Order 201 5

- 4

- 15

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 17 th day of April, 2 01 5

Served: April 17, 2015

Application of

AIR BALTIC CORPORATION A/S D ocket DOT

- OST

- 201 5

- 0065

for an exemption under 49 U.S.C. § 4 0109 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.

Background

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

under the U.S.

- EU Air Transport Agreement. In that Notice, we stated our intent to process requests for this authority under the “streamlining” procedu res set out in our August 23, 2005

Notice in Docket DOT

- OST

- 2005

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

Application

By application filed March 26, 2015, Air Baltic Corporation A/S (AirBaltic)

, a foreign air carrier

of the Republic of Latvia, requests an exemption under 49 U.S.C. § 40109 and a f oreign air carrier permit under 49 U.S.C. § 41301, to engage in the following services:

1 The conditions are attached as Appendix A.a. foreign scheduled and charter air transportation of persons, property and mail from any point or points behind any Member St ate 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 charter 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;

c. foreign scheduled and charter air transportation of cargo between any point or points in

the United States and any other point or points;

d. other char ters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s economic regulations; and

e. t ransportation authorized by any additional route rights made available to European

Union carriers under the U.S.

- EU Agreement in the future

.

AirBaltic states that it proposes to conduct i t s operations through a code

- share arrangement with Uzbekistan Airways (Uzbekistan) , on flights operated by Uzbekistan

. 2

The applicant provided evidentiary materials required by 14 CFR Part 2 11 of our regulations to support its requests for authority.

No answers were filed to the application.

Decision

We have decided, consistent with our August 23 , 2005 Notice referenced above, 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 AirBaltic exemption authority for the services set forth in ordering paragraph 1 below. We will tentatively grant AirBaltic a foreign air carrier permit for these services, as discussed below.

As an additional matter, AirBaltic requested that we grant it

, in addition to authority currently

contained in the U.S.

- EU Agreement, authority to conduct transportation authorized by any

2 AirBaltic states that it plans to offer scheduled service between Riga, Latvia and New York (JFK) by displaying its “BT” designator code on flights operated by Uzbekistan

. Uzbekistan has filed a corresponding application for a statement of authorization under 14 CFR Part 212 to display the AirBaltic designator code on flights operated by Uzbekistan in scheduled foreign air transportation of persons, property and mail betwe en any point or points in

Uzbekistan

, via any intermediate point or points, and any point or points in the United States. Uzbekistan plans to initially display AirBaltic's designator code on the Riga

- New York (JFK) segment of Uzbekistan’s Tashkent

- Riga

New York (JFK) service

. See Docket DOT

- OST

- 2015

- 0067. We will act concurrently on Uzbekistan’s application

.additional route rights that may be made available to European Union carriers in the future. We are granting AirBaltic t his authority by exemption (and tentatively granting it by foreign air carrier permit). We are, however, requiring AirBaltic, 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 evidenc e. 3

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; that the applicant has demonstrated, based on the record, that it is financially and operati onally 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

. 4 We also find that t he authority sought by the applicant is encompassed by the U .S.

- EU Ag reement

.

We also note that the applicant is properly licensed by its homeland to perform the proposed

services. We have verified the applicant’s compliance with 14 CFR Parts 203 (Warsaw liability waiver), and 205 (insurance requirements).

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 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, w e tentatively find and conclude that the factors which support our grant of exemption authority to the applicant also warrant granting the applicant the foreign air carrier permit it

seeks.

In view of the foregoing and all facts of record

, an d 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

attached ;

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, regulations, and requirements;

3 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. a nd Virgin Atlantic Airways Ltd., respectively.

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

- EU Air Transport Agreement, si gned June 24,

2010.

