UNITED STATES OF AMERICA
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY WASHINGTON, DC

Issued by the Department of Transportation on May 13 , 2010

NOTICE OF ACTION TAKEN

-- DOCKET S DOT

- OST

- 20 10

- 0056, DOT

- OST

- 2010

- 00 57
and DOT

- OST

- 2007

- 0012

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

1. Docket DOT

- OST

- 2010

- 0057

Appl ication of CONTINENTAL AIRLINES, INC. (Continental)
, filed 3/4 /20 10
, and supplemented
4/29/ 20 10
, for:

XX E xemption under 49 U.S.C. 40109 to the extent necessary to permit Continental to display its designator code on flights operated by TAM

- Linhas Aereas, S.A. (TAM) on the following services:

F oreign air transportation of persons, property, and mail on a code

- share basis between a point or points in th e United States, via intermediate points, and a point or points in Brazil that may be served directly by U.S. carriers and those points that may be served on a code

- share

- only basis pursuant to the U.S

. - Brazil air services agreement

.

2. Docket DOT

- OST

- 200 7

- 0012

Application of TAM
, filed 3/4/2010 for:

XX E xemption under 49 U.S.C. 40109 to provide the following services:

Scheduled foreign air transportation of persons, property, and mail between any point or points in Brazil and any point or points in th e United States in connection with a code

- share arrangement
with Continental

. 1

3

. Docket DOT

- OST

- 2010

- 00 56

Joint Application of CON TINENTAL , C ONTINENTAL MICRONESIA , I NC . (Continental Micronesia), C OLGAN AIR , I NC . (Colgan), and TAM
, filed 3/4 /20 10 for:

X X Statements of authorization in order to engage in the following code

- share services:

(A) Continental , Continental Micronesia and Colgan request s tatement s of authorization permitting them to display the TAM ( JJ ) designator code in conjunction with foreign air transportation of persons, property and mail on Continental, Continental Micronesia and Colgan flights between (1) points in the United States and (2) points in the United States and points in Brazil (either nonstop or via intermediate points in third countries).

(B) TAM requests a statement of authorization permitting it to display the Continental (CO) designator code in conjunction with foreign air transportation of persons, property, and mail

1 TAM reque sts that its exemption authority be granted for a period of two years.on TAM flights between (1) points in Brazil and (2) points in the United States and points in Brazil (either nonstop or via intermediate points in third countries). 2

Applicant rep s : Lorraine B. Halloway (202) 624

- 2500 (Continental and Continental Micronesia)
, Brian T. Hunt (901) 346

- 6145 (Colgan), and Robert P. Sil verberg (2 0 2) 944

- 330 4 ( TAM )

DOT Analyst: Brett D. Kruger (202) 366

- 8025

DISPOSITION

XX Approved Continental’s exemption authority (subject to conditions, see below)

.

XX Approved in part TAM’s exemption authority , remainder (request for longer

- t erm authority)
dismissed (subject to conditions, see below)

. 3

XX Approved blanket statements of authorization to Continental, Continental Micronesia, Colgan, and TAM (subject to conditions, see below).

The above action granting exemption authority to Continental is effective when taken : May 13 , 2010

, through May 13 , 201 2

. The above action granting exemption authority to TAM is effective when taken: May 13
, 2010 , through May 13
, 2011

. The above action granting blanket statements of authorization to
the referenced carriers is effective: May 13 , 2010 , and will remain in effect indefinitely, subject to
conditions.

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

XX The authority granted is consist ent with the U.S

- Bra zil Air Transport Agreement.

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

XX Continental ’s certificates of public convenience and necessity

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

XX Standard foreign carrier exemption conditions (attached as Appendix B)

XX Conditions for Statements of Authorization (attached as Appendix C)

_______________________________________________________ ______________________________________________________________ Remarks / Conditions : We note that Continental 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
rel evant audit report and found it to be acceptable.

