Order 2013

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23 rd day of January , 20 1 3

Served: January 23, 2013

Application of

JSC ORENBURG AIRLINES D / B / A ORENAIR Docket DOT

- OST

- 20 12

- 01 97

for an exemption u nder 49 U.S.C. §40109 and a foreign air carrier permit under 49 U.S.C. §41301

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By this order we (1) grant the application of the referenced foreign air carrier for an exemption under 49 U.S.C. §40109, subject to conditions; 1 and (2) tentatively find that it is in the public interest to grant the applicant the foreign air carrier permit attached as Appendix B to this

order.

Background

On August 23, 2005, the Department issued a Notice, in Docket DOT

- OST

- 2005

- 22228, announcing several steps designed to streamline our regulatory procedures for licensing U.S. and foreig n air carriers. Among other things, the Notice stated that:

Assuming, based on the record and on the public interest/public convenience and necessity elements germane to our licensing decisions, that we were in a position to act favorably, we would proce ed to issue a single order (1) granting the exemption request for whatever duration we would normally have imposed, or until certificate/permit authority becomes effective, whichever is shorter, and (2)

1 The conditions are attached as Appendix A.2 tentatively deciding ( i.e. , show

- cause) to award a co rresponding certificate (or permit), again for the standard duration we would normally have imposed (such as, in the case of certificates, five years for limited

- entry markets, indefinite for open

entry markets, and in the case of permits, five years for c omity and reciprocity regimes, indefinite for agreement regimes).

Our action in this Order serves to implement these streamlined regulatory procedures for the application involved in this proceeding.

Application

By ap plication filed November 20 , 2012

, J SC Orenburg Airlines d/b/a Orenair ( Orenair ) , a foreign air carrier of the Russian Federation, requests an exemption under 49 U.S.C. §4 0109 and a foreign air carrier permit under 49 U.S.C. §41301 to engage in (1) charter foreign air transportation of perso ns, property

, and mail between point (s) in the Russian Federation and point (s) in the United States ; and (2) other charter operations subject to the terms, conditions,

and limitations of 14 CFR P art 212 and pertinent national, bilateral and international laws and regulations

.

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to support its requests for authority.

No answers were filed to the application.

Decision

We have decided, under assigned authority and co nsistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for exemption authority, subject to conditions, and tentatively to grant, subject to show

- cause procedures, its request for a foreign air carrier permit, also subje ct to conditions.

With respect to the applicant’s request for exemption authority, we find that grant of this authority is consistent with the public interest; that the applicant has demonstrated, based on the record, that it is financially and operationa lly qualified to perform the services authorized ; and that it is substantially owned and effectively controlled by citizens of its claimed homeland

. 2

2 The applicant states that 100% of its stock is held by Russian citizens and that it is wholly

- owned by Joint Stock Company “Aeroflot

– Russian Airlines” (Aerof lot), a licensed foreign air carrier of the Russian Federation. In

turn, t he record indicates that approximately 67.5% of Aeroflot’s reported s hares is held by private and government entities of the Russian Federation, with the remaining 32.5% of its shar es held by shareholders with less than a 5% ownership interest. The record further indicates that Orenair ’s General Director, Board Members, and key management personnel are all Russian Citizens.3 The authority sought by the applicant is encompassed by the 1994 Air Transport Agreement

between the Un ited States and the Russian Federation. 3 We therefore find that grant of the requested exemption authority, for a one

- year term, or until the requested permit authority becomes effective, whichever occurs earlier, is warranted.

We also note that the appl icant is properly licensed by its homeland to perform the proposed services. In addition, on January 14, 2013, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the applicant’s request. We have

veri fied the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

Finally, in the conduct of the charter services authorized and tentatively authorized herein,

Orenair must adhere to (1) the conditions atta ched to this order; (2) FAA

- approved flight routings; and (3) the Air Transport Agreement between the United States and the Russian Federation, including its Annexes. In accordance with 14 CFR §212.9(d) and (e) of the Department’s rules, Orenair shall not perform any charter(s) unless specific authority in the form of a statement of authorization for such charter(s) has been granted by the Department. Applications for the statements of authorization required above shall be filed in accordance with the pro cedures set forth in 14 CFR §212.10.

