 

			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on December 27, 2005

NOTICE OF ACTION TAKEN -- DOCKET OST-2004-17065

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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:  VARIG LOGISTICA S.A., d/b/a VARIG LOG	Date Filed:  February
5, 2004, as supplemented 

Relief requested: Exemption authority from 49 U.S.C. § 41301 to engage
in scheduled foreign air transportation of property and mail from a
point or points in Brazil, via intermediate points, to New York,
Atlanta, Miami, Orlando, Detroit, Washington/Baltimore, Houston,
Chicago, Los Angeles, San Francisco, Boston and San Juan, Puerto Rico;
and to conduct all-cargo charters subject to 14 CFR Part 212 of the
Department’s rules.

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

Applicant representative:  George Mencio (305) 374-8500

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

Responsive pleadings:  None filed

	DISPOSITION

Action:  Approved								Action date:  December 27, 2004

Effective dates of authority granted:  December 27, 2004-December 27,
2005

Basis for approval (bilateral agreement/reciprocity):  Air Transport
Agreement between the United States and Brazil (the Agreement)

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

X  Standard exemption conditions (Attached)

Special conditions/Partial grant/Denial basis/Remarks:  Based on the
record in this case, we found that VARIG LOG is financially and
operationally qualified to perform the services authorized above.  We
also found that VARIG LOG is substantially owned and effectively
controlled by Brazilian nationals.  The carrier is properly licensed and
designated by the Government of Brazil to perform the proposed services.
 By memorandum dated September 24, 2004, the FAA advised us that it knew
of no reason why we should act unfavorably on VARIG LOG’s application.

The authority granted above is subject to the provisions of the
Agreement, and the further condition that VARIG LOG shall not perform
any third- and fourth-freedom charters unless specific authority in the
form of a statement of authorization for such charter(s) has been
granted by the Department.  VARIG LOG shall file applications for such
statements of authorization pursuant to the procedures set forth in §
212.10 of the Department’s rules.

2

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 

Foreign Air Carrier Standard 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.

												05/2004

  On October 1 and December 22, VARIG LOG supplemented both its
exemption application at issue here and its foreign air carrier permit
application in Docket OST-2004-17064.  The October 1 supplement was
placed into both dockets.  The December 22 supplement was filed only in
VARIG LOG’s foreign air carrier permit application (Docket
OST-2004-17064).  However, in light of the applicant’s statement in
its exemption application that it incorporates by reference all
information and documentation submitted in the context of its permit
application as support for its instant request, we are considering both
supplemental filings as part of the record in this docket
(OST-2004-17065).

  VARIG LOG is owned (99%) by VARIG, S.A., the flag carrier of Brazil,
and (1%) by FRB-Par Investimentos Ltds.  Both are Brazilian
corporations.  In addition, all of VARIG LOG’s key management
personnel are citizens of Brazil.

  By Order 81-5-44, the Department required VARIG, a foreign air carrier
of Brazil, to obtain a statement of authorization under Part 212 of the
Department’s rules prior to operating any Brazil-U.S. charter flights.
 This requirement remains in effect and has been extended to all foreign
carriers of Brazil holding Department authority to conduct charter
services.

