Order 2012

- 11

- 16

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 16 th d ay of November

, 2012

Se rved: November 16 , 2012

Application of

BLUEBIRD CARGO LTD (BLAFUGL EHF) Docket s DOT

- OST

- 2003

- 16018

DOT

- OST

- 2003

- 16019

for renewal and amendment of an exemption under 49 U.S.C. §40109 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 refere nced foreign air carrier for a renewal and

amendment of its exemption under 49 U.S.C. §40109, subject to conditions; 1 and (2) tentatively

find t hat it is in the public interest to grant the applicant a 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, announcing 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 germane 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 whate ver 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

1 The conditions are attached as Appendix A.2

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).

Our action in this Order serves to implement these streamlined regulatory procedures for the application involved in this proceeding.

Application s

By application s most recently amended July 3, 2012, 2 Bluebird Cargo Ltd (Blafugl ehf) (“Bluebird”)

, a foreign a ir carrier of Iceland

, requests renewal and amendment of its e xemption under 49 U.S.C. §40109

, 3 and a foreign air carrier permit under 49 U.S.C. §41301

, to permit it to conduct the new rights made available in the U.S.

- EU

- Iceland

- Norway Air Transport Agreement of June 21, 2011 (the Agreement). Specifically, Bluebird requests authority to engage in:

a. s cheduled and charter foreign air transportation of property and mail between any point or points in Iceland and any point or points in the United States;

b. scheduled and charter foreign air transportation of property and mail between any point or points in the United States and any point or points in a third country or countries ;

c. all

- cargo charters in accordance with the Department’s regulations ; and

d. transportation authorized by any additional route rights made available to European

Union carriers in the future

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

Responsiv e Pleadings

We received no answers in response to Bluebird’s application as amended. 4

Decision

2 Bluebird’s original application for a foreign air carrier permit was filed in Docket DOT

- OST

- 2003

- 16018 on August 25, 2003, and was subsequently amended on September 2, 2003, A ugust 25, 2006, and July 3, 2012.

3 Bluebird’s current exemption authority auth orizes it to conduct scheduled and charter all

- cargo service between Iceland and the United States, and between the United States and any point or points in a third country or countries. ( See Notice of Action Taken dated July 9, 2010, in Docket DOT

- OST

- 20 03

- 16019.) We note that while the applicant styled its exemption request as a renewal application, it is also seeking exemption authority to the extent necessary to conduct additional services available to it under the Agreement. Therefore, we will treat its exemption application as a request for renewed and amended authority.

4 On September 9, 2003, Arrow Air, Inc. (Arrow) filed an answer to Bluebird’s initial request for an exemption and a foreign air carrier permit, and Bluebird filed a reply on Sept ember 17, 2003. The Department summarized these responsive pleadings and addressed the concerns raised by Arrow in our initial action in which we granted Bluebird’s request for exemption authority. ( See Order 2004

- 8

- 24, issued on August 20, 2004, in Dock et DOT

OST

- 2003

- 16019.)3

We have decided, consistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for renewed and amended 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.

Specifically, we will grant Bluebird renewed and amended exemption authority for the services set forth in ordering paragraph 1 below. We will also tentatively grant Bluebird a for eign air carrier permit for these services

.

As an additional matter, Bluebird has requested that we grant it, in addition to authority currently

contai ned in the Agreement, authority to conduct transportation authorized by any additional

route rights that may be made available to European Union carriers in the future. We are granting the request of Bluebird for this authority by exemption (and tentatively granting it by foreign air carrier permit). We are, however, requiring Bluebird

, before it commences any new service under this authority, to provide us with evidence that it holds a homeland license for th at new service, unless it has already provided such evidence. 5

With respect to the applicant’s request for exemption authority, we find that grant of this authority, as conditioned, is consistent with the public interest. We find that the applicant is

fi nancially and operationally qualified to perform the services authorized, and that it is substantially owned and effectively controlled consistent with the provisions of the Agreement

. 6 We also find that the authority sought by the applicant is encompassed by the Agreement

.

Further, we note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, on July 25, 2012, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the applicant’s requests. We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver) and 205 (insurance requirements).

In view of the above, we find that grant of the requested exemption authority, as condi tioned, for

a two

- year term, or until the requested permit authority becomes effective, whichever occurs earlier, is warranted.

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. 7 In particular, we tentatively find and conclude that the fa ctors which support our grant of renewed

5 See Orders 2007

- 6

- 19 and 2007

- 10

- 1, and Orders 2007

- 7

- 13 and 2007

- 10

- 16, where we granted this authority to British Airways Plc. and Virgin Atlantic Airways Ltd., respectively.

6 We make this finding based on the Agreement provision on reciprocal recognition of fitness and citizenship

determinations.

7 The applicant’s request for a foreign air carrier permit was summarized in the Department’s published weekly list of applications filed. This notice described the authori ty sought and gave interested persons an opportunity to submit evidence and objections to the award of this foreign air carrier permit authority.4

and amended exemption authority to the applicant, as discussed above, also warrant granting the applicant the f oreign air carrier permit it seeks.

