\\DC - 082908/000001 - 5802358 v1 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of CHINA SOUTHERN AIRLINES COMPANY LIMITED for an exemption pursuant to 49 U.S.C. § 40109 and for an amended foreign air carrier permit pursuant to 49 U.S.C. § 41301 (Guangzhou/Wuhan-San Francisco) ) ) ) ) ) ) ) ) Docket DOT-OST-1996-2008

APPLICATION OF CHINA SOUTHERN AIRLINES COMPANY LIMITED FOR AN EXEMPTION AND AN AMENDED FOREIGN AIR CARRIER PERMIT
Communications with respect to this document should be addressed to:

Lu Wei Xi Senior Vice President – The Americas China Southern Airlines Co. Ltd. Los Angeles Office 8300 Wilshire Boulevard Suite 101 Los Angeles, CA 90048 Telephone: +1 323 653 8088 Facsimile: +1 323 653 8066 George U. Carneal HOGAN LOVELLS US LLP Columbia Square 555 Thirteenth Street, NW Washington, D.C. 20004 Telephone: +1 202 637 6546 Facsimile: +1 202 637 5910 E-mail: george.carneal@hoganlovells.com Counsel for CHINA SOUTHERN AIRLINES COMPANY LIMITED

October 10, 2014

NOTICE: Any person may support or oppose this application by filing an answer

and serving a copy of that answer on counsel for China Southern Airlines Company Limited and all persons served with this application. Answers to the exemption request are due October 27, 2014, and answers to the permit request are due October 31, 2014. However, Counsel for China Southern intends to poll the U.S. air carrier representatives listed on the attached service list to confirm that there are no objections to this application in advance of those dates.\\DC - 082908/000001 - 5802358 v1 BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of CHINA SOUTHERN AIRLINES COMPANY LIMITED for an exemption pursuant to 49 U.S.C. § 40109 and for an amended foreign air carrier permit pursuant to 49 U.S.C. § 41301 (Guangzhou/Wuhan-San Francisco) ) ) ) ) ) ) ) ) Docket DOT-OST-1996-2008

October 10, 2014 APPLICATION OF CHINA SOUTHERN AIRLINES COMPANY LIMITED FOR AN EXEMPTION AND AN AMENDED FOREIGN AIR CARRIER PERMIT China Southern Airlines Company Limited (“China Southern”) hereby applies under 49 U.S.C. §§ 41301, 41302 and 40109, Subparts B and C of the Department’s Rules of Practice (14 C.F.R §§ 302.201 and 302.301, et seq.), Part 211 of the Department’s Economic Regulations (14 C.F.R. Part 211), and the Department’s August 23, 2005 Notice in Docket DOT-OST-2005-22228 (the “Streamlined Licensing Procedures Notice”) for exemption authority and an amended foreign air carrier permit authorizing China Southern to engage in scheduled foreign air transportation of persons, property, and mail between Guangzhou (CAN) and Wuhan (WUH), People’s Republic of China (“PRC”), on the one hand, and San Francisco, CA (SFO), on the other hand.China Southern seeks such authority to introduce scheduled service on the CAN-WUHSFO route on December 16, 2014 . China Southern requests immediate consideration of this application and will be polling the U.S. air carriers served with this application to help facilitate prompt DOT approval. Pursuant to the show-cause procedures described in the Streamlined Licensing Procedures Notice, China Southern requests issuance of an Order (a) approving anApplication of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 2

\\DC - 082908/000001 - 5802358 v1 exemption to authorize the scheduled Guangzhou/Wuhan-San Francisco services specified above for a period of one year, or until the effective date of China Southern’s final amended foreign air carrier permit, whichever occurs first, and (b) tentatively awarding an amended foreign air carrier permit to China Southern adding the CAN/WUH-SFO route. As soon as possible thereafter, China Southern requests that the Department release a Final Order issuing China Southern its amended foreign air carrier permit authorizing scheduled CAN/WUH-SFO services for a period of indefinite
duration. Notably, with the introduction of CAN-WUH-SFO flights, China Southern proposes to open up Wuhan as a new Chinese gateway for non-stop service to the United States. It would represent the first-ever combination service by a Chinese air carrier between an interior mainland PRC city and the U.S. mainland (whereas, up until now, Beijing, Shanghai and Guangzhou have been the exclusive passenger service gateway points within mainland China). This new service would also establish San Francisco as China Southern’s third combination service destination in the United States. China Southern’s new flights would link San Francisco not only with central China via Wuhan, but also with China Southern’s main Guangzhou hub on a one-stop basis, creating multiple new connecting opportunities that will bring substantial benefits to travelers. In further support of this application, China Southern submits the following information:

