UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on December 13 , 2012



### NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 2012

- 0136

_____________________________________________________________________________________________________________________________ ___ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional

co nfirming order will be issued in this matter).

Joint Applicant s: TACA INTE R NATIONAL AIRLINES, S.A. (TACA), TRANS AMERICA N AIRLINES. S.A. D/B/A TACA PERU (TACA Peru), LINEAS AEREAS COSTARRICENSES S.A. (LACSA), and AVIATECA S.A. (Aviateca) (together the TAC A Group) and AEROVIAS DEL CONTINENTE AMERICANO S.A. (Avianca)

Date Filed: August 13, 2012

Relief requested: Exemption under 49 U.S.C. § 40109 permitting the joint applicants to register under 14 CFR Part 215

their collective use of the trade name "Avianca" an d use of the designator code "A V" for their services in foreign air transportation to and from the United States. 1

The TACA Group also requests blanke t statements of authorization under 14 CFR Part 212 to display the “AV” designator code on fl ights operated by the TACA Group in U.S. markets in which both the operator and Avianca hold current Department authority to conduct scheduled foreign air transportation of persons, property and mail, further to the proposed common branding arrangement.

To the extent necessary, 

### Aviateca and LACSA request registration of the "TACA" trade name pursuant to Part 215 to avoid potential consumer confusion and permit Aviateca and LACSA to hold out service under the Avianca brand. 2

In support of their re quests , the joint applicants state that since 2005, TACA, TACA Peru, LACSA, and Aviateca have

been authorized by the Department to operate under the common "TACA" trade name and "TA'' designator code. 3 The joint applicants state that i n 2010, the y came under the common ownership of a single parent company and now seek to maximize the marketing potential of their common ownership with a new trade name and designator code that represents

the ir combined strength throughout the Americas. They contend that since grant of the TACA Group's initial application,

it has been demonstrated during the subsequent seven years in which those carriers have operated under a common trade name and designator code, that the use of such common branding has greatly simpl ified the marketing and promotion of their services, without any accompanying consumer confusion. The j oint a pplicants state that they firmly expect that these efficiencies and benefits will carry over into "A vianca" branded foreign air transportation serv ices.

The joint applicants state that they will not operate or market flights for which they do not hold underlying economic authority from the Department, nor will they engage in prohibited cabotage. They also describe and provide examples of

various me asures that they will take to ensure that appropriate disclosure is provided to the traveling public to minimize the potential for consumer confusion in the marketing and operation of their services. The joint applicants also state that

1 The joint applicants state that they plan to use the trade name "Avianca" and the "AV" designator code in their combined mark eting and sale of services to and from the United States starting in the first quarter of 2013.

2 The joint applicants note that neither Aviateca nor LACSA maintain their own airport check

- in counters or operate their own liveried aircraft, so a consumer may be confused unless Aviateca and LACSA utilize TACA as a d/b /a , allowing a consumer is able to readily identify, among other t hings, the ticketing location at which he or she should check in and the d/b/a identity of the aircraft operator.

3 See Order 2005

- 1

- 22, issued on January 25, 2005, in Docket DOT

- OST

- 2004

- 17355. The joint applicants note that while LACSA holds exemption authority to operate under the common "TACA " trade name and “T A" designator code, it has continued to hold out and opera te service under its own "LR" designator code as previously authorized by the Department

. The joint applicants state the

LACSA will c omplete the necessary technological changes necessary to exclusively use the "A vianca" trade name and "A V" designator cod e. They expect the se changes to be complete d during the first quarter of 20 13. See Appendix C, note 1 and accompanying text.they will accept a ll conditions imposed on the TACA Group carriers in Order 2006

- 11

- 10, a prior action in which the Department granted the renewal and amendment of the TACA Group carriers’ common branding authority. 4

Applicant representative s : Richard D. Mathias, David M . Endersbee, and Jonathon F. Foglia, 202

- 973

- 7926

DOT analyst: Robert J. Finamore , 202

- 366

- 2405

Responsive pleadings: None.

DISPOSITION

Action: Approved , subject to conditions (see below) Action date: December 13 , 2012

Effective dates of authority granted: The exemption authority granted to the joint applicants is effective December 13

, 2012 , through December 13 , 2013

. The statements of authorization granted to the TACA Group carriers are effective

December 13 , 2012, t hrough December 13 , 2013, subject to conditions. We will also grant the request of Aviateca and LACSA for registration of the TACA trade under 14 CFR Part 215, effective December 13

, 2012.

Basis for approval : Aviation agreements between the U.S. and the homelands of each of the joint a pplicants. 5

Except to the extent exempted/waived, this authority is subject to the terms, conditions, and limitations of our s tandard exemption conditions (attached as Appendix A )

, code

- share conditions (attached as Appendix B), and the consumer disclosure conditions set forth in Appendix C.

Special conditions/Remarks: We have decided to grant the requests of the joint applicants for: 1) exemption authority to permit them common use under 14 CFR Part 215 of the “AV” designator code and the Avianca trade name for their services in foreign air transportation to and from the United States ; and 2) blanket statements of authorization under 14 CFR Part 212 to permi t the TACA Group to display the “AV” designator code on flights operated by the TACA Group in U.S. markets in which both the operator and Avianca hold current Department authority to conduct scheduled foreign air transportation of persons, property and mai l, further to the proposed common branding arrangement described herein.

In the implementation of the authority granted here, as noted above and agreed to by the joint applicants

, they must also comply with the consumer disclosure conditions previously im posed on the common branding authority granted to the TACA Group carriers in Docket DOT

- OST

- 2004

- 17355 by Orders 2005

- 1

- 22, 2006

- 11

- 10, and subsequent renewals of that authority. We have attached those conditions as Appendix C.

