 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on October 28, 2005

NOTICE OF ACTION TAKEN –

DOCKET OST-2003-15758

________________________________________________________________________
_____________________________________________

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  United Air Lines, Inc.   and  British Midland
Airways Limited d/b/a bmi (“bmi”)  filed   07/12/05 for:

XX Amendment to United’s existing exemption authority in the
above-captioned docket pursuant to 49 U.S.C. §40109 to permit United to
provide the following service:

Scheduled foreign air transportation of persons, property and mail
between (a) points in the United Kingdom; and (b) points in the United
Kingdom and points in third countries.  United intends to use this
authority to code share on  flights operated by bmi’s wholly-owned
affiliate British Midland Regional d/b/a bmi regional (“bmi
regional”).  United also requests the authority to integrate its
exemption here with all of United’s other existing certificate and
exemption authority.  

XX Amendment to bmi’s existing exemption authority in the
above-captioned docket pursuant to 49 U.S.C. §40109 to permit bmi’s
wholly-owned affiliate bmi regional to provide the following service:

Scheduled foreign air transportation of persons, property and mail
between (a) points in the United Kingdom; and (b) points in the United
Kingdom and points in third countries, either nonstop or via
third-country intermediate points.  This authority would be used by bmi
regional to engage in code-share services with United on flights
operated by bmi regional.    

XX  Amendment to bmi’s existing Statement of Authorization in the
above-captioned docket under 14 CFR Part 212 to permit bmi’s
wholly-owned affiliate bmi regional to:

Display United’s designator code on flights operated by bmi regional
between (a) points in the United Kingdom; and (b) points in the United
Kingdom and points in third countries, either nonstop or via
third-country intermediate points.

No answers to the application were filed.

Applicant rep: Marshall S. Sinick (202) 626-6651 DOT Analyst:  Michael
D. Bodman  (202) 366-9667

D I S P O S I T I O N

XX  Granted (See conditions below).

The above action was effective when taken:  October 28, 2005, through
October 28, 2007.  

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 the United Kingdom.  

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

XX  United’s certificates of public convenience and necessity

XX  Standard exemption conditions (attached as Appendices A and B)

XX  Code-Share Conditions (attached as Appendix C)

XX  United/bmi Statement of Authorization dated December 3, 2003, in the
above-captioned docket, and conditions therein.  

________________________________________________________________________
_____________

Conditions:  The exemption authority granted to United and bmi is
limited to services provided on a code-share basis only.  

The route integration authority granted 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 should be construed as conferring upon the holder
rights (including fifth-freedom intermediate and/or beyond rights) to
serve markets where U.S. carrier entry is limited unless the holder
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 the
holder’s authority by virtue of the route integration exemption
granted here, but that are not then being used by the holder, the
holding of such authority by route integration will not be considered as
providing any preference for the holder in a competitive carrier
selection proceeding to determine which carrier(s) should be entitled to
use the authority at issue.

_________________________

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, 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

U.S. Carrier

Standard 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, 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; 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.

APPENDIX B

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, including, but not limited to, 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.

			APPENDIX C

CODE-SHARE CONDITIONS

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

(a)  The statements of authorization will remain in effect only as long
as (i) United and bmi/bmi regional 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)  United and/or bmi/ bmi regional 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-2003-15758; 

(c)  United and/or bmi/bmi regional 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 approved code-share services.
 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-2003-15758;

(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 United and bmi/bmi regional rights (including
code-share, fifth freedom intermediate and/or beyond rights) to serve
markets where U.S. carrier rights are limited unless United and bmi/bmi
regional 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;1 and (ii) should there be a request by any carrier
to use the limited-entry route rights that are included in United and
bmi/bmi regional’s authority by virtue of the blanket statement of
authorization granted here, but that are not being used by United and
bmi/bmi regional, the holding of such authority will not be considered
as providing any preference for United and bmi/bmi regional 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 United nor bmi/bmi regional shall give any force or effect to
any contractual provisions between themselves that are contrary to these
conditions.

________________________

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

We note that United and bmi have filed an application in the above
docket for renewal of their existing Statements of Authorization to code
share and related exemption authorities.  We will address this renewal
application separately.    

 PAGE   

 PAGE   5 

