapter 

413 ... of this title, or a regulation or term prescribed under any of 

those provisions, when the Secretary decides that the exemption is 

consistent with the public interest.”.

The provisions of 49 USC from which AirOne seeks to be exempted are 

§ 41301 and § 41302 which provide as follows:

“Sec. 41301. Requirement for a permit

A foreign air carrier may provide foreign air transportation only if the 

foreign air carrier holds a permit issued under this chapter authorizing 

the foreign air transportation.

Sec. 41302. Permits of foreign air carriers

The Secretary of Transportation may issue a permit to a person

(except a citizen of the United States) authorizing the person to

provide foreign air transportation as a foreign air carrier if the

Secretary finds that -

(1) the person is fit, willing, and able to provide the foreign air 

transportation to be authorized by the permit and to comply with this 

part and regulations of the Secretary; and

(2)(A) the person is qualified, and has been designated by the

government of its country, to provide the foreign air transportation 

under an agreement with the United States Government; or

(B) the foreign air transportation to be provided under the
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permit will be in the public interest.”

AirOne is a private Barbados corporation which is wholly owned by 

AirOne Holdings Limited (“AirOne Holdings”),a St. Lucia corporation

over three quarters of whose issued shares are owned by nationals of 

member states of the European Union (“EU” or (“EU nationals”)).

AirOne has been recognised, as a matter of policy, by the Government 

of Barbados as a Barbados carrier in terms under which it will be 

designated by Barbados under air services agreements to which 

Barbados is a party. AirOne does not appear to contravene the 

corporate eligibility requirements to be considered for the issuance of a 

Barbados Air Operator‟s Certificate under the Civil Aviation (Air 

Operator Certification and Administration) (Amendment) Regulations 

2009 (made by the Minister on December 30th, 2009) once it meets 

the substantive Barbados Air Operator‟s Certificate requirements.

Neither Barbados nor St. Lucia is party to an Open Skies Agreement 

with the US. St. Lucia, through its membership in the Organisation of 

Eastern Caribbean States, is a FAA IASA Category 1 state – Barbados 

has not yet been assessed an IASA category by the FAA.

With respect to ownership and control, it has long been Department 

policy to require foreign carriers to be substantially owned and 

effectively controlled by citizens of their respective homelands. The 

U.S- Barbados bilateral agreement expressly establishes homeland 

ownership and effective control as a condition for securing a license 

from the other party. In the absence of such ownership and control, 

the grant of a license to a carrier is entirely within the discretion of the 

Department. (See Lan Ecuador Order 2002-12-15 - December 20, 

2002 : DOT-OST-2002-13661)

The Applicant is a private corporation organised under the laws of 

Barbados and is a wholly owned subsidiary of AirOne Holdings whose 

registered office is in St. Lucia (it is presumably a private St. Lucia 

corporation) which itself is presently owned as to 76.67% of its issued 

shares by EU nationals, 10.92% by US nationals (Allegiant Airlines) 

and 10.88% by nationals of Barbados with the remaining 1.53% of the 

issued shares held equally by Jamaican and South African nationals.

The current three person Board of Directors of AirOne comprises its 

CEO/Chairman and its Director of Business Development, both 
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nationals of Ireland (an EU member state) and a national of Barbados. 

The size, present composition and nationalities of the Board of 

Directors of AirOne Holdings are not specified.

While it cannot be said who owns and controls AirOne Holdings and 

thereby AirOne (without knowledge of the nature of the issue in

question, the make up of the Board of Directors of AirOne Holdings

and the laws of St. Lucia and Barbados) since the Barbados interest is 

limited to a 10.92% shareholding in AirOne Holdings and a single 

Director (out of three at present) in AirOne it can be said that AirOne 

is not substantially owned or effectively controlled by nationals of 

Barbados, the homeland of the applicant.

On the issue of effective control not a single member of the current 

seven member senior management team of AirOne is a national of 

Barbados (six being nationals of EU member states and one a US 

national) – leaving operational and management control also in the 

hands of non nationals of AirOne‟s homeland.

A reasonable conclusion based on the facts presented in the 

application is that substantial ownership and effective control

of AirOne is in the hands of EU nationals not homeland nationals.

The US has an Open Skies Agreement with the EU which has been 

provisionally applied since October 28,2007 and which has recently 

been agreed to be amended in a Protocol contained in a Memorandum 

of Consultation initialled on March 25, 2010 in which “both delegations 

expressed their expectation that their respective aeronautical 

authorities would permit operations consistent with the terms of the 

agreement as amended by the March 25, 2010 Protocol, on the basis 

of comity or reciprocity, or on an administrative basis, from the date of 

signature of the Protocol.” (This Protocol is as yet unsigned).