1. China Southern is a well-known and well-established air carrier of the PRC. Its principal office and primary hub are located at Baiyun International Airport, Guangzhou, PRC. With a fleet of over 600 aircraft and service to over 200 globalApplication of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 3

\\DC - 082908/000001 - 5802358 v1 destinations, China Southern ranks as the largest Asian air carrier in terms of passengers carried, and is among the 10 largest airlines in the world. 2. China Southern currently holds a DOT foreign air carrier permit that authorizes it to provide: (a) scheduled foreign air transportation of persons, property, and mail between (i) Guangzhou, PRC and the terminal point Los Angeles, CA, and (ii) Guangzhou, PRC and New York, NY; (b) scheduled foreign air transportation of property and mail between Shenzhen, PRC and the coterminal points Anchorage, AK and Chicago, IL; and (c) charter foreign air transportation, subject to the prior approval requirements of Section 212.9(e) of the Department’s regulations. 1/ China Southern also holds exemptions authorizing it to engage in: (a) scheduled foreign air transportation of persons, property, and mail between points in the PRC and points in the United States, via intermediate points, and beyond, on a code-share basis with any authorized U.S. air carrier; 2/ and (b) scheduled foreign air transportation of property and mail between any point or points in the PRC and any point or points in the United States open to scheduled service, via intermediate points and beyond to any points outside the United States. 3/
3. Pursuant to its existing DOT economic authority, China Southern operates scheduled passenger flights between its Guangzhou hub and Los Angeles, a service it has provided since 1997, and between Guangzhou and New York, a service it introduced just this past summer. China Southern also conducts freighter service

1/ DOT Order 2014-8-21.

2/ DOT Notice of Action Taken dated November 7, 2013 (Docket DOT-OST-1999-5031).

3/ DOT Notice of Action Taken dated April 15, 2010 (Docket DOT-OST-2010-0047) (timely renewal application dated April 6, 2011 pending).Application of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 4

\\DC - 082908/000001 - 5802358 v1 between Shanghai and Chicago via Anchorage, and between Shanghai, Guangzhou, Qingdao and Zhengzhou, on the one hand, and Los Angeles on the other hand. China Southern is seeking expedited DOT approval of an exemption and subsequent issuance of an amended foreign air carrier permit to enable it to introduce passenger service on the Guangzhou-Wuhan-San Francisco route on December 16, 2014. 4. China Southern is unquestionably fit, willing, and able to provide the scheduled foreign air transportation described in this application. Upon issuing China Southern its initial foreign air carrier permit in 2001 and on numerous occasions since then, the Department has determined that China Southern is operationally and financially fit to engage in scheduled and charter foreign air transportation, and China Southern remains so qualified. See DOT Orders 2001-11-4 and 2014-6-2 and Notices of Action Taken in Dockets DOT-OST-2004-18727, DOT-OST-2003-16786, DOT-OST-2002-12655 and DOT-OST-1999-5031. China Southern requests, pursuant to Rule 24(g) of the Department’s Rules of Practice, that the Department take official notice of the relevant facts in these dockets and otherwise on file with the Department to support approval of this permit amendment/exemption application. 5. In support of its application for issuance of an amended foreign air carrierpermit (and interim exemption) authorizing scheduled Guangzhou/WuhanSan Francisco passenger air transportation, China Southern hereby incorporates by reference the updated and additional fitness information that was set forth in its Application for an Exemption and Amended Foreign Air Carrier Permit filed in Docket DOT-OST-1996-2008 on May 21, 2014. Except as noted below, the information contained in that recent Application pertaining to 14 C.F.R. §§ 211.20(a), (b), (e), (f), (i), (n), (o) and (s) remains substantially unchanged. China Southern provides the followingApplication of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 5

\\DC - 082908/000001 - 5802358 v1 additional information required under 14 C.F.R. § 211.21 in support of this instant Application: § 211.20(c) & (p) Statement of the additional authority requested, a description

of the new services proposed, and an estimate showing the total traffic and financial results of the new services for the first full year of normal operations. China Southern is seeking DOT exemption authority and subsequent issuance of an amended foreign air carrier permit under the Department’s streamlining procedures to authorize China Southern to provide scheduled foreign air transportation of persons, property, and mail between Guangzhou and Wuhan, People’s Republic of China, on the one hand, and San Francisco, CA, on the other hand. Such authority is available to Chinese air carriers under the U.S.-PRC Agreement Relating to Civil Air Transport, signed September 17, 1980, as amended (“U.S.-PRC Agreement”). Pursuant to the requested exemption and amended permit authority, China Southern plans to introduce year-round scheduled one-stop Guangzhou (CAN) - Wuhan (WUH) - San Francisco (SFO) service effective December 16, 2014, using recently-delivered Boeing 787-8 aircraft. China Southern’s B-787-8 aircraft are configured with 228 seats in three classes (4 First Class, 24 Business Class, and 200 Economy Class). China Southern has a substantial fleet of other long-range aircraft, including Airbus 380s and Boeing 777s, and reserves the right to use other equipment on the CAN-WUH-SFO route if warranted. China Southern has been advised that the Transportation Security Administration (TSA) has assessed WUH under TSA’s Foreign Airports Assessment Program. Therefore, China Southern anticipates that it will be ableApplication of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 6

