BEFORE THE
DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_________________________________________ ) Application of ) ) STRATEGIC AIRLINES PTY LTD ) ) DOCKET DOT-OST-2011- for a Foreign Air Carrier Permit pursuant ) to 49 U.S.C. § 41301 and exemption ) authority pursuant to 49 U.S.C. § 40109 ) (Australia-U.S. scheduled and charter) ) _________________________________________ )

APPLICATION OF STRATEGIC AIRLINES PTY LTD
FOR A FOREIGN AIR CARRIER PERMIT

AND AN EXEMPTION

Communications with respect to this document should be sent to:

John R. Mietus, Jr. Law Office of John Mietus, LLC 6701 Democracy Blvd., Suite 300 Bethesda, MD 20817-7500 (202) 747-5212 - Telephone (240) 396-5362 - Fax john@mietuslaw.com
Counsel for STRATEGIC AIRLINES

PTY LTD

NOTICE: Any person may support or oppose this application by filing an answer and serving a copy of the answer on counsel for Strategic Airlines and upon persons served with this application. Answers to the exemption application are due June 20, 2011 and answers to the permit application are due June 24, 2011.

June 3, 2011BEFORE THE
DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_________________________________________ ) Application of ) ) STRATEGIC AIRLINES PTY LTD ) ) DOCKET DOT-OST-2011- for a Foreign Air Carrier Permit pursuant ) June 3, 2011 to 49 U.S.C. § 41301 and exemption ) authority pursuant to 49 U.S.C. § 40109 ) (Australia-U.S. scheduled and charter) ) _________________________________________ )

APPLICATION OF STRATEGIC AIRLINES PTY LTD
FOR A FOREIGN AIR CARRIER PERMIT

AND AN EXEMPTION

Pursuant to 49 U.S.C. § 41301, Part 211 of the Department's Economic

Regulations, and the August 26, 2005 "Streamlining" Notice in Docket OST2005-22228, Strategic Airlines Pty Ltd ("Strategic Airlines") requests that the

Department issue a foreign air carrier permit to enable Strategic Airlines,

consistent with the open skies, U.S.-Australia Air Transport Agreement

signed in 2008, to operate:

1) scheduled foreign air transportation of persons, property, and mail from points behind Australia, via Australia and intermediate points, to a point or points in the United States, and beyond;

2) scheduled all-cargo services between any point or points in the United States and any point or points in any third country or countries;

3) charter foreign air transportation of persons, property, and mail between any point or points in Australia and any point or points in the United States, and between any point or points in the United States and any point or points in third countries provided that, except with respect to cargo charters, such services constitute part of a continuous operation that includes service at aStrategic Airlines Permit and Exemption Application Page 2

point or points in Australia for the purpose of carrying local traffic between Australia and the United States; and

4) other charters in accordance with 14 C.F. R. Part 212.

Pursuant to 49 U.S.C. § 40109

, Strategic Airlines also requests: (1) exemption

authority, to the extent necessary and for an initial period of two years or

until the requested permit is issued

, to enable it to hold out and provide the

service described above; and (2) such additional or other relief as the

Department may deem necessary or appropriate.

In support of this application, Strategic Airlines provides the

information required by 14 C.F.R. § 211.20 in the Exhibits attached to this

application and states as follows:

1. Strategic Airlines is an Australian flag carrier headquartered at

Brisbane Airport. It is wholly-owned by James Family Pty Ltd, an Australian

limited company created to benefit the company's Managing Director,

Michael James, and members of his family. Mr. James is an Australian

citizen, as ar e the other beneficiaries of James Family Pty Ltd, and almost all

the key personnel of Strategic Airlines are Australian citizens. Thus,

substantial ownership and effective control of Strategic Airlines rests with

Australian nationals.

2. Strategic Airlines is fit, willing, and able to provide scheduled and

charter foreign air transportation to and from the United States. Its key

personnel possess substantial business and aviation experience, and it hasStrategic Airlines Permit and Exemption Application Page 3

the financial resources necessary to serve the United States safely and

without undue risk to passengers.

3. The 2008 U.S.-Australia agreement authorizes open skies rights for

U.S. and Australian carriers. The Department has previously granted such

rights to Australian carriers , s ee, V Australia , Order 2009-9-18, and Qantas

,

Order 2008-8-17, and the Australian Embassy in Washington has designated

Strategic Airlines under that Agreement by note dated May 10, 2011.

