Document ID: DOT-OST-2006-26737-0005
Agency: dot
Document Type: Notice
Title: Notice of Action Taken re: American Airlines, Inc. and Malev Hungarian Airlines
Posted Date: 2007-05-17T04:00Z

UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on May 17, 2007

NOTICE OF ACTION TAKEN -- DOCKET OST-2006-26737

________________________________________________________________________
___________________________________

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 AMERICAN AIRLINES, INC. (AMERICAN)  and MALÉV
HUNGARIAN AIRLINES (MALÉV) filed 12/22/06 , and supplemented on 3/23/07
for:

XX   Exemption for American for two years under 49 U.S.C. 40109 to
provide the following services:  

Scheduled foreign air transportation of persons, property, and mail (1)
between points in Hungary, 

(2) between points in Hungary and points in the United States, and (3)
between points in Hungary and points in third countries (either nonstop
or via intermediate points), and the right to integrate this authority
with its existing exemption and certificate authority.  American seeks
this authority to display its designator code on flights operated by
Malév.

XX   Exemption for Malév for two years under 49 U.S.C. 40109 to provide
the following services:  

Scheduled foreign air transportation of persons, property, and mail (1)
between points in the United States, (2) between points in the United
States and points in Hungary, and (3) between points in the United
States and points in third countries (either nonstop or via intermediate
points in third countries), and the right to integrate this authority
with its existing foreign air carrier permits and exemptions.  Malév
seeks this authority to display its designator code on flights operated
by American.   

XX   Statement of authorization for blanket code-share authority for
American under 14 CFR Part 212 to:

Display Malév’s “MA*” designator code in conjunction with foreign
air transportation on flights operated by American (or its affiliates)
(1) between points in the United States, (2) between points in the
United States and points in Hungary, and (3) between points in the
United States and points in third countries (either nonstop or via
intermediate points in third countries).

XX   Statement of authorization for blanket code-share authority for
Malév under 14 CFR Part 212 to:

Display American’s “AA” designator code in conjunction with
foreign air transportation on flights operated by Malév (1) between
points in Hungary, (2) between points in Hungary and points in the
United States (either nonstop or via intermediate points in third
countries), and (3) between points in Hungary and points in third
countries (either nonstop or via intermediate points).  

Applicant reps: Carl B. Nelson (202) 496-5647 (American) DOT Analyst:
Thuy H. Cooper  (202) 366-5423

	           Stephen J. Fearon (212) 490-9100 (Malév)

D I S P O S I T I O N

XX  Granted request of American for exemption authority to serve between
points in the United States and Budapest and the intermediate/beyond
points Frankfurt and Zurich (subject to conditions, see below; see also
decision below) 

XX  Dismissed, as moot, request of American for broad exemption
authority to serve between points in the United States and Hungary via
intermediate/beyond points effective March 30, 2008

XX  Granted request of Malév for exemption authority to serve between
points in Hungary and Chicago, Los Angeles, and New York and the
intermediate/beyond points Rome and Zurich (subject to conditions, see
below; see also decision below)

XX  Granted request of Malév for broad exemption authority to serve
between points in the United States and Hungary via intermediate/beyond
points effective March 30, 2008 (subject to conditions, see below; see
also decision below)

XX  Granted requests of American Eagle Airlines, Inc. and Executive
Airlines, Inc. d/b/a American Eagle for route integration (subject to
conditions, see below)

XX  Dismissed requests of American and Malév for route integration 

XX  Granted request of American for blanket statement of authorization
(subject to conditions, see below; see also decision below)

XX  Granted request of Malév for blanket statement of authorization
limited to operations conducted by Malév using its own aircraft and
crews  (We deferred action on Malév’s request to conduct these
code-share operations by wet lease.) (subject to conditions, see below;
see also decision and remarks, below)

The above action granting point-specific exemption authority to American
was effective when taken: 

May 17, 2007, through May 17, 2009.

The above action granting point-specific exemption authority to Malév
was effective when taken: 

May 17, 2007, through May 17, 2009.  The broader exemption authority
granted to Malév will take effect March 30, 2008 and will remain
effective through May 17, 2009. 

The above action granting blanket statement of authorization to American
was effective when taken:

May 17, 2007 and will remain in effect indefinitely, subject to the
conditions below.  (See decision below.)

