UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on January 25

, 201 3



### NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 20 1 2

- 0209

________________________________________________________________________________________________ __________________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional c onfirming order will be issued in this matter).

Joint Applicant s : AMERICAN AIRLINES, INC. (American) 1 

### and TAM

- LINHAS AEREAS, S.A. (TAM)

Date Filed: December 17, 2012

, as supplemented December 18 , 2012

Relief requested:

American

— Exemption from 49 U .S.C. § 41301 and a blanket statement of authorization under 14 CFR

Part 212 to permit American to engage in reciprocal code

- share services with TAM and display TAM’s (JJ*) designator code in conjunction with foreign air transportation of persons, property , and mail on flights operated by American or American Eagle between (1) points in the United States; (2) points in the United States and points in Brazil (either nonstop or via intermediate points in third countries); (3) points in the United States and p oints in third countries; and (4) points in Brazil and points in third countries.

TAM

— Exemption from 49 U.S.C. § 41301 and a blanket statement of authorization under 14 CFR Part

212 to permit TAM to engage in reciprocal code

- share services with American a nd display American’s (AA*) designator code in conjunction with foreign air transportation of persons, property and mail on flights operated by TAM between (1) points in Brazil; (2) points in Brazil and points in the United States (either nonstop or via i ntermediate points in third countries); (3) points in Brazil and points in third countries; and (4) points in the United States and points in third countries. 2

The Joint Applicants request that their statements of authorization be granted for an indefini te duration

and further request a waiver of the 45

- day advance filing requirement under 14 CFR Part 212.

The Joint Applicants request that , with respect to code

- share notice requirements, the Department apply

its Notice in the Matter of Blanket Notificati on of Codeshare Service to Open

- Skies Partners and Points dated February 9, 2009 , even though they recognize that we are in a transition period to full implementation of U.S.

- Brazil Open Skies

.

Applicant representative s : American: Francis C. Heil (202 ) 496

- 5642 TAM: Marshall S. Sinick (202) 626

- 6651

1 American Airlines states that it is also apply ing on behalf of its affiliated carriers American Eagle Airlines, Inc. and Executive Airlines, Inc. d/b/a American Eagle.

2 To the extent necessary, TAM also requests a special authorization under 14 CFR Part 216 allowing it to provide blind sector service between its authorized U.S. gateways an d points in third countries, either nonstop or via intermediate points in third countries, for the carriage of TAM’s authorized Brazil

- U.S. traffic in combination with

Brazil

- third country traffic. We have determined that no such special authorization is necessary because the contemplated blind sector services are encompassed in TAM’s existing exemption authority. See Notice of Action Taken dated April 27, 2012, in Docket DOT

- OST

- 1997

- 2421.DOT Analyst: Shelita A. Johnson (202) 366

- 1226

Responsive pleadings: None filed

. 3

DISPOSITION

Action: Approved in part , subject to conditions , remainder dismiss ed (see below)

A ction date : Jan uary 25 , 2013

Effective dates of exemption authority granted to American : January 25 , 2013

– January 25 , 2015

.

Effective dates of exemption authority granted to TAM : January 25 , 2013

– January 25 , 2014.

The statement s of authorization granted to American and TAM are effective January 25 , 2013, and shall remain in effect for an indefinite duration, subject to conditions

.

Basis for approval (bilateral agreement/reciprocity) : Air Transport Agreement between the United States and Brazil and the Memorandum of Consultations signed March 19, 2011

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations

indicated:

X American’s Certificates of Public Convenience and Ne cessity

X Standard U.S. air carrier exemption conditions (attached as Appendix A )

X__ Standard foreign air carrier exemption conditions (attached as Appendix B)

X__ Code

- share conditions (attached as Appendix C )

Special condi tions/Remarks:

We are dismissing the request of t he Joint Applicants that the Department apply its Notice in the Matter of Blanket Notification of Codeshare Service to Open

- Skies Partners and Points, dated February 9, 2009.

