 

			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on July 21, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST-2003-15479

________________________________________________________________________
________________________________________________________

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:  The Fair Inc.						Date Filed:  June 20, 2003, as
supplemented

Relief requested:

Exemption from 49 U.S.C. § 41301 to engage in scheduled foreign air
transportation of persons, property and mail between any point or points
in Japan and any point or points in the United States in connection with
a code-share arrangement with United Airlines, Inc. (United).

Statement of authorization under 14 CFR Part 212 to display the
designator code of United (UA*) on flights operated by The Fair between
points in Japan (limited to the carriage of United’s U.S.-Japan
traffic), using small aircraft.

If renewal, date and citation of last action:  New authority

Applicant representative:  Charles J. Simpson, Jr. and Shannon M. Moyer
(202) 298-8660

DOT Analyst:  Gordon H. Bingham (202) 366-2404

Responsive pleadings:  None filed

	DISPOSITION

Action:  Approved							Action date:  July 21, 2003

Effective dates of the exemption authority granted:  July 21, 2003-July
21, 2004

The statement of authorization granted was effective when taken July 21,
2003 and will remain in effect indefinitely, subject to the conditions
listed below.

Basis for approval (bilateral agreement/reciprocity):  1998 Memorandum
of Understanding between the United States and Japan (1998 MOU)

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

X  Standard exemption conditions attached and the 1998 MOU 

Special conditions/Partial grant/Denial basis/Remarks:  Based on the
record in this case, we found that The Fair is financially and
operationally qualified to perform the services authorized above.  We
found that The Fair is

2

substantially owned and effectively controlled by citizens of Japan. 
The Fair is properly licensed by the Government

of Japan to perform the proposed services. 

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

(a)  The authority granted above is limited to the carriage of
code-share traffic only.

(b)  The statement of authorization will remain in effect only as long
as (i) The Fair and/or United 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.

(c)  The Fair and/or United must promptly notify the Department if the
code-share agreement providing for the code-share operations is no
longer effective or the carriers decide to cease operating any or all of
the approved code-share services.  Such notices should be filed in
Docket OST-2003-15479.

(d)  The Fair and/or United 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 and the date on which the service will begin.  Such notices
should be filed in Docket OST-2003-15479.

(e)  The code-sharing operations conducted under this authority must
comply with 14 CFR 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 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. carrier
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.

(f)  The authority granted here is specifically conditioned so that
neither carrier shall give any force or effect to any contractual
provisions between themselves that are contrary to these conditions.

(g)  In the conduct of the code-share operations authorized, the holder
shall use only small aircraft (i.e., aircraft designed to have a maximum
passenger capacity of not more than 60 seats or a maximum payload
capacity of not more than 18,000 pounds).

(h)  We may amend, modify, or revoke the authority granted at any time
without hearing at our discretion.  

Action taken by:  Paul L. Gretch, Director	

		      Office of International Aviation	

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________________________________________________________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) the applicant was qualified to perform the
proposed operations; (2) our action was consistent with Department
policy; (3) grant of the authority was consistent with the public
interest; and (4) 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:

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



Attachment

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, 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.

____________________________

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, 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.

  By letter dated June 24, 2003, The Fair notified the Department that
because it will not operate any aircraft designed to have a maximum
capacity of more than 60 passengers, it would not oppose our limiting
the authority requested to the operation of small aircraft only.  

  The Fair will display United’s designator code (UA*) on The Fair
domestic Japanese flights that connect with United and All Nippon
Airways (ANA) code-share services between the United States and Japan. 
In that regard, on August 7, 1998, we granted United and ANA, blanket
statements of authorization to engage in code-share services in the
U.S.-Japan market (undocketed).  Similarly, we have also granted
statements of authorization to ANA’s subsidiary companies (Air Nippon
Co., Ltd. and Air Japan Co., Ltd.) to permit them to display the UA*
designator code on Air Nippon and Air Japan flights.  See Dockets
OST-2002-13144 and OST-2002-13473, respectively. 

  The Fair holds an Air Operator Certificate (AOC) issued by Japan’s
Ministry of Transport on June 20, 2000, authorizing The Fair to conduct
scheduled air transport services within Japan using Bombardier CL-600
aircraft.

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

