Order 20 1 5

- 2

- 6

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 10 th day of February

, 20 1 5

Served: February 10 , 2015

Application of

AIR BUSAN CO., LTD. Docket DOT

- OST

- 2014

- 0228

for an exemption under 49 U.S.C. § 4 0109 and a foreign
air carrier permit under 49 U.S.C. §41301

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By this order we (1) grant the application of the referenced foreign air carrier for an exemption under 49

U.S.C. § 40109, subject to conditions; 1 and (2) tentatively find that it is in the public interest to grant the
applicant the foreign air carrier permit attached as Appendix B to this order.

Background

On August 23 , 2005, the Department issued a Notice , in Docket DOT

- OST

- 2005

- 22228

, announcin g several steps designed to streamline our regulatory procedures for licensing U.S. and foreign air carriers.
Among other things, the Notice stated that:

Assuming, based on the record and on the public interest/public convenience and necessity
elements g ermane to our licensing decisions, that we were in a position to act favorab ly, we
would proceed to issue a single order (1) granting the exemption request for whatever duration
we would normally have imposed, or until certificate/permit authority becomes effective,

whichever is shorter, and (2) tentatively deciding ( i.e. , show

- cause) to award a corresponding
certificate (or permit), again for the standard duration we would normally have imposed (such

as, in the case of certificates, five years for limited

- entry markets, indefinite for open

- entry markets, and in the case of permits, five years for comity and reciprocity regimes, indefinite for
agreement regimes).

1 The conditions are attached as Appendix A.Our action in this Order serves to implement thes e streamlined regulatory procedures for the application
involved in this proceeding.

Application

By application filed December 19, 2014

, Air Busan Co., Ltd. (Air Busan), a foreign air carrier of the
Republic of Korea

, requests an exemption under 49 U.S.C

. § 40109 and a f oreign air carrier permit under

49 U.S.C. § 41301, to engage in : 1) scheduled foreign air transportation of persons , property, and mail

from points behind the Republic of Korea via the Republic of Korea and intermediate points to a point
or points in the United States and beyond 2 ; 2) charter foreign air transportation of persons, property,
and mail between any point or points in the Republic of Korea and any point or points in the United
States, and between any point or points in the United States and any point or points in a third country or
countries, provided that such service constitutes part of a continuous operation, with or without a change
of aircraft, that includes service to the Republic of Korea and the United States; and 3) other charter

fo reign air transportation pursuant to 14 CFR Part 212.

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to support
its requests for authority.

No answers were filed to the application.

Decision

We have decided, under assigned authority and consistent with our August 23 , 2005 Notice referenced

above, to grant the applicant’s request for exemption authority, subject to conditions, and tentatively to
grant, subject to show

- cause procedures, its request for a foreign air carrier permit, also subject to

conditions.

With respect to the applicant’s request for exemption authority, we find that grant of this authority is

consistent with the public interest; we also find that the applicant has demonst rated, based on the record

, that it is financially and operationally qualified to perform the services authorized

, 3 and that it is
substantially owned and effectively controlled by citizens of its claimed homeland. 4

The authority sought by the applicant is encompassed by the Air Transport Agreement between the
United States and the Republic of Korea. We therefore find that grant of the requested exemption
authority, for a two

- year term, or until the requested permit authority becomes effective, whichever

occurs earlier, is warranted.

2 Air Busan states that it plans to introduce weekly roundtrip flights between Busan and Guam on or about June 30, 2015

. 3 The record indicates that Asiana Airlines, Inc. (Asiana) holds 46% of the capital stock of Air Busan. Asiana is a foreign air
carrier of the Republic of Korea (ROK) th at is substantially owned and effectively controlled by citizens of the R OK.. See

Order 2000

- 11

- 10. The record further indicates that the Busan Metropolitan City holds 5.02% of capital stock in Air Busan

and that all other Air Busan stockholders are ROK companies and citizens

. 4 The record indicates that Air Busan’s Chairman of the Board, Board Members, Officer s , and key management personnel are

all citizens of the Republic of Korea.We also note that the applicant is properly licensed by its homeland to p erform the proposed services.

