Order 201 3

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- 17

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 15 t h day of February 15, 20 1 3

Served: February 15, 2013

Application of

C.A.L.

- CARGO AIRLINES LTD. Docket DOT

- OST

- 2 01 3

- 0005

for an exemption under 49 U.S.C. § 40109 and an amended 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 a n amended foreign air carrier permit attached as Appen dix 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) granti ng 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

1 The conditions are attached a s Appendix A.2

permits, five years for comity and reciprocity regimes, indefi nite for agreement regimes).

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

Application

By application filed January 3, 201 3 (as supplemented February 4, 2013)

, C.A.L.

- Cargo Airlines Ltd. (C.A.L. Cargo)

, a foreign air carrier of Israel r equests an exemption for a two

- year

term under 49 U.S.C. § 40109 and a n amended foreign air carrier permit under 49 U.S.C. §41301

to engage in the following services: 2

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

b. Scheduled and charter foreign air transportation of property and mail from any point or points behind Israel via Israel and via any intermediate points to any point or points in the United States and to any points be y ond ; and

c. Other charter fore ign air transportation of property and mail pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations

.

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to

su pport its requests for authority.

On February 4, 2013, the applicant filed a supplement to its original application that clarified the scope of its request.

No answers were filed to the application.

Decision

We have decided, under assigned authority a nd 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 n amended foreign air carrier perm it, also subject to conditions.

2 C.A.L . Cargo ’s current foreign air carrier permit was issued November 25, 2003, by Order 2 003

- 11

- 25 in Docket

DOT

- OST

- 2000

- 7251

, and permits it to engage in scheduled foreign air transportation of property and mail from points behind Israel via Israel and Cyprus, Turkey, Greece, Romania, Italy, Spain, Portugal, Switzerland, Austria, Germany, Fr ance
, Luxembourg, Belgium, Netherlands, United Kingdom, Ireland, Montreal, and Toronto, to New York (and ten additional points in the United States to be selected by Israel and notified to the United States), and beyond (a) one specified U.S. point to Mexi co City, and (b) any specified U.S. points to South America and Asia, without traffic rights between U.S. points beyond the United States; and to conduct all

- cargo charters in accordance with Part 212 of the Departments rules.3

With respect to the applicant’s request for exemption authority, we find that grant of this authority is consistent with the public interest; that the applicant has demonstrated, 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 Government of the United States and Israel. We also note that the applicant is properly licensed by its homeland to p erform the proposed services. In addition, the Federal Aviation

Administration advised us on January 29, 2013, that it kn ows of no reason why we should act

unf a vorably on the applicant’s requests. We have verified the applican t’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (i nsurance requirements)

.

In view of the above, w e find that grant of the requested exemption authority, as conditioned, for

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

Tentative Findings and Conclusions

— Amended Foreign Air Carrier Permit Application

We tentatively find and conclude that the public interest warrants granting the applicant a n amended 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

amended 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 the public interest to issue the applicant a n amended 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 attach ed 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;

3 The applicant has requested confidential treatment of its financial submissions, under the provisions of 14 CFR § 302.12. Good cause having been shown, we will grant this request

. 4 T he record indicates that 88.5% of the applicant ’s shares are held by Ka nfei Hagai Ltd. (Kanfei), an Israeli private limited liability company. In turn, 96% of the shares of Kanfei are held by Mr. Offer Gilboa, a dual citizen of Israel and Great Britain who also serves as the applicant’s Chairman of the Board of Directors. T he remaining 11.5% of the applicant’s shares are held by the Plenus Mezzanine Fund, a group of four Israeli and one Cayman limited partnerships organized under an Israeli management company. The record further indicates that the remainder of the applicant ’s Directors and key management personnel are all citizens of Israel.

5 The applicant’s request for a n amended foreign air carrier permit was summarized in the Department’s published weekly list of applications filed. This notice described the authority s ought 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.4

4 . The public interest req uires that the exercise of the privileges granted 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 foreign 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 §41307 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 Departm ent’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 conferring on the applicant, the applicant is qualified to perform those operation s; and that grant of the exemption authority is consistent with the public

interest and would not constitute a major regulatory acti on under the Energy Policy and

Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of C.A.L.

- Cargo Airlines Ltd. for an exemption under 49 U.S.C. §40109 for the services set forth below:

a . Scheduled and charter foreign air transportation of property and mail from any point or points behind Israel via Israel and via any intermediate points to any point or points in the United States and beyond; 7 and

b . Other all

- cargo charter s pursuant to the prior approval requirements set forth in 14 CFR Part

212 of the D epartment’s regulations

.

2 . T he exercise of the privileges granted above is subject to compliance by C.A.L.

- Cargo

Airlines Ltd. w ith the conditions listed in Append ix A;

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

- term net annual change in aircraft fuel consumption of 10 million gallons or more.

7 We note that C.A.L. Cargo also requested authority to conduct scheduled and charter foreign air transportation of property and mail be tween any point or p oints in Israel and any point or points in the United States . That authority is encompassed in the broader route authority granted in paragraph (1) (a).5

3. We grant the motion of C.A.L.

- Cargo Airlines Ltd. for confidential treatment of its financial submissions, consistent with the provisions of 14 CFR § 302.12;

4

. 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 ;

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 exemption authority in Docket

DOT

- OST

- 20 1 3

- 00 05 ;

7

. With respect to the applicant’s request for a n amended 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;

8

. Any interested person objecting to the issuance of an order making final our tentative findings

and conclusions wi th respect to the applicant’s request for a n amended 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 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 t o 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;

10

. 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 concl usions set forth in this order; and

1 1

. We will serve a copy of this order on the applicant

, the Embassy of Israel in Washington, D.C., the Departmen t of State

, and the Federal Aviation Administration

.

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 re quest for exemption authority6

under 49 U.S.C. § 40109 is effective immediately , and the filing of a petition for review will not

alter such effectiveness.

By:

PAUL 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.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 author ization 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 limi ted 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) fro m 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 c ommencement 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 termi nation 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 Conven tion 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 stoppi ng 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 "internati onal 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 authoriz ed, 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 th e 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.

1 2 /200 7Appendix B

Issued by

Order 20 1 3

-

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



### -------------------------------- ---------------------- ------------------------ PERMIT TO F OREIGN AIR CARRIER (as amended)



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



### C.A.L.

- CARGO AIRLINES LTD.

A Foreign Air Carrier of Israel

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 :

Scheduled and charter foreign air transportation of property and mail from any point or points b ehind Israel via Israel and via any interme diate points to any point or points

in the United States and beyond

.

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 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 bilateral right for the service authorized by this permit from the service which may be op erated by airlines designated by the Government of Israel (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 d esignated by the

Government of Israel lieu of the holder; or (4) upon the termination or expiration of the applicable air services agreement between the United States and Israel. However, clause9

(4) of this paragraph shall not apply if prior to such t ermination or expiration, the foreign air transportation authorized herein becomes the subject of another treaty, convention or agreement

to which the United States and Israel become parties.

The Department of Transportation has executed this permit and a ffixed its seal on
, 20 1 3

.

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 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 Admin istration, 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 w ith 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 it s 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 com pleted 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 author ity 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 sp ecifically 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 trans portation 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 c laim 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, excep t 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 w ith 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.

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