BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

HAINAN AIRLINES CO., LTD. )

)

For an amended foreign air carrier permit ) Docket No. OST-2007-0066

pursuant to 49 U.S.C. § 41301 and exemption )

authority pursuant to 49 U.S.C. § 40109 )

)

(China-US Scheduled Service) )

)

APPLICATION OF HAINAN AIRLINES CO., LTD.

FOR AN EXEMPTION AND AMENDED FOREIGN AIR CARRIER PERMIT

Communications with respect to this document should be addressed to:

Joel M. Chusid

Executive Director, USA

HAINAN AIRLINES CO., LTD.

18000 International Blvd., Suite 1188

Seattle, WA 98188

Email: joel@hnair.com 

January 20, 2015

Josh Romanow

Peter Nelson

PILLSBURY WINTHROP SHAW 

PITTMAN LLP

1200 Seventeenth Street, N.W.

Washington, D.C. 20036

Tel: (202) 663-8000

Fax: (202) 663-8007

E-mail: romanow@pillsburylaw.com

 peter.nelson@pillsburylaw.com

 

Counsel for Hainan Airlines Co., Ltd.

NOTE: Any person who wishes to support or oppose this application may: (1) file an answer, and 

(2) serve that answer on counsel identified above and all persons served with a copy of this 

application. Answers to the exemption application are due on February 4, 2015; answers to the 

foreign air carrier permit application are due on February 10, 2015. Hainan intends to poll on this 

application and will advise the Department of the results.
2

BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

)

Application of )

)

HAINAN AIRLINES CO., LTD. )

) 

For an amended foreign air carrier permit ) Docket No. OST-2007-0066

pursuant to 49 U.S.C. § 41301 and exemption )

authority pursuant to 49 U.S.C. § 40109 )

)

(China-US Scheduled Service) )

)

APPLICATION OF HAINAN AIRLINES CO., LTD.

FOR AN EXEMPTION AND AMENDED FOREIGN AIR CARRIER PERMIT

Pursuant to 49 U.S.C. §§ 40109 and 41301, Part 211 of the Department’s economic 

regulations, and the Department’s rules of practice, Hainan Airlines Co., Ltd. (“Hainan 

Airlines”), an air carrier of the People’s Republic of China, respectfully requests that the 

Department amend Hainan Airlines’ foreign air carrier permit to enable it to engage in scheduled

foreign air transportation of persons, property and mail between (i) Beijing, People’s Republic of 

China (PEK), on the one hand, and San Jose, California (SJC), on the other hand, and (ii) 

Shanghai, People’s Republic of China (PVG), on the one hand, and Seattle, Washington (SEA), 

on the other hand. Hainan Airlines’ service to San Jose would represent the first nonstop service 

between China and the fast-growing Silicon Valley, and its service to Seattle would expand 

options for travelers in the Pacific Northwest.

Hainan Airlines also requests exemption authority under 49 U.S.C. § 40109 to the extent 

necessary so that it may exercise the rights requested in this application prior to the issuance of 

an amended foreign air carrier permit. Consistent with the Department’s notice of August 23, 
3

2005 (Docket No. OST-2005-22228) (the “August 23, 2005 Notice”), Hainan Airlines requests 

that the Department process this application on an expedited basis and grant Hainan Airlines an 

amended foreign air carrier permit so that it can begin offering the proposed services as soon as 

possible. In this regard, Hainan Airlines respectfully requests that the Department issue a single 

order (1) granting the requested exemption authority for a one-year period or until after the 

effective date of the requested amended permit authority; and (2) approving the amended foreign 

air carrier permit authority under the streamlined procedures set forth in the August 23, 2005 

Notice, unless the Department deems it appropriate to proceed directly to a final order issuing an 

amended foreign carrier permit to Hainan Airlines. 

In support of this application, Hainan Airlines states as follows:

1. Since Hainan Airlines began service in 1993, it has grown steadily, and inaugurated its 

first non-stop service to the United States on June 9, 2008 with flights between Beijing 

and Seattle. On September 3, 2013, Hainan successfully launched non-stop service 

between Beijing and Chicago, and on June 20, 2014 initiated service between Boston and 

Beijing.