Article 6 - Additional Matters related to Ownership, Investment, and 

Control of the 2007 Agreement provides as follows:

“Notwithstanding any other provision in this Agreement, the Parties 

shall implement the provisions of Annex 4 in their decisions under their 

respective laws and regulations concerning ownership, investment and 

control.”.
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Article 2 (1) of Annex 4 provides as follows:

“(1) Neither Party shall exercise any available rights under air services 

arrangements with a third country to refuse, revoke, suspend or limit 

authorizations or permissions for any airlines of that third country on 

the grounds that substantial ownership of that airline is vested in the 

other Party, its nationals, or both.”

Were it to be determined in the instant application that “substantial 

ownership” of AirOne was vested in EU nationals, under the EU – US 

Open Skies Agreement, the US would not have the right to refuse the 

authority requested by AirOne in its application on the basis that 

substantial ownership of AirOne was vested in EU nationals.

The argument made by the Applicant that this also applied to Article 3 

of Annex 6 to the March 25, 2010 Protocol (substantially identical to 

Article 2 of Annex 4 of the 2007 Agreement but with respect to 

“effective control” rather than “substantial ownership”) is incorrect.

Annex 6 – Article 3 of the Protocol provides as follows:

“(3) Neither Party shall exercise any available rights under air services 

arrangements with a third country to refuse, revoke, suspend or limit 

authorizations or permissions for any airlines of that third country on 

the grounds that effective control of that airline is vested in the other 

Party, its nationals, or both, provided that the third country in question 

has established a record of co-operation in air services relations with 

both parties.”.

This “effective control” exemption for third country airlines controlled 

by EU nationals is subject to the proviso that the third country is 

considered by both the EU and the US to have an “established record 

of cooperation in air services relations with both parties.” as certified 

by the Joint Committee established by the Agreement – a certification 

that has not yet been made.

Moreover the amended Article 21 (3) of the Agreement (contained in 

Article 6 of the March 25, 2010 Protocol) which specifies the 

implementation criteria for Annex 6 of the Protocol, provides that 

Annex 6 only comes into effect when the Joint Committee has provided 

written confirmation “that the laws and regulations of each party 
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permit majority ownership and effective control of its airlines by the 

other party or its nationals.”.

The Department policy to require foreign carriers to be effectively 

controlled by citizens of their respective homelands is not therefore 

affected by the EU – US Open Skies Agreement.

The April 8, 1982 US – Barbados Air Transport Agreement (“ATA”)

provides in Article 3 (2) that on application by an airline designated by 

either party, the other party shall grant appropriate authorisation 

provided that “substantial ownership and effective control” of the 

designated airline “are vested in the party designating the airline, 

nationals of that party, or both;” - 3(2)(a); that the designated airline 

is qualified to meet the international air transportation regulations of 

the designating party - 3(2)(b); and that the designated airline is 

maintaining and administering the safety standards specified in the 

agreement 3(2)(c).

Article 3 (2) of the US – Barbados ATA is substantively identical to 

Section 3 (2) of the US – Ecuador ATA signed on September 26, 1986.

Neither ATA is an Open Skies Agreement.

In two cases involving the latter ATA and a combined foreign air 

carrier permit exemption and ownership and control waiver application 

(similar to the current AirOne application) by LAN ECUADOR : DOTOST-2002-13661 and DOT-OST-2003-14291, the Department gave 

exhaustive consideration to the conditions under which such a waiver 

could be granted to an airline from a country with which the US had an 

ATA that was not an Open Skies agreement.

The Department in its ORDER DENYING EXEMPTION by Order 2002-

12-15 on December 20, 2002 in DOT-OST-2002-13661 summarised 

the relevant facts as follows:

“Lan Ecuador noted that 100% of its voting shares are owned by Lan 

Chile Investment Limited, a Cayman Islands corporation, which in turn 

is 100% owned by Lan Chile S.A. Lan Ecuador states that its board of 

directors consists of three Chilean, one U.S. and one Ecuadorian 

citizen, and all four key management positions are held by citizens of 

Chile. 
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Lan Ecuador requests a waiver of the ownership and control 

requirements contained in Article 3(2) of the U.S.-Ecuador Air 

Transport Agreement (U.S.-Ecuador Agreement).3 Lan Ecuador states 

that, in light of the Open-Skies agreement between the United States 

and Chile, ownership and control by nationals of Chile would not be 

inimical to U.S. aviation policy or interests, and it cites ownership and 

control waivers the Department has granted to four other foreign 

carriers to support its position.4

3 Article 3(2) provides that each side will grant appropriate authorizations and 

permissions provided that “substantial ownership and effective control of that airline 

are vested in the party designating the airline, nationals of that party, or both.”

