UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on May 21, 2010



### NOTICE OF ACTION TAKEN

-- DOCKETS DOT

- OST

- 2008

- 0143 & DOT

- OST

- 2002

- 14057

_____________________________________________________________________________________________________________________________ ___ This serves as notice to the public of the action described below, taken by the Departme nt official indicated (no additional confirming order will be issued in this matter).

Applicant : Sociedad Aeronautica de Medellin Consolidada S.A. (SAM) & Delta Air Lines, Inc. (Delta)

Date Filed: April 18, 2008, as amended July 11, 2008 and March 19, 2 010 (Docket DOT

- OST

- 2008

- 0143 ) ; and June 13, 2005, as amended March 19, 2010 (Docket DOT

- OST

- 2002

- 14057)

Relief requested:

SAM (Docket DOT

- OST

- 2008

- 0143)

-- Exemption under 49 U.S.C. § 4 0109 to permit SAM to engage in scheduled foreign air transportation of persons, property, and mail to the extent necessary to display Delta’s DL* designator code on flights operated by SAM within Colombia and between Colombia and third country points; and a statement of authorization under 14 CFR Part 212 to permit SAM to display Delta’s DL* designator code in conjunction with foreign air transportation on flights ope rated by SAM between Delta’s Colombia gateways and (1) other authorized points in Colombia, 1 and (2) Quito and Guayaquil, Ecuador, pursuant to code

- sharing agreements between Delta and Aerovias del Continente Americano S.A. Avianca (Avianca) and between De lta and SAM

. 2

Delta (Docket DOT

- OST

- 2002

- 14057)

— Renewal of exemption under 49 U.S.C. § 40109 to permit Delta to conduct, on

a codeshare

- only basis with Avianca, 3 scheduled foreign air transportation of persons, property, and mail between points

in the Un ited States and (1) points in Colombia, via intermediate points and beyond, and (2) points in the United States

and Gua y aquil and Quito, Ecuador, via intermediate points and beyond. Delta also requests renewal of its authority to combine this exemption au thority with its existing certificate and exemption authority, consistent with international
agreements. 4

Delta further requests that its existing exemption be amended to permit Delta to d isplay its code on SAM’s

intra

- Colombia flights and flights betwee n Colombia and third countries, in connection with Delta and Avianca’s existing

code

- share services previously authorized in Docket DOT

- OST

- 2002

- 14057. 5

Applicant representatives: Richard D. Mathias & David Endersbee (SAM) (202) 298

- 8660 Alexander Van der Bellen (Delta) (202) 842

- 4184

DOT Analyst: Shelita A. Johnson (202) 366

- 1226

Responsive pleadings: None filed

DISPOSITION

Action: Approved in part, dismissed in part (see footnote 2 and remarks below) Action date: May 21, 2010

1 The currently authorized Colombian points are Armenia, Bogota, Barranquilla, Bucaramanga, Cali, Cartagena de Indias, Cucuta, Manizales, Medellin, Pereira, and San Andres Island.

2 SAM states that it will not operate its own aircraft between the United States and Colombia, and seeks an exemption only to t he extent necessary to permit Delta to hold out service on SAM

- operated flights pursuant to Delta ’s code

- sharing agreements with

Avianca and SAM.

3 Delta’s existing exemption authorizes it to provide code

- share services with both Avianca and ACES. Delta notes that ACES has ceased operations and asks that the reference to ACES be removed.

4 Subsequen t to the filing of Delta’s renewal application, by Order 2006

- 1

- 1, the Department awarded the carrier a blanket route integration certificate. Therefore, we dismiss, as moot, the route integration portion of Delta’s renewal request.

5 See Attachment 3 fo r a list of initial code

- share routes.Effective dates of exemption authority granted to Delta : May 21, 2010

– May 21, 2012 . Effective dates of exemption authority granted to SAM: May 21, 2010

- May 21, 2011.

Effective dates of statement of authorization granted to SAM : May 21, 2010

– Indefinite ( subject to code

- share

conditions attach ed)

Basis for approval (bilateral agreement/reciprocity): The U.S.