2. Hainan Airlines has received several awards, including a five-star certification by 

Skytrax, a prestigious service quality award, for four consecutive years. It has been voted 

the “Best Airline in China” by the readers of Premier Traveler Magazine twice and four 

times by the readers of Global Traveler magazine. Hainan Airlines is a service-oriented 

airline, providing features such as complimentary limo service for long-haul premium 

travelers in Beijing and in the United States, flat-bed seats, upgraded amenities and 

gourmet meals. As one of the launch customers for the Boeing 787 Dreamliner, Hainan 

Airlines aims to provide an innovative and high quality service option for passengers 
4

traveling between the People’s Republic of China, Silicon Valley, and the Pacific 

Northwest.

3. Hainan holds a foreign air carrier permit issued by the Department authorizing it to 

engage in scheduled foreign air transportation of person, property and mail between 

Beijing, People’s Republic of China and Seattle; Beijing and Chicago; and Beijing and 

Boston; as well as authority to engage in charter foreign air transportation of persons, 

property and mail between a point or points in the People’s Republic of China and a point

or points in the United States (See Order 2013-11-26).

4. Authority Requested: Hainan Airlines hereby seeks authority to conduct scheduled

foreign air transportation of persons, property and mail between (i) Beijing, People’s 

Republic of China (PEK), on the one hand, and San Jose, California (SJC), on the other 

hand, and (ii) Shanghai, People’s Republic of China (PVG), on the one hand, and Seattle, 

Washington (SEA), on the other hand. Hainan intends to operate scheduled flights to San 

Jose using a Boeing 787-8 aircraft with a two class configuration and proposes to operate 

initially five flights per week beginning in the second quarter of 2015. Scheduled flights 

to Seattle operate would be operated with an Airbus 330-200 aircraft with a two class 

configuration, at a frequency of four flights per week beginning in the second quarter of 

2015.

5. Approval of Hainan Airlines’ request for an amended foreign air carrier permit is fully 

consistent with the Agreement between the Government of the United States of America 

and the People’s Republic of China Relating to Civil Air Transport, signed September 17, 

1980, as amended, which authorizes airlines designated by the Chinese government to 

operate scheduled combination services from any point or points in the People’s Republic 
5

of China to any point or points in the United States open to scheduled international 

services. It would benefit travelers in both the United States and China by providing the 

first scheduled service in the San Jose market and additional travel options in the Seattle 

market, and would therefore serve the public interest.1 The relaxation of new U.S.-China 

visa requirements is expected to dramatically increase travel between the two countries, 

resulting in more demand for air capacity, which Hainan Airlines’ new service would 

provide.

6. The Government of the People’s Republic of China has designated Hainan Airlines to 

conduct the proposed flights from San Jose to Beijing and from Seattle to Shanghai. A 

copy of Hainan Airlines’ authorization issued by the Civil Aviation Administration for 

China (“CAAC”) is attached hereto as Exhibit A.

7. Hainan Airlines hereby incorporates by reference the fitness and citizenship information 

contained in its earlier applications. See Docket OST-2007-0066.

8. An updated copy of Hainan Airlines’ Air Operator’s Certificate (AOC) is attached as 

Exhibit B.

9. Estimates showing the total traffic and the financial results of the proposed services for 

the first full year of normal operations are attached hereto as Exhibit C-1 (San Jose) and 

Exhibit C-2 (Seattle).

10. Grant of the authority sought herein will not result in a near-term increase in fuel 

consumption of ten million gallons or more, and therefore will not comprise a “major 

 1 That the authority sought by Hainan Airlines in this application is authorized under a bilateral agreement is 

indicative that approval of this application is in the public interest. See S. REP. NO. 96-329, at 4 (1979), reprinted in 

1980 U.S.C.C.A.N. 54, 57 (“[T]he negotiation of a bilateral agreement itself represents a determination by the 

Government of the United States that the grant of route authority provided for under the bilateral is in the ‘public 

interest.’”).
6

regulatory action” under the Energy Policy and Conservation Act of 1975, as defined in 

14 C.F.R. § 313(a)(1).

11. Hainan Airlines has not been involved in any safety or tariff violations or any fatal 

accidents in the past five years.

12. Hainan Airlines’ maintenance program continues to comply with the provisions of ICAO 

Pilots and Airmen Annexes 1, 6 (Part 1) and 7.