When the U.S.

- Brazil Open Sk ies Agreement is fully applied , the Joint Applicants may provide notice of

their intent to conduct code

- share services to points in Open Skies partner countries . Until such time, the Joint Applicants must provide code

- share notice in accordance with parag raph (b) of Appendix C of this

Notice

.

We note that American has conducted a safety audit of TAM under the Department’s Code

- Share Safety Audit Program, and the FAA has advised us that it has reviewed the relevant audit report and found it to be acceptabl e.

Action taken by: Paul L. Gretch, Director

Office of International Aviation

3 The Joint Applicants notified the Department that they polled interested parties served with the application

, and

that Delta commented that “ it has no objection provided the Department is willing to grant similar blanket authority

to other U

. S

. - Brazil code

- share relationships." All other served parties indicated th at they had no comment or objection.____________________________________________________________________________________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) the applicant s were qualified to perform the ir proposed operations; (2) our action was consistent with Department policy; (3) grant of the authority was consistent with the public interest; and (4) grant of the authority would not constitut e a major regulatory action under the Energy Policy and Conservation Act of 1975. To the extent not granted/deferred/dismissed, we denied all requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any t ime 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 issu ance of this Notice. This action was effective when taken, and the filing of a petition for review

will not alter such effectiveness.

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govAppendix A

U .S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating authority from the government of each country served;

(2) Comply with applicable requirements concerning oversales contained in 14 CFR 250 (for scheduled operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insurance coverage, and for certifying that co verage to the Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a Department Order, comply with the requirements of 14 CFR 203, concerning waiver of Warsaw Convention liability limits and defenses;

(6) Comply with all applicable requirements of the Federal Aviation Administration, the Transportation Security Administration, and with all applicable U.S. Government requirements concerning security, including, but not limited to, 49 CFR Part 1544. To ass ure compliance with all applicable U.S. Government requirements concerning security, the holder shall, before commencing any new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector (PSI) to advise the PSI 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;

(7) Comply with such other reasonable terms, conditions, and limitations required by the p ublic interest as may be prescribed by the Department of Transportation, with all applicable orders and regulations of other U.S. agencies and courts, and with all applicable laws of the United States.

The authority granted shall be effective only during the period when the holder is in compliance with the conditions imposed above.

1/2008

### Appendix B Foreign Carrier Exemption 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 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 Transpo rtation 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 departure for the United States, contact its International Indus try 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 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 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 complie s 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 international air services;

(6) Except as specifically exempted o r 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 immunit y, 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, accor ding 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 intern ational 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 sha ll 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, 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 applicable orders or regulations of other U.S. agencies an d 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.

12/2007Appendix C

The statements of authorization granted here are also subject to the following conditio ns:

(a) The statements of authorization will remain in effect o nly as long as (i) American and TAM 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 remain in effect.

(b) American and/or TAM 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 identify the market(s) to be served, which carrier will be operating the aircraft in the code

- share m arket added, and the date on which the service will begin.

Such notices should be filed in Docket DOT

- OST

- 2012

- 0209. 1

(c) American and TAM must promptly notify the Department if the code

- share agreement providing for the

code

- share operations is no lon ger effective or if the carriers decide to cease operating all or a portion of the approved code

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

- OST

- 2012

- 0209. 2

(d) The code

- sharing operations conducted under this authority must comply with 1 4 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 the 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) accept responsi bility for the entirety of the code

- share journey for all obligations established in its contract of carriage with the passenger; that the passenger liability of the operating carrier be unaffected; and that the operating carrier shall not permit the code of its U.S. code

- sharing partner to be carried on any flight that enters, departs, or transits the airspace of any area for whose airspace the Federal Aviation Administration has issued a flight prohibition.

