UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on June 30 , 20 1 4



### NOTICE OF ACTION TAKEN

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________________________ ________________________________________________________________________ ________ 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 Applicant s : CHINA EASTERN AIRLINES CORPORATION LTD. (China Eastern); and VIRGIN AMERICA INC. (Virgin America)

Date Filed: June 17, 2014

Relief requested: E xemption under 49 USC § 4 0109 to permit China Eastern to engage in scheduled foreign air transportation of persons, property and mail on a code share only basis with Virgin America between points in the

United States

. The applicant requests that the authority be granted for a period of two years.

B lanket statement of authorizatio n under 14 CFR Part 212 permitting Virgin America to display China Eastern’s “MU” designator code on flights operated by Virgin America between any points in the United States, in conjunction with foreign air transportation of persons, property, and mail h eld out by China Eastern between China and the United

States.

The joint applicants further request a waiver of the 45

- day advance filing requirement under 14 CFR Part 212. 1

Applicant representative s : Evelyn D. Sahr and Drew M. Derco (China Eastern)

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- 6600; and Malcolm L. Benge and Jonathon H. Foglia (Virgin America) 202

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DOT ana lyst: Brett D. Kruger

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Responsive pleadings: None

.

DISPOSITION

Action: Approved in part, remainder (request for longer

- term exemption authority) dismissed

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Action date: June 30 , 2014 3

Effective dates of authority granted: The exemption authority granted to China Eastern is effective June 30 , 2014

, through June 30 , 2015

.

The statement of authorization granted to Virgin America is effe ctive June 30 , 2014, and will remain in effect indefinitely, subject to conditions.

Basis for approval (bil ateral agreement/reciprocity): The authority granted is consistent with the aviation agreement between the United States and the People’s Republic o f China.

1 The joint applicants filed a motion requesting confidential treatment of their unredacted C odeshare A greement under 14 CFR §302.12. We will grant the motion.

2 The one

- year duration of the exemption authority we granted China Eastern is consistent with our usual policy of granting

e xemption authority in the circumstances presented. We therefore dismissed the application to the extent that it sought authority for a longer period.

3 We acted on this application without awaiting expiration of the answer period with the consent of all p arties served.Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our standard exemption conditions (attached as Appendix A ) ; the code

- share conditions (attached as Appendix B); and to the

otherwise

- appl icable terms, conditions, and limitations of China Eastern’s foreign air carrier permit (Order 92

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- 7).

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 s w ere qualified to perform their proposed operations; (3 ) grant of the authority was consistent with the public interest; and (4) grant of the authority would not constitute a major regulatory action under the Energy Poli cy and Conservation Act of 1975. To the extent not granted/deferred/dismissed, we denied a ll requests in the referenced Docke ts

. We may amend, modify, or revoke the 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 within seven (7) days after the date of issuance of this Notice. This action was effec tive when taken, and the filing of a petition for review will not alter such effectiveness.

An e lectronic version of this document is available on the World Wide Web at: http://www.regulations.gov

### APPENDIX A Foreign Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carr ier 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 requirem ents of the Federal Aviation Administration, the Transportation Security Administration, and with all applicable U.S. Government 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 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 departur e 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

dete rmined 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 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 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 requirements of its Government for internation al 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 op erations 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" means "international transportation" as defi ned 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 Sta tes 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 required by the public interest as may be prescribed by the Department, with all ap plicable 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.

1 2/2007APPENDIX B

The code

- share operations authorized here are subject to the following conditions:

(a) The state ment of authorization will remain in effect only as long as (i) China Eastern and Virgin America 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) China Eastern and/or Virgin America 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 iden tify the market(s) t o be served and the date on which the service will begin. Such notice should be filed in Docket DOT

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(c ) China Eastern and/or Virgin America must promptly notify the Department if the code

- share agreement providing

for the code

- share opera tions is no longer effective or if the carriers decide to cease operating all or a portion of the approved code

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

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(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

- share arrangements that may be adopted. Notwithstanding any provisions in the contract between the carriers, our approval here is expressly conditioned upon

th e requirements that the subject foreign air transportation be sold in the name of the carrier holding out such service in the computer reservation systems and elsewhere; that the carrier selling such transportation ( i.e., the carrier shown on the ticket) a ccept responsibility for the entirety of the code

- share journey for all obligations established in its contract of carriage with the passenger; and that the passenger liability of the operating carrier be unaffected

.

(e) The authority granted here is spec ifically conditioned so that neither China Eastern nor Virgin America shall give any force or effect to any 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.

4 See Appendix C for a list of initial code

- share points.

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

- effectiveness or of such decision.APPENDIX C



### List of Initial Code

- Share Routes

Display of China Eastern's "MU" Designator Code on Virgin America Operated Flights

From/To Los Angeles, California (LAX)

Boston, Massachusetts (BOS) Dallas Love Field, Texas (DAL) Dallas/Fort Worth, Texas (DFW) Fort Lauderdale, Florida (FLL) New York, New York (JFK) Las Vegas, Nevada (LAS) Chicago, Illinois (ORD) Seattle, Washington (SEA)

From/To San Francisco, California (SFO)

Dallas Love Field, Texas (DAL)

Dallas/For t Worth, Texas (DFW) Newark, New Jersey (EWR) Washington, D.C. (IAD) New York, New York (JFK) Las Vegas, Nevada (LAS) Los Angeles, California (LAX) Chicago, Illinois (ORD) Seattle, Washington (SEA) San Diego, California (SAN)