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 authority sought and gave interested persons an opportunity to

submi t evidence and objections to the award of this foreign air carrier permit authority. As noted above, no answers

to the application were filed.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 f oreign air carrier permit will not constitute a major regulatory action

under the Energy Policy and Conservati on Act of 1975, as defined in 14 CFR §313.4(a)(1) of our

r egulations; 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 pe rmit 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 desig nee under 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 exemp tion 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 and would not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Air Baltic Corporation A/S for an exemption under 49 U.S.C. §40109

for the services set forth below :

a. foreign scheduled and charter 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;

b. foreign scheduled and charter air transportat ion 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;

c. foreign scheduled and charter air transportation of cargo between any point or points in

the Uni ted States and any other point or points;

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

- term net annual cha nge in aircraft fuel consumption of 10 million gallons or more.d. other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s economic regulations; and

e. t ransportation authorized by any additional route rights made available to Eu ropean Union carriers in the future

.

2

. Air Baltic Corporation A/S shall, before it commences any new service under subparagraph (e) of ordering paragraph 1 above, provide the Department in Docket DOT

- OST

- 201 5

- 0065 with evidence that it holds a homeland license for that new service, unless it has already provided such evidence to the Department;

3

. The exercise of the privileges granted above is subject to compliance by Air Baltic Corporation A/S with the conditio ns listed in Appendix A;

4

. In the conduct of the operations authorized, Air Baltic Corporation A/S may only operate through a code

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

air carrier , where Air Baltic Corporation A/S is not physically operating the flight to and from

the United States ; 7

5

. Our action granting the exemption authority described herein is effective immediately, for a period of two year s 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 the applicant’s request for exemption authority in this Docket (DOT

- OST

- 201 5

- 0065 ) ;

8

. With respect to the applicant’s request for a foreign air carrier permit in this proceeding, w e 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 s hall, 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 conclusion s 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 ti mely 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;

7 The Republic of Latvia has not been assessed under the Federal Aviation Administration’s International Aviation Safety Assessment (IASA) Program.1 1

. In the event no objections are filed, all further procedural steps shall be deemed w aived, 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 conc lusions set forth in this order; and

1 2

. We will serve a copy of this order on Air Baltic Corporation A/S ; the Embassy of the Republic of Latvia; in Washington, D.C. ; the Department of State; and the Federal Aviation

Administration

.

Persons entitled to petition the Department for review of this order under the Department’s regulatio ns, 14 CFR §385.30, may file their petitions within seven (7) days after the date of

issuance of this order . Our action with respect to the applicant’s request for exemption authority

under 49 U.S.C. § 40109 is effective immediately , and the filing of a petition for review will not

alter such effectiveness.

By:

PAUL L. GRETCH

Director

Office of International A viation

(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 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 3 6 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 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 Transportati on 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 thi s 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 file d 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 Govern ment 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 operat ions 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 which the contract of carriage was purchas ed 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 authorized, except as otherwise provided in the applic able 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

im posed 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

Or der 20 1 5

- X X

- X X

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



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



### ---------------------------------------------------------



### AIR BALTIC CORPORATION A/S

A F oreign Air Carrier of the Republic of Latvia

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 the following services :

Foreign scheduled and charter 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 charter 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;

Foreign scheduled and charter air transportatio n of cargo between any point or points in the United States and any other point or points;

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

T ransporta tion 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

that it ho lds 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

- 2015

- 0065.This permit and the exercise of the privileges granted in it shall be subject to th e 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 becom e effective during the period this permit remains in effect, to which the United States and the holder’s homeland are or shall become parties.

In addition, in the conduct of the operations authorized, Air Baltic Corporation A/S may only operate through a code

- share arrangement with a duly authorized and properly supervised U.S. or foreign air carrier, where Air Baltic Corporation A/S is not physically operating the flight to

and from the United States

.

This permit shall be effec tive on Month XX, 2014. Unless otherwise terminated at an earlier date pursuant to the terms 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) up on 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 Memb er 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 it s Member States. However, clause (3) of this paragraph shall not apply if prior to such termination or expiration, the foreign air transportation authorized herein becomes the subject of another treaty, convention or agreement to which the United States a nd the European Union and its Member States become parties.

The Department of Transportation has executed this permit and affixed its seal on Month XX

, 20 1 5

.

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 cop y 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, includi ng, 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 cha rter flights) from 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 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 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 wai ver 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 agai nst 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 destinati on, 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 dat a;

(10) If charter operations are authorized, 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 term s, 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 n ot 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