Order 201 4

- 8

- 23

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 29 th day of August, 201 4

Served: August 29, 2014

Application of

BLUE JET SP. Z O

. O.

D/B/A BLUE JET Docket DOT

- OST

- 201 4

- 0026

for 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 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 the foreign air carrier permit attached as Appendix B to this order.

Application

By application filed February 24, 2014, Blue Jet S p

. z o

. o . (Blue Jet) a foreign air carri er of Poland, request s an exemption under 49 U.S.C §40109, and a foreign air carrier permit under

49 U.S.C. §41301, to engage in the following services , using small aircraft :

a. Foreign charter air transportation of persons and property 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;

b. Foreign charter air transportation of persons and property 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 regulat ions; and

1 The conditions are attached as Appendix A.2

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.

Responsive Pleadings

A number of responsive pleadings were filed by both JetBlue Airways Corporation (JetBlue) 2

and Blue Jet

.

Mr. Butterfield contends that Blue Jet ' s name is so similar to JetBlue ' s name that consumer

confusion is inevitable and unavoidable if Blue Jet's application is granted. He states that JetBlue has been attempting for several years to resolve its name dispute with Blue Jet and that JetBlue has filed an action in the Southern District of New York seeking a court declarat ion that Blue Jet's use of its mark infringes on JetBlue's trademark rights.

JetBlue also maintains that consumer confusion is inevitable and unavoidable should use of the name “Blue Jet” be permitted. 3 JetBlue further maintains that confusion will also result from the geographic overlap of Blue Jet’s proposed operations with JetBlue’s operations and that of its

code

- share and interline partners. JetBlue contends that, despite the difference in aircraf t currently used by Blue Jet and JetBlue, the color scheme and similar markings of Blue Jet’s aircraft will also lead to public confusion.

In sum, both JetBlue and Mr. Butterfield contend that approval of Blue Jet’s application would cause public confus ion and/or harm to JetBlue, and request that the Department deny Blue Jet’s exemption and permit request unless Blue Jet agrees to operate its U.S. services under a different

name.

In its consolidated reply, Blue Jet states that JetBlue’s request for the Department to deny or suspend Blue Jet’s application based on alleged name similarity should be denied because: 1) JetBlue already has resorted to private litigation in accordance with current Department policy ; 4
and 2) there is no significant potential fo r, or actual, public confusion. Blue Jet asserts that, except for the alleged similarity in names, none of the factors contributing to public confusion are present in the current proceeding. It asserts that the two carriers operate vastly different

types of service (charter versus scheduled); utilize vastly different types of aircraft (business jet aircraft with up to 14 passenger seats versus large airliners with at least 100 passenger seats); and cater to vastly different market segments (sophisticated charterers versus low

- cost travelers).

2 JetBlue’s filings consisted of those filed by both JetBlue itself and Mr. Toby Butterfield, who states that his firm represents JetBlue in intellectual property and litigation matters

. 3 In support of its po sition, JetBlue cites a number of Department cases involving trade name issues under 14 CFR

Part 215.

4 Blue Jet states that section 215.2 of the Department’s Regulations states that Part 215’s purpose is to place the responsibility for resolving private d isputes about the use of similar names with the air carriers involved, through recourse to the trade names statutes and the courts, and notes that, in every Part 215 case since 1988 involving a U.S. air carrier and a foreign air carrier, the Department has stated “the responsibility for resolution of name disputes rests with the affected carriers through recourse to trade name statutes and the civil courts”.3

Blue Jet asserts that it has operated to the United States for over four years, and there is no material evidence of actual public harm or confusion among relevant consumers caused by those operations. 5

JetBlue file d a sur

- reply to Blue Jet’s consolidated answer. 6 JetBlue describes certain actions that Blue Jet has taken, or refused to take, that have frustrated the process set forth by Part 215 of the Department’s regulations for resolving trade name disputes thro ugh the courts. JetBlue also asserts that Blue Jet has mischaracterized JetBlue’s operations in attempt to differentiate between

Blue Jet and JetBlue.

Blue Jet filed an answer in opposition to JetBlue’s motion for leave to file and its sur

- reply. 7

Blue Jet contends that JetBlue’s discussion of the ongoing trademark litigation between the parties adds nothing relevant or new to the record and that JetBlue failed to provide any new information regarding consumer confusion.

The record in this proceeding also consists of a May 22, 2014 e

- mail request sent by the Department to the parties

, requesting clarification of the status of service of a summons and complaint in the pending trademark litigation case between the parties an d subsequent responses.

Blue Jet advise d that it offered to waive service of the summons and complaint, but JetBlue did

not accept that offer and ended up serving Blue Jet with the complaint. JetBlue went on to add

that s ervice of the compla int was made on April 25, 2014, and t he parties agreed to seek an extension of time of 30 days (from May 16, 2014 until June 16, 2014) for Blue Jet to answer the complaint, which the Court granted. JetBlue states that t he parties also agreed to maintain the

status quo with respect to Blue Jet's current U

. S

. airline operations and its EU trademark claims, for as long as the parties are discussing and negotiating an overall settlement to their dispute.

On July 18, 2014, JetBlue submitted a letter stating that it and Blu e Jet have reached a settlement in principle of the litigation. JetBlue notes that while closing documents have not been finalized, the parties filed a “Joint Notice of Settlement” with the court on July 15, 2014 requesting a 30

- day adjournment of all dea dlines and appearances in the litigation. JetBlue states that until such definitive agreement is finalized, JetBlue retains its objections to the Blue Jet application and requests that the Department not act upon it. 8

On August 6, 2014 , Blue Jet filed a letter in response confirming that it a nd JetBlue have reached a settlement in principle in the trademark litigation and are working together on memorializing a written agreement for signature by the parties

. However, Blue Jet asserts that it fully expects
there will be a period of time during which the parties will be permitted to implement the terms

of the settlement. It therefore contends that there are no grounds for delaying the Department's

decision in this proceeding, and requests that the De partment act on Blue Jet's application.

