			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on September 23, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST 2003-16163

________________________________________________________________________
________________________________________________________

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:  POLYNESIAN LIMITED                                          
                              Date Filed:  September 11, 2003 

Relief requested:  Exemption from 49 U.S.C. section 40109(g) to permit
the applicant to conduct scheduled, combination services between Pago
Pago, American Samoa, and Ofu, American Samoa, and between Pago Pago and
Ta'u, American Samoa, through November 8, 2003, using 19-seat Twin Otter
aircraft.  The applicant stated that Samoa Aviation, which had been
serving with its Twin Otter aircraft, has suspended service while its
sole aircraft undergoes eight weeks of required maintenance (no other
U.S. carrier provides scheduled service in the markets involved). 
Polynesian stated that, under an arrangement it has reached with the
Government of American Samoa, it is prepared to provide several flights
per week in the affected markets, with the Government of American Samoa
reimbursing its costs of operation, until Samoa Aviation resumes
operations.  It further stated that, absent its services, the residents
of American Samoa would not have access to inter-island air
transportation, and that these residents, and the economy of American
Samoa, would suffer as a result.

Applicant representative:  Charles F. Donley II, 202-626-6840        DOT
analyst:  Allen F. Brown, 202-366-2405

Responsive pleadings:  Polynesian Limited served its application on
those U.S. carriers having the potential to conduct these intra-American
Samoa services.  Each of these carriers, except Samoa Aviation and
Hawaiian Airlines (see below), indicated that it did not have aircraft
available to conduct the proposed operations and that it had no comment
or did not oppose grant of the requested authority.

On September 12, 2003, Samoa Aviation filed an answer, stating that
there is no reason to grant Polynesian’s request.  Samoa Aviation
stated that while it is “on the verge” of putting its aircraft into
maintenance, it will in fact be operating a reduced schedule for the
next several weeks (one flight per week in each of the two island
markets), at which time it plans to wet lease equipment from the New
Zealand company Air National (see Docket OST 2003-16117) for
continuation of its service, while maintenance is being performed on its
Twin Otter.

On September 15, 2003, Hawaiian Airlines filed a pleading.  Hawaiian
stated that it does not object to the Department’s granting Polynesian
Limited’s request, if the grant is limited in duration to 60 days and
the exemption is limited to the present seating capacity provided by
Samoa Aviation in the markets to be served by Polynesian’s exemption.

On September 22, 2003, Polynesian Limited filed a reply to the pleadings
of Samoa Aviation and Hawaiian Airlines.  Polynesian asserts that, even
if Samoa Aviation is continuing intra-American Samoa services with
reduced capacity, that capacity is inadequate to meet the community’s
current need for lift.  Polynesian stated that Samoa Aviation can only
operate ten roundtrip flights before it must put its aircraft into
maintenance; and that Samoa Aviation in the past operated between two
and three daily roundtrip flights in the affected market, in contrast to
the two flights per week Samoa Aviation now proposes to operate. 
Polynesian stated that Air National, from which Samoa Aviation plans to
wet-lease aircraft in the future, has not completed its application for
Department authority and, in any event, the Federal Aviation
Administration does not permit U.S. air carriers to wet-lease aircraft
from foreign carriers.  Polynesian further stated that limiting the
number of seats it may offer, as Hawaiian suggests, would hinder its
ability to assist American Samoa.  With its reply, Polynesian attached
two letters from the Governor of American Samoa.  In the first,
addressed to Samoa Aviation, the Governor cited the difficulty the
reduced schedule of Samoa Aviation was causing the people of American
Samoa.  In the second, addressed to the Secretary of Transportation, the
Governor 

stated that Samoa Aviation had been operating 266 weekly seats in the
inter-island markets; that it was currently operating only 38 weekly
seats; that passengers were being stranded; and that Samoa Aviation
“is simply not able to provide adequate minimum service for the market
at this time.”