The above action granting blanket statement of authorization to Malév
to operate using its own aircraft and crews was effective when taken:
May 17, 2007 and will remain in effect indefinitely, subject to the
conditions below.  (See decision below.)

The above action deferring action on Malév’s request for blanket
statement of authorization for wet lease service was effective when
taken: May 17, 2007.  (See remarks below.)

The above actions granting route integration authority to American Eagle
Airlines, Inc. and Executive Airlines, Inc. d/b/a American Eagle were
effective when taken: May 17, 2007, through May 17, 2009.

The above actions dismissing the requests of American for broad
exemption authority and route integration authority and the request of
Malév for route integration were effective when taken: May 17, 2007.

Action taken by:   Paul L. Gretch, Director	

		      Office of International Aviation	

XX   The point-specific authority granted and effective immediately is
consistent with the aviation agreement between the United States and
Hungary.  The broad authority granted and effective March 30, 2008 is
consistent with the aviation agreement between the United States and the
European Union that will be provisionally applied beginning on that
date.

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

indicated:    XX  American’s certificates of public convenience and
necessity

	XX  Malév’s foreign air carrier permit

	      XX  Standard U.S. Carrier Exemption Conditions (attached as
Appendix D) 

	      XX  Standard Foreign Carrier Exemption Conditions (attached as
Appendix E)

	      XX  Conditions for Statements of Authorization (see below)

Responsive Pleadings: On January 8, 2007, United Air Lines, Inc.
(United) filed an answer to American's and Malév’s joint application.
 United states that it does not object to American's and Malév’s
request for approval of their code-share arrangement.  However, United
asserts that several services to points beyond Hungary are inconsistent
with applicable international agreements or with U.S. policies.  United
states that it questions the propriety of notices of code-share services
by American and Malév whenever American’s designator code would be
displayed on Malév-operated flights in some of these markets. 
Specifically, United notes that Beirut and Damascus are two points where
U.S. carrier operations are prohibited for safety or security reasons. 
United also notes that the Department should not approve the
code-sharing services to cities such as Athens and Thessaloniki, Greece;
Cairo, Egypt; Moscow, Russia; and Odessa, Ukraine because under existing
limits United is unable to exercise or expand its code-share rights to
points in these countries.  

On January 10, 2007, American and Malév filed a joint reply stating
that the intent of the initial notice submitted was to give the carriers
the flexibility to implement all of American's and Malév’s proposed
code-share services consistent with applicable international agreements
and other restrictions as soon as any issues can be resolved.  The
carriers recognize that certain of their proposed services cannot
immediately be operated, but American and Malév wished to clear the
requirement of code-share notice so that it would not be an impediment
to implementation.  In the interest of removing any cause for delay in
approval of the application, American and Malév withdrew initial notice
of American’s designator code on flights operated by Malév beyond
Budapest to the following cities: Beirut, Damascus, Cairo, and Odessa. 
American maintains its notice with respect to the remainder of the
cities that United questioned in its answer.

On March 23, 2007, American and Malév filed a supplement to their
application requesting that their pending application be processed as if
the United States and European Union (E.U.) air transport agreement were
already in effect, and that the two carriers be granted broad
code-sharing authority on an extra-bilateral basis until March 2008. 
American and Malév state that if the Department determines to strictly
enforce the 

U.S.-Hungary bilateral agreement until March 30, 2008, and to reject any
extra-bilateral requests, American and Malév name the following
intermediate points for U.S.-Hungary code-share service: (1) American:
Brussels, Frankfurt, London (Gatwick), Paris, Rome, and Zurich and (2)
Malév: Brussels, Paris, Rome, Zurich, and Toronto.

Decision:  We have decided to grant American and Malév the authority
that is available under the currently effective U.S.-Hungary air
transport agreement.  We are not granting extra-bilateral rights. 
Accordingly, we grant American’s request for exemption authority for
the following: between points in the United States and Budapest and the
intermediate/beyond points Frankfurt and Zurich.  Similarly, we are
granting for immediate effectiveness, Malév’s request for exemption
authority to serve between points in Hungary and Chicago, Los Angeles
and New York and the intermediate/beyond points Rome and Zurich.  