In addition, on January 21 , 2015 , th e Federal Aviation Administration advised us that it knew of no
reason why we should act unfavorably on the applicant’s request. We have verified the applicant’s
compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

Tentative Findings and Conclusions

-- Foreign Air Carrier Permit Application

We tentatively find and conclude that the public interest warrants granting the applicant a foreign air
carrier permit, in the form attached as Appendix B and subject to the conditions attached

. 5 In particular,

w e tentatively find and conclude that the factors which support our grant of exemption authority to the
applicant also warrant granting the applicant the foreign air carrier permit it seeks.

In view of the foregoing and all facts of record, we tentatively find and conclude that:

1. It is in th e public interest to issue the applicant a foreign air carrier permit in the form attached ;

2. The applicant is fit, willing and able properly to perform the foreign air transportation described in
the attached permit and to conform to the provisions of Title 49 of the U.S. Code , and to our rules,
regulations, and requirements;

3. The applicant is substantially owned and effectively controlled by citizens of its claimed homeland;

4 . The public interest requires that the exercise of the privileges gran ted by the permit should be subject
to the terms, conditions, and limitations contained in the attached permit, and to such other reasonable
terms, conditions, and limitations required by the public interest as we may prescribe;

5 . The issuance of this f oreign air carrier permit will not constitute a major regulatory action under the
Energy Policy and Conservati on Act of 1975, as defined in 14 CFR §313.4(a)(1) of our r egulations; 6

6 . The public interest does not require an oral evidentiary hearing on the application ; and

7 . Our action with respect to this foreign air carrier permit should, unless disapproved by the President
of the United States under §41307 of Title 49 of the U.S. Code, become effective on the 61st day after

its submission for §4130 7 review, or upon the date of receipt of advice from the President or his
designee under Executive Order 12597 and implementing regulations that he or she does not intend to
disapprove this portion of the Department’s decision under that section, whichever occurs earlier.

In view of the above, an d acting under authority assigned by the Department in its regulations, 14 CFR
Part 385, we find that (1) our actions are consistent with Department policy; and (2) with respect to the
exemption authority we are co nferring on the applicant, the applicant is qualified to perform those

5 The applicant’s request for a foreign air carrier permit was summ arized in the Department’s published weekly list of
applications filed. This notice described the authority sought and gave interested persons an opportunity to submit evidence
and objections to the award of this foreign air carrier permit authority. As noted above, no answers to the application were

filed.

6 This finding is based on the fact that the grant of this permit will not result in a near

- term net annual change in aircraft fuel
consumption of 10 million gallons or more.operation s; and that grant of the exemption authority is consistent with the public interest and would not
constitute a major regulatory action under the Energy Policy and Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Air Busan Co., Ltd. f or an exemption under 49 U.S.C. §40109 to permit it to
engage in : 1) scheduled foreign air transportation of persons, property, and mail from points behind the
Republic of Korea via the Republic of Korea and intermediate points to a point or points in the United
States and beyond; 2) charter foreign air transportation of persons, property, and mail between any point
or points in the Republic of Korea and any point or points in the United States, and between any point or
points in the United States and any point or points in a third country or countries, provided that such
service constitutes part of a continuous operation, with or without a change of aircraft, that includes

service to the Republic of Korea and the United States; 3) other charter foreign air transportation
pursuant to 14 CFR Part 212 ;

2

. The exercise of the privileges granted above is subject to compliance by Air Busan Co., Ltd. with the

conditions listed in Appendix A;

3

. Our action granting the exemption authority described herein is effective immediately, for a period of

two year s from the issue date of this order , or until the attached permit becomes effective, whichever is

earlier ;

4

. We may amend, modify, or revo ke the exemption authority set forth herein at our discretion at any
time and without hearing;

5

. To the extent not acted upon above, we dismiss the applicant’s request for exemption authority in this

Docket (DOT

- OST

- 2014

- 0228 ) ;

6

. With respect to the applicant’s request for a foreign air carrier permit in this proceeding, w e direct all
interested persons to show cause why our tentative decision on that application, set forth above

, should

not be made final;

7

. Any interested person objecting to the i ssuance of an order making final our tentative findings and

conclusions with respect to the applicant’s request for a foreign air carrier permit shall, no later than

twenty

- one (21) calendar days after the date of service of this order, file with the Depar tment and serve

on the parties to this proceeding , a statement of objections specifying the part or parts of the tentative
findings and conclusions objected to, together with a summary of testimony, statistical data, and
concrete evidence to be relied upon in support of the objections; if objections are filed, answers to
objections are due no later than seven (7) calendar days thereafter;

