BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of ) ) ALITALIA- COMPAGNIAAEREA ITALIANA S.P.A ) DocketDOT-OST-2014-

__ _ ) and ) ) ALITALIA- SOCIETA AEREA ITALIANA S.P.A. ) ) for an exemptionpursuant to 49 U.S.C. § 40109 and ) transfer offoreign air carrierpermit under ) 49 U.S.C. § 41303 and related authorizations ) (EU- U.S. Open Skies) )

------------------------------------- 

### ) JOINT APPLICATION FOREXEMPTION AND TRANSFER OF FOREIGNAIR CARRIERPERMIT AND RELATED AUTHORIZATIONS AND MOTION FORA SHORTENED ANSWER PERIOD Communications with respect to this document should be sent to:

December 1, 2014 Jonathon H. Foglia Richard D. Mathias David M. Endersbee Zuckert Scoutt & Rasenberger LLP 888 17th Street, NW, Suite 700 Washington, D.C. 20006-3309 (202) 298-8660 (phone) (202) 342-0683 (fax) jhfoglia@zsrlaw.com rdmathias@zsrlaw.com dmendersbee@zsrlaw.com Counsel to ALITALIA- COMPAGNIA AEREA ITALIANA S.P.A and ALITALIA

- SOCIETA AEREA ITALIANA S.P.A.

NOTE: The Joint Applicants have requested a shortened answer date ofDecember 8, 2014, and will poll the carrier representatives served with this Joint Application and notify the Department ofthe polling results. A copy of any answer to this JointApplication should be served on counsel for the Joint Applicants.BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of ) ) ALITALIA-COMPAGNIAAEREA ITALIANA S.P.A ) Docket DOT-OST-2014-

__ _ ) and ) ) ALIT ALIA- SOCIETA AEREA ITALIANA S.P.A. ) ) for an exemptionpursuant to 49 U.S.C. § 40109 and ) transfer offoreign air carrierpermit under ) 49 U.S.C. 

### § 41303 and related authorizations ) (EU- U.S. Open Skies) )



### _____________________________________ 

### ) JOINT APPLICATION FOREXEMPTION AND TRANSFER OF FOREIGN AIR CARRIER PERMIT AND RELATED AUTHORIZATIONS AND MOTION FORA SHORTENED ANSWER PERIOD Alitalia

- Compagnia Aerea Italiana S.p.A. ("Alitalia") and Alitalia

- Societa Aerea Italiana S.p.A. ("Alitalia Societa") (collectively, the "Joint Applicants"), hereby respectfully apply, under Subparts Band C ofthe Department's Rules ofPractice in Proceedings (14 C.P.R. 302.201 and 302.301 et seq.), Parts 211 and 212 ofthe Department's Economic Regulations, and the Department's streamlined licensingprocedures 1 for (i) an exemptionunder 49 U.S.C. § 40109 for Alitalia Societato provide scheduled and charter foreign airtransportation ofpersons, property and mail, (ii) the transfer andre-issuance ofAlitalia's foreign air carrierpermit under 49 U.S.C. § 40103 from Alitalia to Alitalia Societa,2 and (iii) the transfer andre-issuance ofAlitalia's codeshare statements ofauthorization to Alitalia Societa, each as more fully described herein.

1 See Notice in Docket OST-2005-22228 (Aug. 23, 2005). 2 Withrespect to the exemption and foreign air carrierpermit transfer andre-issuance requests, the Joint Applicants have relied on the Department's Application Procedures for Foreign Air Carriers of the European Union, implementing the Procedures for the Reciprocal Recognition ofRegulatory Determinations withRegardto Airline -1-

### The DOT authorities which are the subject of this Joint Application are requested in connectionwith a transaction implementation agreement (the "Transaction") betweenAlitalia and Etihad Airways P.J.S.C. ("Etihad Airways"), a foreign air carrier ofthe United Arab Emirates, previously announced on August 8, 2014. Under the terms ofthe Transaction, most ofAlitalia's assets andliabilities relatedto Alitalia's airtransport services will be transferredto Alitalia Societa through a contribution process under Italian law (ramo d'azienda), which effectively entails the continuationbyAlitalia Societa ofAlitalia'sbusiness operations withoutinterruption.3 

