Order 20 1 4

- 5

- 10

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 21 st day of May

, 20 1 4

Served: May 21 , 2014

Application of

“ AZERBAIJAN AIRL INES ” CJSC Docket DOT

- OST

- 2014

- 0 019

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

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

- OST

- 2005

- 2222 8

, 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

necessit y elements germane to our licensing decisions, that we were in a position to act

favorab ly, 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

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).

1 The conditions are attached as Appendix A.Our action in this Order serves to implement thes e streamlined regulatory procedures for the

application involved in this proceeding.

Application

By application filed February 10, 2014

, “ Azerbaijan Airlines ” CJSC (Azerbaijan Airlines ), a

foreign air carrier of Azerbaijan

, 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 : 1) scheduled air transportation of

passengers, property, and mail between any point or points in Azerbaijan, via intermediate

points, and any point or points in the United States; and 2) charter air transportation of

passengers, property, and mail between any point or points in Azerbaijan and any point or points

in the United States, as well as any point or points in the United States and any point or points in

a third country or countries

, subject to pertinent national, bilateral and international rules and

regulations. 2

The applicant provided evidentiary materials required by 14 CFR Part 211 of our regulations to

support its requests for authority.

No answers were filed to the application.

Decision

We have decided, under assigned authority and consistent with our August 23 , 2005 Notice

referenced above, to grant in part the applicant’s request for exemption authority, subject to

conditions, and tentatively to grant in part , subject to show

- cause procedures, its request for a

foreign air carrier permit, also subject to conditions.

Specifically, we grant Azerbaijan Airlines exemption authority to permit it to engage in

scheduled foreign air transp ortation of persons, property, and mail between Baku, Azerbaijan

, and New York, New York. We also grant the applicant authority to engage in charter foreign air

transportation of persons, property, and mail between any point or points in Azerbaijan and an y

point or points in the United States; and other charters in accordance with the requirements of 14

CFR Part 212. We will tentatively grant Azerbaijan Airlines a foreign air carrier permit for these

services. 3

With respect to the exemption authority we are granting the applicant , we find that grant of this

authority is consistent with the public interest; and that the applicant has demonstrated, based on

the record , that it is financially and operationally qualified to perform the services authorized

. T he record further indicates that Azerbaijan Airlines is substantially owned and effectively

controlled by the Government and citizens of Azerbaijan

. 4

2 Azerbaijan Airlines intends to begin operations no later than the winter season of 2014.

3 As noted below , a viation relations between the United States and Azerbaijan are governed by comity and

reciprocity. Consistent with our usual policy of granting authority in th os e circumstances , we will grant the

applicant the authority specified here rather than the broader authority it requested.

4 The record shows that 100% of the applicant’s shares are owned by the Government of Azerbaijan, and that all of

Azerbaijan Airlines’ key management personnel are citizens of Azerbaijan, excep t for one citizen of Latvia

.Aviation relations between the United States and Azerbaijan are governed by comity and

reciprocity. W e find that sufficient reciprocity exists with Azerbaijan to warrant grant of

exemption authority for a one

- year term, or until the permit authority becomes effective,

whichever occurs earlier

.

We also note that the applicant is properly licensed by its h omeland to p erform the proposed

services. In addition, on February 27, 2014 th e Federal Aviation Administration advised us that

it knew of no reason why we should act unfavorably on the applicant’s request. We have

verified the applicant’s compliance wit h 14 CFR Parts 203 (Warsaw liability waiver), and 205

(insurance requirements).

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 in part of

exemption authority to the applicant also warrant g ranting in part the foreign air carrier permit it

seeks.

In view 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 the Government and

citizens of its claimed homeland ;

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 regulato ry 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

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 t o

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

to the application were filed.

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

- term net annu al change in

aircraft fuel consumption of 10 million gallons or more.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 Presiden t 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, an d acting under authority assigned by the Department in its regulations,

14 CFR Part 385, we find that (1) our actions 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 operation s; 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 “ Azerbaijan Airlines ” CJSC f or an exemption under 49 U.S.C.

§40109 to permit it to engage in : 1) scheduled foreign air transportation of persons, property, and

mail between Baku, Azerbaijan, and New York, New York ; and 2) charter f oreign air

transportation of per sons, property, and mail between any point or points in Azerbaijan and any

point or points in the United States; and 3) other charters in accordance with Part 212 of the

Department’s economic regulations

.

2

. The exercise of the privileges granted above is subject to compliance by “ Azerbaijan

Airlines ” CJSC with the conditions listed in Appendix A;

3

. Our action granting the exemption authority described herein is effective immediately, for a

period of one ye ar from the issue date of this order , or until the attached permit becomes

effective, whichever is earlier ;

4

. We may amend, modify, or revoke the exemption authority set forth herein at our discretion

at any time and without hearing;

5

. To the extent not acted upon above, we dismiss the applicant’s request for exemption

authority in this Docket (DOT

- OST

- 2014

- 0 019 ) ;

6

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

direct all interested pe rsons to show cause why our tentative decision on that application, set

forth above

, should not be made final;

7

. Any interested person objecting to the issuance of an order making final our tentative findings

and conclusions with respect to the applican t’s request for a foreign air carrier permit shall, 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 conclusions objected to, together with a summary of

testimony, statistical data, and concrete evidence to be relied upon in support of the objections; ifobjections are filed, answers to objections are due no later than seven (7) calendar days

thereafter;

8

. If timely 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;

9

. In the event no objections are filed, all further procedural steps shall be deemed waived, 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 co nc lusions set forth in this

order; and

10

. We will serve a copy of this order on the applicant, the Embassy of Azerbaijan in

Washington, D.C., the Federal Aviation Administration, and the U.S. Department of State

.

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 re quest 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.govAppendix A

F oreign 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 homel and 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. Govern ment 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, be fore 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 Prin cipal 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 insura nce 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 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 t o 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 St ates 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 tribun al 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 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

imposed above. Moreover, this authority cannot be sold or otherwise transferred without explicit Department

approval under Title 49 of the U.S. Code.

1 2/2007Appendix B

Issued by

Order 20 1 4

- X

- X

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.



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

PERMIT TO FOREIGN AIR CARRIER



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



### “ AZERBAIJAN AIRLINES ” CJSC

A F oreign Air Carrier of Azerbaijan

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 :

Scheduled foreign air transportation of persons, property, and mail between Baku,

Azerbaijan

, and New York, New York ; and

Charter foreign air transportation of persons, property, and mail between any point

or p oints in Azerbaijan and any point or points in 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 permit and the attachment to this order,

and to all applicable provisions of any trea ty, 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 perm it shall be effective on __________ XX. 2014, and shall terminate five years thereafter;

provided, that if during said period the operation of the foreign air transportation authorized becomes

the subject of any treaty, convention or agreement to which the United States and the applicant’s

homeland a re or shall become parties, then this permit is continued in effect during the period

provided in such treaty, convention, or agreement.The Department of Transportation has executed this permit and affixed its seal on

__________.

By:

PAUL L. GRETC H

Director

Office of International Aviation



### (SEAL)Foreign Air 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 applicable requirements of the Federal Aviation Administration, the Transportation Security

Administration, and wi th 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 s ecurity, 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 refe rred 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 re quirements 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 Administratio n’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 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 purchased in the United States; or (b) based on a claim

under any international agreement or treaty cognizable in an y 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 Part ies 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 o f 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 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

imposed above. Moreover, this authority cannot be sold or otherwise transferred without explicit Department

approval under Tit le 49 of the U.S. Code.

1 2 /200 7