BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of NIPPON CARGO AIRLINES CO., LTD. for exemption authority pursuant to 49 U.S.C. § 40109 Docket DOT-OST-2013-

APPLICATION OF NIPPON CARGO AIRLINES CO., LTD. FOR EXEMPTION AUTHORITY

Communications with respect to th is document should be sent to:

Don H. Hainbach Jason E. Maddux Garofalo Goerlich Hainbach PC 1200 New Hampshire Avenue NW Washington, D.C. 20036 Phone 202-776-3970 Fax 202-776-3975 dhainbach@ggh-airlaw.com jmaddux@ggh-airlaw.com Counsel for Nippon Cargo Airline Co., Ltd. July 19, 2013 Notice: Any person who wishes to support or o ppose this application ma y file an answer and serve that answer on above-named counsel and a ll persons served with the application by August 5, 2013.BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

Application of NIPPON CARGO AIRLINES CO., LTD. for exemption authority pursuant to 49 U.S.C. § 40109 Docket DOT-OST-2013-

APPLICATION OF NIPPON CARGO AIRLINES CO., LTD. FOR EXEMPTION AUTHORITY

Nippon Cargo Airlines Co., Ltd. (“NCA”) curren tly operates service to the United States pursuant to its foreign air ca rrier permit issued by DOT Orde r 1998-4-17. NCA’s foreign air carrier permit authorizes it to e ngage in scheduled foreign air tr ansportation of property and mail: “Between any point or points behind Japan, via any point or points in Japan, and any intermediate point or points, and any point or poi nts in the United States, and any point or points beyond.” NCA’s permit further authorizes it to engage in charter trips in foreign air transportation. Although NCA’s foreign air carrier permit authorizes it to engage in scheduled cargo services without prior DOT approval, Pa ragraph 3 of Order 1998-4-17 requires prior approval for third and fourth freedom cargo char ters operated by NCA. Pursuant to section 212.9(b)(1) of the Department’s re gulations, NCA must obtain prio r approval for fifth, sixth, and

seventh freedom charters. 1 By this application, NCA is reque sting removal of the current prior

1 Pursuant to section 212.9(c), the Department ma y issue blanket statements of authorization to foreign air carriers to conduct fifth freedom charters.2 approval requirement for third, four th, and fifth freedom cargo char ters, except with respect to flights operated by NCA to or from T okyo International Airport (“Haneda”). More specifically, NCA requests exempti on authority under 49 U.S.C. § 40109 to the extent necessary to enable NCA to engage in foreign charter air transportation of property and mail between any point or points in Japan 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 a third country or countries, provided that such service constitutes pa rt of a continuous operation, with or without a change in aircraft, that includes service to or from Japan for the purpose of carrying local traffic to or from Japan. NCA requests that the ex emption authority descri bed above be issued expeditiously and that the authority remain ef fective for a period of at least two years. In support of this applicati on, NCA states as follows:

1. The 2010 MOU establishes an open skies re gime between the United States and Japan. Pursuant to that open skies regime , the 2010 MOU provides fo r U.S. and Japanese carriers to conduct third, fourth, and fifth freedom charters between the United States and Japan. That authority is subject to a limited restriction a pplicable to charter flights to and from Haneda Airport in Japan. Each party’s carriers are limited to 600 annual f lights to or from Haneda.

2. Retention of the prior approval requirem ent for third, fourth, and fifth freedom charter flights is inconsistent with the terms of the 2010 MOU, and indeed the Department has implicitly acknowledged that the prior approval requirement should no longer be applicable. More specifically, except for flights to or fr om Haneda, the Department has not imposed the prior approval requirement when granting char ter authority to Japanese carriers following implementation of the 2010 MOU. 2 Removal of the prior approval requirement also will allow

2 See Star Flyer, Inc. , Notice of Action Taken, Docket DOT-OST-2012-0200 (Jan. 28, 2013); Skymark Airlines Inc. , Order 2012-8-29, Docket DOT-OST-2010-0096 (Aug. 22, 2012).3 NCA to more quickly and efficiently respond to customer demand and provide more flexible service options, thereby benefitting the shipping public.