### Concurrent with this transfer, Etihad Airways, either directly or through a wholly-owned subsidiary or its parent company, will (a) invest €387.5Mfor a 49% equity stake in Alitalia Societa, (b) invest a further €112.5Mfor a 75% equity stake in Alitalia Loyalty S.p.A. (which operates MilleMiglia, the Alitaliafrequent flyer program), and (c) acquire five (5) Alitalia slotpairs at London Heathrow Airport ("LHR") in exchange for €60M,which will then be leasedback to Alitalia Societa. Upon the closing ofthe Transaction, Alitalia, which is majority owned by EU Member State interests, shall ultimately hold a 51% controlling equity stake inAlitalia Societa. It is anticipated the Transaction will close on or about December 31, 2014, at whichpoint, and as described above, Alitalia Societa will assume**Alitalia'~** 

### air transport services. 4 

### Expressed another way, Alitalia Societa will, upon the closing ofthe Transaction, effectively succeedAlitalia with respect to the latter's air transport services, including, but not limited to, transatlantic

Fitness and Citizenship as adopted by the U.S.-EU Joint Committee by exchange ofletters dated January 12, 2009 (the "2009 U.S.-EU Procedures for Reciprocal Recognition"). 3 The transfer will exclude Alitalia's ownership interest in Air One S.p.A. as well as certain retained liabilities and litigation matters. 4 Itis anticipatedthat the investment and equity stake in Alitalia Loyalty S.p.A. will be consummated in early 2015, and that the LHR slot transaction will be completed in early 2016. -2-operations between ltaly andAlitalia's U.S. gatewaycities ofBoston, Chicago, New York, Miami, and Los Angeles. 5 The Joint Applicants hereby move for a shortened answer date ofDecember 8, 2014, to facilitate expedited Department approval and to permit the Joint Applicants to proceed with the Transactionbythe closing date, as discussed above. The Joint Applicants intendto poll the carrier representatives on the attached service list regarding the DOT authorities which are the subject of this Joint Application and the requested shortened answer period, and will notify the Department ofthe results as soon as suchpolling has been completed. Alitaliapresentlyholds a foreign air carrierpermit, issued bythe Department under Order 2010-1-15, authorizing Alitalia to engage in foreign air transportation to the full extent permitted under the U.S.-EU Air Transport Agreement, including:

• Foreign scheduled and charter air transportation ofpersons, property, and mail from anypoint or points behind any Member State ofthe European Union, via any point or points in any Member State and via intermediate points to any point or points in the United States andbeyond;

5 Alitalia's wholly-owned subsidiary C.A.I. First, S.p.A. ("C.A.I. First") holds an exemption under 49 U.S.C. § 40109 to the extent necessary to display the DL* code ofDelta Air Lines, Inc. on C.A.I. First flights within the EU. See Notice of Action Taken in Docket DOT-OST-2001-10417 (Apr. 10, 2013). Additionally, Alitalia's wholly-owned subsidiary CityLiner, S.p.A. ("CityLiner") holds an exemption under 49 U.S.C. § 40109 to the extent necessary to display the DL* code on CityLiner flights within the EU and between the EU and points in third countries. See Notice ofAction Taken in Docket DOT-OST-2012-0038 (Apr. 9, 2014). C.A.I. First and CityLinerwillbecome wholly-owned subsidiaries ofAlitalia Societa upon the closing ofthe Transaction, and will continue to utilize these exemptions to the extent necessary for the display ofthe DL

