UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on April 16 , 201 3

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 201 3

- 0 043

_______________________________________________________________________________________________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional confirming order will be issued in this matter).

Applicant: AIR PALACE , S.A. de C.V. D ate Filed: March 4, 2013

Relief requested: E xemption from 49 US C §4 1301 to permit the applicant to conduct passenger charter operations between Mexico and the United States, and other passenger charters in accordance wi th 14 CFR Part 212, using small

aircraft

. The applicant also requests stopover privileges and relief from the requirement to provide advance notice of each flight, or serie s of flights, between Mexico and the United States. The applicant further requests that its exemption authority be granted for a period of at least two years.

Applicant representative: Eugene E. Smith

, 2 10

- 590

- 1630

DOT analyst: David R. Christofano , 202

- 366

- 0584

Responsive pleadings: None.

DISPOSITION

Action: Approved. Action date: April 16 , 2013

Effective dates of authority granted: April 16

, 2013, through April 16

, 201 5

.

Basis for approval (bil ateral agreement/reciprocity): United States

- Mexico Air Transport Services Agreement (“the Agreement”).

Except to the extent exempted/waived, this authority is subject to the terms, condition s, and limitations of our standard exemption conditions (attached).

Special conditions/Remarks: Based on the record in this case, w e found that the applicant is operationally and financially qualified to conduct its proposed operations and is substantially owned and effectively controlled by citizens of its

homeland. 1 We also note that the applicant is properly licensed by its homeland to perform the proposed services. In addition, on April 11

, 201 3

, the FAA advised us that it knows of no reason to withhold this authority.

In the conduct of these operations, the carrier must adhere to all applicable provisions of the Agreement and may only use aircraft capable of carrying no more than 60 passengers a nd having a maximum payload capacity of no more than 18,000 pounds (small aircraft ). The above grant includes authority to operate Third and Fourth Freedom charters. While we have subjected, consistent with the provisions of the Agreement, Mexican carrie rs conducting charter operations with large aircraft to prior approval or submission of notice for their Third and Fourth Freedom charters, we determined that any such requirement was not necessary on public interest grounds in the case of this carrier, si nce the carrier will be conducting these operations solely with small aircraft. 2 (Other charter operations to/from the United States under this authority, however, are subject to prior approval under 14 CFR Part 212.) Further, we are continuing

to allow Mexican carriers conducting passenger charters using small aircraft to make stopovers in the United States in the conduct of such operations.

1 The record indicates that the applicant is wholly owned by Mexican citizens

. The record further indicates that the applicant’s

General Director and key management personnel are also citizens of Mexico.

2 We note, however, that the applicant must meet any reporting requirements set forth in its FAA Operations Specifications.Action taken by: Paul L. Gretch, Director, Office of International Aviation

______________________________________________________________________________________________ __________ Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our action was consistent w ith Department policy; (2) the applicant was qualified to perform its proposed operations; (3) grant of the authority was consistent with the public interest; and (4) grant of the authority would not constitute a major regulatory action under the Energy Poli cy and

Conservation Act of 1975. To the extent not granted/deferred/dismissed, we denied all requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set forth in this Notice under the Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of issuance of this Notice. This action was effec tive when taken, and the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide Web at: http://www.regulations.gov/

### Foreign Carrier Exemption 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 wit h 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 foreig n 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

commencemen t 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 airma n 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 liabi lity 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 t ribunal 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 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 t ransportation" 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 and 380); and

(11) Comply with such other reasonable ter ms, 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 no t 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.

12/ 2007