Exem ption No. 10437

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC 20591

In the matter of the petition of

NORTH AMERICAN AIR CHARTER, INC. Regulatory Docket No. FAA-2011-1081

for an exemption from Special Federal Aviation Regulation No.77 of Title 14, Code of Federal Regulations

GRANT OF EXEMPTION

By letter dated October 10, 2011, Mr. Jonath an D. Ross, Director of Operations, North

Am erican Air Charter, Inc. (NAAC), 90 Arri val Avenue, Suite 20-LI MacArthur Airport, Ronkonkoma, New York 11779, petitioned the Federal Aviation Administration (FAA) on behalf of NAAC for an exemption from Speci al Federal Aviation Regulation (SFAR) No. 77 of Title 14, Code of Federal Regulations ( 14 CFR). The proposed exemption, if granted, would permit flights between points outside of Iraq and the Erbil International Airport (ORER) under NAAC’s part 135 certificate.

The petitioner requests relief from the following regulation:

SFAR No.77 – Prohibition Against Certain Flights Within the Territory and Airspace of Iraq. Paragraph 2, Flight prohibition, pres cribes that no person may conduct flight operations over or within the territory of Iraq except as provided in paragraphs 3 and 4 of this SFAR or except as follows:

(a) Overflights of Iraq may be conducted a bove flight level (FL) 200 subject to the approval of, and in accordance with the c onditions established by, the appropriate authorities of Iraq.

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(b) Flights departing from countries adjacent to Iraq whose climb performance will not permit operation above FL 200 prior to entering Iraqi airspace may operate at altitudes below FL 200 within Iraq to the extent necessary to permit a climb above FL 200, subject to the approval of, and in accordance with the conditions established by, the appropriate authorities of Iraq.

Paragraph 3, Permitted operations, prescribes that this SFAR does not prohibit persons described in paragraph 1 from conducting flight operations within the territory and airspace of Iraq where such operations ar e authorized either by another agency of the United States Government with the approval of the FAA or by an exemption issued by the Administrator.

The petitioner supports its request with the following information:

The petitioner states that this request app lies to only N-registered aircraft N4T and N917R, both of which are BD-700-1A10 aircraft which will be operated by NAAC in accordance with 14 CFR part 135. The aircra ft will be operated by airmen who hold

FAA-issued airman certificates. The aircraft will be used to transport key executives

and others in furtherance of the business in terests of the owner of aircraft N4T in a firm that is exploring and de veloping oil fields located in the Kurdistan region of Iraq. NAAC initially expects that operations will be conducted to and from Erbil International Airport in Iraq on the aver age of twice monthly, although the frequency of operations could differ de pending on business conditions.

NAAC states that its operation of aircraft within Iraq is in the public interest because

the Government of the United States ha s a long-term national interest in the development of the economy of Iraq. NAAC fu rther states that oil is the major source (90%) of foreign exchange earnings for Ira q and that the Government of Iraq has embarked on a program to increase oil produ ction and to export oil to support its growing revenue needs. The owner of the aircra ft is seeking to assist those in Iraq that are pursuing oil exploration and developmen t. NAAC submits that, to the extent increasing oil-related revenues will allow for greater stabil ity of the Government of Iraq, and the Middle East region, the nati onal and security interests of the United States will be furthered by approval of these flight operations.

NAAC states that the aircra ft owner and NAAC have made arrangements to ensure that the aircraft, the flight crew, and any ground staff are adequately protected while in Iraq. NAAC asserts it will contract with Palm Aviation, a Dubai-based firm experienced in obtaining local Iraq flight permissions and providing necessary ground handling and communications, to support th e proposed operations. Palm Aviation will be the primary supplier to NAAC of all ne cessary aeronautical weather and airport assessment information, as well as Notice to Airman (NOTAMS). Threat assessments will be communicated to NAAC and its flight crews through Palm Aviation’s Erbil office. NAAC will inquire about all po ssible threat assessments prior to each3

operation into and out of Iraq. To supplement the Palm Aviation supplied information, NAAC will also query its other international handler, Universal Weather and Aviation, which will provide threat assessment information and other intelligence for the Iraq area, in addi tion to airport assessments.

