Order 20 11

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UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 23 rd day of September , 20 11

Served: September 23 , 2011

Application of

GRUPO AEREO MONTERREY, S.A. de C.V. d/b/a

MAGNICHARTERS Docket DOT

- OST

- 200 3

- 16308

for an exemption under 49 U.S.C. §401 09 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 con ditions; 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

On August 23, 2005, the Department issued a Notice, in Docket DOT

- OST

- 2005

- 22228, announcing several steps designed to streamline our regulatory procedures for licensing U.S. and foreign air carriers. Among other things, the Notice stated that:

Assuming, based on the record and on the public interest/public convenience and necessity e lements germane to our licensing decisions, that we were in a position to act favorably, we would proceed to issue a single order (1) granting the exemption request for whatever duration we would normally have imposed, or until certificate/permit authority becomes effective, whichever is shorter, and (2) tentatively deciding ( i.e.

, show

- cause) to award a corresponding certificate (or permit), again for the standard

1 The conditions are attached as Appendix A.duration we would normally have imposed (such as, in the case of certificates, five years

for limited

- entry markets, indefinite for open

- entry markets, and in the case of permits, five years for comity and reciprocity regimes, indefinite for agreement regimes).

Our action in this Order serves to implement these streamlined regulatory procedures f or the application involved in this proceeding.

Application

By application filed October 9, 2003

, as supplemented August 16, 2011, Grupo Aereo Monterrey, S.A. de C.V. d/b/a Magnicharters (Magnicharters) , a foreign air carrier of Mexico

, requests an exemp tion under 49 U.S.C. §40109, and a foreign air carrier permit under 49 U.S.C. §41301, to engage in charter foreign air transportation of persons, property, and mail between the

United States and Mexico , and other charter operations in accordance with Part 212 of the Department’s economic regulations.

The applicant requests that the exemption authority it seeks be granted for a term of two years. The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to support its req uests for authority.

No answers were filed to Magnicharters’ application.

Decision

We have decided, under assigned authority and consistent with our August 23, 2005 Notice referenced above, to grant the applicant’s request for exemption authority, 2 subj ect to conditions, and tentatively to grant, subject to show

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

With respect to the applicant’s request for exemption authority, we find that grant of this authority is consistent with the public interest; that the applicant has demonstrated, based on the record, that it is financially and operationally qualified to perform the services authorized; 3 and that it is substantially owned and effectively controlled by citiz ens of its claimed homeland. 4

The authority sought by the applicant is encompassed by the Air Transport Services Agreement

between the United States and Mexico . We therefore find that grant of the requested exemption authority, for a one

- year term, or un til the requested permit authority becomes effective, whichever occurs earlier, is warranted.

2 Except that, consistent with our usual pol icy of granting exemption authority in the circumstances presented , we will grant the authority for a one

- year instead of a two

- year term.

3 The applicant has requested confidential treatment of its financial information, under the provisions of 14 CFR §3 02.12. Good cause having been shown, we will grant this request.

4 The record reflects that Magnicharters is owned in equal shares by four citizens of Mexico. Magnicharters states that its CEO, Directors, and key management personnel are citizens of Mexi co.We also note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, on September 22 , 20 11 , 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).

Finally, in the conduct of the charter services authorized and tentatively authorized herein, in accordance with 14 CFR §212.9(d), Magnicharters shall not perform any charter flights to or from the United States unless the Department has granted a statement of authorizati on for such operations. 5

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. 6 In particular, we 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 v iew of the foregoing and all facts of record, 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. The applicant is substantially owned and effectively controlled by citizen s of its claimed homeland;

5 See , e.g. , Order 91

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- 25, where the Department placed this condition on the foreign air carrier permit granted to Aerovias de Mexico, S.A. de C.V. We note, however, that the Department has granted blanket exemption authority to existing and future M exican carriers, relieving them of this prior approval requirement for third and fourth freedom charter operations if they submit to the Department advance notice of their charter operations as described

in Orders 98

- 4

- 2 and 99

- 7

- 23.

6 The applicant’s requ est 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 submit evidence and objections to the award of th is foreign air carrier permit authority. As noted above, no answers to the application were filed.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, condi tions, 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; 7

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 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

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, and acting under authority assigned by the Department in its regulations, 14 CFR Part 385, we find that (1) our act ions are consistent with Department policy; and (2) 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 and would not constitute a major regulatory action under the Energy Policy and

Conservation Act of 1975.