4. Strategic Airlines' proposed operations, beginning with BrisbaneHonolulu scheduled service, will benefit the traveling public by providing

additional, competitive price and service options for U.S.-Australian air

transportation and otherwise are consistent with the public interest for the

reasons described herein. These operations will have a limited

environmental impact. 1 /

1 / Strategic Airlines estimates that its forecast U.S. operations would not result in a net change in fuel consumption of 10,000,000 gallons of fuel or more annually. Accordingly, issuance of the requested authority will not constitute a "major federal action significantly affecting the quality of the human environment" within the meaning of section 102(2)(c) of the National Environmental Policy Act or a "major regulatory action" under the Energy Policy and Conservation Act, as implemented in Part 313 of the Department's Regulations.Strategic Airlines
Exhibit 1

INFORMATION SUPPLIED PURSUANT
TO THE DEPARTMENT'S REGULATIONS

Strategic Airlines hereby supplies, in support of its application, the information required by the Department pursuant to 14 C.F.R. § 211.20.

(a) Name and address of applicant; form and country of organization.

Strategic Airlines Pty Ltd
5-7 Boronia Road
BRISBANE AIRPORT

, 4007
AUSTRALIA

Strategic Airlines is a proprietary company limited by shares registered under the Australian Corporations Act 2001. Its Australian Company
number is 131 128 571.

(b) Government air transport authority of applicant's homeland.

Economic and security regulatory authority is exercised by:

The Secretary Department of Infrastructure, Transport and Local Government
GPO Box 594 CANBERRA, ACT 2601
AUSTRALIA

Safety Regulatory authority is exercised by:

Chief Executive Officer Civil Aviation Safety Authority ("CASA") 16 Furzer Street, Philip CANBERRA, ACT 2606
AUSTRALIA

(c) Authority requested and proposed services.

Strategic Airlines requests authority, consistent with the U.S.-Australia open skies agreement, to conduct:Strategic Airlines
Exhibit 1 Page 2

1) scheduled foreign air transportation of persons, property, and mail from points behind Australia, via Australia and intermediate points, to a point or points in the United States, and beyond;

2) scheduled all-cargo services between any point or points in the United States and any point or points in any third country or countries;

3) charter foreign air transportation of persons, property, and mail between any point or points in Australia and any point or points in the United States, and between any point or points in the United States and any point or points in third countries provided that, except with respect to cargo charters, such services constitute part of a continuous operation that includes service at a point or points in Australia for the

purpose of carrying local traffic between Australia and the United States; and

4) other charters in accordance with 14 CFR Part 212.

Strategic Airlines also requests exemption authority to the extent necessary to enable it to hold out and provide the service described above pending issuance of a foreign air carrier permit and such additional or other relief as the Department may deem necessary or appropriate. Strategic Airlines requests that the Department process this application pursuant to the streamlined licensing procedures set forth in the Notice dated August 23,
2005 and issued in Docket OST- 2005 -22228. Therefore, Strategic Airlines requests that the Department issue a single order granting the requested exemption authority for a two-year period or until after the requested permit authority becomes effective, whichever occurs first, and proposing to grant the requested permit authority. See Jetstar Airways Pty. Limited , Order

2010-4- 18

.

Strategic Airlines intends to begin U.S. service with an Airbus A330-200aircraft operating regular passenger transport (scheduled), BrisbaneHonolulu flights.

(d) Names, addresses, citizenship, and experience of directors, officers, and key personnel of applicant.

The following individuals may be reached through the headquarters of Strategic Airlines at the address listed above, and none are related by bloodStrategic Airlines
Exhibit 1 Page 3

or marriage. Except as noted below, each person listed is a n Australian
citizen.

Michael James

– Managing Director Michael, a fully-rated commercial pilot, joined Strategic Aviation Pty Ltd in 2005 after more than ten years' experience with Ansett Aviation, where he rose within the Head Office Operations Department. With Strategic Aviation he was instrumental in acquiring and managing the operation of the
Australian Defence Force air charter contract. He became an executive director and equal shareholder in Strategic Aviation in 2006

, helped to diversify the Strategic brand into other aviation businesses, including the applicant, and recently purchased his business partner's interests in Strategic-branded enterprises.

David Blake

– Chief Executive Officer and Director
David is an accomplished pilot who has held senior management positions with several airlines both in Australia and Europe during his thirty years in the industry. His experience includes 10 years with Dan Air UK before working for British Airways, and he was a post holder with European Aviation Air Charter, which operated B747s to the United States. He is a
British citizen.