As to the broader aspects of the American and Malév requests, we note
that on April 30, 2007, the U.S.-E.U. air transport agreement was
signed, and that it will be provisionally applied beginning March 30,
2008.  American holds an open-skies certificate allowing it to serve any
open-skies countries where an open-skies agreement is being applied. 
Accordingly, American will be able to serve, on an unrestricted basis,
points in the European Union as of that date and needs no further
authority here as to such points.   The balance of the authority it
seeks is covered by the certificate.  The broad exemption authority that
Malév seeks we are granting here, but for effectiveness March 30, 2008.
   

We have granted both American and Malév blanket statements of
authorization, subject to our standard 

30-day notice requirement.  Although we are granting them blanket
statements of authorization, the points served under this authority
prior to March 30, 2008, must be consistent with the U.S.-Hungary
bilateral agreement and with the carriers' underlying economic authority
(which during this period will remain limited).  Points meeting these
criteria and for which they provided notice are listed in Appendix B. 
When the U.S.-E.U. air transport agreement is applied (March 30, 2008),
code-share services may include additional points, including additional
intermediate/beyond points (see Appendix C). 

Conditions:  The statements of authorization granted are subject to the
following conditions:

(a)  The statements of authorization will remain in effect only as long
as (i) American and Malév continue to hold the necessary underlying
authority to operate the code-share services at issue, and (ii) the
code-share agreement providing for the code-share operations remains in
effect.

(b)  American and/or Malév must promptly notify the Department (Office
of International Aviation) if the code-share agreement providing for the
code-share operations is no longer effective or if the carriers decide
to cease operating all or a portion of the approved code-share services.
 Such notices should be filed in Docket OST-2006-26737.

(c)  American and/or Malév must notify the Department no later than 30
days before they begin any new code-share service under the code-share
services authorized here.  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 notices should be filed in Docket 

	OST-2006-26737.

(d)  The code-sharing operations conducted under this authority must
comply with 14 CFR 257 and with any amendments to the Department’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 sold in the name of the carrier
holding out such service in the 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; that the passenger liability of the
operating carrier be unaffected; and that the operating carrier shall
not permit the code of its U.S. code-sharing partner to be carried on
any flight that enters, departs, or transits the airspace of any area
for whose airspace the Federal Aviation Administration has issued a
flight prohibition.

(e)  Any service provided shall be consistent with all applicable
agreements between the United States and Hungary, and all applicable
agreements with other foreign countries involved.  Furthermore, 

(i) nothing in the award of this blanket statement of authorization
should be construed as conferring upon American’s rights (including
code-share, fifth-freedom intermediate and/or beyond rights) to serve
markets where U.S. carrier rights are limited unless American notifies
us of its intent to serve such 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 that are included in American’s authority by virtue of
the blanket statement of authorization granted here, but that are not
being used by American, the holding of such authority will not be
considered as providing any preference for American in a carrier
selection proceeding to determine which carrier(s) should be entitled to
use the authority at issue.

(f)  The authority granted here is specifically conditioned so that
neither American nor Malév shall give any force or effect to any
contractual provisions between themselves that are contrary to these
conditions.

The route integration authority granted here is subject to the condition
that any service provided under this exemption shall be consistent with
all applicable agreements between the United States and the foreign
countries involved.  Furthermore, (a) nothing in the award of the route
integration authority requested should be construed as conferring upon
American Eagle Airlines, Inc. or Executive Airlines, Inc. d/b/a American
Eagle rights (including fifth-freedom intermediate and/or beyond rights)
to serve markets where U.S. carrier entry is limited unless the carrier
wishing to serve such a market (American Eagle Airlines, Inc. or
Executive Airlines, Inc. d/b/a American Eagle, as the case may be),
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 (b) should there be a request by any carrier
to use the limited-entry route rights that are included in American
Eagle Airlines, Inc. or Executive Airlines, Inc. d/b/a American
Eagle’s authority by virtue of the route integration exemption granted
here, but that are not then being used by American Eagle Airlines, Inc.
or Executive Airlines, Inc. d/b/a American Eagle, the holding of such
authority by route integration will not be considered as providing any
preference for American Eagle Airlines, Inc. or Executive Airlines, Inc.
d/b/a American Eagle in a competitive carrier selection proceeding to
determine which carrier(s) should be entitled to use the authority at
issue.