### *code on flights they operate. The conditions attached to the exemptions issued to C.A.I. First and CityLiner restrict any transfer ofthe subject authority without approval fromthe Department. To the extentthatthe Departmentdetermines thatthe Transaction constitutes a defacto transfer ofthe exemptions issued to each ofC.A.I. First and CityLiner, the Joint Applicants ask that the underlying exemptions issuedto C.A.I. First and City Linerbe permittedto continue inforce and effect uponthe closing ofthe Transaction, subject to the conditions attached thereto. Finally, byNotice ofAction Taken onMarch 18, 2011 inDocketDOT-OST-2009-0023, the Departmentissued anexemptionunder49 U.S.C. § 40109 to C.A.I. Second, S.p.A. ("C.A.I. Second"), a wholly-owned subsidiary of Alitalia, to engage in foreign air transportation as authorizedunderthe U.S.-EU Air TransportAgreement. Byits terms, C.A.I. Second's exemption expired on March 18, 2013. If and to the extent that C.A.I. Second may conduct U.S. operations in the future, appropriate DOT authority will be sought in advance ofsuch operations. As a consequence, no action is requested with respect to C.A.I. Second, which does not currently hold any effective DOT exemption authority. -3-• Foreign scheduled and charter airtransportation ofpersons,property, andmailbetween any point or points in the United States and any point orpoints in any member ofthe European Common Aviation Area; • Foreign scheduled and charter cargo air transportation between any point or points in the United States and any otherpoint orpoints; • Other charters pursuant to the prior approval requirements set forth in 14 C.F.R. Part 212 ofthe Department's regulations; and • Transportation authorized by any additional route rights made available to European Community carriers in the future, subject to required pre-notifications to the Department. The Joint Applicants request that Alitalia's foreign air carrierpermitbe transferred andreissued to Alitalia Societa and that the requested exemption allow Alitalia Societa to engage in the air transport services authorized under Order 2010-1-15 pending the transfer andre-issuance of the foreign air carrier permit. The Joint Applicants ask that the exemption be valid for two years from its issuance date or until the effective date ofthe foreign air carrier permit transfer and reissuance, whichever occurs first. Alitalia also holds the following code-share statements ofauthorization:

• Statement ofauthorization to displaythe AM* designator code ofAerovias de Mexico, S.A. de C.V. on flights operated by Alitalia between (1) Rome and New York, (2) Rome and Miami, and (3) Milan and New York. See Notice of Action Taken in Dockets OST-2002-12482 and OST-2002-12896 (Jan. 14, 2009). • Blanket statement ofauthorization to display the AF* designator code of Societe Air France, S.A. on transatlantic flights operated by Alitalia. See Notice ofAction Taken in Docket OST-2002-13958 (Jan. 9, 2009). • Blanket statement ofauthorization to display the DL* code ofDelta Air Lines, Inc. on flights operated by Alitalia between (1) any point or points in Italy and any point or points inthe United States (either nonstop or via intermediate points), (2) anypoints in Italy, and (3) between anypoint orpoints in Italy orthe United States and anypoint or points in any third country. See Notice ofAction Taken in Docket OST-2001-10417 (Jan. 12, 2009). The Joint Applicants request that these code-share statements ofauthorization previously issued to Alitalia under 14 C.F.R. Part 212 be transferred and re-issued to Alitalia Societa, for an

-4-indefinite duration.6 In this regard, Alitalia Societa will conduct its code-sharing operations in compliance with Part 257 of the Department's economic regulations and will accept the Department's standard conditions ordinarilyimposed on code-sharing arrangements such as those at issue here. Given the anticipated date bywhen Alitalia Societa will commence operations, the Joint Applicants ask for a waiver from the requirement under 14 C.F.R. § 212.10(d)(2) that requests for statements ofauthorization be filed at least 45 days in advance ofthe first proposed flight. As required under Article 4 ofthe U.S.-EU Air Transport Agreement, upon the closing of the Transaction, substantial ownership and effective control ofAlitalia Societa shall be vested in EU interests and Alitalia Societa shall be licensed as a Community airline with its principal place ofbusiness in the territory ofthe European Community. In this regard, at closing: (i) Alitalia, whichwill continue to bemajority ownedbyEUinterests, shall hold a 51% equity stake inAlitalia Societa through a newly formed subsidiary, MidCo S.r.l. ("MidCo"); (ii) the majority ofAlitalia Societa's board of directors, including the chairman, shall be EU nationals appointed by Alitalia/MidCo; and (iii) the majorityofAlitalia Societa's officers andkeymanagementpersonnel, including in particular its chiefexecutive officer ("CEO;'), shall be EUnationals. 7