The exemption authority granted here is for code

- share operations with TAM . Should Continental and any additional code

- share partner be granted statements of authorization, Continental will need to appl y for exemption authority to the extent necessary to permit Continental to display its code on flights operated by the new code

- share partner and will need to have conducted code

- share safety audits of its foreign partners prior to receipt of authority for such code

- share services.

2 The joint applicants note that Continental Micronesia and Colgan will not place their codes on flights operated by TAM, but TAM will place its code on flights operated by Continental Micronesia and Colgan.

3 The one

- year duration of the authority we granted to TAM is consistent with our usual policy of granting exemption authority in the circumstances presented. We therefore, dismissed the application to the extent that it sought auth ority for a longer period.Under the U.S.

- Brazil a ir transport agreement, the U.S. Government may name 30 points for U.S. carriers

to serve exclusively via code

- share service. At this time, the United States has selected the following 24
code

- share poin ts: Aracaju, Bauru, Campo Grande, Cascavel, Cuiaba, Florianopolis, Goiania, Iguacu, Ilheus, Joao Pessoa, Joinville, Londrina, Maceio, Marina Parin, Natal, Navagantes, Petrolina, Porto Seguro, Porto Velho, Ribeirao Preto, Sao Luiz, Teresina, Vilhena, and V itoria. 4 The authority granted here permits Continental to serve points that may be served directly by U.S. carriers, all code

- share only points currently selected by the United States

, and those code

- share only points that may be selected in
the future u nder the U.S.

- Brazil agreement. This authority shall not be construed as to grant Continental authority to serve any point that is not properly selected

.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we foun d
Continental qualified to provide the exemption services authorized. 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) grant of the authority was consis tent with the public interest; and (3) grant of the authority would not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975. To the extent not granted or 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 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 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 avai lable on the World Wide Web at:

http://www.regulations.gov

4 In addition to the 30 points that U.S. carriers may only serve via code share, U.S. carriers may also provide code

share service to points that may be served directly by U.S. carriers.

### Appendix A

U.S. Carrier Exemption Conditions

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

(1) Hold at all tim es 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 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 al l 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, 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 suc h 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. agencie s 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 Ex emption 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 requirements concerning security, including, b ut 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 Industry Representative (IIR) (formerly 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 with the requirements for minimum insurance coverage contained in 14 CFR Part 205, and,

pr ior 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 Chicago Convention;

(5) Conform to the a irworthiness 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 W arsaw 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 i n 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 point of origin, point of destination, or a greed 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 United States. In this condition, the ter m "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 definition;

(8) Except as specifically author ized 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 re quired 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 shall not be effective during any period w hen 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.

12/2007

### Appendix C

The code

- shar e operations authorized here are subject to the following conditions:

(a) The statements of authorization will remain in effect only as long as (i) Continental, Continental Micronesia, Colgan, 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 remains in effect.

(b) Continental, Continental Micronesia, Colgan and/or TAM

, as appropriate, 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 market added, and the
date on which the service will begin. Such notice should be filed in Docket DOT

- OST

- 2010

- 0056

. 1

(c) Continental, Continental Micronesia, and/or TAM , as appropriate, must promptly notify the Department if the
code

- share agreement providing for the code

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

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

- OST

- 20 10

- 0056

. 2

(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 requir ements 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 re sponsibility 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 cou ntries 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 the se blanket statement s of authorization should be construed as conferring upon Continental

, Continental Micronesia , or Colgan rights (including code

- share , fifth freedom intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless Continental

, Continental
Micronesia , or Colgan notifies the Department of their 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
autho rized to exercise such rights; and (ii) should there be a request by any carrier to use the limited

- entry route rights that are included in the authority of Continental

, Continental Micronesia , or Colgan by virtue of the blanket statement s of authorization granted here, but that are not then being used by Continental

, Continental Micronesia , or Colgan , the holding of such authority will not be considered as providing any preference for Continental

, Continental Micronesia

, or Colgan 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 Continental, Continental Micronesia, Colgan

nor TAM shall give any force or ef fect to any contractual provisions between themselves that are contrary to these
conditions.

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

1 See Appendix D for list of initial code

- share points.

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

INITIAL LIST OF CODE

- SHARE POINTS