UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC

Issued by the Department of Transportation on May 6, 2011

NOTICE OF ACTION TAKEN -- DOCKET DOT-OST-2011-0065

_____________________________________________________________________________________________________________________ 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).

Joint Application of Delta Air Lines, Inc. (Delta) and China Eastern Airlines Corporation Ltd. (China Eastern) filed 3/23/11 for:

XX Blanket exemption under 49 U.S.C. §40109 for a two- year period to permit Delta to provide the following

service:

Scheduled foreign air transportation of persons, propert y, and mail, on a codeshare-only basis with China Eastern, between points in China and behind, int ermediate, and beyond points in third countries.

XX Blanket exemption under 49 U.S.C. §40109 for a two-year period to permit China Eastern to provide the following service:

Scheduled foreign air transportation of persons, pr operty, and mail, on a codeshare-only basis with Delta/Delta Connection, between points in the United States and behind, intermediate, and beyond points

in third countries.

XX Blanket statement of authorization unde r 14 CFR Part 212 to permit Delta to:

Display the (MU*) designator code of China Eastern on flights operated by Delta between the United States and China, within the United States and China, and to behind, intermediate, and beyond points in third countries. Delta requests that this blanket statement of authorization extend to its Delta Connection regional affiliates which operate serv ice for Delta within North America. 1

XX Blanket statement of authorization under 14 CFR Part 212 to permit China Eastern to:

Display the (DL*) designator code of Delta on flights operated by China Eastern between the United States and China, within China and the United States, and to behind, intermediate, and beyond points in

third countries.

The joint applicants request that their statements of aut horization be granted for an indefinite period. The joint applicants further request flexibility to serve any of th eir named code-share points via any U.S.-China gateway or intermediate routing flown by the ca rriers, without providing additional notice.

Applicant reps: Alexander Van der Bellen and Jeff Morgan (202) 842-4184 (Delta) Evelyn D. Sahr and James G. Ehrig (202) 659-6622 (China Eastern)

DOT Analyst: Robert J. Finamore (202) 366-2405

1 The Delta Connection carriers are Atlantic Southeast Airlin es, Inc.; Chautauqua Airlines , Inc.; Comair, Inc.; Compass Airlines, Inc.; Mesaba Aviation, Inc.; Pi nnacle Airlines, Inc.; SkyWest Airlines, Inc.; and Shuttle America Corporation.D I S P O S I T I O N

XX Granted in part (subject to conditions, see below), remainder dismissed 2

The above action granting exemption author ity to Delta is effective when taken : May 6, 2011 , through May 6,

2013 . The above action granting exemption authorit y to China Eastern is effective when taken : May 6, 2011

, through May 6, 2012 . The above action granting blanket statements of authorization to Delta and China Eastern

is effective: May 6, 2011 , and will remain in effect indefinitely, subject to conditions.

Action taken by: Paul L. Gretch, Director

Office of International Aviation

XX The authority granted is consistent with the aviation agreement between the United States and the People’s Republic of China.

Except to the extent exempted or waived, this authorit y is subject to the terms, conditions, and limitations

indicated:

XX The holder’s certificates of public convenience and necessity

XX China Eastern’s foreign air carrier permit (Order 92-11-7)

XX Standard U.S. carrier exemption co nditions (attached as Appendix A) XX Standard foreign carrier exemption conditions (attached as Appendix B)

XX Code-share conditions (attached as Appendix C)

Special conditions/Remarks: We note that Delta has conducted a safety audit of China Eastern under the Department’s Code-Share Sa fety Audit Program, and the FAA has advised us that it has reviewed the relevant audit report and found it to be acceptable.

The exemption authority granted to Delta and China E astern is limited to code-s hare only operations.

On the basis of data officially noticeable under Rule 24(g) of the Depa rtment's regulations, we fo und the applicant qualified to provide the exemption services authorized.

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) grant of the authority was consiste nt with the public interest; and (3) 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, 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 issu ance 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

2 The one-year duration of the exemption authority we granted to China Eastern is consistent with our usual policy of granting exemption authority in the circumstances presented. Th erefore, we dismissed the application to the extent that China Eastern sought exemption auth ority for a longer period.