5 Since 2010, Blue Jet has held a Department

- issued Part 375 Special Authorization that permits it to conduct certain charter operations to/from the United States.

6 We grant JetBlue’s motion for leave to file.

7 We grant Blue Jet’s motion for leave to file

. 8 JetBlue asserts that the purpose of its letter is to advise the Department of developments in the dispute between JetBlue and Blue Jet and should not be construed as waiving any JetBlue right or legal position in the above

referenced or any other proce eding.4

D ecision

We have decided to grant the applicant’s request for exemption authority, as described below and 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 Blue Jet exemption authority for the services set forth in ordering paragraph 1 below. We will tentatively grant Blue Jet a foreign air carrier permit for these

services.

As an additional matter, Blue Jet requested that we grant it, in addition to authority currently

contained in the U.S.

- EU Agreement, authority to conduct transportation authorized by any additional route rights made available to EU carriers in the future. We a re granting the request of

Blue Jet for this authority by exemption (and tentatively granting it by foreign air carrier permit). We are, however, requiring Blue Jet , before it commences any new service under this authority, to provide us with evidence that it holds a homeland license for that new service, unless it has already provided such evidence. 9

With respect to the applicant’s request for exemption authority, we find that grant of this authority, as conditioned, is consistent with the public inte rest. 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. 10 We a lso find that the authority sought by the applicant is encompassed by the U.S.

- EU Agreement.

Further, we note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, on April 17, 2014, 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).

With respect to the trade name matter raised by JetBlue, we note that we do not make public interest determinations under our regulations concerning name similarity , and the record in this case indicates that the parties are attempting to resolve that matter in the appro priate civil litigation forum as set forth in 14 CFR Part 215. We have also considered JetBlue’s assertions regarding potential public confusion resulting from the name similarity between the carriers and, in the circumstances presented here, are not pers uaded that the potential exists for significant

consumer confusion at this juncture

. Accordingly, we tentatively find that the issu es concerning

th e applicant's name do not support denial of the authority requested by Blue Jet.

9 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.

10 We make this finding based on Article 2 (Reciprocal Recognition of R egulatory Determinations with Regard to Airline Fitness and Citizenship) of the Protocol to amend the U.S.

- EU Air Transport Agreement, signed

June 24, 2010.5

In view 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 Air Carrier Permit Ap plication

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. 11
In particular, we tentatively find and conclude that the factors which support our grant of exemption authority to the applicant, as discussed above, also warrant granting the applicant the foreign air carrier permit it seeks.

In view of the foregoing a nd 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

attac hed , for operations with small aircraft ; 12

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, reg ulations, and requirements;

3. The applicant is substantially owned 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 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 Conservation Act of 1975, as defined in 14 CFR §313.4(a)(1) of our regulations; 13

6. The public interest does not require an oral evidentiary hearing on the applicati on; 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

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

12 The applicant specifically s tated that it was applying to provide its services using small aircraft.

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

- term net annual change in aircraft fuel consumption of 10 million gallons or more.6

or she does not intend to disapprove this portion of the Department’s decision under that section,

whichever occurs earli er.

In view of the above, we find that, 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 an d would not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Blue Jet S p

. z o

. o . f or an exemption under 49 U.S.C. §40109 for the

services set forth below:

a. Foreign char ter air transportation of persons and property 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;

b. Foreign charter air transportation of persons and property 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 the Department’s regulations governing charters; and

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

Union carriers in the future.

2. In the conduct of these operations Blue Jet Sp. z o.o. may only use aircraft capable of carrying no more than 60 passengers and having a maximum payload capacity of no more than 18,000 pounds;

3

. Blue Jet S p

. z o

. o . s hall, before it commences any new service under subparagraph ( d ) of ordering paragraph 1 above, provide the Department in Do cket DOT

- OST

- 2014

- 0026 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 compliance by Blue Jet S p. z o.o. wi th the conditions listed in Appendix A;

5 . Our action granting the exemption authority described herein, subject to the provisions of the ordering paragraphs 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

7 . To the extent not acted upon above, we dismiss all req uests for exemption authority in the referenced docket (DOT

- OST

- 201 4

- 0026 );

8 . With respect to the applicant’s request for a foreign 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;

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 tentative findings and conclusions objecte d 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 procedural steps shall be deemed waived, an d 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 serve a copy of this order on Blue Jet Sp

. z o.o. ; JetBlue Airways Corporation; Mr. Toby Butterfield; the Embassy of Poland 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 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 au thorization 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

limit ed 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

commen cement 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 terminatio n 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 com petency 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 whi ch 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 transportati on" 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 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, ex cept 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 publ ic 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.

EU carrier 01/2008Appendix B

Issued by

Order 201 4

-

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

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

--------------------------------------------------------- BLUE JET SP. Z O.O.

d/b/a Blue Jet

A Foreign Air Carrier of Poland

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:

Fore ign charter air transportation of persons and property 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 charter air transportation of persons and property 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

Transportation 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 addi tional 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 DOT

- OST

- 201 4

- 0 026

.

In the conduct of these operations, the holder may only use aircraft capable of carrying no more than 60 passengers and having a maximum payload capacity of no more than 18,000 pounds.

This permit and the exercise of the privileges granted in it shall be subject to the ter ms, 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 effe ctive 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 term s 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 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 ter mination or expiration, the foreign 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 affixed 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 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 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 woul d 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 Transpo rtation 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 sha ll 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 a nd 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 th e 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 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 authori zed, 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.

EU carrier 1/2008