Statutory Standards:  Under 49 U.S.C. section 40109(g), we may authorize
a foreign air carrier to carry commercial traffic between U.S. points
(i.e., cabotage traffic) under limited circumstances.  Specifically, we
must find that the authority is required in the public interest; that
because of an emergency created by unusual circumstances not arising in
the normal course of business the traffic cannot be accommodated by U.S.
carriers holding certificates under 49 U.S.C. section 41102; that all
possible efforts have been made to place the traffic on U.S. carriers;
and that the transportation is necessary to avoid unreasonable hardship
to the traffic involved (an additional required finding, concerning
emergency transportation during labor disputes, was not relevant here).

                                                                        
        DISPOSITION

Action: Approved in part, remainder deferred (see below).               
                    Action date:  September 23, 2003

Basis for approval:  We are granting Polynesian Limited authority to
operate its proposed intra-American Samoa services, using its 19-seat
Twin Otter aircraft, for a period of 30 days (that is, through October
23, 2003), or until five days after we are notified that Samoa Aviation
or another U.S. carrier is providing the level of service that was being
provided in these markets prior to the onset of Samoa Aviation’s
reduction of services, whichever occurs first.  We are deferring action
on the remaining portion of Polynesian’s application, i.e., to
continue this operation through November 8, 2003.

In acting favorably on this request for emergency cabotage authority, we
find that Polynesian Limited’s request met all the relevant criteria
of 49 U.S.C. section 40109(g) for the grant of an exemption of this type
and that the grant is required in the public interest.

The effects of the severe cutbacks in service in the inter-island
American Samoa markets by Samoa Aviation, the only U.S. carrier
conducting service in the inter-island markets involved (and the
prospective impact of the cessation of service when Samoa Aviation must
put its sole aircraft into maintenance), clearly constitute an emergency
created by unusual circumstances not arising in the normal course of
business.  As Polynesian and the Governor of American Samoa have
documented, neither Samoa Aviation nor any other U.S. carrier appears
able at this time to provide the level of service necessary to meet the
needs of American Samoa, an isolated multi-island community uniquely
dependent on air transportation.  Further, provision of the services
Polynesian proposes is clearly needed to prevent undue hardship to the
residents of American Samoa, a number of whom, as noted by the Governor
of American Samoa, have already had their travel plans disrupted by the
inadequacies of the services currently offered in the affected markets.

Given these circumstances, we find that the standards for grant of
emergency cabotage authority have been met, and that grant of the
exemption requested by Polynesian, for a 30-day term, is warranted.

In taking this action, we are not persuaded by Samoa Aviation’s
assertion that its current limited service in the market, or its planned
wet-lease arrangement with Air National, justify denial of this
authority.  The Governor of American Samoa has noted the effects of the
severe cutbacks in service in the inter-island markets.  Moreover, Air
National, a foreign air carrier of New Zealand, currently holds no
Department authority and would itself require emergency cabotage
authority (for which it has applied) in order to conduct services for
Samoa Aviation.  There are regulatory questions regarding the
arrangement between Samoa Aviation and Air National, including whether
that arrangement would even be eligible for FAA approval (see CFR
121.153(c)).  In these circumstances, we do not see the arguments of
Samoa Aviation as a basis to withhold approval of the Polynesian
request.

We also do not see merit to Hawaiian’s view that we should limit the
seating capacity operated by Polynesian under this authority.  Given the
critical need for Polynesian’s service in the affected markets, and
the fact that some passengers already have been unable to travel on the
dates they wished, we see no public interest reason to hinder
Polynesian’s efforts to provide American Samoa with the level of
inter-island service it requires.

As provided in 49 U.S.C. section 40109(g), we will review this exemption
near the end of this 30-day term to see if the unusual circumstances
that established the need for the exemption still exist, and will decide
at that time whether the situation warrants extension of this authority
for an additional term.

Finally, we found that the applicant is qualified to perform its
proposed operation.  Except to the extent exempted/waived, this
authority is subject to our standard exemption conditions.

Action taken by:      Michael W. Reynolds

                                  Acting Assistant Secretary for

                                     Aviation and International Affairs	

An electronic version of this document is available on the World Wide
Web at:

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