13. The verification required by 14 C.F.R. 302.4(b) is attached hereto as Exhibit D.

For the reasons set forth above, Hainan Airlines is fully qualified to operate the services 

for which authority is herein requested, and grant of the authority will serve the public interest.

WHEREFORE, based upon the foregoing information, Hainan Airlines respectfully 

requests that it be granted an exemption and amended foreign air carrier permit to engage in 

scheduled foreign air transportation of persons, property and mail as more fully described above.

Respectfully submitted,

Josh Romanow

Peter Nelson

PILLSBURY WINTHROP SHAW PITTMAN LLP

1200 Seventeenth Street, N.W.

Washington, DC 20036

Phone: (202) 663-8000

Fax: (202) 663-8007

Email: romanow@pillsburylaw.com

 peter.nelson@pillsburylaw.com

January 20, 2015 Counsel for Hainan Airlines Co., Ltd.
CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing application of Hainan Airlines Co., Ltd. for an amended 

foreign air carrier permit and exemption has been served by electronic mail this the 20th day of 

January, 2015, upon each of the parties listed below.

David Henthorn

Rick Mayfield

Federal Aviation Administration

david.e.henthorn@faa.gov

rick.mayfield@faa.gov

Mark E. Kiehl

Manager, Air Service Development

Norman H. Mineta San Jose Intl. Airport

1701 Airport Blvd., Suite B-1 153

San Jose, CA 95110

mkiehl@sjc.org

Kazue Ishiwata

Senior Manager, Air Service Development

Seattle-Tacoma International Airport

P.O. Box 68727

Seattle, WA 98168

Ishiwata.K@portseattle.org

Sascha Vanderbellen

Chris Walker

Delta Air Lines, Inc.

sascha.vanderbellen@delta.com

chris.walker@delta.com

Robert Wirick

Howard Kass

American Airlines, Inc.

robert.wirick@aa.com

howard.kass@aa.com

Nancy S. Sparks

Bailey Leopard

Federal Express Corporation

gbleopard@fedex.com

nssparks@fedex.com

Russell E. Pommer

Associate General Counsel & Sr. Director

 Regulatory Affairs

Atlas Air Inc.

rpommer@atlasair.com

Anita Mosner

Jennifer Nowak

Counsel for UPS

Holland & Knight

anita.mosner@hklaw.com

jennifer.nowak@hklaw.com

Dan Weiss

Steve Morrissey

United Air Lines

dan.weiss@united.com

steve.morrissey@united.com

Robert Silverberg

Counsel for ABX Air, Inc.

rsilverberg@sgbdc.com

Mark W. Atwood

Counsel for Kalitta Air

matwood@cozen.com

/s/ Peter Nelson

Peter Nelson
TABLE OF EXHIBITS

Exhibit A Authorization from the Government of the People’s Republic of China

Exhibit B Air Operator’s Certificate

Exhibit C Estimate of Traffic and Financial Forecast for Proposed Operations

Exhibit D Verification
9

EXHIBIT A

AUTHORIZATION FROM THE 

GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA 

(ATTACHED)
10
11

EXHIBIT B

AIR OPERATOR’S CERTIFICATE
12

PUBLIC AIR TRANSPORT

AIR OPERATOR’S CERTIFICATE

DUPLICATE

A.T. REGISTERED NO.029

EXAMINED AND APPROVED OF THE OPERATION IN

ACCORDANCE WITH THE CIVIL AVIATION LAW OF

PEOPLE’S REPUBLIC OF CHINA.

Name: Hainan Airlines Company Limited

Address: Hainan Airlines Plaza, No.7 Guoxing Road, Haikou City, Hainan Province

Base Airport: Haikou Meilan International Airport

Business Entity Type: Limited Liability Company

Registered Capital: RMB 3,530,252,801

Legal Person: Di XIN

Scope of Operation: Authorized domestic and international air passenger, cargo and mail 

transportation (include those to Hong Kong and Macau); services related to air transportation.

