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 , 2010BEFORE 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. § 4 0109(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 fore ign 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 pu rpose of carrying local traffic between Ja maica and the United States; scheduled foreign air transportation of persons, property, and mail b etween 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 b etween 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 operatio nal 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 D epartment authority in Dockets OST

2006

- 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 Limit ed . 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 Apr il 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. T hat arrangement has most recently been recognized by the Department in Assistant Secretary Kurland's July 14, 2010 letter to counsel for Air JamaicaCaribbean 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 C IT 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 gover nment of Grenada. 2 / In the recent past, Air Jamaica also has served Atlanta, Baltimore, Boston, Chicago, Houston, Newark, Los Angeles, Miami, Orl ando, and Phoenix from Jamaica. I t also has operated B arbados

- 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 proce ss 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, Ai r 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 a uthority 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 u nder the regulatory oversight of the Government of Tr inidad 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/G renada/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 ; th at designation right will continue so long as GOJ holds at least a 5% int erest. 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 n ecessary to account for Jamaican ownership interests, such a waiver is clearly warranted under Department policy. A s 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 Open

Skies 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 interes ts, 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

. T he "o pen 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. carriersCaribbean Airlines Exemption Application Page 6 enjoy broad rights to serve both countries 3 / 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

. T he Department has long permitted Caribbean carriers to provide U.S. service for island neighbors even when U.S. bilater al 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 propos ed operations under the requested authority are consistent with the public interest. CAL's duplication of Air Jamaica's

cur rent 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 servi ce between the United States and Caribbean countries other than their homeland s, 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).