Remarks: We note that the joint applicants state that the
Budapest-Zagreb, Budapest-Cluj-Napoca, and Budapest-Ljubljana routes may
be operated by Malév with aircraft wet leased from Moldavian Airways
and/or Carpatair.  We are deferring action on this portion of the
request until (1) Moldavian Airways and/or Carpatair receive exemption
authority and related statements of authorization to display the
American designator code on flights operated by either carrier in the
subject markets and (2) American conducts a safety audit of the two
foreign carriers under the Department’s Code-Share Safety Audit
Program, and the FAA has advised that it has reviewed the relevant audit
and found it to be acceptable.

We note that American has conducted a safety audit of Malév under the
Department’s Code-Share Safety Audit Program, and the FAA has advised
that it has reviewed the relevant audit and found it to be acceptable.

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

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicants qualified to provide
the 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 consistent 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 or dismissed, we denied all requests in the
referenced Dockets.  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:

  HYPERLINK "http://dms.dot.gov//reports/reports_aviation.asp" 
http://dms.dot.gov//reports/reports_aviation.asp 

Appendix A

CODE-SHARE ROUTES

Any Route between AA’s North American Gateways at New York (JFK) and
Toronto and the Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between AA’s European Gateways at Brussels, Paris, Dublin,
Frankfurt, London, Madrid, Zurich and Toronto and the Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between Budapest and the Following Point(s)

City				Country				Operating Carrier

Tirana (TIA)			Albania					MA

Sarajevo (SJJ)			Bosnia Herzegovina			MA

Sofia (SOF)			Bulgaria				MA

Varna (VAR)			Bulgaria				MA		

Dubrovnik (DBV)		Croatia					MA

Split (SPU)			Croatia					MA			

Zagreb (ZAG)			Croatia					MA*

Athens (ATH)			Greece					MA	

Thessaloniki (SKG)		Greece					MA

Skopje (SKP)			Macedonia				MA

Krakow (KRK)		Poland					MA

Bucharest (OTP)		Romania				MA

Cluj-Napoca (CLJ)		Romania				MA*	

Constanta (CND)		Romania				MA	

Timisoara (TSR)		Romania				MA

Tirgu Mures (TGM)		Romania				MA	

Moscow (SVO)		Russia					MA

Ljubljana (LJU)		Slovenia				MA*

Istanbul (IST)			Turkey					MA

Pristina (PRN)			Serbia					MA

* Routes may be operated by Malév with aircraft wetleased from
Moldavian Airlines and/or Carpatair.  

Any Route between MA’s North American Gateways at New York (JFK) and
Toronto and the Following Point(s)

City				Country				Operating Carrier

Halifax (YHZ)			Canada				AA

Montreal (YUL)		Canada				AA

Toronto (YYZ)		Canada				AA

Punta Canta (PUJ)		Dominican Republic			AA

Santiago Do (STI)		Dominican Republic			AA

Santo Domingo (SDQ)	Dominican Republic			AA

Montego Bay (MBJ)		Jamaica				AA

San Juan (SJU)		Puerto Rico				AA

Providenciales (PLS)		Turks and Caicos Islands		AA

Baltimore/Washington (BWI)	USA					AA

Boston/Logan (BOS)		USA					AA

Chicago (ORD)		USA					AA

Cleveland/Hopkins (CLE)	USA					AA

Dallas/Ft. Worth (DFW)	USA					AA

Fort Lauderdale (FLL)	USA					AA

Houston/Bush (IAH)		USA					AA

Los Angeles (LAX)		USA					AA

Miami (MIA)			USA 					AA

Minneapolis/St. Pauk (MSP)	USA					AA

New York/Kennedy (JFK)	USA					AA

New York/LaGuardia (LGA)	USA					AA

Orlando (MCO)		USA					AA

Raleigh/Durham (RDU)	USA					AA

San Antonio (SAT)		USA					AA

San Diego/Lindbergh (SAN)	USA					AA

San Francisco (SFO)		USA					AA

Seattle (SEA)			USA					AA

St. Louis (STL)		USA					AA

Washington/Reagan (DCA)	USA					AA

Caracas (CCS)			Venezuela				AA

St. Thomas (STT)		USA					AA

Any Route between MA’s European Gateways at Brussels, Paris, Dublin,
Frankfurt, London, Madrid, and Zurich and the Following Point(s)

