 

			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

	     Issued by the Department of Transportation on February 19, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST-2003-14397

________________________________________________________________________
________________________________________________________

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:  KLM Cityhopper B.V.					Date Filed:  January 28, 2003, 

									as supplementedFebruary 6, 2003

Relief requested:  (1)  Exemption from 49 U.S.C. 41301 to conduct
scheduled foreign air transportation of persons, property and mail by
displaying the airline designator codes of Northwest Airlines, Inc., and
Continental Airlines, Inc., 

on flights operated by KLM Cityhopper between points in The Netherlands
and points in third countries;

(2)  Statement of authorization pursuant to 14 CFR 212 of the
Department’s regulations to display Northwest’s airline designator
code on KLM Cityhopper-operated flights between points in The
Netherlands and points in third countries. 

Applicant representative:  Charles Donley  202-626-6600		DOT analyst: 
Barbara Schools  202-366-2401

Responsive pleadings:  None

	DISPOSITION

Action:  Approved									Action date:  February 19, 2003

Effective dates of exemption authority granted:  February 19, 2003  - 
February 19, 2005

Effective dates of statement of authorization granted:  February 19,
2003 - Indefinite, subject to attached conditions

Basis for approval (bilateral agreement/reciprocity):  The authority is
provided for in the U.S.-Netherlands Air Transport Agreement.  We found,
based on the record, that the carrier is substantially owned and
effectively controlled by citizens of The Netherlands, properly licensed
by its homeland, and operationally and financially qualified to
undertake the proposed operations.  Finally, the FAA has advised us that
it knows of no reason why the Department should act unfavorably on the
carrier’s application.

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:

 X  Standard exemption conditions (attached)         X  Code-share
conditions (attached)

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) 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/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://dms.dot.gov//reports/reports_aviation.asp

												        Appendix A

FOREIGN AIR CARRIER CONDITIONS OF AUTHORITY

In the conduct of the operations authorized, the holder 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, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security;1

(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 (formerly the
Federal Aviation Act of 1958, as amended).__________________

1  To assure compliance with all applicable U.S. Government requirements
concerning security, the holder should, 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, inform its
Principal Security Inspector of its plans.

 											

U.S. Department of Transportation	

Office of the Secretary of Transportation									        (41301/40109)
10/2002



KLM Cityhopper/Northwest Airlines, Inc., Code-Share Conditions  (Docket
OST-2003-14397)

The code-share operations authorized here are subject to the following
conditions:

 (a)  The statement of authorization will remain in effect only as long
as (i) KLM Cityhopper and Northwest 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)  KLM Cityhopper and/or Northwest 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-2003-14397; 

 (c)  KLM Cityhopper and/or Northwest must notify the Department
immediately if the code-share agreement under which these code-share
services are operated is no longer in effect or if the carriers decide
to cease operating all or a portion of the code-share services under the
agreement.  We expect this notification to be received within 10 days of
such non-effectiveness or of such decision.  Such notices should be
filed in Docket OST-2003-14397;

 (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 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)  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 all 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 KLM Cityhopper and Northwest rights (including
code-share, fifth freedom intermediate and/or beyond rights) to serve
markets where U.S. carrier rights are limited unless KLM Cityhopper and
Northwest notify us of their 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 that are included in KLM
Cityhopper’s and Northwest’s authority by virtue of the blanket
statement of authorization granted here, but that are not being used by
KLM Cityhopper and Northwest, the holding of such authority will not be
considered as providing any preference for KLM Cityhopper and Northwest
in a competitive carrier selection proceeding to determine which
carrier(s) should be entitled to use the authority at issue; and

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

We may amend, modify, or revoke this authority at any time without
hearing.

  KLM Cityhopper already holds a statement of authorization permitting
it to display Continental’s code on KLM Cityhopper-operated flights
between The Netherlands and third countries (see Notice of Action Taken
dated November 29, 2001, in Docket OST-2001-10880).

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