4 Air Aruba, N.V.; Aerovias Nacionales Ecuatorianas, S.A. (Aeronem); Air Plus 

Argentina, S.A.; and Cielos del Peru, S.A. (Export Air).”.

The Department‟s decision and the reasons therefore were as follows:

“Decision

We have decided to deny Lan Ecuador’s request. In determining 

whether to grant an exemption to a foreign carrier under 49 U.S.C. § 

40109, the statutory finding we must make is that the exemption 

would be consistent with the public interest. In the case before us 

here, we cannot make that finding.

It has long been Department policy to require foreign carriers to be 

substantially owned and effectively controlled by citizens of their 

respective homelands. The U.S.-Ecuador bilateral agreement expressly 

establishes homeland ownership and effective control as a condition 

for securing a license from the other party. In the absence of such 

ownership and control, the grant of a license to a carrier is entirely 

within our discretion. In recognition that there are occasionally nonhomeland ownership interests in foreign carriers, we have sometimes 

granted waivers of our ownership and control policies where we could 

find that such a grant would not be inimical to U.S. aviation policy or 

interests. However, we are unable to make the necessary 

determination to support the grant of a waiver in this instance.

The record shows that Lan Ecuador is ultimately owned, in its entirety, 

by Lan Chile.

Chilean interests are also in a position to exercise effective control. Lan 

Ecuador’s board of directors consists of three Chilean, one U.S. and
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one Ecuadorian citizen.6 Moreover, all four key management positions 

of Lan Ecuador are held by citizens of Chile with recent affiliations with 

Lan Chile. The record also clearly demonstrates that the management 

structure of Lan Ecuador is characterized by the presence of Chilean 

rather than Ecuadorian influence in the day-to-day operations and 

decision making of the company.

The question thus becomes one of whether, given these facts, we can 

find that Lan Ecuador meets our test to grant the waiver necessary for 

approval of its application. We conclude that in this case we cannot 

make that finding.

Of principal concern is that we have a restrictive aviation regime with 

Ecuador. The record plainly shows that U.S. carriers currently have 

unmet operating aspirations in the U.S.- Ecuador market, and given 

the restrictive nature of our relationship, U.S. carriers do not have full 

flexibility to respond to changing market demands in the future. 

Furthermore, the extent of non-homeland ownership and control 

presented by the applicant here is significantly greater than in any 

comparable case where we have found a waiver to be warranted in 

recent years.7 In our view, in the circumstances presented, an OpenSkies agreement with Ecuador would be a prerequisite for even 

considering a waiver of our ownership and control policy. Against this 

background, we cannot find that the grant of an ownership and control 

waiver here is warranted.

Given that we cannot find that grant of the requisite ownership and 

control waiver is justified in this case, we cannot conclude that grant 

to Lan Ecuador of the exemption authority it seeks is in the public 

interest. Therefore we shall deny its application.

ACCORDINGLY,

1. We deny the request of Lan Ecuador for an exemption from 49 

U.S.C. § 41301 to engage in scheduled foreign air transportation of 

persons, property and mail between Guayaquil and Quito, Ecuador, on 

the one hand, and Miami and New York, on the other hand;”

6 The U.S. citizen on the board of directors is also an employee of Lan Chile.

7 In each of the cases cited by Lan Ecuador, we found that there was a significant 

measure of homeland ownership and control. In the Air Aruba case (Order 99-3-21), 

we noted a significant amount of the authorized share capital of Air Aruba was to be 
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held by the Government of Aruba and that the government insisted on certain 

conditions to the proposed arrangement with the Venezuelan corporation to retain 

control of Air Aruba’s corporate structure and its status as the national airline of 

Aruba. Similarly, we found significant homeland ownership and control in the other 

cases cited by Lan Ecuador. For example, in the case of Aerovias Nacionales 

Ecuatorianas, S.A. (Aeronem ) in Docket OST-95-713, the carrier reported that it 

was 60% owned by Ecuadorian citizens and 40% by French citizens, while in Air Plus 

Argentina (Docket OST-99-6400), we noted that the carrier was 27% owned by two 

Argentine citizens, with the remainder owned by an Argentine corporation which in 

turn was majority owned by a Uruguayan corporation (in addition, eight of Air Plus 

Argentina’s nine directors, officers and key management personnel were citizens of 

Argentina). Finally, in the case of Cielos del Peru, S.A. (Export Air) in Docket OST95-617, we noted the presence of 30% homeland ownership and the fact that two of 

Export Air’s three directors and substantially all of its key management personnel 

were citizens of Peru, the homeland of the applicant.”