City				Country				Operating Carrier

Chicago (ORD)		USA					AA

Dallas/Ft. Worth (DFW)	USA					AA

Miami (MIA)			USA 					AA

New York/Kennedy (JFK)	USA					AA

Raleigh/Durham (RDU)	USA					AA

Appendix B

CODE-SHARE ROUTES

(Effective Immediately)

Any Route between AA’s North American Gateway at New York (JFK) and
the Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between AA’s European Gateways at Frankfurt and Zurich and
the Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between MA’s North American Gateways at New York (JFK) and
the Following Point(s)

City				Country				Operating Carrier

Chicago (ORD)		USA					AA

Los Angeles (LAX)		USA					AA

New York/Kennedy (JFK)	USA					AA

New York/LaGuardia (LGA)	USA					AA

Any Route between MA’s European Gateways at Zurich and the Following
Point(s)

City				Country				Operating Carrier

Chicago (ORD)		USA					AA

New York/Kennedy (JFK)	USA					AA

Appendix C

CODE-SHARE ROUTES

(Effective March 30, 2008)

Any Route between AA’s North American Gateway at Toronto and the
Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between AA’s European Gateways at Brussels, Paris, Dublin,
London, Madrid, Rome, and Toronto and the Following Point(s)

City				Country				Operating Carrier

Budapest (BUD)		Hungary				MA

Any Route between Budapest and the Following Point(s)

City				Country				Operating Carrier

Tirana (TIA)			Albania				MA

Sarajevo (SJJ)			Bosnia Herzegovina			MA

Sofia (SOF)			Bulgaria				MA

Varna (VAR)			Bulgaria				MA		

Dubrovnik (DBV)		Croatia					MA

Split (SPU)			Croatia					MA			

Zagreb (ZAG)			Croatia					MA*

Athens (ATH)			Greece					MA	

Thessaloniki (SKG)		Greece					MA

Skopje (SKP)			Macedonia				MA

Krakow (KRK)		Poland					MA

Bucharest (OTP)		Romania				MA

Cluj-Napoca (CLJ)		Romania				MA*	

Constanta (CND)		Romania				MA	

Timisoara (TSR)		Romania				MA

Tirgu Mures (TGM)		Romania				MA	

Ljubljana (LJU)		Slovenia				MA*

Istanbul (IST)			Turkey					MA

Pristina (PRN)			Serbia					MA

* Routes may be operated by Malév with aircraft wetleased from
Moldavian Airlines and/or Carpatair.  We are deferring action with
regards to the code-share operations via the wet lease from Moldavian
Airlines and/or Carpatair until (1) Moldavian Airways and/or Carpatair
receive exemption authority and related statements of authorization to
display the American designator code on flights operated by either
carrier in the subject markets and (2) American conducts a safety audit
of the two foreign carriers under the Department’s Code-Share Safety
Audit Program, and the FAA has advised that it has reviewed the relevant
audit and found it to be acceptable.

Any Route between MA’s North American Gateways at New York (JFK) and
Toronto and the Following Point(s)

City				Country				Operating Carrier

Halifax (YHZ)			Canada				AA

Montreal (YUL)		Canada				AA

Toronto (YYZ)		Canada				AA

Punta Canta (PUJ)		Dominican Republic			AA

Santiago Do (STI)		Dominican Republic			AA

Santo Domingo (SDQ)	Dominican Republic			AA

Montego Bay (MBJ)		Jamaica				AA

San Juan (SJU)		USA					AA

Providenciales (PLS)		Turks and Caicos Islands		AA

Baltimore/Washington (BWI)	USA					AA

Boston/Logan (BOS)		USA					AA

Chicago (ORD)		USA					AA

Cleveland/Hopkins (CLE)	USA					AA

Dallas/Ft. Worth (DFW)	USA					AA

Fort Lauderdale (FLL)	USA					AA

Houston/Bush (IAH)		USA					AA

Los Angeles (LAX)		USA					AA

Miami (MIA)			USA 					AA

Minneapolis/St. Pauk (MSP)	USA					AA

New York/Kennedy (JFK)	USA					AA

New York/LaGuardia (LGA)	USA					AA

Orlando (MCO)		USA					AA

Raleigh/Durham (RDU)	USA					AA

San Antonio (SAT)		USA					AA

San Diego/Lindbergh (SAN)	USA					AA

San Francisco (SFO)		USA					AA

Seattle (SEA)			USA					AA

St. Louis (STL)		USA					AA

Washington/Reagan (DCA)	USA					AA

Caracas (CCS)			Venezuela				AA

St. Thomas (STT)		USA					AA

Any Route between MA’s European Gateways at Brussels, Paris, Dublin,
Frankfurt, London, Madrid, Rome, and Zurich and the Following Point(s)