Tentative Findings and Conclusions

-- Foreign Air Carrier Permit Application

We tentatively find and conclude that the public interest warrants granting the applicant a foreign air carrier permit, in the form attached a s Appendix B and subject to the conditions

described above and the conditions attached. 4 In particular, we tentatively find and conclude that the factors which support our grant of exemption authority to the applicant also warrant granting the applicant t he foreign air carrier permits it seeks.

In view of the foregoing and all facts of record, we tentatively find and conclude that:

1. It is in the public interest to issue the applicant a foreign air carrier permit in the form attached;

3 On February 13, 2009, the United States and the Russian Federation agreed, ad referendum , to revised Annexes

to the U.S.

- Russia Air Transport Agreement and stated that, pending their entry force, their respective aeronautical authorities intend to implement the provisions of those Annexes on the basis of comity and reciprocity.

4 The applicant’s request for a foreign air carrier permit was summarized in the Department’s published weekly list of applications filed. This notice described the authority sought and gave interested persons an opportunity to

submit evidence and objections to the award of this foreign air carrier permit authority. As noted above, no answers to the application were filed.4 2. The applican t is fit, willing

, and able properly to perform the foreign air transportation described in the attached permit and to conform to the provisions of Title 49 of the U.S. Code, and to our rules, regulations, and requirements;

3. The applicant is substantia lly owned and effectively controlled by citizens of its claimed

homeland ;

4. The public interest requires that the exercise of the privileges granted by the permit should be subject to the terms, conditions, and limitations contained in the attached perm it, and to such other reasonable terms, conditions, and limitations required by the public interest as we may prescribe;

5. The issuance of this foreign air carrier permit will not constitute a major regulatory action under the Energy Policy and Conserva tion Act of 1975, as defined in 14 CFR §313.4(a)(1) of our regulations; 5

6. The public interest does not require an oral evidentiary hearing on the application; and

7. Our action with respect to this foreign air carrier permit should, unless disapprov ed by the President of the United States under §41307 of Title 49 of the U.S. Code, become effective on the 61st day after its submission for §41307 review, or upon the date of receipt of advice from the President or his designee under Executive Order 1259 7 and implementing regulations that he or she does not intend to disapprove this portion of the Department’s decision under that section, whichever occurs earlier.

In view of the above, and acting under authority assigned by the Department in its regulati ons, 14 CFR Part 385, we find that (1) our actions are consistent with Department policy; and (2) with respect to the exemption authority we are conferring on the applicant, the applicant is qualified to perform those operations; and that grant of the exem ption authority is consistent with the public interest and would not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of JSC Orenburg Airlines d/b/a Orenair for an exemptio n under 49

U.S.C. § 40109 to permit it to engage in (1) charter foreign air transportation of persons, property

, and mail between any point or points in the Russian Federation and any point or points in the United States ; and (2) other charters in accordanc e with 14 CFR Part 212 of the Department’s regulations ;

2. The exercise of the privileges granted above is subject to JSC Orenburg Airlines d/b/a

Orenair’s compliance with the conditions listed in Appendix A, and to the conditions that, in

5 This finding is based on the fact that the grant of this permit will not result in a near

- term net annual chang e in aircraft fuel consumption of 10 million gallons or more.5 the conduct of the charter services authorized herein, JSC Orenburg Airlines d/b/a Orenair must adhere to (1) FAA

- approved flight routings; and (2) the Air Transport Agreement between the United States and the Russian Federation, including its Annexes. In accordance

wi th 14 CFR §212.9(d) and (e) of the Department’s rules, JSC Orenburg Airlines d/b/a

Orenair shall not perform an y charter(s) unless specific authority in the form of a statement of authorization for such charter(s) has been granted by the Department. Appli cations for statements of authorization required above shall be filed in accordance with the procedures set

forth in 14 CFR §212.10 ;

3 . Our action granting the exemption authority described herein is effective immediately, for a period of one year from t he issue date of this order, or until the attached permit becomes effective, whichever is earlier;

4 . We may amend, modify, or revoke the exemption authority set forth herein at our discretion at any time and without hearing;

5 . To the extent not acted upon above, we dismiss all requests for exemption authority in this

Docket ( DOT

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- 20 12

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6 . With respect to the applicant’s request for a foreign air carrier permit in this proceeding, we direct all interested persons to show cause why our tentat ive decision on that application, set forth above, should not be made final;

7 . Any interested person objecting to the issuance of an order making final our tentative findings and conclusions with respect to the applicant’s request for a foreign air carr ier permit shall, no later than twenty