8

. If timely and properly supported objections are filed, we will give further consideration to the matters

and issues raised by the objections before we take further action;

9

. In the event no objections are filed, all further procedural steps shall be deemed waived, and the

Department will enter an order which will (subject to Presidential review under §41307 of Title 49 of
the U.S. Code) make final our tentative findings and conc lusions set forth in this order; and1 0

. We will serve a copy of this order on the applicant, the Embassy of the Republic of Korea in
Washington, D.C., the Federal Aviation Administration, and the U.S. Department of State

.

Persons entitled to petition the Department for review of this order under the Department’s regulations,
14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this order

. Our action with respect to the applicant’s request for exemption authority under 49 U.S.C. § 40109 is
effective immediately , and the filing of a petition for review will not alter such effectiveness.

By:

PA UL L. GRETCH

Director

Office of International A viation

(SEAL)

Appendices

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

F oreign Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carrier applicant(s) s hall:

(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 assu re 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 Sta tes, contact its International Industry 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 unde r 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 constitu te 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) bas ed 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 Conventi on, 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) C omply 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 regulatio ns 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 so ld or otherwise transferred without explicit Department
approval under Title 49 of the U.S. Code.

1 2/2007Appendix B

Issued by

Order 20 1 5

- X

- X

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



### -------------------------------------------------------- PERMIT TO FOREIGN AIR CARRIER



### ---------------------------------------------------------



### AIR BUSAN CO., LTD.

A F oreign Air Carrier of the Republic of Korea

is authorized, subject to the following p rovisions, the provisions of Title 49 of the U.S. Code,
and the orders, rules, and regulations of the Department of Transportation, to engage in :

Scheduled foreign air transportation of persons, property, and mail from points
behind the Republic of Korea via the Repu blic of Korea and intermediate points to a
point or points in the United States and beyond; and

Charter foreign air transportation of persons, property, and mail between any point
or points in the Republic of Korea and any point or points in the United St ates, and
between any point or points in the United States and any point or points in a third
country or countries, provided that such service constitutes part of a continuous
operation, with or without a change of aircraft, that includes service to the Re public

of Korea and the United States

.

The holder shall also be authorized to engage in other charter trips in foreign air transportation,
subject to the terms, conditions, and limitations of the Department’s regulations governing

charters.

This permit and the exercise of the privileges granted in it shall be subject to the terms,
conditions and limitations in both the order issuing this permit and the attachment to this order,
and to all applicable provisions of any treaty, convention or agreement affec ting international air
transportation now in effect, or that may become effective during the period this permit remains
in effect, to which the United States and the holder’s homeland are or shall become parties.

This permit shall be effective on

______ ___________ . Unless otherwise terminated at an
earlier date pursuant to the terms of any applicable treaty, convention or agreement, this permit
shall terminate (1) upon the dissolution or liquidation of the holder to whom it was issued; (2)upon the ef fective date of any treaty, convention, or agreement or amendment, which shall have
the effect of eliminating the bilateral right for the service authorized by this permit from the
service which may be operated by airlines designated by the Government of t he Republic of

Korea (or, if the right is partially eliminated, then the authority of this permit shall terminate in
like part); (3) upon the effective date of any permit granted by the Department to any other
carrier designated by the Government of the Re public of Korea in lieu of the holder; or (4) upon
the termination or expiration of the applicable air services agreement between the United States

and the Republic of Korea . However, clause (4) of this paragraph shall not apply if prior to such

terminati on or expiration, the foreign air transportation authorized herein becomes the subject of
another treaty, convention or agreement to which the United States and the Republic of Korea
become parties.

The Department of Transportation has executed this permi t and affixed its seal on

__________.

By:

PAUL L. GRETCH

Director

Office of International Aviation


### (SEAL)Foreign Air Carrier Permit 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 ass ure 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 St ates, contact its International Industry 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 securit y 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 th e 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 und er 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 constitu te 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) bas ed 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

Conventi on, 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) C omply 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 can not be sold or otherwise transferred without explicit Department
approval under Title 49 of the U.S. Code.

1 2 /200 7