Order 20 1 1

- 7

- 13

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 28 th day of July, 20 1 1

Served: July 28, 2011

Applica tion of

CY PRUS AIRWAYS PUBLIC LIMITED Docket DOT

- OST

- 20 11

- 0114

for a n exe mption under 49 U.S.C. §40109 and a f oreign air carrier permit under 49 U.S.C. §41301

ORDER GRANTING EXEMPTION AND TO SHOW CAUSE

Summary

By t his 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 th e f

oreign air carrier permit a ttached as Appendix B to this order.

Background

By Notice dated May 3, 2007, we invited foreign air carriers of the European Union (EU) to apply for Department economic authority to conduct operations to and from the United States under the U.S.

- EU

Air T ransport Agreement. In that Notice, we stated our intent to process requests for this authority under the “streamlining” procedures set out in our August 23, 2005 Notice in Docket OST

- 2005

- 22228, in which we announced several steps designed to simplify ou r regulatory procedures for licensing foreign (and U.S.) air carriers. Our action in this Order serves to implement those streamlined regulatory procedures for the application involved in this proceeding.

Application

By application filed June 9, 2011, C yprus Airways Public Limited, a foreign air carrier of the Republic of Cyprus, requested an e xe mption under 49 U.S.C § 40109, and a f oreign air carrier permit under

49 U.S.C. § 41301, to engage in the following servic es: :

a. F oreign scheduled and c harter air transportation of persons , property and mail fr om any point or points behind any Member State of the European Union via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;

1 The conditions are attached as Appendix A.2

b. Foreign scheduled and c harter air transportation of persons , p roperty and mail between any point or points in the United States and any point or points in any member of the European

Common Aviation Area ;

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

d. T ransportation authorized by any additional route rights made available to E uropean Union

carriers in the future

.

Cyprus Airways stated that it does not intend to operate flights to the United States using its own aircraft at this time, and that it would accept a condition on its authority to limit its operations t o those using an

authorized wet

- lease or code

- sharing partner.

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

We received no answers to the application.

Decision

We have decided, consistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for exemption authori ty, as described below and subject to conditions, and tentatively to grant, subject to show

- cause procedures, its request for a f oreign air carrier permit, also subject to conditions.

Specifically, we will grant Cyprus Airways Public Limited e xemption aut hority for the services set forth in ordering paragraph 1 below. We will tentatively grant Cyprus Airways Public Limited a foreign air carrier permit for these services

.

As an additional matter, Cyprus Airways Public Limited requested that we grant it, i n addition to authority currently contained in the U.S.

- EU Agreement, authority to conduct t ransportation authorized by any additional route rights made available to E U carriers in the future. We are granting the request of Cyprus Airways Public Limited f or this authority by exemption (and tentatively granting it by foreign air carrier permit). We are, however, requiring Cyprus Airways Public Limited, b efore it commences any new service under this authority, to provide us with evidence that it holds a hom eland license for that new service, unless it has already provided such evidence. 2

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 also find that the applicant is financially and operationally qualified to perform the services authorized , and that it is substantially owned and effectively controlled in a manner consistent with the provisions of the U.S.

- EU Agreement

. 3 We also

find that the au thority sought by the applicant is encompassed by the U.S.

- EU Air Transport Agreement

.

2 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.

3 We make this finding based on Article 2 (Reciprocal Recognition of Regulatory Determinations with Regard to Airline Fitness and Citizenship) of t he Protocol to amend the U.S.

- EU Air Transport Agreement, signed

June 24, 2010.3

Further, we note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, by memorandum dated July 6, 2011, the Federal Aviation Administration advised us that it knew of no reason why we should act unfavorably on the applicant’s requests. 4 We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

In vi ew of the above, we 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

-- Foreign A ir 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,

we tentativel y find and conclude that the factors which support our grant of exemption authority to the applicant, as discussed above, also warrant granting the applicant th e foreign air carrier permit it seeks.

In view of the foregoing and all facts of record and act ing 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 f oreign air carrier permit in the form attached ;

2. The applicant is fi t, 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 owne d and effectively controlled in a manner consistent with the provisions of the U.S.

- EU 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 contai ned 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

En ergy Policy and Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of our regulations; 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 s hould, 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

4 We will require that Cyprus Airways conduct the operations at issue here only using aircraft wet

- leased from, or

under a code

- share arrangement with, a duly authorized an d properly supervised U.S. or foreign air carrier. In this regard, we note that Virgin Atlantic Airways Ltd. has filed an application in Docket DOT

- OST

- 2011

- 0113 for a blanket statement of authorization to display the designator code of Cyprus Airways on certain of its flights. We will act on that request concurrently with our action here.

