Order 20 11

- 8

- 17

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 11 th day of August , 20 11

Served: August 11 , 20 11

Application of

STRATEGIC AIRLINES PTY L T D Docket DOT

- OST

- 20 11

- 01 06

for an exemption under 49 U.S.C. § 4 0109 a nd 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; 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 elements ge rmane 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 e ffective, 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

- e ntry 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 for the

app lication involved in this proceeding.Application

By application filed June 3 , 20 11

, as supplemented July 26 and August 1 , 2011

, Strategic

Airlines P ty L td , a foreign air carrier of Australia

, requests an exemption under 49 U.S.C. § 40109

, and a foreign air carrier permit under 49 U.S.C. § 41301, to engage in :

a. scheduled foreign air tran sportation of persons, property , and mail from points behind Australia, via Australia and intermediate points, to a point or points in the United States

, and beyond;

b. scheduled all cargo services between any point or points in the United States and any point or points in any third country or countries;

c. c harter foreign air transportation of persons, property, and mail between any point or points in Australia and any point or points in the United States, and between any point or points in the Unite d States and any point or points in third countries provided that, except with respect to cargo charters, such services constitute part of a continuous oper ation that includes service at a point or points in Australia for the purpose of carrying local traffic between Australia and the United States; and

d. other cha rters in accordance with 14 CFR P art 212.

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 Strategic Airlines ’ application.

Decision

We have decided, under assigned authority and consistent with our August 23 , 2005 Notice referenced above, t o grant the applicant’s request for exemption authority, subject 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 f or 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 ; and that it is substantially owned and effectively controlled by citizens of its claimed homeland. 1

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

the United States and Australia . We therefore find that gra nt of the requested exemption

1 The applicant has requested confidential treatment of the financial information it provided with its initial application and with its August 1, 2011 supplement, under the provisions of 14 CFR 302.12. Good cause having been shown, we will grant the request s

. Moreover, the record indicates that the applicant is ultimately owned by Mr. Michael James, an Australian citizen, who is also the applicant’s Managing Director (and sole Director).authority, for a two

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

In addition, in a memorandum dated June 1 7 , 2011, 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 wavier), and 205 (insurance requirements).

We therefore find that grant of the req uested exemption authority, for a two year period, or until the requested permit aut hority 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. In particular, w e tentatively find and conclude that the fac tors 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, we tentatively find and conclude that:

1. It is in the pu blic 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 Titl e 49 of the U.S. Code

, and to our rules, regulations, and requirements;

3. The applicant is substantially owned and effectively controlled by 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 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 . 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 heor she does not intend to disapprove this portion of the Department’s decision under that section,

whichever o ccurs 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 con ferring 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 A ct of 1975.

ACCORDINGLY,

1. We grant the request of Strategic Airlines P ty L td for an exemption under 49 U.S.C. §40109

to permit it to engage in :

a. scheduled foreign air transportation of persons, property, and mail from points behind Australia, via Australia and intermediate points, to a point or points in the United States and beyond;

b. scheduled all cargo services between any point or points in the United States and any point or points in any third country or countries;

c. c harter foreign air transpor tation of persons, property, and mail between any point or points in Australia and any point or points in the United States, and between any point or points in the United States and any point or points in third countries provided that, except with respect to cargo charters, such services constitute part of a continuous operation that includes service at a point or points in Australia for the purpose of carrying local traffic between Australia and the United States; and

d. other charters in accordance with 14 CFR P art 212.

2

. The exercise of the privileges granted above is subject to compliance by Strategic Airlines Pty

L td with the conditions listed in Appendix A;

3. We grant the requests of Strategic Airlines Pty Ltd for confidential treatment of its financial information, consistent with the provisions of 14 CFR §302.12;

4

. 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 b ecomes effective, whichever is earlier ;

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 this Docket (DOT

- OST

- 20 11

- 01 06 ) ;7

. 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;

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 sh all, 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; if objections are filed, answers to objections are due no later than seven (7) calendar days thereafter;

9

. If time ly 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;

10

. In the event no objections are filed, all further procedural steps shall be deemed wai ved, 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 conclusions set forth in this order; and

1 1

. We will serve a copy of this order on Strategic Airlines Pty L td , the Ambassador of Australia to the United States 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 Departm ent’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 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 homeland for such operations, and it has filed a copy of such authorizatio n 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 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 fo reign 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 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 commence ment 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 airm an 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

tr ibunal 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 tran sportation" 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 da ta;

(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 11

-

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.



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



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



### Strategic Airlines P ty L td

A F oreign Air Carrier of Australia

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 fr om points behind Australia, via Australia and intermediate points, to a point or points in the United States and beyond;

Scheduled all cargo service between any point or points in the United States and any point or points in any third country or countries ; and

Charter foreign air transportation of persons, property, and mail between any point or points in Australia and any point or points in the United States, and between any point or points in the United States and any point or points in third countries provided that, except with respect to cargo charters, such services constitute part of a continuous operation that includes services at a point or points in Australia for the purpose of carrying local traffic between Australia and the Un ited States.

The h older 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 treaty, convention or agreement affecting international air transportation now in e ffect, 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 ____, _, 2011 . 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 authorized by this permit from the service which may be operated by airlines designated by the Government of Australia (or, if the right is partially eliminated, then the authority of this permit shall terminate in like part); (3) upon the effective date of any permit granted by the Department to any other carrier designated by the

Government of Australia in lieu of the holder ; or (4) upon the termination or expiration of the applicable air services agreement between the United States and Australia . 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 Australia become parties.

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

.

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(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 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 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 Internat ional 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 mini mum 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 Managem ent 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 t he 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 respec t 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 any court or other tri bunal 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, nonsche duled, 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 o ther 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. Co de.

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