The “substantial ownership” element of the “ownership and control”

test is not a factor in the instant application under the provisions of the 

US-EU Open Skies Agreement.

However “effective control” by homeland nationals remains an 

operative “condition”.

In the case of AirOne (with two of three AirOne Directors being non 

homeland nationals, no information on the nationality or number of the 

Directors of AirOne Holdings and no members of the executive 

management of AirOne being homeland nationals), EU “interests are 

also in a position to exercise effective control”; the record clearly 

demonstrates that the management structure of AirOne is 

characterized by the presence of EU rather than Barbados influence in 

the day-to-day operations and decision making of the company; and

“the extent of non-homeland ..... control presented by the applicant”

“is significantly greater than in any comparable case where we have 

found a waiver to be warranted in recent years.”

Lan Ecuador in the following year (2003) submitted a second

application for the same foreign air transportation economic authority

after restructuring its ownership and control structure.

The Department in its Order 2003-3-9 on March12, 2003 in OST-2003-

14291 stated as follows:
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“Background

By Order 2002-12-15, we denied an earlier exemption request by Lan 

Ecuador to provide scheduled foreign air transportation of persons, 

property and mail between Guayaquil and Quito, Ecuador, on the one 

hand, and Miami and New York, on the other hand, on the basis that 

the carrier was not substantially owned and effectively controlled by 

citizens of Ecuador.1

In that Order, we found that the record showed that Lan Ecuador, as 

then structured, was ultimately owned, in its entirety, by Lan Chile and 

that Lan Ecuador’s management structure was characterized by the 

presence of Chilean rather than Ecuadorian influence in the day-to-day 

operations and the decision making of the company

1 See Docket OST-2002-13661. Lan Ecuador would have provided the service with 

aircraft wet leased from Lan Chile.

Application

On January 15, 2003, Lan Ecuador filed a new application requesting 

the identical exemption authority, i.e., to engage in scheduled foreign 

air transportation of persons, property and mail between Guayaquil 

and Quito, Ecuador, on the one hand, and Miami and New York, on the 

other hand, with aircraft wet leased from Lan Chile.2

In support of its request, Lan Ecuador states that it recently completed 

a restructuring of its ownership and management. In that regard, Lan 

Ecuador states that it is now ultimately 52.5% Ecuadorian and 45% 

Chilean owned.4 Lan Ecuador adds that its board of directors now 

consists of three Ecuadorian and two Chilean citizens and that all of its 

key management personnel are citizens of Ecuador. Lan Ecuador 

believes that while the composition of the carrier following its 

restructuring satisfies the ownership and control provisions of the 

Agreement, it nevertheless requests a waiver of our policy that it be 

substantially owned and effectively controlled by homeland nationals, 

stating that such a waiver would be consistent with Department 

precedent and in the public interest. 5

2 At the time of Lan Ecuador’s original request, Lan Chile filed a corresponding 

request for a statement of authorization under Part 2 12 to wet lease aircraft to Lan 

Ecuador, for a period of two years. Lan Chile’s request has remained pending. See 
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application of Lan Chile, dated October 24,2002 (Foreign Air Carrier Licensing 

Division reference 2002-447).

3 By Notice dated January 22,2003, we modified the procedural schedule for 

responsive pleadings to Lan Ecuador’s request by requiring that answers be filed no 

later than January 27, 2003 (rather than the January 23 date requested by Lan 

Ecuador). We also set January 29, 2003, as the due date for reply comments, The 

notice was served on all parties in Docket OST-2003- 1429 1.

4 Lan Ecuador provided an exhibit which breaks down in detail its revised ownership

structure. See Exhibit LE- 1, page 2 of 2, Docket OST-2003- 14291.

5 Lan Ecuador cites the following cases to support its waiver request, noting that 

most recently, we granted exemption authority, including a waiver of our ownership 

and control policy, to TACA Ecuador, a similarly situated Ecuadorian carrier. Lan 

Ecuador also cited waivers we have granted in cases involving Aerovias Nacionales 

Ecuatorianas, S.A. (Docket OST-95-7 13); and Air Aruba, N.V. (Order 99-3-2 1) to 

support its waiver request.

