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 -- DOCKETS DOT-OST-2010-0056, DOT-OST-2010-0057

and DOT-OST-2007-0012 _____________________________________________________________________________________________________________________

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).

1. Docket DOT-OST-2010-0057

Application of CONTINENTAL AIRLINES, INC. (Continental), filed 3/4/2010, and supplemented 

4/29/2010, for:

XX Exemption 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:

Foreign air transportation of persons, property, and mail on a code-share basis between a point or 

points in the 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-2007-0012

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

XX Exemption 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 the United States in connection with a code-share arrangement 

with Continental.

1

3. Docket DOT-OST-2010-0056

Joint Application of CONTINENTAL, CONTINENTAL MICRONESIA, INC. (Continental 

Micronesia), COLGAN AIR, INC. (Colgan), and TAM, filed 3/4/2010 for:

XX Statements of authorization in order to engage in the following code-share services:

(A) Continental, Continental Micronesia and Colgan request statements 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 requests 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 reps: Lorraine B. Halloway (202) 624-2500 (Continental and Continental Micronesia),

Brian T. Hunt (901) 346-6145 (Colgan), and Robert P. Silverberg (202) 944-3304 (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-term 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, 2012. 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 consistent with the U.S-Brazil 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 

relevant 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 apply 

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 authority for a longer period.
Under the U.S.-Brazil air 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 points: 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 Vitoria.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 under 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 found 

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 consistent 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 available 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 codeshare 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 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 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 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 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.

 

1/2008
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 Transportation 

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 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, 

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 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 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 international 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 shall 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 

and 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.

12/2007
Appendix C

The code-share 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-2010-

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 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 responsibility 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 these blanket statements 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 

authorized 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 statements

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 effect 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