ACCORDINGLY,

1. We grant the request of Grupo Aereo Monterrey, S.A. de C.V. d/b/a Magnicharters for an exemption under 49 U.S.C. §40109 t o permit it to engage in charter foreign air transportation of persons, property, and mail between Mexico and the United States, and other charter operations in accordance with 14 CFR Part 212;

2 . The exercise of the privileges granted above is subject to compliance by Grupo Aereo Monterrey, S.A. de C.V. d/b/a Magnicharters with the cond itions listed in Appendix A and to the terms set forth in this Order;

3. We grant the motion of Grupo Aereo Monterrey, S.A. de C.V. d/b/a Magnicharters for

confidential treatment of its financial submissions, consistent with the provisions of 14 CFR §302.12;

7 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 milli on gallons or more.4 . Our action granting the exemption authority described herein is effective immediately, for a period of one year from the issue date of this order, or until the attached permit becomes effective, whichever is earlier; 8

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

6 . To the extent not acted upon above, we dismiss the applicant’s request for exemption authority in D ocket DOT

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- 20 03

- 16308 ;

7 . 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, s et forth above, should not be made final;

8 . 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 twe nty

- 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 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;

9 . If timely and properly suppor ted objections are filed, we will give further consideration to the matters and issues raised by the objections before we take further action;

10

. In the event no objections are filed, all further procedural steps shall be deemed waived, and the Departme nt 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 1

. We will serve a copy of this order on Grupo Aereo Monterrey, S .A. de C.V. d/b/a Magnicharters ; the Embassy of Mexico in Washington, D.C. ; the Department of State (Office of Aviation Negotiations) ; and the Federal Aviation Administration.

8 The one

- year duration of the authority we granted is consistent with our usual policy of granting exemption authority in the circumstances presented. We, therefore, dismissed the application to the extent that it sought exemption aut hority for a longer period.Persons entitled to petition the Department for review of this order under the Department’s regulations, 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 Aviation (SEAL)

Appendices

An electronic version of this document is available on the World Wide Web at: http://www.regulations.govForeign Carrier Exemption Conditions Appendix A

In the conduct of the operations authorized, the foreign carrier applicant(s) shall:

(1) Not conduct any operations unless it holds a c urrently 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 Admi nistration, 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 require ments 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 (I IR) (formerly referred to as International Principal Security Inspector) to advise the I IR 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 Avia tion 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 safe ty 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 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 car riage, 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 its homeland;

(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 rules governing charters (including 14 CFR Parts 212 an d 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 applica ble 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 ap proval under Title 49 of the U.S. Code.

1 2 /200 7Appendix B

Issued by

Order 20 11

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__

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



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



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



### Grupo Aereo Monterrey, S.A. de C.V. d/b/a Magnicharters

A Foreign Air Carrier of Mexico

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 :

Charter foreign air transportation of persons, property

, and mail between Mexico and

the United States

.

The holder shall also be authorized to engage in other charter trips in foreign air transportation

, subject to the terms, conditions, and limitations of the Department’s regulations governing

charters.

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 p ermit 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 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 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) upon the effective date of any treaty, convention, or agreement or amendment, which shall have the effect of eliminating the bilateral right for the service a uthorized by this permit from the service which may be operated by airlines designated by the Government of Mexico (or, if the right is partially eliminated, then the authority of this permit shall terminate in like part); (3) upon the

effective date of an y permit granted by the Department to any other carrier designated by the

Government of Mexico in lieu of the holder; or (4) upon the termination or expiration of the applicable air services agreement between the United States and Mexico . However, clause (4) 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 and Mexico become parties.The D epartment of Transportation has executed this permit and affixed its seal on , 20 11

.

By:

PAUL L. GRETCH

Director

Office of International Aviation 

### (SEAL)Foreign Carrier Permit Conditions

In the conduct of the operations authorized, the foreign carrier applicant(s) 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 appli cable 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 154 6 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 poi nt of departure for the United States, contact its International Industry Representative (IIR) (formerly referred to as International Principal Security Inspector) to advise the I IR of its plans and to find out whether the Transportation Security Administr ation 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 offic e);

(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 and defenses;

(7) Agree that operati ons 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 o n 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

Unit ed States in its homeland;

(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

agre ement, 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 a ll 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. More over, this authority cannot be sold or otherwise transferred without explicit Department approval under Title 49 of the U.S. Code.

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