6 The code-sharing partners identified above also hold statements ofauthorization to display the AZ* code, issued in the same notices of action which authorized Alitalia to display the partners' codes. The Joint Applicants understandthat, consistent withDepartmentprecedent, the underlying statements ofauthorizationmaybe re-issued in their entirety. See Order 2011-1-3 (Jan. 6, 2011), at Appendix B (re-issuing statements of authorization previously granted to Iberia Lineas Aereas de Espana, S.A. ("Old Iberia") and each ofAmerican Airlines, Inc. and British Airways PLC, in connection with transfer offoreign air carrier permit and code-sharing authorities from Old Iberia to Iberia Lineas Aereas de Espafia Sociedad An6nima Operadora). The Joint Applicants hereby incorporate by reference all notices ofadditional code-sharing previously filed inthe above-referenced dockets. 7 Inthis regard, it is anticipated that, in additionto the CEO, each ofAlitalia Societa's directors/supervisors offlight safety, flight operations, maintenance, crew training, ground operations, quality and security, as well as its chief pilot, shall be EU nationals upon the closing ofthe Transaction. -5-EU regulations require that Alitalia Societa, among other things, remain majority owned andeffectively controlledbya Member State ornationals ofa Member State. See Regulation (EC) No. 1008/2008 ofthe European Parliament and ofthe Council. The Transaction has been closely reviewed under the requirements of Regulation (EC) No. 1008/2008 by Ente Nazionale per l'Aviazione Civile ("ENAC"), the Italian civil aviation authority. Based on this.review, ENAC concluded on November 19, 2014 that Alitalia Societa will be majority owned and effectively controlledbyEU interests uponthe closing ofthe Transaction. Additionally, the Transaction has been carefully scrutinized by the European Commission under the EU Merger Regulation, with approval granted onNovember 14, 2014, subject to certain conditions. 8 Under Article 4 ofthe U.S.-EU Air Transport Agreement, the United States "shall grant appropriate authorizations and permissions" upon receipt of an application from an airline of a Member State "with minimum procedural delay," provided "substantial ownership and effective control ofthat airlines is vested in a Member State

... or nationals ofsuch a state." As set forth in the 2009 U.S.-EU Procedures for Reciprocal Recognition, each Party, upon receipt ofsuch an application, including the one at issue here, should "recognise any fitness and/or citizenship determination made by the aeronautical authorities of the [other] Party with respect to that air carrier as if such determination had been made by its own aeronautical authorities," and, as a general principle, "not inquire further into [ ] such matters." ld. at Section 3. As here relevant, ENAC has carefully reviewed the Transaction under Regulation (EC) No. 1008/2008 and concluded that Alitalia Societa will be majority owned and effectively controlled by EU interests