5 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 au thority sought and gave interested persons an opportunity to submit evidence and objections to the award of this foreign air carrier permit authority.

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

- term net ann ual change in aircraft fuel consumption of 10 million gallons or more.4

submission for §41307 review, or upon the date of receipt of advice from the President or his designee

und er 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, we find that, with respect to the exemption au thority 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 Cyprus Airways Public Limited for a n exemption under 49 U.S.C. §40109 for

the services set forth below:

a. Foreign scheduled and c harter air transportation of persons, property and m ail f rom any point or points behind any Member State of the European Union via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;

b. Foreign scheduled and c harter air transportation o f persons

, property and mail between any point or points in the United States and any point or points in any member of th e European Common Aviation Area;

c. Other c harters pursuant to the prior approval requirements set forth in the Department’s regulations governing charters; and

d. T ransportation authorized by an y additional route rights made available to E uropean Union

carriers in the future.

2. Cyprus Airways Public Limited may conduct the operations authorized by this exemption only using

aircraft wet

- le ased from, or under a code

- share arrangement with, a duly authorized and properly supervised U.S. or foreign air carrier;

3

. Cyprus Airways Public Limited, s hall, before it commences any new service under subparagraph ( e ) of ordering paragraph 1 above, p rovide the Department in Docket DOT

- OST

- 20 11

- 0114 with evidence that it holds a homeland license for that new service, unless it has already provided such evidence to the Department;

4

. The exercise of the privileges granted above is subject to complianc e by Cyprus Airways Public

Limited wi th the conditions listed in Appendix A;

5 . Our action granting the exemption authority described herein

, subject to the provisions of the ordering paragraph s 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;

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

7 . To the extent not acted upon above, we dismiss all requests for exemption authority in th e referenced

docke t ( DOT

- OST

- 20 11

- 0114 ) ;5

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

9 . 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 parties to this proceeding, a statement of objections specifying the part or parts of the tenta tive 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;

10 . 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;

1 1 . In the event no objections are filed, all further proced ural 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 2 . We will serv e a copy of this order on Cyprus Airways Public Lim ited, the Embassy of the Republic of Cyprus, in Washington, D.C., the Department of State, and the Federal Aviation Administration.

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 appl icant 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 A viation 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 assur e 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 Stat es, 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 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 under this au thority 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 specific ally 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 soverei gn 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 Stat es that are: (a) based on its operations in international air transportation t hat, 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 a ny 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 S tates 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 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 ru les 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 abov e. Moreover, this authority cannot be sold or otherwise 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 1

-

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

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

--------------------------------------------------------- 

## CYPRUS AIRWAYS PUBLIC LIMITED

A Foreign Air Carrier of the Republic of Cyprus

is authorized, subject to the follow ing 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 c harter air transportation of persons
, property and mail from any point or points behind any Member State of the European Union via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond;

Foreign scheduled and c harter air transportation of persons
, property and mail between any point or points in the United States and any point or points in any member of the European Common Aviation Area;

Other charters pursuant to the prior approval requirements set forth in the Department’s regulations governing charters ; and

T r a nsportation authorized by any additional route rights made available to European

Union carriers in the future; provided , that the holder shall, before it commences any new service under such additional route rights, provide the Department with evidence th at 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 DOT

- OST

- 20 11

- 0114

.

The holder may conduct the operations authorized by this permit only using air craft wet

- leased from, or

under a code

- share arrangement with, a duly authorized and properly supervised U.S. or foreign air

carrier.

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 perm it 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, conve ntion 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 ri ght for theservice authorized by this permit from the service which may be operated by airlines of the European

Union and its Member States (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 of the applicable air services agreement between the United States and the European Union and its Member States. However, clause (3) of this paragraph shall not apply if prior to such termination or expiration, the forei gn air transportation authorized herein becomes the subject of another treaty, convention or agreement to which the United States and the European Union and its Member States become parties.

The Department of Transportation has executed this permit and af fixed 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 shall:

(1) Not conduct any operations unl ess 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 Transportat ion 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. G overnment requirements concerning security, the holder shall, before commencing any new service (including charter flights) from a foreign airport t hat 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 commencement of any operations under this authority, file evidence of such coverage, in the form of a completed OST Form 6411, wit h 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 wi th 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 ot herwise 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, f or 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 Stat es 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 internation al 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 a M ember State of the European Union;

(9) Comply wit h 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 rule s 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 abov e. Moreover, this authority cannot be sold o r otherwise transferred without explicit Department approval under Title 49 of the U.S.

Code.

EU carrier 1/2008