 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on April 21, 2004

   NOTICE OF ACTION TAKEN -- DOCKET OST-2003-15401           

________________________________________________________________________
_________________________________

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).

Application of      Continental Airlines, Inc.     filed   6/11/03  for:

XX  Exemption under 49 U.S.C. 40109 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail
between any point or points in the United States and any point or points
in Portugal, directly and via intermediate points, and beyond Portugal
to any point or points in third countries, and to integrate this
authority with its existing certificate and exemption authority. 
Continental initially intends to operate this service pursuant to a
reciprocal code-share arrangement with TAP Air Portugal but seeks broad
authority to also operate its own flights.

Application of   Continental Airlines, Inc.  filed  6/11/03  for:

XX  Statement of authorization under 14 CFR Part 212 to:

Permit Continental to display the designator code of TAP in conjunction
with foreign air transportation of persons, property, and mail on
flights operated by Continental between (1) points in the United States,
(2) points in the United States and points in Portugal (either nonstop
or via intermediate points in third countries), (3) points in the United
States and points in third countries; and (4) points in Portugal and
points in third countries.

Application of  TAP Air Portugal       filed   6/11/03 for:

XX  Statement of authorization under 14 CFR Part 212 to:

Permit TAP to display the designator code of Continental in conjunction
with foreign air transportation of persons, property, and mail on
flights operated by TAP between (1) points in Portugal, (2) points in
Portugal and points in the United States (either nonstop or via
intermediate points in third countries), (3) points in Portugal and
points in third countries, and (4) points in the United States and
points in third countries.

Applicant rep: R. Bruce Keiner, Jr.  (202) 624-2615 (CO)  DOT Analyst: 
Sylvia Moore, (202) 366-6519

                        William Karas  (202) 429-6223 (TAP)

(See Reverse Side)2

D I S P O S I T I O N

XX  Granted  (subject to conditions, see below)

The above action with respect to Continental’s exemption authority was
effective when taken:  April 21, 2004, through    April 21, 2006

The statements of authorization granted were effective when taken:   
April 21, 2004, and will remain in effect indefinitely, subject to the
conditions listed below.

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 Portugal.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated:  XX Continental’s
certificates of public convenience and necessity 

	   XX  TAP Air Portugal foreign air carrier permit      

	   XX  Standard exemption conditions (attached)

The exemption authority granted is subject to the following conditions:

The authority granted to serve intermediate and beyond points is limited
to countries with which the United States has signed open-skies
agreements and/or countries for which the carrier holds authority to
serve under certificates or exemptions issued by the Department, and for
which it holds route integration authority, by virtue of either the
present action or other action of the Department, and is subject to all
conditions attached to that authority.

The route integration authority granted is subject to the condition that
any service provided under this authority shall be consistent with the
applicable bilateral aviation agreements between the United States and
the foreign countries involved.  Furthermore, (a) nothing in the award
of this authority requested should be construed as conferring upon
Continental additional rights (including code-share, fifth-freedom
intermediate and/or beyond rights) to serve markets where U.S. carrier
entry is limited unless Continental first 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 Continental’s authority by virtue of the route
integration and blanket code-share authority granted here, but that are
not then being used by Continental, the holding of such authority will
not be considered as providing any preference for Continental in a
competitive carrier selection proceeding to determine which carrier(s)
should be entitled to use the authority at issue.

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

(a)	The statement of authorization will remain in effect only as long as
(i) Continental and TAP 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.

3

(b)	Continental and TAP 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-2002-13609.2

(c)	Continental and TAP 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 being. 
(Such notice should be filed in this Docket.)

(d)	The code-sharing conducted under this authority must comply with
Part 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; and that the passenger liability of the
operating carrier be unaffected.  Further, the operating carrier shall
not permit the code of its U.S. air carrier code-sharing partner to be
carried on any flights that enter, depart, or transit 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 these blanket statements of authorization should be
construed as conferring upon Continental additional rights (including
code-share, fifth-freedom intermediate and/or beyond rights) to serve
markets where U.S. carrier entry is limited unless Continental first
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 that are included in
Continental’s authority by virtue of the route integration and blanket
code-share authority granted here, but that are not then being used by
Continental, the holding of such authority will not be considered as
providing any preference for Continental in a competitive 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 Continental nor TAP shall give any force or effect to any
contractual provisions between themselves that are contrary to these
conditions.

________________________________________________________________________

On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found Continental 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 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, 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.

4

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



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 and with all applicable U.S. Government requirements
concerning security.  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 Principal Security Inspector (PSI) to
advise the PSI 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; and

(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.

									   	

8/2003

 TAP already holds the underlying route authority to operate the
proposed code-share services.  (See Notice of Action Taken dated April
5, 2002, in Docket OST-2000-7003.)

 Continental states in its application that the TAP code will also be
displayed on flights operated by Continental’s code-share partner,
ExpressJet Airlines, Inc.  ExpressJet does not require a statement of
authorization since it operates only small aircraft as defined in
section 298.2 of the Department’s regulations (Section 212.1).

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

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