City				Country				Operating Carrier

Chicago (ORD)		USA					AA

Dallas/Ft. Worth (DFW)	USA					AA

Miami (MIA)			USA 					AA

New York/Kennedy (JFK)	USA					AA

Raleigh/Durham (RDU)	USA					AA										Appendix D

U.S. Carrier Exemption Conditions

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

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

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

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

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

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

(6)  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, 49 CFR Part 1544.  To assure compliance with all
applicable U.S. Government requirements concerning security, the holder
shall, before commencing any new service (including charter flights) to
or from a foreign airport, contact its International Principal Security
Inspector (IPSI) to advise the IPSI 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;

(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 applicable orders and regulations
of other U.S. agencies and courts, and with all applicable laws of the
United States.

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

								

11/2006

Appendix E

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 Principal Security Inspector
(IPSI) to advise the IPSI 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.

11/2006

 The joint applicants include American affiliates American Eagle
Airlines, Inc. and Executive Airlines, Inc. d/b/a American Eagle.

 The code-share partners provided a listing of specific code-share
markets that they intend initially to serve under this arrangement.  We
have reproduced it as Appendix A of this Notice.  See decision below.   

 See fn. 2.

 We have dismissed, as moot, American’s request for broader exemption
authority, as the carrier will hold broad authority to serve Hungary
pursuant to its blanket open-skies certificate authority.  See Order
2007-4-2.   

 By Order 2006-1-1, the Department awarded American a blanket route
integration certificate.

 As a standard practice, the Department does not grant route integration
to foreign carriers; therefore we are dismissing Malév’s request for
route integration.

 Under the U.S.-Hungary air transport agreement, the United States may
select seven intermediate/beyond points in Europe and/or Canada.   The
U.S. initially selected Zurich, Frankfurt, Vienna, Bucharest, and
Dubrovnik and subsequently selected Amsterdam and Cologne.  The U.S. has
no additional selections; therefore, we are unable, consistent with the
bilateral agreement, to grant American’s request for Brussels, London
(Gatwick), Paris, and Rome.

 Under the U.S.-Hungary air transport agreement, the Government of
Hungary may select five intermediate/beyond points in Europe and/or
Canada.  The Government of Hungary initially selected Frankfurt and
Zurich and subsequently selected Rome.  The Government of Hungary,
therefore, may select two additional points but they have not done so. 
Under these circumstances, we are unable, consistent with the bilateral
agreement, to grant Malev’s request for Brussels, Paris, and Toronto.

 DOT’s list of open-skies partners covered by blanket open-skies
certificates is at:   HYPERLINK
"http://ostpxweb.dot.gov/aviation/international/agreementsbeingapplied.h
tm" 
http://ostpxweb.dot.gov/aviation/international/agreementsbeingapplied.ht
m .  Hungary is included on the list but with the caveat that the
certificate holder may not commence service to Hungary under the
certificate before March 30, 2008.

 This includes exemption and code-share authority to serve the
intermediate/beyond points of Brussels, London (Gatwick), Paris, and
Rome. 

 This includes exemption and code-share authority to serve the
intermediate/beyond points of Brussels, Paris, and Toronto.

 We note United’s objections with regards to Moscow, Athens, and
Thessaloniki.  We are disapproving the joint applicants’ notice with
respect to Moscow.  Third-country code-share opportunities will be
discussed at the upcoming civil aviation negotiations with the Russian
Federation.  With regards to Athens and Thessaloniki, the authority to
serve these points will become effective March 30, 2008.  We note that
United has the authority to serve these same points (see 30-day notice
of United and Lufthansa, undocketed, dated September 30, 1998).       

 We expect this notification to be received within 10 days of such
non-effectiveness or of such decision.

 The notice referenced in condition (c) above may be used for this
notification.