**Re: Caribbean A irlines Limited :**  **International Route A uthority**  **Exempt ion** 

**Extension and Renewal A** **pplication OST -** **2006 –**  **26586 dated A** **pril 16, 2012** 1. I , John Gilmore, am an interested party with respect to the instant application. I have been accepted as an interested party in other Route Authority Exemption, Extension and Renewal Departmental proceedings involving this applicant, and am a party at present to ongoing OST
-2010
- 0232 proceedings in which the applicant seeks the extension and renewal of certain other exemption authority , as a carrier not designated under the applicable bilateral agreements, on certain non homeland Caribbean

– US routes (between Jamaica and the US passim and between Grenada and New York ). 2. The applicant pursuant to 49 U.S.C. § 40109(c) seeks the renewal of an international route authority exemption granted by Notice of Action taken dated April 21, 2011 for a one year period , itself the renewal of prior exemption authority, and so on back to its original route authority, itself by way of exemption under 49 U.S.C. § 40109(c)

. The applicant has never applied for a foreign air carrier permit, the requirement for which under 

### 49 U.S.C. § 

### 41301 is the subject of the exemption requested. This last fact is material. The Department itself makes clear in its Foreign Air Carrier Information Packet that a Foreign Air Carrier permit “ 

### is the more permanent license, typically having a duration coextensive with the terms of the applicable bilateral aviation agreement between the United States and the applicant’

s homeland, or, if there is no agreement, a duration of five years.” (Page 2). The applicant has chosen from its initial grant of route authority to proceed exclusively by way of route authority exemption under 49 U.S.C. § 40109(c) a consequence of which is that it is required to demonstrate on a regular (in its case annual) basis that the renewal of the exemption is in the public interest. The Department is charged with making that determination and its rules require the applicant to provide the factual information necessary for a valid public interest determination to be made. Failure to provide the required information to the Department and to the public makes a valid public interest determination impossible under departmental rules

. That is the case here. The applicant has failed to provide the information required by Departmental rules as the necessarily precedent factual basis for any public interest determination and accordingly no valid public interest determination is possible

.3

. The instant application states that:

“CAL intends to invoke the automatic extension provisions of 5 U.S.C. § 558(c) and Part 377 of the Department's Special Regulations.” 4

. 5 U.S.C. § 558(c) , the ‘automatic extension’ or ‘ non expiry’ provision reads as follows: (Last Sentence)
“

.... When the licensee has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the appl ication has been finally determined by the agency.’’ 5

. This renewal application is “ timely” having been filed on April 16, 2012 (the authority sought to be extended expires on its terms on April 20, 2012), though barely so, with little leeway reserved to the applicant to cure any deficiencies

. 6

. To be “

sufficient” under 5 U.S.C. § 558(c ) , 14 CFR 377 .10(b) provides the “agency rules” governing the instant application :

“ **(b) Contents of renewal application** 

. The application must contain all the information required by law and the Board’ s regulations, and meet the requirements thereof as to form.” 7

. The Department has made it clear in its “ Foreign Air Carrier Information Packet” that the 14 CFR 211 regulations governing applications for foreign air carrier permits apply equally to applications for exemption authority, and thus also to renewals the reof as for renewals of permits: **Page 2 Note 4** “... Although Part 211 refers to applications for foreign air carrier permits, the same evidentiary information is re quired of foreign carriers seeking exemption authority. ...” 8

. The permit (and exemption) renewal requirements of 14 CFR 211 are clear and appear a t 211.21 as follows:

**“ §211.21 Amendments or renewal of foreign air carrier permits.**  A person applying for an amendment or renewal of a foreign air carrier permit shall submit the information listed below. The applicant must comply fully with this requirement. If the applicant is unable to respond to an item, the application shall contain an explanation and include the substitute information most closely approximating the information requested. The Department may require an applicant to provide any additional information necessary.(a) The information required in paragraphs (a), (b), (i), (o), (q), (r), and (s), o f