Decision

We have decided to grant the exemption request of Lan Ecuador. We 

find that the authority requested is provided for in our bilateral 

aviation agreement with Ecuador. We will also grant the request of Lan 

Chile for a statement of authorization to wet lease aircraft to Lan 

Ecuador in the conduct of its authorized services.7 The authorities 

granted will be effective for one year from the service date of this 

order.8

The record before us shows that Lan Ecuador has significantly altered 

its ownership and control structure from that of its previous 

application. Instead of ultimate 100% Chilean ownership, the carrier is 

now ultimately 52.5% owned by Ecuadorian citizens. Concerning its 

management structure, when we took our action in Order 2002-12-15, 

the record showed virtually no influence on the day-to-day operations 

of the carrier by homeland nationals; now there appears to be almost 

total control by Ecuadorian citizens, none of whom are or has been 

affiliated with Lan Chile.9

Based on the changes to Lan Ecuador’s ownership and management 

noted above, particularly when viewed in light of the bilaterallyprovided-for nature of the Lan Ecuador route authority in question, the 

open-skies regime governing U.S.-Chile aviation relations, and our 

established ownership precedents,10 we conclude that there is nothing 

in the ownership and control of Lan Ecuador that would be inimical to 

U.S. aviation policy or interests. We therefore find that grant to the 

carrier of a waiver of our ownership and control standard is 

warranted.11
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7 Because Ecuador is currently a Category 2 country under the FAA’s International 

Aviation Safety Assessment (IASA) program, we will make the authority granted Lan 

Ecuador subject to an operational condition that it wet lease aircraft from a duly 

authorized and properly supervised U.S. or foreign air carrier.

8 We note that Lan Ecuador and Lan Chile each sought authority for a two-year 

period. However, as is our usual practice in conferring authority in the circumstances 

presented, we are limiting the term of authority for each carrier to one year. Lan 

Ecuador and Lan Chile may, of course, seek renewal of these authorities in 

accordance with the Department”s regulations.

9 We also find that Lan Ecuador is properly licensed and designated by the 

Government of Ecuador to perform the proposed services and is financially and 

operationally qualified, subject to the wet lease condition noted above, to conduct 

the proposed services. The carrier has experienced management and appears 

financially sound.

10 See, e.g., Notice of Action Taken dated November 22,2002, Docket OST-2002-

13608, granting TACA Ecuador exemption authority.

11 We also find that the record before us contains sufficient information on Lan 

Ecuador’s ownership and control to permit us to proceed without further 

investigation.”

As noted above, in the instant application the “substantial ownership”

condition does not apply; however the “effective control” condition is 

applicable – and, absent changes similar to those made by Lan 

Ecuador prior to its second application, AirOne must be considered to 

fail to meet the “effective control” condition – with a similar result.

AirOne, like Lan Ecuador in its initial application has only one national 

on its Board of Directors. In the initial Lan Ecuador application all four 

key management positions were held by non nationals – likewise in the 

case of AirOne all key management positions are held by non 

nationals.

The Department‟s conclusions in the initial Lan Ecuador application are 

equally applicable to this AirOne application: “The record also clearly 

demonstrates that the management structure is characterized by the 

presence of non national rather than national influence in the day-today operations and decision making of the company.”

The facts in the two cases are the same: the same bilateral, the same

domination of the Board of Directors and management structure by 

non nationals. The facts being the same it would be my submission 

that the Department‟s conclusion should be the same unless and until 

AirOne modifies the structure of its Board of Directors and 
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management and that of the Board of Directors of AirOne Holdings – if 

it is similarly controlled by non nationals of AirOne‟s homeland.

It was those modifications and those modifications alone that caused 

the Department to grant the second Lan Ecuador application – no 

other material changes having occurred in the interim on the record of 

the application. Accordingly the Department, in my submission, should 

reach the same conclusion on the facts of the instant application.

The Applicant in its argument in support of its Waiver Application cites 

certain precedents, in addition to those considered by the Department 

in the Lan Ecuador cases, namely; Premiair, Lan Argentina and Trans 

Latin.

In the Premiair case (Docket OST-97-2167 – Notice of Action Taken : 

May 14, 1997) the requested waiver of the ownership and control 

requirements was by a Danish carrier and involved charter operations. 

Denmark, Premiair‟s homeland, was an Open Skies partner of the US 

under the Denmark/Norway/Sweden ATA. Moreover the action was 

taken over five years prior to the first Lan Ecuador case. For those 

reasons it has no application in the instant case.