NAAC will also ensure that the aircraft used to operate to and from the Erbil airport will be free of any exterior markings excep t the FAA aircraft registration number. NAAC states that its flight crew will operate the airc raft to and from Iraq in

accordance with threat assessmen t and all local operating rules and procedures to exit the SFAR area expeditiously and thereby minimize hazards to the aircrew and aircraft. Finally, as a condition of approval of this request, NAAC states th at it is willing to provide a flight update to the FAA Washi ngton Operations Center Complex (WOCC) when the aircraft enters and leaves Iraq i airspace on each flight operated under the authority of paragraph 3 of the SFAR.

A summary of the petition was published in the Federal Register on October 31, 2011, (76 FR 67246). No comments were received.

The FAA’s analysis is as follows:

The FAA has considered fully the petitioner’s request and supporting information and finds that the circumstances presented by th e petitioner justify a grant of exemption. For the following reasons, the FAA finds th e petitioner has suffici ently shown that a grant of exemption for operations between point s outside of Iraq and Erbil International Airport (ORER) 1 would be in the public interest and that a level of safety equivalent to that provided by the SFAR would be maintained.

Public Interest:

NAAC’s clients are seeking to pursue commer cial opportunities in Iraq, which will aid in the economic development of Iraq. The Erb il International Airport in northern Iraq has supported non-U.S. air carrier operations for a number of years without incident. There are currently fourteen foreign ai rlines, including Lufthansa and Austrian, operating approximately nine departures per day from ORER to the Ankara Flight Information Region. Because of the prohi bitions imposed by SFAR 77, U.S. operators must contract with foreign operators or use foreign regi stered aircraft to conduct operations in Iraq. A grant of exemption in this instance allows a U.S. operator to operate from points outside Iraq directly into Erbil Internati onal Airport without incurring the cost of contrac ting with a foreign operator or using foreign-registered aircraft. Based largely on these changes in the operational envir onment affecting U.S. civil aviation operations and potential benefits to U.S. operators and their customers

1 We construe NAAC’s request for an exemption to con duct operations between points outside of Iraq and Iraq generally through the Erbil airport” as a request to conduct operations to Erbil airport only, as described in the proposed routing information submitted to the FAA on October 10, 2011, and as limited by the conditions and limitations included in this grant of exemption.4

through im proved access to ORER, the FAA has determined that NAAC’s request for exemption is in the public interest.

Equivalent Level of Safety:

After reviewing a national-level threat asse ssment and evaluating risk exposure to U.S. civil aviation, the FAA has dete rmined that the proposed oper ations, to the extent that they are between points outside of Iraq a nd ORER, may be conducted with a level of safety equivalent to that provided by SFAR 77, based on the following conditions offered by the petitioner, in addition to the conditions and limitati ons that are listed following the FAA’s decision.

1. The aircraft will have no U.S. marking except for the FAA registration numbers

N4T and N917R.

2. NAAC will obtain timely threat informati on from Palm Aviation, experienced in obtaining local Iraq flight permissions, providing necessary ground handling and

communications.

3. NAAC will obtain supplementary threat in formation from Universal Weather and

Aviation.

4. NAAC flight crewmembers will operate the ai rcraft with the intent to minimize any security and/or safety risk to the maxi mum extent feasible and exit the SFAR area expeditiously to minimize hazards to the aircrew and aircraft.

The FAA’s Decision:

In consideration of the foregoing, I find that a grant of exem ption is in the public interest. Therefore, pursuant to the authority contained in 49 U.S. C. §§ 40113 and 44701, delegated to me by the Administrator, North American Air Ch arter, Inc. is granted an exemption from 14 CFR part 91, SFAR 77 to the extent neces sary to allow NAAC to conduct part 135 operations with aircraft N4T and N917R only between points outside of Iraq and the Erbil International Airport (ORER), subject to the conditions and limitations listed below, in addition to the conditions offered by the petitioner in the Equivalent Level of Safety section

above.

Conditions and Limitations:

1. NAAC m ust comply with the conditions a nd limitations set forth in Operations specification A320 2

.

2 See also the interpretation of 14 CFR part 91, SFAR 77 published in the Federal Register on April 23, 2004, at

69 FR 21953-21954.5

2. All flights under this exemption will be conducted by pilots employed by NAAC who are U.S. airmen current and qualified unde r the applicable requirements of 14 CFR part 135.