Clive Adams

– Chief Operations Officer (COO) Clive started his aviation career as a pilot with Ansett Airlines in 1982. He has over 17,000 hours flying and was a B737 inspector and captain. Following his departure from Ansett Airlines after 20 years, and further experience operating with other carriers world-wide, he stopped flying and attained a senior role with the Civil Aviation Safety Association (CASA) as Group General Manager of the Air Transport Operations Group before joining Strategic Airlines as COO.

Damien Vasta

– Chief Commercial Officer (CCO) Damien has a Business and Law Degree from the Queensland University of Technology and has held a variety of senior commercial positions in the private and public sector. He was also involved with the Queensland Government’s development of policies for airl ine economic regulation.

Marc Devine

– Chief Financial Officer Marc has over 11 years' experience as a Chief Financial Officer, five of which were with a highly respected construction management firm in the United Kingdom. On his return to Australia, he took up a senior finance position with a health care group that had the largest privately-owned hospital groupStrategic Airlines
Exhibit 1 Page 4

in Australia. More recently, Marc has set up his own boutique business advisory firm that assists businesses with performance improvement, restructuring and management consulting. He has a degree in accounting which he obtained at Griffith University in Queensland.

David Griffiths

– Head of Flight Operations Captain Griffiths has held a wide variety of Check, Training, and Senior Management positions with airlines around the globe, including operations in Australia, the South Pacific, the Middle East, Vietnam, Singapore, China, Sweden, France, Portugal, and Italy. David joined Strategic Airlines in 2009.

Stewart Tully

– Head of Network Operations Stewart’s aviation career started over 22 years ago with Ansett Australia

, and he has held a variety of operational positions, most recently as the Network Operations Manager with V Australia.

William Douglas Scott

– Safety Manager Doug Scott, a fully qualified commercial airline pilot, has logged over 17,000 total flying hours (12,000 in B737s) during his thirty years of aviation experience. He is also a lead investigator and a lead auditor and has headed the Strategic Airlines Safety Department since the airline began.

Gary Hanrahan

– Head of Training and Checking Gary has had over 15,000 hours of flying in his career, which began with Ansett Airlines in 1989. He has had experience throughout Asia, Europe, America, Africa and Australasia. He qualified as a flight instructor in March 2001 and began at Strategic Airlines in October 2009

.

Simon Fuchon

– Head of Maintenance
Simon started his career with the Australian Defence Force in 1988 as a mechanical Aircraft Technician and worked his way up to be an inspector. He then joined BAE as an Aircraft Technical Trainer before becoming the Deputy Superintendent of the Quality Department. In 2008 he started with Qantas in the Quality and Safety Department before moving to Strategic
Airlines.

(e) Persons having a substantial interest in the applicant.

James Family Pty Ltd. owns 100% of the outstanding shares of Strategic Airlines. That Australian proprietary company, limited by shares, is owned by/for the benefit of Michael James, an Australian citizen.Strategic Airlines
Exhibit 1 Page 5

(f) Ownership or control of other airlines or transportation companies.

Except for its investment in Strategic Airlines SA of Luxembourg, discussed below, Strategic Airlines Pty Ltd does not hold any interest in (1) any U.S. air carrier, (2) any other foreign air carrier, (3) any person engaged in the business of aeronautics, or (4) any common carrier or any person whose principal business is the holding of stock in, or control of, any air carrier. Other companies owned in common with the applicant are discussed in item (j) below.

(g) Relationship between applicant and its homeland government.

There is no relationship, other than that occasioned by regulatory oversight, between Strategic Airlines and the Australian government.

(h) Insurance coverage.

The carrier will extend its insurance, which meets or exceeds the requirements of 14 C.F.R. Part 205, to cover U.S. operations and will file OST
Form 6411 with the Federal Aviation Administration.

(i) Applicant's homeland operating authority.

Exhibit 2 contains a copy of amended Australian International Airline License 2010/02, issued to Strategic Airlines on May 13, 2011 to conduct scheduled international air service between Australia and various countries, including the United States. Strategic Airlines also is authorized by Australian aviation law to operate international charters.

(j) Operating history of the applicant.