### Appendix A

U.S. Carrier Exemption Conditions

In the conduct of the operations authori zed, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating author ity from the government of each country served;

(2) Comply with applicable requirements c oncerning oversales contained in 14 CFR 250 (for scheduled operations, if authorized);

(3) Comply with the requirements fo r reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insura nce coverage, and for certifying that coverage to the Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise pr ovided for in a Department Order, comply with the requirements of 14 CFR 203, concerni ng waiver of Warsaw Convention liability limits and defenses;

(6) Comply with all applicable requirement s of the Federal Aviati on Administration, the Transportation Security Administ ration, and with all ap plicable U.S. Government requirements concerning security, including, but not limited to, 49 CFR Part 1544. To assure compliance with all applicable U.S. Government requirements concer ning security, the holder shall, before commencing any new service (including charter fli ghts) to or from a foreign airpor t, contact its Principal Security Inspector (PSI) to advise the PSI of its plans a nd to find out whether the Transportation Security

Administration has determined that security is adequate to allow such airport(s) to be served;

(7) Comply with such other reasonable terms, conditions, and limitations required by the public interest as may be prescribed by the Department of Transportation, with all applicab le orders and regulations of other U.S. agencies and courts, a nd with all applicable laws of the United States.

The authority granted shall be eff ective only during the period when the holder is in compliance with the conditions imposed above.

1/2008

### Appendix B 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 aut horization from its homeland for such operations, and it has filed a copy of su ch authorization with the Department;

(2) Comply with all applicable requirements of th e 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 requi rements concerning security, the holder shall, before commencing any new service (including charter flights) fro m a foreign airport that would be the holder’s last point of departure for the United States, contact its In ternational Industry Representative (IIR) (formerly referred to as International Principal Security Inspector) to a dvise 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 fo r 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 (AFS260), Flight Standards Service (any changes to, or termina tion 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 provi ded 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 s overeign 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 internationa l 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 "i nternational air transportation" means "international transportation" as defined by the Warsaw Convention, ex cept 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 othe rwise provided in the applicable aviation agreement, comply with the Department's rules governing ch arters (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 orde rs 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 wh en 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

### Appendix C

The code-share operations authorized here a re subject to the following conditions: 1

(a) The statements of authorization will remain in eff ect only as long as (i) Delta and China Eastern continue to hold the necessary underlying authority to operate the code-s hare services at issue, and (ii) the code-share agreement providing for the code-sha re operations remains in effect.

(b) Delta and/or China Eastern, as appropriate, must no tify the Department no later than 30 days before they begin any new code-share service under th e code-share services authorized he re. Such notice shall identify the market(s) to be served, which carrier will be operating the aircraft in the code-share market added, and the date on which the service will begin. Such notice should be filed in Do cket DOT-OST-2011-0065. 2

(c) Delta and/or China Eastern, as appropriate, must prom ptly notify the Department if the code-share agreement providing for the code-share ope rations 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 DOT-OST-2011-0065. 3

(d) The code-sharing operations conduc ted under this authority must comply with 14 CFR 257 and with any amendments to the Department’s regulations concer ning code-share arrangement s 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 transpor tation be sold in the name of the carrier holding out such service in the computer reservation systems and el sewhere; 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; that the passenger liability of the operating carrier be unaffected; and that the operating carrier shall not permit th e code of its U.S. code-sharing partner to be carried on any flight that enters, departs, or transits the ai rspace of any area for whose airspace the Federal Aviation Administration has issued a flight prohibition.

(e) The authority to operate to third countries is subject to the condition that any service provided under the

statement of authorization shall be consistent with a ll applicable agreements between the United States and the foreign countries involved. Furthermore, (i) nothing in the award of this blanket statement of authorization should be construed as conferring upon Delta rights (incl uding code-share, fifth freed om intermediate and/or beyond rights) to serve markets where U.S. carrier entry is limited unless Delta notifies the Department of its

intent to serve such a market and unless and until the Department has completed any necessary carrier selection procedures to determine which carrier(s) should be authorized to exercise such rights; and (ii) should there be a request by any carrier to use the limited-entry route rights th at are included in the authority of Delta by virtue of the blanket statement of authorization granted here, but that are not then being used by Delta, the holding of such authority will not be considered as providing an y preference for Delta in a competitive carrier selection proceeding to determine which carrier(s) shoul d be entitled to use the authority at issue. 4

(f) The authority granted here is specifically conditioned so that neither Delta nor China Eastern shall give any force or effect to any contractua l provisions between themselves that are contrary to these conditions.

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

1 The Delta Connection carriers identified in the body of this notice will also be subject to these code-share conditions.

2 The initial code-share points proposed by the Joint Applicants are attached as Appendix D. We grant the request of Delta that notice by Delta or any of the Delta Connection carriers would be deemed notice given for all (except in the case of Mexico where operator-specific notices will continue to be su pplied for Delta/Delta Connection services). Also, we grant the joint applicants’ request for flexibility to serve any of their named code-share points via any authorized U.S.-China gateway or intermediate routing flown by the carriers, with out providing additional notice, to the extent that such operations are consistent with the underlying authority held by Delta and China Eastern.

3 We expect this notification to be received within ten (10) days after su ch non-effectiveness or of such decision.

4 The notice in paragraph (b) above can be used for this notification.

### Appendix D