8 These conditions include: (i) the release ofslots to facilitate new entrant competition onthe Rome-Belgrade route; and (ii) a commitment to offer a special prorate agreement, a fare combinability agreement, an interline agreement and frequent flyer program access to one or more new entrants onthe route, to render such entry more likely. A copy oftheEuropeanCommission'spressrelease announcingthe approval ofthe Transactionunderthe EUMerger Regulation is available at http:/ /europa.eu/rapid/press-release IP-14-1766 en.htrn. -6-upon the closing ofthe Transaction-acitizenship determinationthatis inaccordance withArticle 4 of the EU-U.S. Air Transport Agreement and which should be accepted as such by the Department under the 2009 U.S.-ED Procedures for Reciprocal Recognition. The Transaction will allow Alitalia Societa to stabilize and strengthen its balance sheet, investin a muchneeded long-haul aircraft fleet expansion, and revitalize the "Alitalia"brand. The Transaction also willprovide enhancedcareeropportunities for Alitalia employees, andwill ensure that Italy retains the benefits ofa viable and sustainable national flag carrier well into the future, majority-ownedby and under the continued effective control ofMember State interests. In accordance with 14 C.P.R. Part 211 and the Department's Application Procedures for Foreign Air Carriers ofthe European Union, the Joint Applicants state as follows: 1. The full name and address ofthe exemption applicant and foreign air carrierpermit transferee is Alitalia Societa Aerea Italiana S.p.A., with a principal place ofbusiness at via A. Nassetti, s.n.c., Pal. NHQ, Fiumicino, Italy, organized under the laws ofthe Republic ofltaly. 9 2. The homeland government air transport authority with jurisdiction over Alitalia Societa is the Ente Nazionale per 1'Aviazione Civile ("ENAC"), the Italian Civil Aviation Authority, with an address at Viale Castro Pretorio, 118

- 00185- Rome, Italy. 3. Alitalia Societa will hold all necessary homeland operating authority to engage in the international air transport services which are the subject of this Joint Application. In this regard, ENAC has confirmed that the Air Operator Certificate ("AOC") and related operating license presentlyheldbyAlitalia will be transferred and re-issued to Alitalia Societa byamending the name ofthe carrier set forth onthese authorizations, after all necessaryENAC procedures have

9 Alitalia Societa was organized under Italian law on September 24, 2014 as a Societa a Responsabilita Limitata (S.r.L.). On or about December 3, 2014, Alitalia Societa will be converted from an S.r.L. into a Societaper Azioni (S.p.A.). The corporate form for both an S.r.L. and an S.p.A. is effectively that of a limited liability company under Italian law. -7-

### been successfully completed, with the underlying authority effective upon the closing of the Transaction. Once this ENAC process - which already is underway- has been completed, documentary evidence of Alitalia Societa's homeland operating authority will be filed in the docket established for this Joint Application. 10 

### 4. Alitalia Societa's insurance coverage will meet or exceed the liability limits of 14 C.P.R. Part 205. The underlying policy will be issued by Generali Italia Sp.A. A completed OST Form 6411, Foreign Air Carriers

- Certificate of Insurance, will be separately filed with the Department shortly. 5. A completed OST Form 4523, documenting Alitalia Societa's waiver ofliability limitations under the Warsaw Conventionwillprovided separately and filed in Docket OST-1995- 236. 6. Alitalia Societa shall adopt Alitalia's Family Assistance Planpreviously submitted to the Department and National Transportation Safety Board (the "Board"). A letter to this effect shall be filed in Docket OST-1996-1960 and transmitted to the Board. 7. Alitalia Societa shall adopt Alitalia's Passenger Manifest Collection Procedures as required under 14 C.P.R. Part 243. A letterto this effect shall be filed inDocket OST-1998-3305. 8. Grant ofthe authorities sought herein will not result in a near term increase in fuel consumption of ten million gallons or more, and thus shall not constitute a "major regulatory action" underthe EnergyPolicyand ConservationAct of 1975, as definedin 14 C.P.R.§ 313(a)(l). 9. The Joint Applicants request that Alitalia Societa's foreign air carrier permit be issued for an indefinite period. Alitalia Societa is willing to accept all terms, conditions and limitations typically attached to such foreign air carrier permits.