Strategic Airlines began operations less than one year ago as an Australian "regular public transport" (scheduled) airline. Its A330 aircraft operate twice-weekly international services in the Melbourne-Phuket (Thailand), Brisbane-Phuket, and Brisbane-Bali (Indonesia) markets. The addition of A320 aircraft allowed Strategic Airlines to expand its international and domestic Australian networks. Today, those aircraft provide multiple, weekly, scheduled services in the Perth-Derby, Brisbane-Gladstone,Strategic Airlines
Exhibit 1 Page 6

Brisbane -Port Hedland, Perth-Bali, and Brisbane/Townsville-Bali markets. Strategic Airlines also wet-leases aircraft to Solomon Airlines for four, weekly, Honiara-Brisbane services.

Strategic Airlines initially was formed to complement other air service operations also conducted under the Strategic brand. From 2005 to 2010, most such operations were conducted by an Australian affiliate, Strategic Aviation Pty Ltd, that was awarded the primary Global Charter contract
with the Australian Defence Force

. Michael James, who had managed that contract with a previous operator, joined Strategic Aviation in 2005 and in 2006 became an Executive Director and equal shareholder of that company. During the ADF Global Charter operations, which now have ended, James and his colleagues diversified the Strategic brand; in addition to Strategic Airlines, they formed a U.K. air charter brokerage company and both French and Luxembourgeois airlines.

Of these Strategic-branded companies, only Strategic Airlines SA of Luxembourg provides public air transportation services today. That company is 51% owned by David Blake (listed above) and 49% by Strategic Airlines Pty Ltd (the applicant herein), and two of the applicant’s directors/managers (James and Blake) participate in the management of Strategic Airlines SA as directors of that company.

k) Fleet information.

Strategic Airlines operates three Airbus A320-200 and one A330-200 aircraft, all leased and Australian-registered, and it has recently committed to lease a second A330- 200 aircraft. It intends to conduct U.S. operations with the A330-200 aircraft, which are leased from Swiss International Air Lines Ltd and registered in Australia (the first is registered as VH-SSA).

(l) Aircraft maintenance.

Strategic Airlines relies on its own CASA-licensed personnel and a contractor, John Holland Aviation Services, to perform maintenance. Its maintenance program is approved by CASA and complies with annexes 1, 6 (Part I), and 7 to the Convention on International Civil Aviation, to whic h Australia is a contracting party. The FAA has rated Australia "Category 1" under the IASA program.Strategic Airlines
Exhibit 1 Page 7

(m) Agreements with other carriers.

No agreements with other carriers w ill affect the proposed U.S. services.

(n) Financial data summaries.

As Strategic Airlines only recently began operations, it does not have comprehensive, historic financials. Ho wever, since Strategic Airlines began operations with aircraft used by Stra tegic Aviation as the latter was winding down its charter operations, the applic ant is submitting as Confidential Exhibit A the private, June 30, 2010 financial statements of Strategic
Aviation. These statements are subm itted under seal, together with a request for confidential treatment under Rule 12, and include financials and explanatory notes for Strategic Avia tion’s last two fiscal years.

(o) Homeland government financial assistance.

None. See item (g) above.

(p) Financial forecast.

Confidential Exhibit B, which has been filed under seal together with a motion for confidential treatment under Rule 12, provides a forecast for initial Strategic Airlines operations to and from the United States.

(q,r) Bilateral agreement; homeland government policy with respect to
U.S. carriers.

The open-skies U.S.-Australia ag reement, discussed above, has been recognized by the Department in su bsequent grants of authority to Australian carriers. Strategic Airlines has been designated by the Australian Government pursuant to the provisio ns of Article III of the 2008 U.S.- Australia Air Transport Agreement.

(s) Accidents or safety or tariff violations.

Strategic Airlines has not experienced an y safety or tariff violations or fatal
accidents.Strategic Airlines
Exhibit 1 Page 8

(t) OST Form 4523.

Strategic Airlines will provide the Department, under separate cover in Docket OST-1995-236, three copies of OST Form 4523 (CAB Agreement 18900) relating to the liability limitations of the Warsaw Convention pursuant to 14 C.F.R. Part 203.

(*) Family assistance and passenger manifest plans.

Strategic Airlines will file with the Department (in Docket OST-1998-3304) and the National Transportation Safety Board the family assistance plan required by the Foreign Air Carrier Family Support Act of 1997, as amended. Strategic Airlines also will file with the Department (in Docket OST-1998- 3305) the passenger manifest plan required by 14 C.F.R. Part 243.2 June 2011