- one (21) calendar days after the date of service of this order, file with the Department and serve on the parties to this proceeding, a statement of objections specifying the part or parts of the tentative findings an d conclusions objected to, together with a summary of testimony, statistical data, and concrete evidence to be relied upon in support of the objections; if objections are filed, answers to objections are due no later than seven (7) calendar days thereafter ;

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. If timely and properly supported objections are filed, we will give further consideration to the matters and issues raised by the objections before we take further action;

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. In the event no objections are filed, all further procedural steps shall be deemed waived, and the Department will enter an order which will (subject to Presidential review under §41307 of Title 49 of the U.S. Code) make final our tentative findings and conclusions set forth in this order; and

1 0 . We will serve a copy of this order on JSC Orenburg Airlines d/b/a Orenair

, the Embassy of the Russian Federation in Washington, D.C., the Federal Aviation Administration, and the U.S. Department of State

.6 Persons entitled to petition the Department for review of this order under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this order. Our action with respect to the applicant’s request for exemption authority under 49 U.S.C. §40109 is effective immediately, and the filing of a petition for

review will not alter such effectiveness.

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govForeign Carrier Exemption Conditions Appendix A

In the conduct of the operations authorized, the foreign carrier applicant(s) shall:

(1) Not conduct any operations unless it holds a c urrently 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

Adm inistration, 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 requir ements 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 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, 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 Avi ation 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 saf ety requirements at least equivalent to Annex 6 of the Chicago Convention;

(5) Conform to the airworthiness 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 ca rriage, 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 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, concernin g 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 a nd 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 applic able 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

a pproval under Title 49 of the U.S. Code.

1 2/2007Appendix B

Issued by

Order 20 1 3

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



### -------------------------------------------------------- PERMIT TO FOREIGN AIR CARRIER



### ------------ ---------------------------------------------



### JSC ORENBURG AIRLINES D / B / A ORENAIR

A Foreign Air Carrier of the Russian Federation

is authorized, subject to the following provisions, the provisions of Title 49 of the U.S. Code, and the orders, rules, and regulations of the Department of Transportation, to engage in charter foreign air transportation of persons, property

, and mail as follows:

B etween any point or points in the Russian Federation and any point or points in the United

States

.

The holder sh all also be authorized to engage in other charter trips in foreign air transportation, subject to the terms, conditions, and limitations of the Department’s regulations governing charters.

This permit and the exercise of the privileges granted in it shall be subject to the terms, conditions and limitations in both the order issuing this permit and the attachment to this order, and to all applicable provisions of any treaty, convention or agreement affecting international air transportation now in effect,

o r that may become effective during the period this permit remains in effect, to which the United States and the holder’s homeland are or shall become parties.

This permit shall be effective on

________ , 20 1 3 . Unless otherwise terminated at an earlier dat e pursuant to the terms of any applicable treaty, convention or agreement, this permit shall terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2) upon the effective date of any treaty, convention, or agreement or amend ment, which shall have the effect of eliminating the bilateral right for the service authorized by this permit from the service which may be operated by airlines designated by the Government of the Russian Federation (or, if the right is partially eliminat ed, then the authority of this permit shall terminate in like part); (3) upon the effective date of any permit granted by the Department to any other carrier designated by the Government of the Russian Federation in lieu of the holder; or (4) upon the term ination or expiration of the applicable air services agreement between the United States and

the Russia n Federation . However, clause (4) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transportation authorize d herein becomes the subject of another treaty, convention or agreement to which the United States and the Russia n Federation become parties.The Department of Transportation has executed this permit and affixed its seal on

______ , 20 12

.

By:

PAUL L. GRETCH

Director

Office of International Aviation 

### (SEAL)Foreign Carrier Permit 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 authoriza tion 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 ap plicable 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 departure for the United States, contact its International Industry Representative (IIR) (formerly referred to a s International Principal Security Inspector) to advise the IIR 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 requiremen ts 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 Prog ram 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

e quivalent to Annex 6 of the Chicago Convention;

(5) Conform to the airworthiness and airman competency requirements of its Government for international air services;

(6) Except as specifically exempted or otherwise provided for in a Department Order, com ply 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 w ith 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 "international air transportation" means "international transportation" as defined by the Warsaw Convention, except that all States shall be considered to be High Contracting Parties for th e 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 schedule d, 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 w ith 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 Sta tes.

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 t he U.S. Code.

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