UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on September 21, 2010

NOTICE OF ACTION TAKEN – DOCKET DOT-OST-2010-0227 ________________________________________________________________________________________________________________________________

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 Applicants: ALASKA AIRLINES, INC. (Alaska), HORIZON AIR INDUSTRIES, INC. (Horizon), and 

CATHAY PACIFIC AIRWAYS LIMITED (Cathay Pacific)

Date Filed: September 7, 2010 

Relief requested: Blanket statements of authorization under 14 CFR Part 212 permitting Alaska and Horizon to display 

Cathay Pacific’s two-letter designator code on flights operated by Alaska or Horizon between Cathay Pacific’s U.S. and 

Canada gateways, on the one hand, and 25 U.S. code-share points, on the other hand.1

Exemption from 49 USC § 41301 to permit Cathay Pacific to engage in scheduled foreign air transportation of persons, 

property and mail between Hong Kong and 25 U.S. code-share points beyond Cathay Pacific’s U.S. and Canadian 

gateways pursuant to its code-share agreement with Alaska and Horizon.2

Applicant representatives: John R. Mietus, Jr., 202-747-5212 (Cathay Pacific) and 

Charles F. Donley II, 202-626-6600 (Alaska and Horizon)

DOT analyst: Brett D. Kruger, 202-366-8025

Responsive pleadings: None

DISPOSITION

Action: Approved, subject to conditions Action date: September 21, 20103

Effective dates of authority granted: The exemption authority granted to Cathay Pacific is effective from September 21, 

2010, through September 21, 2012. The statements of authorization granted to Alaska and Horizon are effective 

September 21, 2010, and will remain in effect for an indefinite duration, subject to conditions. 

Basis for approval (bilateral agreement/reciprocity): U.S.-Hong Kong Air Transport Agreement (the Agreement) and the

Memorandum of Understanding of October 19, 2002 (the MOU).

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our standard 

foreign air carrier exemption conditions attached as Appendix A and to the code-share conditions attached as Appendix B.

Special conditions/Remarks: The exemption authority granted to Cathay Pacific is limited to operations conducted only 

through code-share arrangements with Alaska or Horizon, on flights operated by Alaska or Horizon. Furthermore, Cathay 

 1 See Appendix C for a list of initial code-share routes. 2 The Government of the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR) may, at its 

discretion, change the code-share points in the United States on not less than 30 days’ notice in writing to the Government of the 

United States. By letter dated April 28, 2010, the HKSAR selected Seattle and Portland to replace San Francisco and Nashville as two 

of its code-share points under the Agreement and MOU. The 25 U.S. points for code-share operations are Atlanta, Austin, Boston, 

Chicago, Dallas/Fort Worth, Denver, Detroit, Fort Lauderdale, Houston, Las Vegas, Miami, New Orleans, New York/Newark, 

Orlando, Philadelphia, Pittsburgh, Portland, Raleigh-Durham, San Diego, San Jose, San Juan, Seattle, St. Louis, Tampa, and 

Washington/Baltimore.

3 The Department is acting on the application prior to the expiration of the 15-day answer period with the consent of all parties served.
Pacific’s code-share operations shall be operated within the level of code-share frequencies provided for under the U.S.-

Hong Kong Memorandum of Understanding of October 19, 2002.4

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 with 

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 Policy and 

Conservation Act of 1975. To the extent not granted, 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 effective 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

 4 We note that under the MOU, Cathay Pacific may code share on a total of 21 weekly round trip frequencies to each code-share point 

in the United States, from each of its direct service points in Canada or the United States.
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 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 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 

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 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 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 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.

12/2007
Appendix B

The code-share operations authorized here are subject to the following conditions:

(a) The statements of authorization will remain in effect only as long as (i) Alaska, Horizon and Cathay Pacific 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) Alaska, Horizon and/or Cathay Pacific must promptly notify the Department (Office of International Aviation) if the

code-share agreement providing for the code-share operations is no longer effective or if the carriers decide to cease 

operating all or a portion of the approved code-share services. Such notices should be filed in Docket DOT-OST2010-0227.

1

(c) Alaska, Horizon and/or Cathay Pacific must notify the Department no later than 30 days before they begin any new 

code-share service under the code-share services authorized here. Such notice shall identify the market(s) to be served, 

which carrier will be operating the aircraft in the code-share market added, and the date on which the service will 

begin. Such notices should be filed in Docket DOT-OST-2010-0227.

(d) The code-sharing operations conducted under this authority must comply with 14 CFR 257 and with any amendments 

to the Department’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 sold in the name of the carrier holding out such service in the 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.

(e) The authority to operate to third countries is subject to the condition that any service provided under these statements

of authorization shall be consistent with all applicable agreements between the United States and the foreign countries 

involved. Furthermore, (i) nothing in the award of these blankets statement of authorization should be construed as 

conferring upon Alaska or Horizon rights (including code-share, fifth freedom intermediate and/or beyond rights) to 

serve markets where U.S. carrier entry is limited unless Alaska or Horizon notifies the Department of their intent to 

serve such a market and unless and until the Department has completed any necessary carrier selection procedures to 

determine which carrier(s) should be authorized to exercise such rights; and (ii) should there be a request by any carrier 

to use the limited-entry route rights that are included in the authority of Alaska or Horizon by virtue of the blanket 

statements of authorization granted here, but that are not then being used by Alaska or Horizon, the holding of such 

authority will not be considered as providing any preference for Alaska or Horizon in a competitive carrier selection 

proceeding to determine which carrier(s) should be entitled to use the authority at issue.2

(f) The authority granted here is specifically conditioned so that neither Alaska, Horizon, nor Cathay Pacific shall give 

any force or effect to any contractual provisions between themselves that are contrary to these conditions.

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. 2 The notice in paragraph (b) above can be used for this notification. 
Appendix C