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 joint applicant s were qualified to perform the proposed operations; (3) grant of the authority was consistent with the public interest; and (4) grant of the authority would no t constitute a major regulatory action under the Energy Policy and Conservation Act of 1975. To the extent not granted/deferred/dismissed, we denied all requests in the referenced Docket. We may amend, modify, or revoke the authority granted in this Noti ce 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 regulati ons, 14 CFR §385.30, may file their petitions within seven (7) days after the d ate 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 The joint applicants note that condition 2(a) of Order 2006

- 11

- 10 required the TACA Group carriers to (among other things) "sto p using other two

- letter designator codes [i.e., other than TA]." The joint applicants request that any similar condition imposed by the Department permit a transition period wherein the joint applicants will continue to hold out some service under the TAC A trade name and designator code as it is gradually phased out of U.S. service , presently expected to be completed du ring the first quarter of 2013.

5 The homelands of the joint applicants are as follows: TACA

– El Salvador; TACA Peru

– Peru; LACSA

- Costa Rica;

Aviateca

– Guatemala; and Avianca

– Colombia.

### 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 woul d 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 Transpo rtation 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 sha ll 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 requir ements 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 def enses;

(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

Unit ed 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 co ntract 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" mean s "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 term inate 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 provi ded 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

p rescribed 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 /200 7Appendix B

The Statements of Authorization granted are subject to the following conditions:

(a) The statement of authorization will remain in effect only as long as the TACA Group and Avianca , as appropriate, continue to hold the underlying authority to operate the code

- share services at issue, and the code

- share agreement providing for the code

- share operations remains in effect.

(b) The TACA Group and Avianca , as appropriate, must promptly notify the Department if the code

- share agreement is no longer effective or if the carriers decide to cease operating all or a portion of the approved code

- share services. (Such notice should be filed in Docket OST

- 2012

- 0136 .)

(c) The TACA Group and Avianca, as appropriate must notify the Department no later than 30 days before they begin

any new code

- share service under the codeshare services authorized here. Such notice shall identify the market(s) to be served, which carrier will be operating the aircraft in the code

- sh are market added, and the date on which the service will begin. Such notices should be filed in Docket DOT

- OST

- 2012

- 0136

. 1

( d ) The code

- sharing operations conducted under this authority must comply with 14 CFR §257 and with any amendment to the Departmen t’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 sol d in the name of the carrier holding out such service in 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 granted here is specifically conditioned so that neither the TACA Group nor A vianca sha ll give any force or effect to any contractual provisions between themselves that are contrary to these conditions.

(f

) We may amend, modify, or revoke the authority granted at any time without hearing at our discretion.

1 In its application, t he TACA Group provides notice of its intent to provide open skies code

- share services in accordance with the Department's Notice "In the Matter of Blanket Notification of Code

- Shar e Service to Open

- Skies Partners and Points," dated February 9, 2009. The TACA Group states that it will provide at least 30

- day ’ s notice before commencing new code

- share

services to non

- open skies points.Appendix C

I n the implementation of the authority granted here the joint applicants must:



### a) Identify their flights to and from the United States under the common “AV” designator code, and stop using other two

- letter designator codes. 1 

### In addition to the use of the “AV” code, each carrier must identify its U.S. flights by using dedicated flight numbers specifically assigned to each carrier;

b) Fully disclose their use of the common code. In this connection, advertisements must includ e notification to consumers that flights are operated by a TACA Group carrier and/or Avianca , and must identify each carrier’s full legal name as well as its common name in cases where the common name may not be apparent;

c) In holding out their flights i n all editions of the Official Airline Guide , have those flights shown with

the “ AV ” designator code and a flight number from each carrier’s dedicated series of flight numbers. Listed adjacent to the flight number must be an easily identifiable mark, such as an asterisk, diamond, arrow, or plus sign, notifying customers that they should consult the OAG further for identity of the operating carrier. Disclosure of the operating carrier’s identity must be made in the back of the OAG in

the section devoted to disclosure of code

- share services, and must be presented in a manner that is

consistent with code

- share disclosures;

d) Disclose the operating carrier’s identity in global distribution system (GDS) displays. In addition to

u sing the “ AV ” designator code coupled with a flight number from the dedicated series, appearing in the “segment sell” display immediately beneath each flight must be a statement identifying the operating carrier and the marketing carrier;

e) Prominently disclose on each passenger’s i tinerary the operating carrier’s identity, and the itinerary must show the flight’s origin and destination cities, the times of departure and arrival, and the flight number. Immediately under this information, the itinerary must clearly identify the opera ting and marketing carrier. In the case of multiple segments or roundtrip itineraries, the carriers must clearly disclose the operating and marketing carrier for each flight segment;

f) Disclose the operating carrier on each passenger’s paper ticket, boa rding pass, or online check

- in

document. Whichever of these sources the carriers choose to use for disclosure must also show each flight number from the dedicated flight

- number series with the “ AV ” code and must also clearly show the operating carrier’s i dentity;

g) Provide reservation and customer service offices with disclosure notices that must be read to customers before making reservations. This disclosure must notify each consumer of the identities of the operating and marketing carriers for the “ A V ” coded flight; and

h) Comply with the consumer

- disclosure provisions of the Department’s regulations under 14 CFR Part

257 ;

1 We will permit the joint applicants to temporar ily continue use of the TACA trade name and designator code through March 31, 2013, as they transition to phasing out the name and code from their U.S. operations.