10 The Joint Applicants have no objection to the effectiveness ofthe requested Alitalia Societa exemption authority being conditioned on the issuance by Italian authorities ofAlitalia Societa's AOC and operating license. -8-

### 10. A copy ofthe required verification statement is attached hereto as Exhibit A.

The Alitalia brand has been in continuous operation since 1946 and has linked the United States to points in Italy and beyond for approximately 45 years. Alitalia presently serves approximately 70 airports throughout the world with a fleet ofmore than 100 aircraft, and carried

more than 24 million passengers in 2013. The authorities requested herein will provide for the seamless transition oftransatlantic air transport services from Alitalia to Alitalia Societa, ensuring the continuation of consumer benefits, competition and online service options for travelers and shippers in the U.S.-ED market. The requested exemption and transfer andre-issuance of the code-share statements ofauthorization and foreign air carrierpermit are in the public interest.

-9-

### WHEREFORE, based on the foregoing, the Joint Applicants respectfully request that the Department (i} expeditiously grant the requested exemption and code-share statements of authorization and approve the foreign air carrierpermit transfer andre-issuance, each as described herein, and (ii) shorten the answer period to December 8, 2014. The Joint Applicants further request such other or additional relief as the Department considers consistent with this Joint Application and the public interest.

December 1, 2014

-10- Respectfully submitted,

David M. Endersbee Zuckert Scoutt & 

### Rasenberger LLP 888 17th Street, NW, Suite 700 Washington, D.C. 20006-3309 (202) 298-8660 (phone) (202) 342-0683 (fax) jhfoglia@zsrlaw.com rdtnathias@zsrlaw.com dmendersbee@zsrlaw.co1n Counsel to ALITALIA- COMPAGNIA AEREA ITALIAN A S.P.A and ALITALIA

- SOCIETA AEREA ITALIANA S.P.A.CERTIFICATE OF SERVICE I hereby certify that on this, the 1st day of December 2014, a copy of the foregoing Joint Application was served via electronic mail on the parties indicatedbelow: rsilverberg@sgbdc.com (Counsel for ABX Air) jjohnson@sgbdc.com (Counsel for ABX Air) chuck.hill@airtransport.cc francis.heil@aa.com howard.kass@aa.com robert.wirick@aa.cotn jrichardson@johnlrichardson.com (Counsel for Amerijet International) jcanny@ameriiet.com rpommer@atlasair.com john@mietuslaw.com (Counsel for Centurion Air Cargo) sascha.vanderbellen@delta.com sam etta.c.barnett@delta.com sllunsford@fedex.com sharon.pasley@fedex.com gbleopard@fedex.com charles.donley@sguirepb.com (Counsel for Florida West International Airways) matwood@cozen.com (Counsel for Kalitta Air) kevin.montgomery@polaraircargo.com peter.beckett@polaraircargo.con1 agoerlich@ggh-airlaw.cotn (Counsel for Southern Air) dan.weiss@united.com gmurphy@crowell.com (Counsel for United Airlines) sseiden@crowell.com (Counsel for United Airlines) anita.mosner@hklaw.con1 (Counsel for United Parcel Service) jennifer.nowak@hklaw.com (Counsel for United Parcel Service) robert.finamore@dot.gov jeffrey.gaynes@dot.gov paul.gretch@dot.gov brian.hedberg@dot.gov peter.irvine@dot.gov benjmnin.taylor@dot.gov john.s.duncan@faa.gov englets@state.gov info@airlineinfo.com

-11- 

# P,/M I {/ Jonathon H. FogliaEXHIBIT A VERIFICATION STATEMENTVERIFICATION Pursuant to Title 18 United States Code Section 1001, I, Giancarlo Schisano, inmyindividual capacity and as the authorized representative ofthe pleader, have not in anymannerknowingly and willfullyfalsified, concealed or failed to disclose anymaterial fact ormade anyfalse, fictitious, or fraudulent statement orknowinglyused any documents which contain such statements inconnection with thepreparation, filing orprosecution ofthe pleading. I understand that an individual who is found to have violatedthe provisions ofTitle 18 United States Code Section 1001 shall be fined or imprisoned notmore than five years, orboth. 

## ,0 Signed Sole Administrator Alitalia- Societa Aerea Italiana S.r.L. December 1, 2014