(e) The authority to operate to third countries is subject to the condition that any service provided under the statement of authorization shall be consistent with all applicable agreements between the United States and the foreign countries involved. Furthermore, (i) nothing in the award of this blan ket statement of authorization should be construed as conferring upon American rights (including code

- share, fifth freedom intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless American notifies the Department of it s intent to serve such a market and unless and until the Department has completed any necessary carrier selection procedures to determine which carrier(s) should be authorized to exercise such rights; and (ii) should there be a request by any

carrier to us e the limited

- entry route rights that are included in the authority of American by virtue of the blanket statements of authorization granted here, but that are not then being used by American , the holding of such authority will not be considered as providi ng any preference for American in a competitive carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue. 3

( f

) The authority granted here is specifically conditioned so that neither American nor TAM shal l give any force or effect to any contractual provisions between themselves that are contrary to these conditions.

(g ) We may amend, modify or revoke the authority granted at any time without hearing at our discretion.

1 The Joint Applicants also provide initial code

- share notice at Appendix D.

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

- effectiveness or of such decision.

3 The notice in paragraph (b) above can be used for this notification.Appendix D

O pe r a ti ng C a r ri e r A m e ri c a n / M a r k e t i ng C a r r i er T A M

Mi a m i/ N ew Y o r k / O r l a n do /D a ll a s t o / fr om

A l buqu e r que D e tr o i t Los A n g e l es O k l aho m a C it y San J o s e

A tl a n t a El Pa s o M aui Ph i l ad e l ph i a San J u a n

A u st i n F r e s no Mi a m i Phoen i x San F r a nc i s co

B a l t i m o r e H a r t f o r d Mi n n eap o l i s Po r t l and San t a B a r b a r a

B o is e H ono l u l u M on t e r ey R a l e i g h Sea t t l e

B o st on H ou st on N a s h v il l e R eno S t . Lo u i s

C ha rl o t t e J ac k s on v i l l e N e w a r k Sac r a m en t o T a m pa

C h i ca g o K ona N ew Y o r k Sa l t L a k e C it y T u c s on

D a ll a s K a u ai N ew O rl e a ns San A n t o n i o V a i l / Ea g l e

D en v er Las V e g as O rl an d o San D i e g o Wa s h i n g t on

Mi a m i t o / f r om

B e l o H o r i z on t e R ec i f e Sa l v ador

B r a s il i a R i o de J an e ir o Sao Pa u l o C ancun M ex i co Ci t y M ana u s
M on t r e a l T o r on t o

N ew Y o r k t o / f r om

R i o de J an e ir o Sao Pa u l o
M on t r e a l T o r on t o

Dallas to/from

R i o de J an e ir o Sao Pa u l oO pe r a ti ng C a r ri e r T A M / M a r k e t i ng C a r r i e r A m e ri c a n

B e l o H o r i z on t e / B r a s il i a/ M ana u s / R ec i f e / R i o de J a n e ir o / S a l v ador and

São Pa u l o t o / fr om

A r ac a j u C u r i ti b a J o i n v i l e Pa l m as Sa l v ador

B e l ém F l o r i an o po l i s Lond r i na Po rt o A l e g r e Sao J o s e do R i o P r e t o

B e l o H o r i z on t e Fo rt a l e z a M ac a pá Po rt o S e g u r o Sao Lu i z

B oa V i s t a G o i an i a M ac e i o Po rt o V e l ho Sao Pa u l o

B r a s il i a Ig ua ss u Fa l l s M ana u s R ec i f e T e r e s i na

C a m p i nas I l heus M a r abá R i be i r ao P r e t o U be r l and i a

C a m po G r ande I m pe r a t r i z N a t al R i o B r a n co V i t o r i a

C u i aba J o ao P e ss oa N a v e g an t es R i o de J an e ir o

Sao Pa u l o and R i o d e J a ne i r o t o / f r om

Mi a m i N ew Y o r k O rl an d o

B e l o H o r i z on t e / B r a s il i a/ M ana u s t o / fr om

Mi a m i