- Colombia Air Transport Agreement

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

X Standard exemption conditions ( Attachments 1 and 2 )

Special conditions/Partial grant/Denial basis/Remarks: Based on the record in this case, we found that SAM is financially and operati onally qualified to perform the services authorized above. SAM is substantially owned and effectively controlled by citizens of Colombia. 6 All of SAM’s directors and key management personnel are citizens of Colombia. The carrier is properly licensed by t he Government of Colombia to perform the proposed services. We note that Delta has conducted a safety audit of SAM under the Department’s Code

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

SAM has requested authority to engage in scheduled foreign air transportation of persons, property, and mail between points in Colombia and between Colombia and third countries in conjunction with Delta’s U.S.

- Colombia service. Annex

II of the U.S.

- Colombia Air Transport Agreement limits U.S. carrier routes beyond to Colombia to points in the Western Hemisphere. We, therefore, dismissed the application to the extent that it sought authority to countries not in the Western Hemisphere.

T he operations authorized here are subject to the following conditions:

a) The statement of authorization will remain in effect only as long as (i) SAM and Delta continue to hold the necessary underlying authority to operate the code

- share services at iss ue, and (ii) the code

- share agreement providing for the code

share operations remains in effect.

(b) SAM and/or Delta must promptly notify the Department (Office of International Aviation) if the code

- share agreement providing for the code

- share operatio ns is no longer effective or the carriers decide to cease operating any or all of the approved code

- share services. 7 Such notice should be filed in Dockets DOT

- OST

- 2008

- 0143 and DOT

- OST

2002

- 14057.

(c) SAM and/or Delta must notify the Department no late r 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 and the date on which the services will begin. Such notices shall be filed in Dockets DOT

- OST

- 2008

- 0143 and DOT

- OST

- 2002

- 14057.

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

- share journey for all obligations established in its contract of carriage with the passenger; that the pas senger 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.

6 The applicant states that SAM is 95% owned by Aerovias Nactionales de Colombia, S.A. (AVIANCA) with the remaining 5% owned by Synergy Ocean Air Colombia (Synergy), which is ultimately owned by citizens of Colombia, and which in turn, is the majority owner of AVIANCA. All of SAM’s management and key personnel are Colombian citizens.

7 We expect this notification to be received within 10 days of such non

- effectiveness or of such decision.(e) Any service provided shall be consistent with all applicable agreements between the United States and Colombia, and all applicable agreements with other foreign countries involved. Furthermore, (i) nothing in the award of this authority should be construed as conferring upon Delta rights (including code

- share, fifth

- freedom intermediate and/or beyond rights) to serve markets where U.S. carrier rights are limited unless Delta notifies us of its intent to serve such 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; 8 and (ii) should there be a request by any carri er to use the limited

- entry route rights that are included in Delta’s authority by virtue of the blanket statement of authorization granted here, but tha t are not being used by Delta, the holding of such authority will not be considered as providing any pr eference for Delta in a carrier selection proceeding to determine which carrier(s) should be entitled to use the authority at issue.

(f) The authority granted here is specifically conditioned so that neither carrier shall 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.

Action taken by: Paul L. Gretch, Director

Office of Interna tional Aviation

_________________________________________________________________________________________________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) the applicant is qualified to perform the p roposed 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 constitute a major regulatory action under the Energy Policy and Conserva tion 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 time without hearing at our discretion.

Persons entitled to pet ition 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 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.gov

8 The notice referenced in co ndition (c) above may be used for this notification.Foreign Carrier Exemption Conditions Attachment 1

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 Transportation Security Administrati on, 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 con cerning 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) (form erly 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 w ith 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 Adm inistration’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 requ irements 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 carria ge, 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 co gnizable 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 Co ntracting 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 and courts, and with all appli cable 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.Attachment 2 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 coverage 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 waive r 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 assure 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, con tact 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 public 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.

1/2008Attachment 3



### Initial Code

- Share Markets Delta DL* code on flights operated by SAM

Between Bogota (BO G) and:

Cali (CLO) Bucaramanga (BGA) Barranquilla (BAQ) Medellin (MDE) Cartagena (CTG) Pereira (PEI)