In the Lan Argentina case (NOTICE OF ACTION TAKEN - DOCKET OST2005-22140 : September 30, 2005) 95 percent of its shares were

owned by the Argentine company Sociedad Inversora Cordillera S.A., 

which itself was owned 5 I percent by Argentine interests and 49 

percent by Chilean interests. The President and two of three of the 

airline‟s Board of Directors were homeland nationals and both 

Argentina and Chile (the non homeland element in the ownership and 

control structure) were Open Skies partners of the US.

This substantial homeland control at the Board of Director and 

management level distinguishes this case from the instant case.

In the Trans Latin case (DOCKET– OST–1993-48425 Order 93-2-12 : 

February 4, 1993) 52 percent of its capital stock, and the majority of 

its key management positions are held by Panamanian citizens -

neither of which is present in the instant case. The case also predates 

the Open Skies era – the first such agreement being with the 

Netherlands in 1992 and the next with several related European states 

in 1995.
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The applicant in support of its request for a waiver cites the case of the 

designation by Barbados of Air Jamaica as a Barbados carrier which 

was accepted by the Department without an ownership and control 

waiver, indeed, without any comment and a Permit Exemption was 

granted. Docket DOT-OST-2007-28221 Notice of Action Taken : May 

23, 2007. (The Application was filed on May 10, 2007).

Jamaica had been an Open Skies partner of the US for five years as at

the time the Permit Exemption Application was made.

In this Air Jamaica case the diplomatic note in which it was designated 

by Barbados as a Barbados carrier drew the attention of the US 

authorities to the membership of both Jamaica and Barbados in the 

Caribbean Community and asked the US authorities “to recall 

Paragraph 3 of Section II (Co-operation in Regulatory Arrangements) 

of the International Civil Aviation Organisation (ICAO) Resolution 

A35.18 entitled “Consolidated Statement of Continuing ICAO Policies in 

the air transport field” whereby the ICAO calls upon the Contracting 

States of ICAO to recognise the designation of an airline of a 

developing state which is substantially owned and effectively controlled 

by another developing state or nationals of that state within the same 

regional and economic grouping to exercise route and other air 

transport rights on behalf of the developing state.

It is on this basis that the Ministry urges the Aeronautical Authorities 

of the United States of America to give early and favourable 

consideration to this request to enable Air Jamaica Limited to engage 

in the services as provided for in paragraph 2 of Article 3 of the Air 

Services Agreement.”

This ICAO Resolution while non binding in nature is nevertheless both 

significant and persuasive; particularly in the absence of any 

conflicting substantive policies or factors having a clear priority.

On that basis the grant of the requested Exemption to Air Jamaica as a 

Barbados designated airline without a waiver is unexceptional and 

consistent with the international obligations of the US and not a 

precedent for broader application. 

For all the foregoing reasons it is submitted that based on the record 

the Department should not find that AirOne is “effectively controlled”

by homeland nationals – a requirement of the US - Barbados bilateral

(see Lan Ecuador decisions).
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A finding that the grant of the Waiver Application would not be inimical 

to U.S. aviation policy or interests is however open to the Department 

despite the lack of effective control by homeland nationals.

While the grant of an ownership and control waiver in such control 

circumstances raises the spectre of “flags of convenience” down the 

road in the international airline industry, it is nevertheless within the 

Department‟s discretion and is not a matter on which I am qualified to 

express an opinion.

If the Department chooses to grant the AirOne Waiver Application on 

that basis I would not be opposed provided such a grant is recognised 

as being a precedent for approval of future similar applications with 

respect to the level of non homeland control present here.

5. The Incompleteness of the AirOne Application

On May 24 I contacted the Department with a “procedural question”:

“Is it the normal procedure for the Department to take steps to ensure 

that an Application is complete with respect to the requirements of 14 

CFR 211.20 or are interested Parties required to request such 

completion by Motion under 14 CFR 302.11?

While my concern relates principally to the incomplete nature of the 

application with respect to 14 CFR 211 (k), (n) and (p), a check list 

approach to 211.20 will reveal other missing elements.”

Since no response has been forthcoming from the Department and the 

deadline for Answers to the Application is approaching I will in this 

Answer raise my concerns that the Applicant has not provided all the 

information mandated by 14 CFR § 211.20, information which is 

material to a determination of the merits of its Permit Exemption 

Application and that as an incomplete application it should be neither 

considered further nor granted until all the required information has 

been filed and interested parties given an opportunity to comment 

thereon.