§211.20. (b) Except if seeking renewal of existing authority, the information specified in paragraphs (c) and (p) of §211.20 regarding the new or altered services proposed to be operated. (c) If the financial material for the applicant on file with the D epartment is more than 2 years old, financial summaries setting forth, in U.S. dollars, the applicant’ s profit and loss statements and balance sheets for the 2 most recent available years (calendar or fiscal) as required in paragraph (n) of §211.20, togeth er with the statement of completeness and accuracy required by that paragraph. If the financial material on file with the Department is 2 years old or less, the applicant may incorporate that information by reference as described in §211.14 of this part. ( d) If the ownership and control of the applicant are substantially unchanged, so state. If a change has occurred, the applicant shall respond to the paragraph in §211.20 that most closely relates to the change that has taken place. (e) A statement that applicant’ s maintenance program continues to comply with the provisions of ICAO Pilots and Airmen Annexes 1, 6, (Part 1) and 7.” 9

. As to the information required to be provided in 211.21(a) above (the requirement to provide the information “ required in paragraphs (a), (b), (i), (o), (q), (r), and (s), of §211.20. ”) the applicant has essentially provided only its name and asserted its status as a designated flag carrier of its homeland. A few examples of the information required and not provided are:

- the source and expected renewal of its domestic license authority (i);

- “the amount , type and reason for financial assistance received or expected from the applicant’

s government, if any.” (o) It is a matter of public record that CAL receives a subsidy fro m its homeland government equal to the difference between the price it pays for aviation fuel and US$ 1.50 per US gallon

. By my estimate this subsidy was approximately US$ 75 million in FY 2011 though the applicant has not published any financial statements since FY 2008 when the fuel subsidy amounted to US$ 36.4 million. It is worth noting here that had American Airlines had such a subsidy in FY 2011 its fuel cost of $ 8.304 billion at an average per gallon cost of $ 3.13 would have been $ 3.980 billion a t $ 1.50 per gallon and instead of an Operating Loss of$ 1.054 billion American would have made an Operating Profit of $ 3.270 billion

and arguably would not be in Chapter 11 bankruptcy proceeding threatening the interests of its shareholders, creditors , suppliers and empl oyees and the travelling public. The appli cant’s undisclosed subsidy , even absent the requirement that it be disclosed, would seem to be material in any determination of whether the authority sought is consistent with the public interest

– as an example, did it permit the applicant to engage in pricing at below its unsibsidised cost on routes where it competed with American Airlines thereby contributing to that airlines bankruptcy?

– will it do so in the future in competing with other US airlines? Is that in the public interest? T he US public interest is the relevant public interest in route authority proceedings;

- “ For the preceding 5 years, state whether the applicant has been involved in any safety or tariff violations or any fatal accidents. If so, furnish details .” (s) 10

. As to the financial information required by 211.21(c) nothing has been either provided or incorporated by reference . It is a matter of public record that the last Financial Statements filed by the applicant wi th its homeland government (its once sole, now majority owner) were for FY 2008 (December 31, 2008). 11

. No information is provided regarding changes in the ownership and control of the applicant required by 211.21(d) though it is a matter of public reco rd that ownership changes have taken place, and as to the status of maintenance program (211.21.e) , nothing has been provided. 1 2

. Wh ile any one such substantive omission would in my submission disqualify an application from being considered “sufficient” under U.S.C. § 558(c) and require it to be ruled “defective” under 14 CFR 377.11, the combined effect of the foregoing multiple substantive omissions leave no doubt in this case. 13. The instant application does not contain “ all the i nformation required by law and the Board’

s regulations ”

, and, as such it fails the sufficiency requirement of U.S.C. § 558(c) . Accordingly the authority sought to be renewed by this application by process of law is not extended under 5 U.S.C. § 558(c) and therefore , by proces s of law expires in accordance with its terms on April 20, 2012. 14

. 14 CFR 377.11 provides as follows in such cases:

“ **§ 377.11 Processing of defective renewal applications.** When the Board determines that a renewal application does not comply with the re quirements of this part, or that it does not relate to a license with reference to an activity of a continuing nature, it will so notify the applicant. The applicant may amend his application to cure the deficiency as a matter of right at any time prior to the date when the application was due pursuant to § 377.10(c).”15

. The instant application is not “sufficient” under U.S.C. § 558(c) and must

therefore be ruled “defective” under 14 CFR 377.11. That is the law. That is my submission and I hereby request such a ruling

– with an ‘exceptional’ extension of the authorities sought to provide the applicant with the opportunity to cure the deficiencies by amendment within a reasonable period of time. This last curative request is made solely in the interests of the travelling public and other users of the services sought to be continued by this application despite the fact that the applicant waited until late in the day prior to the scheduled expiry of the authority its application seeks to renew to file its renewal application. 16. The departmental rules are clear and they are mandatory. The information those rules require to be provided in any route authority application is a pre
requisite to the evaluation of the public interest both by the Department and by the public

– that is why it is required by those mandatory rules . Its absence invalidates any purported renewal. Any public interest determination made absent such information would be legally invalid and any route authority renewal made pursuant to s uch public interest determination would be similarly invalid. That, I argue, is the law. 16. In conclusion, I would like to draw to the attention of the Department to the applicant’s statement i n Section 4 of the instant application that “Designation of a carrier by its homeland government is the most significant factor in determining whether grant of an application is in the public interest.” The Department will be aware that the applicant has not been designated by either of the respective homeland governments with respect to any of the routes for which it has sought the renewal of its exceptional exemption authorities in OST
-2010
- 0232 (Jamaica

– US passim and Grenada

– New York ). Respectfully submitted this 30 th day of April , 2012 by and on behalf of

/s/ John Gilmore

_______________________ John Gilmore 48

– 7 St. Antoine We st Montreal, QC H2Z 1G8 514 716 7665 jptgilmore@hotmail.com**CERTIFICA TE OF SERVICE** 

I hereby certify that on this 30th day of April , 201 2 , a copy of this Certificate of Service and of my foregoing Answer to the April 16 , 2012 Exemption Renewal Application DOCKET DOT
- OST
-20 06
-26586 filed on behalf of Caribbean Airlines Limited was filed on the Docket at www.regulations.gov and served by electronic mail : On Counsel for the Applicant at John@mietuslaw.com ; on Paul Gretch and Robert Finamore of the US DOT at paul.gretch@dot.gov and robert.finamore@dot.gov ; and, on each of the persons named below in the Service List provided by the Applicant

. /s/ John Gilmore

_______________________________ John Gilmo re 48

– 7 St. Antoine We st Montreal, QC H2Z 1G8 514 716 7665 jptgilmore@hotmail.com carl.nelson@aa.com ; Robert.wirwick@aa.com ; sascha.vanderbellen@delta.com; jeff.morgan@delta.com ; jonathanlinde@united.com; steve.morrissey@united.com ; dan.weiss@united.com; bkeiner@crowell.com ; gmurphy@crowell.com ; lhalloway@crowell.com ; msinick@ssd.com; efaberman@wrf.com ; bob.kneisley@wnco.com ; howard.kass@usai rwa ys.com, benjamin.slocum@usairways.com ; anita.mosner@hklaw.com ; jennifer.nowak@hklaw; nssparks@fedex.com ; gnleopard@fedex.com ; mlbenge@zsrlaw.com ; pmurphy@ggh
- airlaw.com ; sharfst@usa3000airlines.com ; jrichardson@johnlrichardson.com ; jcanny@amerijet.com ; john.fredericksen@suncountry.com ; jyoung@yklaw.com ; dkirkstein@yklaw.com ; charters@evergreenairlines.com ; ben.graves@evergreenairlines.com; jhill@dowlohnes.com ; urskr@state.gov ; john.allen@faa.gov