UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation on May 22, 2013

NOTICE OF ACTION TAKEN -- DOCKET DOT-OST-2013-0087

________________________________________________________________________________________________________

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).

Applicant: 8165343 CANADA INC. D/B/A AIR CANADA ROUGE (AC rouge)

Date Filed: April 26, 2013

Relief requested: Exemption under 49 USC §40109 and a foreign air carrier permit under 49 USC §41301 to permit the 

applicant to engage in scheduled and charter foreign air transportation of persons, property, and mail between the 

United States and Canada as provided for in the U.S.-Canada Air Transport Agreement as follows:1

(1) Scheduled foreign air transportation of persons, property, and mail from points behind Canada, via Canada and 

intermediate points, to a point or points in the United States and beyond;

(2) Scheduled and charter foreign air transportation of property and mail between any point or points in the United 

States and any other point or points; 

(3) Charter foreign air transportation of persons, property, and mail between any point or points in the United 

States and any point or points in a third country or countries, 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 service to 

Canada for the purpose of carrying local traffic between Canada and the United States; and 

(4) Other charter trips in foreign air transportation and other charters in accordance with 14 CFR Part 212 of the 

Department’s regulations.

Applicant representative: Anita M. Mosner, 202-419-2604 DOT analyst: David R. Christofano, 202-366-0584

Responsive pleadings: None

DISPOSITION

Action: Approved (exemption authority only)2 Action date: May 22, 2013

Effective dates of exemption authority granted: May 22, 2013, through May 22, 2015. The statement of authorization 

granted to AC Rouge is effective May 22, 2013, and will remain in effect for an indefinite duration, subject to 

conditions.

Basis for approval (bilateral agreement/reciprocity): United States-Canada Air Transport Agreement.

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

exemption conditions (attached as Appendix A).

 1 The applicant states that it will operate its flights on behalf of Air Canada pursuant to a capacity purchase agreement, and that Air 

Canada will remain the entity marketing, offering, and selling the service under the (AC*) designator code. AC Rouge further states 

that, in order to commence sales in the peak travel season, it is seeking expedited relief from the Department. 2 AC rouge also requested a foreign air carrier permit to engage in its proposed services. We will act on that portion of its request 

separately. In addition, to the extent necessary, we also grant, sua sponte, AC rouge a statement of authorization under 14 CFR Part 

212 for an indefinite duration to permit it to display the (AC*) code of Air Canada on its U.S. services.
Special conditions/Remarks: Based on the record in this case, we found that AC rouge is operationally and financially 

qualified to conduct the proposed services,3 and that it is substantially owned and effectively controlled by citizens of 

its homeland.

4

As noted by AC rouge, the Canadian Transportation Agency has permitted Air Canada to conduct business as AC rouge, 

but AC rouge is still in the process of obtaining its own operating certificate from Transport Canada.5

 In the 

circumstances presented, we have decided to approve the request of AC rouge for exemption authority subject to the 

following additional conditions: 1) the holding out and sale of service operated by AC rouge, including any services held 

out under the (AC*) designator code of Air Canada, must be made on a “subject to U.S. Government approval” basis

until AC rouge has been licensed to conduct its proposed services by Transport Canada and secures Operations 

Specifications from the Federal Aviation Administration; and 2) AC rouge may not commence U.S. flight operations 

until such actions by Transport Canada and the Federal Aviation Administration have been completed.

With respect to the statement of authorization we are granting AC rouge to conduct U.S. services under the (AC*) 

designator code of Air Canada pursuant to the capacity purchase agreement between the two carriers, such services 

must be carried out in compliance with 14 CFR Part 257.

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/deferred/dismissed, 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

 3 The applicant incorporated into the record its financial submissions that are available at: 

http://www.aircanada.com/en/about/investor/rep_info.html. 4 AC rouge states that it is a wholly-owned subsidiary of Air Canada, a foreign air carrier of Canada that is substantially owned and 

effectively controlled by citizens of Canada. See Order 2008-9-23. The record indicates that AC rouge’s President/Chief Executive 

Officer, Board Members, and key management personnel are all citizens of Canada. 5 AC rouge included in its application correspondence from Transport Canada indicating that at this point Transport Canada does not 

foresee any significant impediments that would hinder the issuance of a homeland Air Operator Certificate to AC rouge near its planned 

start of operations on July 1, 2013.
Appendix

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