3. By this application, NCA requests exemp tion authority, consistent with the 2010 MOU, to engage in foreign charter air transpor tation of property and mail between any point or points in Japan 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 a third country or countries, provided that such service constitutes part of a c ontinuous operation, with or without a change in aircraft, that includes service to or from Japan for the purpose of carrying local traffic to or from Japan. NCA will utilize this authority to operate ad hoc cargo charters, supple menting NCA’s current scheduled service. NCA will operate these char ters using Boeing 747 aircraft from its existing

fleet.

4. Grant of third, fourth, and fifth free dom cargo charter exemption authority, without any corresponding prior approval requiremen t (other than for flights serving Haneda), would be consistent with Department precedent as well as with the 2010 MOU. 3 Moreover, the requested exemption authority will allow NCA to expand its service options to the shipping public. Under those circumstances, removal of th e prior approval requirem ent and grant of the requested exemption authority would be c onsistent with the public interest.

5. NCA anticipates that grant of the requested au thority will not result in aircraft fuel consumption exceeding 10 million gallons. Grant of the requested foreign air carrier permit and exemption authority would not constitute a major regulatory action under the Energy and Conservation Act of 1975, as defined in Sect ion 313.4 of the Department’s regulations.

3 See Skymark Airlines Inc. , Order 2012-8-29, Docket DOT-OST-2010-0096 (Aug. 22, 2012).4 ACCORDINGLY, Nippon Cargo Ai rlines Co., Ltd. requests the Department remove the prior approval requirement for th ird, fourth, and fifth freedom char ter flights (except with respect

to charters between Haneda and the United States and only for so long as Haneda-U.S. charters remain subject to a numerical limitation under the 2010 U.S.-Japan Memorandum of Understanding) and further requests exemption aut hority to the extent necessary to enable NCA to engage in foreign charter air transportation of property and mail between any point or points in Japan 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 a third country or countries, provided that such service constitutes part of a continuous operation, with or w ithout a change in ai rcraft, that includes service to or from Japan for the purpose of carrying local traffic to or from Japan.

Respectfully submitted,

Don H. Hainbach Jason E. Maddux G AROFALO G OERLICH H AINBACH PC Counsel for Nippon Cargo Airline Co., Ltd.

July 19, 2013CERTIFICATE OF SERVICE I certify on this 19th day of July, 2013 a copy of the foregoing application has been served by electronic mail on the parties named below.

_________________________________ Vanessa Krasniewicz

Robert Wirick (American) robert.wirick@aa.com Francis Heil (American) francis.heil@aa.com John Richardson (Amerijet Internationa l) jrichardson@johnlrichardson.com Joan Canny (Amerijet Interna tional) jcanny@amerijet.com Russell Pommer (Atlas Air) rpommer@atlasair.com Dan Weiss (United) dan.weiss@united.com Steve Morrissey (United) steve.morrissey@united.com Jonathan Linde (United) jonathan.linde@united.com Nancy Sparks (FedEx) nssparks@fedex.com Courtney Felts (FedEx) cefelts@fedex.com John Palo (Evergreen) charters@evergreenairlines.com Ed Sauer (Evergreen) esauer@ssd.com Alexander Van der Bellen (Delta) sascha.vanderbellen@delta.com Sametta Barnett (Delta) Sametta.c.barnett@delta.com Kevin Montgomery (Polar) kevi n.montgomery@polaraircargo.com Anita Mosner (UPS) Anita.mosner@hklaw.com Jennifer Nowak (UPS) jennifer.nowak@hklaw.com Jonathan Hill (Hawaiian) jhill@dowlohnes.com Parker Erkmann (Hawaiia n) perkmann@dowlohnes.com

John Allen (FAA) john.allen@faa.gov Krishna Urs (State Department) urskr@state.gov Bob Finamore (DOT) r obert.finamore@dot.gov