BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ 

 ) 

Application of ) 

 ) 

CARIBBEAN AIRLINES LIMITED ) DOCKET DOT-OST-2010- 

 ) 

for an exemption from 49 U.S.C. § 41301 ) 

(Jamaica/Caribbean Points-U.S.) ) 

__________________________________________) 

APPLICATION OF CARIBBEAN AIRLINES LIMITED

FOR AN EXEMPTION

Communications with respect to this document should be sent to:

John R. Mietus, Jr.

William C. Evans

Law Office of John Mietus, LLC

6701 Democracy Blvd., Suite 300

Bethesda, MD 20817-7500

(202) 747-5212

(240) 396-5362 fax

john@mietuslaw.com

Counsel for CARIBBEAN AIRLINES 

LIMITED

 

NOTICE: Any person may support or oppose this application by filing an 

answer no later than September 29, 2010 and serving a copy of the answer on 

counsel for Caribbean Airlines and upon persons served with this application. 

September 14, 2010
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

__________________________________________ 

 ) 

Application of ) 

 ) 

CARIBBEAN AIRLINES LIMITED ) DOCKET DOT-OST-2010- 

 ) September 14, 2010

for an exemption from 49 U.S.C. § 41301 ) 

(Jamaica/Caribbean Points-U.S.) ) 

__________________________________________) 

APPLICATION OF CARIBBEAN AIRLINES LIMITED

FOR AN EXEMPTION

Pursuant to 49 U.S.C. § 40109(c), Caribbean Airlines Limited ("CAL") 

respectfully requests an exemption from the provisions of 49 U.S.C. § 41301 

to the extent necessary to permit CAL to engage in: 

scheduled foreign air transportation of persons, property and mail from 

points behind Jamaica, via Jamaica and intermediate points, to a point 

or points in the United States and beyond; 

charter foreign air transportation of persons, property and mail 

between any point or points in the United States and any foreign point 

or points, provided that, except with respect to cargo charters, such 

service constitutes part of a continuous operation, with or without a 

change of aircraft, that includes services to Jamaica for the purpose of 

carrying local traffic between Jamaica and the United States;

scheduled foreign air transportation of persons, property, and mail 

between Barbados, on the one hand, and the terminal points Fort 

Lauderdale, Florida and New York, New York, on the other hand; and

scheduled foreign air transportation of persons, property, and mail

between the coterminal points Grenada and St. Lucia on the one hand, 

and the terminal point New York, New York on the other hand. 
Caribbean Airlines

Exemption Application

Page 2 

CAL requests this authority so it can assume, as early as November 1, 2010, 

certain U.S. operations now conducted by Air Jamaica that are important to 

the economies of Jamaica and its Caribbean neighbors. In support of this 

application, CAL states as follows:

1. CAL is the flag carrier of Trinidad and Tobago. From its 

operational base at Port of Spain, Trinidad, CAL currently serves 14 airports 

throughout the Western Hemisphere with a fleet of eight Boeing 737-800 and 

five Dash 8-300 aircraft. It holds Department authority in Dockets OST2006-26586, OST-2008-0053, and OST-2008-0059 and currently operates 

scheduled U.S. service to New York, Fort Lauderdale, and Miami.

2. Over the last few years the Government of Jamaica ("GOJ") had 

sought proposals for the divestiture of state-owned Air Jamaica Limited. In 

early 2010 GOJ agreed with CAL's owner, the government of Trinidad and 

Tobago ("GOTT"), to an arrangement by which CAL, as Jamaica's flag 

carrier, would assume certain Air Jamaica activities and routes to the U.S. 

and other countries. Under an April 30, 2010 Transitional Services 

Agreement, Air Jamaica continues to provide Jamaica-flag service under its 

existing DOT authority with financial and managerial support from CAL. 

That arrangement has most recently been recognized by the Department in 

Assistant Secretary Kurland's July 14, 2010 letter to counsel for Air Jamaica
Caribbean Airlines

Exemption Application

Page 3 

(the "July 14 Letter"). Air Jamaica currently operates four Airbus A320, one 

A321, and one A319 aircraft leased from GECAS, AerCap, and the CIT 

Group. Its U.S. service includes flights from Kingston or Montego Bay, 

Jamaica to Fort Lauderdale, New York (JFK), and Philadelphia.1/ Air 

Jamaica also operates St. George's (Point Salinas), Grenada-New York (JFK) 

service with the support of the government of Grenada.2/ In the recent past, 

Air Jamaica also has served Atlanta, Baltimore, Boston, Chicago, Houston, 

Newark, Los Angeles, Miami, Orlando, and Phoenix from Jamaica. It also 

has operated Barbados-U.S. service as a carrier designated by Barbados and 

St. Lucia-U.S. service with the support of that government.

