UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on October 12

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### N OTICE 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)

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Applicant: CATHAY PACIFIC AIRWAYS LIMITED (Cathay Pacific )

Date Filed: September 12 , 201 2

Relief requested: Renewal of e xemption from 49 USC § 41301 to permit Cathay Pacific to engage in scheduled foreign air transportation of persons, proper ty and mail between Hong Kong and 25 U.S. code

- share points beyond Cathay

Pacific ’s U.S. and Canadian gateways pursuant to its code

- share agreement with Alaska Airlines, Inc. (Alaska) and

Horizon Air Industries, Inc. (Horizon)

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If renewal, date and citat ion of last action: September 21, 2010 , in this D ocket

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Applicant representative: John R. Mietus, Jr., 202

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DOT analyst: Brett D. Kruger , 202

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Responsive pleadings: None

DISPOSITION

Action: Approved

, subject to conditions Action date: October 12 , 20 1 2

Effective dates of authority granted: October 12 , 20 1 2

, through October 12 , 20 1 4

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

- Hong Kong Air Transport Agreement (the Agreement) and the

Memorandum of U nderstanding of October 19, 2002 (the MOU).

Except to the extent exempted/waive d , this authority is subject to the terms, conditions, and limitations of our standard foreign air carrier exemption conditions attached as Appendix A and to the code

- share con ditions previously imposed on Cathay Pacific, Alaska, and Horizon in this Docket

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Special conditions/Remarks: The exemption authority granted to Cathay Pacific is limited to operations conducted only through code

- share arrangements with Alaska or Horizon , on flights operated by Alaska or Horizon. Furthermore, Cathay

Pacific’s code

- share operations shall be operated within the level of code

- share frequencies provided for under the U.S.

- Hong Kong Memorandum of Understanding of October 19, 2002. 2

Action ta ken by: Paul L. Gretch, Director

, Office of International Aviation

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1 The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR) may, at its discretion, change the code

- share points in the United States on not less than 30 days’ notice in writing to the Government of the

Unite d States. By letter dated April 28, 201 1 , the HKSAR confirmed that it has selected the following 25 code

- share points under the Agreement and MOU : Atlanta, Boston, Charlotte, Cleveland, Columbus , Dallas/Fort Worth, Denver, Detroit, Houston, Kansas City

, Las Vegas, Miami, Minneapolis/St. Paul, New Orleans, Orlando, Philadelphia, Phoenix, Pittsburgh, Portland, Raleigh

- Durham, Salt Lake City, San Diego, Seattle, St. Louis, and Washington/Baltimore.

2 We note that under the MOU, Cathay Pacific may code share on a total of 21 weekly round trip frequencies to each code

- share point in the United States, from each of its direct service points in Canada or the United States.Under authority assigned by the Department in its regulations, 14 CFR Part 38 5, 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 consistent with the public interest; and (4) grant of the authority would not constitu te a major regulatory action under the Energy Policy and Conservation Act of 1975. To the extent not granted, we denied all requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time without hearin g 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 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.regulat ions.govAppendix A



### 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 requirem ents 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 commenci ng 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 Securit y 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), F light 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 Chicag o 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

CF R 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 pr oceedings 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 or igin, 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 Stat es. 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, c onditions, 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