Validity: from 05/10/2013 to 05/09/2016

Issued by: Civil Aviation Administration of China (Sealed)

04/30/2014
13

EXHIBIT C-1

ESTIMATE OF TRAFFIC AND FINANCIAL FORECAST 

FOR PROPOSED OPERATIONS – SAN JOSE

( 5 x Week )

Month # of 

Flights

Passengers*

1

Revenue*2 Cargo Revenue*

3 Total Costs*4 Profit*5

Unit: USD Unit: USD Unit: USD Unit: USD

15-Jun-15 11 1,524 2,850,436.28 638,246.43 3,301,861.55 186,821.16

31-Jul-15 22 3,549 6,336,133.92 1,276,492.87 6,603,723.10 1,008,903.68

31-Aug-15 23 3,733 8,254,192.59 1,334,515.27 6,903,892.34 2,684,815.52

30-Sep-15 21 3,365 5,097,577.05 1,218,470.46 6,303,553.87 12,493.64

31-Oct-15 22 3,549 4,232,477.98 1,276,492.87 6,603,723.10 -1,094,752.26

30-Nov-15 22 3,549 3,981,961.04 1,276,492.87 6,603,723.10 -1,345,269.20

31-Dec-15 21 3,365 4,355,716.90 1,218,470.46 6,303,553.87 -729,366.51

31-Jan-16 23 3,733 6,596,134.66 1,334,515.27 6,903,892.34 1,026,757.60

29-Feb-16 21 3,365 4,103,007.23 1,218,470.46 6,303,553.87 -982,076.18

31-Mar-16 21 3,365 3,464,183.21 1,218,470.46 6,303,553.87 -1,620,900.20

30-Apr-16 22 3,549 4,391,481.88 1,276,492.87 6,603,723.10 -935,748.36

31-May-16 22 3,549 5,791,631.35 1,276,492.87 6,603,723.10 464,401.11

Total 251 40,192 59,454,934.08 14,563,623.18 75,342,477.23 -1,323,919.98 

*1 non-directional passengers;

*2 revenue based on round trip ticket price;

*3 cargo revenue based on average hourly cargo income;

*4 cost based on fixed hourly total cost;

*5 Profit = Revenue + Cargo Revenue – Total Cost.
14

EXHIBIT C-2

ESTIMATE OF TRAFFIC AND FINANCIAL FORECAST 

FOR PROPOSED OPERATIONS – SEATTLE

( 4 x Week )

Month # of 

Flights

Passengers

*1

Revenue*2 Cargo 

Revenue*3 Total Costs*4 Profit*5

Unit: USD Unit: USD Unit: USD Unit: USD

22-Jun-15 5 948 1,302,501.27 302,200.02 1,611,733.42 -7,032.14

31-Jul-15 18 3,566 5,569,826.58 1,087,920.06 5,802,240.31 855,506.33

31-Aug-15 18 3,681 6,398,482.24 1,087,920.06 5,802,240.31 1,684,161.99

30-Sep-15 17 3,186 4,097,306.38 1,027,480.05 5,479,893.63 -355,107.19

31-Oct-15 18 3,336 3,914,851.09 1,087,920.06 5,802,240.31 -799,469.17

30-Nov-15 17 3,005 3,142,756.04 1,027,480.05 5,479,893.63 -1,309,657.53

31-Dec-15 17 3,295 4,064,916.10 1,027,480.05 5,479,893.63 -387,497.47

31-Jan-16 18 3,527 4,887,993.14 1,087,920.06 5,802,240.31 173,672.89

29-Feb-16 16 2,965 3,617,494.91 967,040.05 5,157,546.94 -573,011.98

31-Mar-16 17 3,186 3,138,974.25 1,027,480.05 5,479,893.63 -1,313,439.32

30-Apr-16 17 3,259 3,740,814.86 1,027,480.05 5,479,893.63 -711,598.71

31-May-16 18 3,527 4,599,193.36 1,087,920.06 5,802,240.31 -115,126.89

Total 196 37,482 48,475,110.22 11,846,240.63 63,179,950.04 -2,858,599.18

*1 non-directional passengers;

*2 revenue based on round trip ticket price;

*3 cargo revenue based on average hourly cargo income;

*4 cost based on fixed hourly total cost;

*5 Profit = Revenue + Cargo Revenue – Total Cost.
15

EXHIBIT D

VERIFICATION

(ATTACHED)
16