\\DC - 082908/000001 - 5802358 v1 to use WUH as a Last Point of Departure to the United States, subject to meeting TSA’s other security requirements. China Southern initially intends to offer 3 weekly CAN-WUH-SFO flights (on Tue./Thu./Sat.), but the frequency may change based on seasonality, market and fleet considerations. The initially proposed CAN-WUH-SFO schedule for the winter season is as follows (all times local): Flight # Dep. Arr. Dep. Arr. CZ659 1130 CAN – WUH 1315 1445 WUH – SFO 1055 ** CZ660 1255 SFO – WUH 1855/+1 2025 WUH – CAN 2210 ** Arrival/departure times at SFO one hour later during Daylight Saving Time. China Southern reserves the right to modify its CAN/WUH-SFO schedule and service pattern, subject to applicable frequency limitations under the U.S.-PRC Agreement. Based on its substantial international air transportation experience and its analysis of demand and expected growth in the market, China Southern reasonably projects that it will carry approximately 60,000 passengers between Guangzhou/Wuhan and San Francisco during the first year of operations and the route will generate income of approximately $54 million during that period.

§ 211.20(d) Updated Officer information. China Southern remains effectively controlled by Chinese citizens. The only change to the list of directors and senior officers set forth as Exhibit CSN-1 to its May 21, 2014 Application is the addition of Mr. Feng Hua Nan as COO Flight Safety of the Company, since August 2014. Mr. Feng is a PRC citizen.Application of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 7

\\DC - 082908/000001 - 5802358 v1 § 211.20(i) Evidence of the Applicant’s homeland operating authority. Enclosed as Exhibit WUH-1 is an authorization issued by CAACpermitting China Southern to provide scheduled service on the GuangzhouWuhan-San Francisco route (with an informal English translation).

§ 211.20(q) Authorization under the civil air transport agreement between the

United States and the People’s Republic of China. The PRC may designate an unlimited number of airlines to operate combination and all-cargo services under the U.S.-PRC Agreement, and China Southern has been so designated for many years. Under Annex I, Section II.A of the Agreement, designated Chinese airlines may operate combination services “[f]rom any point or points in the People’s Republic of China, via Tokyo or another point in Japan, to any point or points in the United States open to scheduled international services.” In terms of the proposed nonstop services between Wuhan and San Francisco, Wuhan is thecapital of Hubei province, which is an area within China Zone 3 and the WUHSFO flights are thus not subject to any frequency limitations under Annex V, paragraph (6), of the U.S.-PRC Agreement. In the event a decision is made to adjust the service pattern so that CAN-SFO is the nonstop segment, the service would equally be authorized within the Annex V frequency limitations. Consequently, issuance of the requested exemption authority and amended foreign air carrier permit for the Guangzhou/Wuhan-San Francisco route is entirely consistent with the U.S.-PRC Agreement (constituting prima facie evidence that approval of this application is in the public interest).Application of China Southern Airlines (Guangzhou/Wuhan-San Francisco) Page 8

\\DC - 082908/000001 - 5802358 v1 6. The introduction of the scheduled CAN-WUH-SFO services contemplated by China Southern will not involve a near-term net annual change in aircraft fuel consumption exceeding 10 million gallons, meaning approval of this application would not constitute a “major regulatory action” under the Energy Policy and Conservation Act, as implemented by 14 C.F.R. Part 313. According to China Southern’s estimates, the fuel burn for its first year of Boeing 787-8 PRC-San Francisco roundtrip services will total approximately 7.436 million gallons. China Southern does not anticipate encountering any difficulty in obtaining adequate supplies of fuel for its proposed services from existing sources. Moreover, China Southern believes that the public benefits of convenient and competitive new services between China and San Francisco, including the establishment of Wuhan as a new Chinese gateway and San Francisco as a new U.S. terminal point for China Southern, warrant and offset any increased fuel consumption that, by necessity, will accompany the introduction of such long-haul air services. 7. In conclusion, China Southern is eager and well-qualified to introduce valuable, competitive and convenient scheduled air transportation between Guangzhou/Wuhan and San Francisco, which is consistent with the U.S.-PRC Agreement. Approval of this application would be consistent with the Department’s standards for issuance of scheduled authority to foreign air carriers, and is in the public interest.Application of China Southern Airlines (Guangzhou/Wuhan-San Francisco)

