UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on August 28

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### N OTICE OF ACTION TAKEN

– DOCKET DOT

- O ST

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- 0148

______________________________________________ __________________________________________________________________________________ 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).

Joint Applicant s : VIRGIN ATLANTIC AIRWAYS LTD ( Virgin Atlantic ) and OPEN JOINT STOCK COMPANY

TRANSAERO AIRLINES ( Transaero )

Date Filed: August 23 , 201 2

Relief requested: Statement of authorization under 14 CFR Part 212 to permit Virgin Atlantic to d isplay Transaero’s “UN” designator code on Virgin Atlantic

- operated flights between London, on the one hand, and Boston, Los Angeles, Orlando, and San Francisco, on the other hand

. 1

E xemption from 49 USC § 41301 to permit Transaero to provide scheduled fo reign air transportation of persons, property,

and mail between Moscow and Boston, Los Angeles, Orlando, and San Francisco by code

- sharing on Virgin Atlantic’s flights between London, on the one hand, and Boston, Los Angeles, Orlando, and San Francisco, on the other hand. Transaero requests that this authority be granted for a two

- year term.

S tatement of authorization under 14 CFR Part 212 to permit Transaero to display Virgin Atlantic’s “ VS ” designator code in conjunction with foreign air transportation of persons, property, and mail on Transaero

- operated flights between Moscow and London that connect to Virgin Atlantic’s flights (bearing Transaero’s code) between London, on the one hand, and Boston, Los Angeles, Orlando, and San Francisco, on the other h and.

Applicant representative s : Anita M. Mosner ( Virgin Atlantic ), 202

- 419

- 2604 and Gerald F. Murphy ( Transaero )

, 202

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- 2500

DOT analyst: Brett D. Kruger , 202

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Responsive pleadings: None

DISPOSITION

Action: Exemption for Transaero : Approved in part (one

- year grant), subject to conditions, remainder (request for longer

- term authority) dismissed. 2

Statements of authorization for Vi rgin Atlantic and for Transaero: Approved, subject to conditions.

Action date: August 28 , 2012 3

1 Virgin Atlantic holds a foreign air carrier permit authorizing it to engage in (1) 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 a nd via intermediate points, to any point or points in the United States and beyond; (2) f oreign 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; (3) foreign scheduled and charter cargo air transportation between any point or points in the United States and any point or points; (4) o ther charters pursuant to the prior approval requirements set forth in the Departm ent’s regulations governing charters; and (5) t ransportation authorized by any additional route rights made available to European Community carriers in the future ( s ee Order 2007

- 10

- 16).

2 The one

- year duration of the authority we granted Transaero is cons istent with our usual policy of granting exemption authority in the circumstances presented. We therefore, dismissed the application to the extent that it sought exemption authority for a longer period.Effe ctive dates of authority granted: Transaero ’s exemption authority is effective from August 28 , 2012

, through August 28 , 2013

. The statement s of authorization granted to Virgin Atlantic and Transaero are effective August 28 , 2012

, and will remain in effect for an indefinite duration , subject to conditions

.

Basis for approval (bilateral agreement/reciprocity): U.S.

- EU Air Transport Agreement, and the Annexes to the 1994

U.S.

- Russian Federation Air Transport Agreement. 4

Except to the extent exempted/waive d , this authority is subject to the terms, conditions, and limitations of our standard foreign air carrier exemption conditions attached as Appendix A and codeshare conditions attached as Appendix B

.

Special conditions/Remarks: The exemption authority gra nted to Transaero is limited to services provided on a

code

- share basis only, only on flights operated by Virgin Atlantic.

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 s w ere qualified to perform their 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 or dismi ssed , 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 t his 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 effective when taken, and the filing of a petition for review will not alter such effe ctiveness.

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

3 We acted on the application without awaiting expir ation of the answer period with the consent of all parties served.

4 On February 13, 2009, the United States and the Russian Federation agreed, ad referendum , to revised Annexes to the U.S.

- Russia Air Transport Agreement and stated that, pending their ent ry into force, the respective aeronautical authorities intend to implement the provisions of those Annexes on the basis of comity and reciprocity

.Appendix A



### 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 with the Department;

(2) Comply with all app licable 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 1 546 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 p oint 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 Adminis tration 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, f ile 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 of fice);

(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 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 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 p urchased 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 transpo rtation" 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/fro m 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 av iation 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 Departm ent, 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 imposed

a bove. Moreover, this authority cannot be sold or otherwise transferred without explicit Department approval under Title

49 of the U.S. Code.

12/2007Appendix B

Th e statement s of authorization are subject to the following conditions:

(a) Th e statement s of authorization will remain in effect only as long as (i) Virgin Atlantic and Transaero continue to hold the necessary underlying authority to operate the code

- share services at issue, and (ii) the code

- share agreement providing

for the code

- share operations remains in effect;



### ( b ) Virgin Atlantic and/or Transaero 

### must notify the Department immediately if the code

- share agreement under

which these code

- share services are operated is no longer in effect or if the carriers decide to cease opera ting all or a portion of the approved code

- share services. Such notices should be filed in Docket DOT

- OST

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( c ) The code

- sharing operations conducted under this authority must comply with 14 CFR Part 257 and with any amendments to the Departme nt's regulations concerning code

- share arrangements that may be adopted. Notwithstanding any provisions in the contract between the carriers, our approval here is expressly conditioned upon the requirements that the subject foreign air transportation be so ld in the name of the carrier holding out such service in computer reservation systems and elsewhere; that the carrier selling such transportation (i.e., the carrier shown on the ticket) accept responsibility for the entirety of the code share journey for all obligations established in its contract of carriage with the passenger; and that the passenger liability of the operating carrier be unaffected;

( d ) The authority granted here is specifically conditioned so that neither Virgin Atlantic nor Transaero 

### shall give any force or effect to any contractual provisions between themselves that are contrary to these conditions ; and

( e ) We may amend, modify, or revoke the authority granted at any time without hearing at our discretion.

1 We expect this notification to be received within 10 days of such non

- effectiveness or of such decision.