UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on December 10 , 2010

NOTICE OF ACTION TAKEN

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

Applicant: AIR PALACE , S.A. de C.V. Date Filed: September 2 2 , 2010

Relief requested: Renewal of e xemption under 49 US C §4 0109 to permit the applicant to conduct passenger charter operations between Mexico and the United States, and other passenger charters in accordance with 14 CFR Part 212, using small equipment

. The applicant also requests stopover privileges and relief from the requirement to provide advance notice of each flight, or seri es of flights, between Mexico and the United States. The applicant requests that the authority be granted for a term of two year s

. If renewal, date and citation of last action: October 9, 2008, in this Docket.

Applicant representative: Eugene E. Smith

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- 1630 DOT analyst: Robert J. Finamore , 202

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Responsive pleadings: None.

DISPOSITION

Action: Approved. Action date: December 10 , 2010

Effective dates of authority granted: December 10 , 2010 , through December 10 , 2012

. Basis for approval (bil ateral agreement/reciprocity): United States

- Mexico Air Transport Services Agreement (“the Agreement”).

Except to the extent ex empted/waived, this authority is subject to the terms, conditions, and limitations of our standard exemption conditions (attached).

Special conditions/Remarks: In the conduct of these operations, the carrier must adhere to all applicable provisions of the Agreement and may only use aircraft capable of carrying no more than 60 passengers and having a maximum payload capacity of no more than 18,000 pounds (small equipment). The above grant includes authority to operate

Third and Fourth Freedom charters. While we have subjected, consistent with the provisions of the Agreement, Mexican carriers conducting charter operations with large aircraft to prior approval or submission of notice for their Third and Fourth Freedom charters, we determined that any such requirement was not necessary on public interest grounds in the case of this carrier, since the carrier will be conducting these operations solely with small aircraft. 1
(Other charter operations to/from the United States under this authority, however, ar e subject to prior approval under 14 CFR Part 212.) Further, we are continuing to allow Mexican carriers conducting passenger charters using small equipment to make stopovers in the United States in the conduct of such operations.

Action taken by: Pa ul L. Gretch, Director, Office of International Aviation

______________________________________________________________________________________________ __________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent with Department policy; (2) the applicant was qualified to perform its proposed operations; (3) grant of the authority was consist ent with the public interest; and (4) grant of the authority would not constitute a major regul atory 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 time without hea ring at our discretion.

Persons entitled to petition the Department for review of the action set forth in this Notice under the Department’s regulati ons, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this Not ice. 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.regul ations.gov/

1 We note, however, that the applicant must meet any reporting requirements set forth in its FAA Operations Specifications.

### 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 Transportation Security Administration, and with all applicable U.S. Government require ments 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 commenc ing 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 Securi ty 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 coverag e 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 complies with operational safety requirements at least equivalent

to Annex 6 of the Chi cago 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 carriage, include a point in the United States as a poin t 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 Uni ted 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 definiti on;

(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

cha rter 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 reasonabl e 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 States.

This authority sha ll 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.

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