\\DC - 082908/000001 - 5802358 v1 

### EXHIBIT LIST

Exhibit WUH-1 Guangzhou-Wuhan-San Francisco Authorization WUH-2 VerificationApplication of China Southern Airlines (Guangzhou/Wuhan-San Francisco)

\\DC - 082908/000001 - 5802358 v1 

## Exhibit WUH-1

Guangzhou-Wuhan-San Francisco Authorization

## %J**~tt[2014J** 

### 129 

## %



# 0/ 00 T#J 

# 7J fJ;t 

# M 17}:fr**~~** 

# 0- fij : 0/ 00 

# m J1Jt 

# ffiJ 1fT 

# tx 11 $ 

# 0- fij { * -f 7f :It 

# r- 11 '1

-**~ix** 

# - 18 

# 4t JJ ) 1 1'!**-*~'-18** 

# 4t JJ**ft~:$..~J1Jt~ ~w** **~** 

# ( WI J1JtMC 2014)274 

## %) 0

### *o/oo~**oo Moo~~~~~{o/$A~#~oo~~~~** 

## ~A**oo ~~~m~~~.~~~~~** ***-f*****~~~~~~ ,** **~~~~~0-fij*****~~~~~~~~~~~~~# ~~~ffiJ**  

# >i '\ :fJL '\ 

# * *- 

# ***~** 

# l1t**~J** 

# :fE 

# r- 11'1

- 1X

- 18 

# 4t JJ 

# ft J1Jt

41;;, L**~A** ;:g:; 

### J.f**,~ti? A~** **~J;1** A 1il-2;- Jjl!: ;::x.

.
__ L....:.r. 

### IS WI 1A '\ JJ..!. }!;tj t:J 7W L 7'.1- 0

## W~0-fij*~~*~A~~*#~,***M~~>i~7f~B**

## '\~~'\**:fJL~ '\** -~*~** 

# l1t j(U 

# 7ffWt o**~~ ~** **~KZ ~~~,** **o/oo~mfWt~ffiJ~rr:It~** 

## ijg 

## E 

# NJ**#c~o**

### [Informal Translation]



# Civil Aviation Administration of China No. Juneixu[2014]129 Operation Authorization for Guangzhou-Wuhan-San Francisco

Round Trip Flights
China Southern Airlines Company Limited, The Civil Aviation Administration of China (CAAC) has scrutinized The Request for Launching Guangzhou-Wuhan-San Francisco International Round Trip Flights (No. Nanhanggu[2014]274) issued by your company. In accordance with the Agreement Between the Government of the United States of America and the Government of the People's Republic of China Relating to Civil Air Transport and the Protocol to this Agreement, which were signed by the Chinese and the U.S. governments, the CAAC agrees that your company operate mixed passenger and cargo flights on the route Guangzhou-Wuhan-San Francisco and vice versa under the operation terms of the above mentioned Agreement and Protocol and in accordance with the air route, aircraft type, frequency and slots approved by the CAAC. It is requested that your company submit detailed flight schedules for approval, and operate the flights in accordance with the approved launch date, air route, aircraft type, frequency and slots. This operation authorization becomes effective as of the date of issue, and will not expire until further noticed by the CAAC.

Civil Aviation Administration of China September 22, 2014Application of China Southern Airlines (Guangzhou/Wuhan-San Francisco)

\\DC - 082908/000001 - 5802358 v1 

## Exhibit WUH-2 Verification\\DC - 082908/000001 - 5802358 v1 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Application of China Southern Airlines Company Limited for an Exemption and an Amended Foreign Air Carrier Permit has been served this 10th day of October, 2014, on the following addressees:

robert.wirick@aa.com; howard.kass@aa.com sascha.vanderbellen@delta.com; chris.walker@delta.com gbleopard@fedex.com; sllunsford@fedex.com jhill@cooley.com; perkmann@cooley.com matwood@cozen.com kevin.montgomery@polaraircargo.com agoerlich@ggh-airlaw.com dan.weiss@united.com; steve.morrissey@united.com anita.mosner@hklaw.com englets@state.gov John.S.Duncan@faa.gov David.E.Henthorn@faa.gov rob.hawks@faa.gov brian.ctr.meehan@faa.gov thomas.keene@tsa.dhs.gov Kandace.Bender@flysfo.com

Jonathan Echmalian