In view of the foregoing and all facts of record, and acting under authority assigned by the Department in its regulations, 14 CFR Part 385, we tentatively find and conclude that:

1. It is in the 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 effe ctively controlled in a manner consistent with the provisions of the Agreement ;

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

5 . The issuance of this foreign air carrier permit will not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of our regulations; 8

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 di sapproved 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 §41307 review, or upon the date of receipt of advice from the President or his designee under Executive Ord er 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, and acting under authority assigned by the Department in its r egulations, 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 conferring on the applicant, the applicant is qualified to perform those operations; 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 Bluebird Cargo Ltd (Blafugl ehf) for renewal and amendment of its exemption under 49 U.S.C. §40109 for the services set forth below:

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

- term net annual c hange in aircraft fuel consumption of 10 million gallons or more.5

a. foreign scheduled and charter air transportation of property and mail between any point or points in Iceland and any point or points in the United States;

b. fo reign scheduled and charter air transportation of property and mail between any point or points in the United States and any other point or points;

c. other all

- cargo charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations ; and

d. transportation authorized by any additional route rights made available to European

Union carriers under the Agreement in the future.

2

. Bluebird Cargo Ltd (Blafugl ehf) shall, before it commences any new se rvice under subparagraph ( d ) of ordering paragraph 1 above, provide the Department

, in Docke t s DOT

- OST

2003

- 16018 and DOT

- OST

- 2003

- 16019

, wi th evidence that it holds a homeland license for that new service, unless it has already provided such evidence to t he Department;

3 . The exercise of the privileges granted above is subject to compliance by Bluebird Cargo Ltd (Blafugl ehf) with the conditions listed in Appendix A;

4 . Our action granting the exemption authority described herein

, subject to the provisions of ordering paragraph s 1 through 3 above, is effective immediately, for a period of two years from the issue date of this order, or until the attached permit becomes effective, whichever is earlier;

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

6 . To the extent not acted upon above, we dismiss all requests for relief in Docket DOT

- OST

2003

- 16019 ) ;

7 . With respect to the applicant’s request for a f oreign air carrier permit in this proceeding, we direct all interested persons to show cause why our tentative decision on that application, set forth above, should not be made final;

8 . Any interested person objecting to the issuance 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 Department and serve on the par ties 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 objecti ons; if objections are filed, answers to objections are due no later than seven (7) calendar days thereafter;

9 . 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;6

1 0 . 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 conclusions set forth in this order; and

1 1 . We will serve a copy of this order on Bluebird Cargo Ltd (Blafugl ehf) ; the Embassy of

I celand in Washington

, D.C.; the Department of State; and the Federal Aviation Administra tion.

By:

PAUL L. GRETCH

Director

Office of International Aviation

(SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govForeign Air Carrier Exemption Conditions Appendix A

In the conduct of the operations authorized, the foreign carrier applicant 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 Administra tion, 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 In ternational 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 all ow 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

OS T 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 co nsidered 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

Iceland or a Member State of the European Union;

(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 go verning 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 other wise transferred without explicit Department approval

under Title 49 of the U.S. Code.

EU carrier 0 1 /200 8Appendix B

Issued by

Order 20 1 2

- X

- X

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



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



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

### BLUEBIRD CARGO LTD (BLAFUGL EHF)

A Foreign Air Carrier of Iceland

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

Foreign scheduled and charter air transportation of property and mail between any point or points in Iceland and any point or points in the United States;

Foreign s cheduled and charter air transportation of property and mail between any point or points in the United States and any other point or points;

O ther all

- cargo charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations; and

T ransportation authorized by any additional route rights made available to European Union carriers under the U.S.

- EU

- Iceland

- Norway Air Transport Agreement in the future; provi ded , that the holder shall, before it commences any new service under such additional route rights, provide the Department with evidence that it holds a homeland license for that new service (unless it has already provided such evidence to the Department). Such evidence shall be filed in Docket s DOT

OST

- 20 03

- 16018 and DOT

- OST

- 2003

- 16019

.

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 attac hment to this order, and to all applicable provisions of any treaty, convention or agreement affecting 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 effective date of any treaty, convention, or agreement or amendment, which shall have the effect of eliminating the right for the service authorized by this permit from the service whichmay be operated by airlines of Iceland ( or, if the right is partially eliminated, then the authority of this permit shall terminate in like part); or (3) upon the termination or expiration between the

United States and Iceland of the applicable air services agreement. However, clause (3) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transportation authorized herein becomes the subject of another treaty, convention or agreement to which the

United States and Iceland become parties.

The Department of Transportation has executed this permit and affixed its seal on ________.

By:

PAUL L. GRETCH

Director

Office of International Aviation



### (SEAL)Foreign Air Carrier Permit Co nditions

In the conduct of the operations authorized, the foreign carrier applicant 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 3 6 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 Transportati on 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 thi s 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 file d 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 Govern ment 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 operat ions 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 purchas ed 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

Iceland or a Member State of the European Union;

(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 prescri bed 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 co nditions imposed above. Moreover, this authority cannot be sold or otherwise transferred without explicit Department approval under Title 49 of the U.S. Code.

EU carrier 01/2008