3. CAL is now working to integrate aircraft, personnel (seconded to Air 

Jamaica from a CAL-controlled company), and systems from Air Jamaica into 

its own company structure. Once that process is complete and DOT has 

granted CAL the requested authority, GOJ-GOTT agreements contemplate 

CAL's acquisition of certain Air Jamaica assets. At that time, Air Jamaica 

 

1/ Air Jamaica's exemption authority in Docket OST-2004-17040, last issued by Notice 

of Action Taken ("NOAT") dated March 3, 2004 (renewal application pending), 

includes a Jamaica-U.S. route description identical to that sought by CAL in this 

application.

2/ Air Jamaica holds authority between New York and Barbados, Grenada, and St. 

Lucia by NOAT dated March 8, 2004 in Docket OST-1999-5544 and Atlanta-St. Lucia 

authority by NOAT dated April 27, 2006 in Docket OST-2004-17480 (renewal 

applications pending). It also held Barbados-Fort Lauderdale authority by Notice of 

Action Taken dated May 23, 2007 in Docket OST-2007-28221. CAL's route request 

herein includes the New York and Fort Lauderdale authority previously granted to 

Air Jamaica in these dockets.
Caribbean Airlines

Exemption Application

Page 4 

will cease to operate, and in its place CAL will assume Jamaica-U.S. and 

Grenada-New York operations under the regulatory oversight of the 

Government of Trinidad and Tobago and at roughly equivalent levels of 

service.

4. CAL is a Trinidad and Tobago carrier and will remain so when it 

begins the Jamaica-U.S. and Barbados/Grenada/St. Lucia-U.S. operations for 

which it requests authority herein. At that time, GOJ will receive a 16% 

equity interest in CAL from GOTT and will designate one CAL director; that 

designation right will continue so long as GOJ holds at least a 5% interest. 

Nonetheless, the remainder of CAL's ownership and its Board of Directors

will remain Trinidadian. GOTT also will retain the right to appoint CAL's 

chairman so long as GOTT holds more than 50% of the outstanding voting 

stock of CAL.

Under these circumstances, CAL remains, in the words of the U.S.-

GOTT bilateral aviation agreement, "substantially owned and effectively 

controlled" by GOTT. Nonetheless, to the extent the Department believes a 

waiver of its ownership and control requirement may be necessary to account 

for Jamaican ownership interests, such a waiver is clearly warranted under 

Department policy. As the Department explains in the July 14 Letter: 
Caribbean Airlines

Exemption Application

Page 5 

It has been our established policy that where we have two OpenSkies countries involved, and where U.S. interests are not 

otherwise compromised, we are favorably disposed toward 

granting ownership and control waivers.

Having found that CAL participation in Air Jamaica's ownership and 

control is not inimical to U.S. aviation policies or interests, the 

Department readily can find that GOJ participation in CAL similarly 

is consistent with U.S. policy.

5. As the Department previously has found, CAL remains fit, willing, 

and able to provide scheduled and charter air transportation to and from the 

United States. Its key personnel possess substantial business and aviation 

experience, and it has the financial resources necessary to continue serving 

the United States safely and without undue risk to passengers.

 

 6. The "open skies" bilaterals the U.S. enjoys with both GOJ and 

GOTT support a grant of the requested authority. The U.S.-Jamaica 

bilateral aviation agreement has been open since 2002, and a number of U.S. 

carriers currently serve Jamaica on a scheduled basis. More significantly, 

the U.S. signed an open skies bilateral aviation agreement with GOTT, which 

has designated CAL as its flag carrier, on May 1, 2010. Thus, U.S. carriers 
Caribbean Airlines

Exemption Application

Page 6 

enjoy broad rights to serve both countries3/ in return for equally broad rights 

available to each country's carriers. GOJ and GOTT now both wish to have 

CAL, under GOTT regulatory oversight, exercise the rights available under 

both bilaterals. The Department has long permitted Caribbean carriers to 

provide U.S. service for island neighbors even when U.S. bilateral

agreements with one or both countries were not open.4/ Thus, now that both 

bilateral relationships are open, it is entirely appropriate for the Department 

to accede to these governments' wishes for Jamaica-U.S. service, and to 

permit continued New York service by CAL to Barbados, Grenada, and St. 

Lucia.

 7. CAL's proposed operations under the requested authority are 

consistent with the public interest. CAL's duplication of Air Jamaica's 

current service with a mixture of CAL and former Air Jamaica aircraft will 

benefit the traveling and shipping public -- and support the sustainability of 

several Caribbean economies -- by maintaining an important, competitive 

price and service option. As CAL will at first merely assume existing Air 

 

3/ American Airlines and Continental Airlines serve both Jamaica and Trinidad and 

Tobago today, and the following U.S. carriers also provide scheduled U.S.-Jamaica 

combination service: AirTran, Delta, JetBlue, Spirit, United, US Airways, and USA 

3000.

 

4/ LIAT and Air Jamaica today operate service between the United States and 

Caribbean countries other than their homelands, as had BWIA International of 

Trinidad and Tobago. See NOAT dated April 28, 2010 in Docket OST-1998-3711 

(LIAT); NOATs listed in note 2 (Air Jamaica); and Order 95-1-16 (BWIA).