3. The NAAC pilots and NAAC will be responsib le for flight planning, and securing all necessary overflight permissions from the appropriate authorities of countries on the planned route.

4. The flight crew must carry a copy of this grant of exem ption on all flights operated under this exemption.

5. Operations under this exemption are not eligible for coverage under a premium aviation insurance policy issued by the FAA under chapter 443 of title 49, U.S. Code. The operator will not request, and the FAA shall not provide, such coverage.

6. The operator, prior to conduc ting its first flight to Ira q under this exemption, must complete and submit to its certificate holdi ng district office the attached document, captioned “Waiver of Claims and Agreement to Indemnify and Hold Harmless the United States of America” containing the operator’s agreement to release the U.S. Government from any and all claims and liabilities, as well as its agreement to indemnify the U.S. Government with respect to any third party claims and liabilities relating to any and all events arising from or related to operations authorized under this grant of exemption.

This exemption is also extended to the NAAC ai rmen who will be exercising the privileges of airmen certificates issued by the FAA in connect ion with the operations authorized under this exemption only to the extent nece ssary to conduct such operations.

This exemption terminates on January 31, 2014, unless sooner supers eded or rescinded.

Issued in Washington, D.C., on January 13, 2012.

/s/

John W. McGraw Acting Director, Flight Standards

Service7

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WAIVER OF CLAIMS

AND AGREEMENT
TO INDEMNIFY AND HOLD HARMLESS T HE UNITED STATES OF AMERICA

1. In consideration of the Federal Aviation Administration (“FAA”) issuing operations specifications or a letter of authorization to:

____________________________________ [Operator’s corporate name]

(“Operator”) for one or more aviation operations in the territory of Iraq (the “Iraq Operations”), pursuant to Special Federal Aviation Regulation (“SFAR”) No. 77, Operator enters into this Waiver of Claims and Agreement to Indemnify and Hold Harmless the United States of America (“Waiver and Agreement”), and hereby:

A. waives any and all claims and liabilities of whatever type or kind, brought in the United States of America or elsewhere, including without limitation those for personal injury, death, or property damage, that it may assert against the United States of America, or any department, agency, or instrumentality thereof, or any current or former officer or employee thereof, or any of them (the “Government Parties”) arising out of or related to Operator’s Iraq Operations;

B. agrees to indemnify and hold harmless the Government Parties against any and all claims or liabilities of whatever type or kind, brought in the United States of America or elsewhere, including without limit ation those for death, personal injury, or property damage, that arise out of or are related to Operator’s Iraq Operations and that may be asserted against the Government Parties by any third person, including without limitation any employee, agent, or supplier or other contractor of Operator;

and

C. agrees to reimburse the United States of America for any and all costs and expenses that the United States of America may incur in defending against the claims or liabilities referred to in paragraph B, above.

2. Nothing in this Waiver and Agreement may be interpreted to affect adversely any protection provided to Operator: (i) under Public Law 85-804, as amended (50 U.S.C. § 1431 et seq .); or (ii) under an effective non-premium insurance policy that the United
States of America issued under 49 U.S.C. § 44305.

3. This Waiver and Agreement applies to events occurring during the time period that begins when an aircraft operated by Operator enters into the territory or airspace of Iraq, and terminates when the outbound leg of that operation exits such territory or airspace.8

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4. Operator understands that this Waiver and Agreement is required by SFAR No. 77 as a condition of, and forms part of the proceedings for:

A. a letter of authorization issued by the Director, Flight Standards Service;

B. a grant of exemption issued pursuant to part 11 of title 14, Code of Federal Regulations; or

C. a grant of approval issued by the Asso ciate Administrator for Aviation Safety or the Deputy Associate Administrator for Aviation Safety;

whichever applies.

5. Operator agrees to be bound by this Waiv er and Agreement, as indicated by the signature of Operator’s duly authorized representative, w ho is an Officer of Operator and is authorized to bind Operator.

For: For:

_____________________________ The Federal Aviation Administration Operator’s Corporate Name

By: By:

_____________________________ ___________________________ Name Name

_____________________________ ___________________________ Title Title

_____________________________ ___________________________ Date Date