The Department in its Foreign Air Carrier InfoPak makes the evidence 

requirements for Permit Exemptions clear: “Although Part 211 refers to 

applications for foreign air carrier permits, the same evidentiary 
17

information is required of foreign carriers seeking exemption 

authority.”

The evidentiary requirements for an initial foreign air carrier permit 

(and initial exemption applications) are set forth in 14 CFR §211.20 as 

follows:

“§211.20 Initial foreign air carrier permit or transfer of a permit 

A person applying for an initial foreign air carrier permit or the transfer 

of a permit shall submit the information listed below. The applicant 

must fully comply with this requirement. If the applicant is unable to 

respond to an item, the application shall contain an explanation, and 

include substitute information most closely approximating the 

information requested. The Department may require an applicant to 

provide additional information as necessary.”

This requirement is mandatory and specifically states that an applicant 

“must fully comply with this requirement.”

In this case the Applicant has not fully complied with this requirement 

and its application is therefore incomplete and ineligible for further 

consideration until complete.

Without specifying all of the omissions from the information required 

by 14 CFR §211.20 I will highlight the few that are of the most concern 

to an individual attempting to assess the merits of the application.

These latter omissions relate to 14 CFR §211.20 (c) (ii), (k), (n) and 

(p) – the material omitted by the applicant is highlighted in bold.

“14 CFR §211.20

(c) Supply the following information regarding the services proposed:

(ii) The frequency of service planned at the start of operations, 

indicating any seasonal variations; whether the service proposed is 

scheduled, non-scheduled, or charter; whether the service would be 

passenger, or property and mail, or a combination; and the type of 

equipment (and configuration) to be used; and

“(k) Provide a list of the aircraft owned, leased and operated by the 

applicant. State each aircraft registration number and the country of 
18

registration. If leased, state the address and citizenship of each lessor. 

Describe any plans for the acquisition or lease of additional 

aircraft if the present permit application is granted as 

proposed. If any of the listed aircraft will not be used exclusively by 

the applicant, explain its proposed use. State whether any aircraft are 

or will be wet-leased.

(n) Supply financial data summaries, setting forth in U.S. 

dollars the applicant’s profit and loss statements and balance 

sheets for the 2 most recent available years (calendar or 

fiscal). These summaries must be accompanied by a statement 

from the applicant’s official responsible for preparation of the 

summaries that the submissions are complete and accurate.

These summaries must include the following data, but need not be 

more detailed than the financial data summaries published by ICAO:

(1) The profit and loss summary shall identify:

(i) Total air transport operating revenues (separated into three 

categories: passenger, cargo, and other transport revenues);

(ii) Total air transport operating expenses;

(iii) Operating result (difference between (i) and (ii));

(iv) Non-operating items; and

(v) Profit or loss after income taxes.

(2) The balance sheet summary shall state and identify:

(i) Current assets;

(ii) Flight equipment (after depreciation);

(iii) Other Assets;

(iv) Total assets (sum of (i) through (iii);

(v) Current liabilities;

(vi) Other liabilities;

(vii) Long-term debt;

(viii) Capital stock;

(ix) Retained earnings (balance including capital surplus); and

(x) Total liabilities and equity (sum of (v) through

(ix)).

.

(p) Submit an estimate showing the total traffic and the

financial results of the proposed services for the first fullyear of 

normal operations and the supporting data employed to 

calculate the financial forecast.”
19

With respect to (c) no frequency of service is indicated (other than 

daily, non stop – does this mean once a day or more than once).

With respect to the omitted information in (p) the applicant does not 

indicate the number of aircraft required for the service initially or as 

intended to be developed. Indeed it only describes the generic aircraft 

type to be used, its passenger configuration and the nature of the 

lease arrangement.

With respect to (n) no actual Financial Statements are provided.

With respect to (p) the applicant has provided only Exhibit E which is 

stated to be “a pro forma financial statement for AirOne’s first year of 

operation.” It is not clear whether this is for AirOne‟s first year of 

operations (which it states will also involve service on intra Caribbean 

routes) or just for its first year of operations on the Barbados – Fort 

Lauderdale route. Further “no supporting data employed to calculate”

the pro forma forecast has been provided – precluding assessment.

In my submission this renders the application incomplete and ineligible 

for further consideration until completed as required by 14 CFR §211.

6. Standards Applicable to Initial Permit or Exemption Applications

A final issue that I believe to be germane to the consideration of the 

AirOne Permit Exemption Application is the standard to be applied in 

the determination of operational and financial fitness.

The Department‟s Foreign Air Carrier InfoPak sets out the factors it 

considers in making its fitness assessments as follows:

“While the overall standard we use in considering foreign air carrier 

applications is a public interest test, there are a number of factors we 

consider in reaching this public interest determination:

......................................

· whether the air carrier is operationally and financially fit and has a 

positive compliance disposition.

Here we look at whether the air carrier has experienced management, 

and whether its operating plan and financing appear reasonable. In 

this context, we are looking primarily at economic fitness, that is, 

whether the air carrier will be in a position to conduct its proposed 
20

operations without putting U.S. passengers’ and shippers’ funds at 

risk;”

I would submit that the standards to be applied, particularly in the 

case of start up carriers, should not be of a lesser standard than the 

standards applied to a US applicant for a certificate for foreign air 

transportation authority under 49 USC § 41102.

A lesser financial and operational standard unfairly prejudices 

potentially competitive US applicants for similar services – a prejudice 

made the more serious by the fast track exemption authority 

procedure available to a foreign applicant but not to a US applicant for 

similar but US based authority.

In both the financial and operational fitness assessments the nature 

and purpose are the same : safety and “whether the air carrier will be 

in a position to conduct its proposed operations without putting U.S. 

passengers’ and shippers’ funds at risk”. 

As an example, one financial requirement a US applicant must meet is 

for foreign air transportation authority is specified in the Certificated 

Air Carrier InfoPak as follows:

“This information will be used to assess the financial position of the 

applicant, whether the applicant has a reasonable understanding of the 

costs of starting and conducting its operations, and whether it has 

access to the capital required to commence operations. Before being 

granted an effective certificate, an applicant must provide 

independent, third-party verification that it has available to it 

resources (e.g., cash, lines-of-credit, or bank loans) sufficient to cover 

all of its pre-operating costs (i.e., all of the costs incurred prior to the

actual commencement of flight operations) plus the operating 

expenses that are reasonably projected to be incurred by the applicant 

during three months of “normal” operations. In determining available 

resources, projected revenues cannot be included.”

It is my submission that the rationale for this requirement of a US 

applicant, if valid, is equally valid, for the same reasons, with respect 

to foreign applicants – particularly initial applicants for discretionary 

fast track exemptions under 49 U.S.C. § 40109(c) as in this case, and 

as a consequence should be equally applied.
21

Providing more lenient conditions for the grant of foreign air 

transportation economic authority to foreign carriers than US carriers, 

both as to the time required to secure such authority and the criteria 

for the assessment of operating and financial fitness, will both 

discourage potential US applicants in competitive situations with 

foreign applicants and encourage US based applicants to become 

foreign applicants to take advantage of the more favourable treatment 

given to such applicants by the Department.

Respectfully submitted electronically this 1st day of June, 2010

at the City of Montreal, Province of Quebec, Canada by and on 

behalf of John Gilmore.

/s/ John P.T. Gilmore

_____________________

John P.T. Gilmore

205 – 4250 St. Ambroise

Montreal, Quebec

Canada H4C 3R4

Telephone: 514 716 7665

E-Mail : jptgilmore@hotmail.com
22

CERTIFICATE OF SERVICE

I hereby certify that on this 1st day of June, 2010, a copy of this 

Certificate of Service and of my foregoing Answer to the May 17, 2010 

Application of AirOne Ventures Limited For An Exemption Under 49 

U.S.C. § 40109(c) (U.S.- Barbados) Docket DOT-OST-2010-0134 was 

served by electronic mail :

On the Attorneys for the Applicant at

charles.hunnicutt@troutmansanders.com; 

pat.snyder7@verizon.net; and,

brent.connor@troutmansanders.com; 

on the Chairman of AirOne Ventures Limited at ian.burns@airone.ie; 

on George Wellington of the US Department of Transportation at 

george.wellington@dot.gov; and,

on each of the persons named below per the Service List provided by 

the Applicant.

/s/ John P.T. Gilmore

_______________________________

John P.T. Gilmore

205 – 4250 St. Ambroise

Montreal, Quebec

Canada H4C 3R4

Telephone: 514 716 7665

E-Mail : jptgilmore@hotmail.com

carl.nelson@aa.com; 

sascha.vanderbellen@nwa.com; 

sametta.c.barnett@delta.com; 

goodchild2518@rogers.com; 

howard_kass@usairways.com; 

benjamin.slocum@usairways.com; 

joanna.geraghty@jetblue.com; 

robert.land@jetblue.com; 

contactfll@broward.org;