 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on July 26, 2004

   NOTICE OF ACTION TAKEN -- DOCKET OST-2004-18017           

________________________________________________________________________
_________________________________

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  Bahamasair Holdings Limited   filed   6/3/04  for:

XX  Exemption from 49 U.S.C. 41301 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail
between points in the Bahamas and points the United States.  Bahamasair
intends to operate this service pursuant to a code-share arrangement
with US Airways and its affiliates Piedmont Airlines and PSA Airlines.

Application of  Bahamasair Holdings Limited    filed   6/4/04 for:

XX  Statement of authorization under 14 CFR Part 212 to:

Permit Bahamasair to display the designator code of US Airways on
flights operated by Bahamasair between (1) points in the United States
and points in the Bahamas, and (2) points in the Bahamas in conjunction
with foreign air transportation services held out by US Airways.

Application of   PSA Airlines, Inc.  filed  6/3/04  for:

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

Scheduled foreign air transportation of persons, property, and mail
between points in the United States and points in the Bahamas, and to
integrate this authority with its existing authorities.  PSA 

intends to operate this service pursuant to a code-share arrangement
with Bahamasair, Piedmont, and US Airways but seeks broad authority to
also operate its own flights.

Application of   US Airways, Inc. (and its affiliates Piedmont Airlines,
Inc. and PSA Airlines, Inc.) filed 6/3/04 for:

XX  Statement of authorization under 14 CFR Part 212 to:

Permit US Airways (and its affiliates) to display the designator code of
Bahamasair on flights operated by US Airways, Piedmont, and PSA between
(1) points in the United States and points in the Bahamas, and (2)
points in the United States in conjunction with foreign air
transportation services held out by Bahamasair.

Applicant rep: Howard Kass  (703) 872-5230 (US Airways) DOT Analyst:
Sylvia Moore, (202) 366-6519

                        George U. Carneal  (202) 637-6546 (Bahamasair)

2

Gulfstream International Airlines filed an answer objecting to the joint
application.  Gulfstream states that Bahamasair is delinquent in filing
its required T-100 traffic reports from October 2002 through at least
December 2003, creating a significant competitive disadvantage for other
airlines offering U.S. Bahamas service which have reported their
traffic.

Bahamasair filed a reply stating it did submit T-100 reports for the
period October 2002 through December 2003.  Bahamasair states, however,
that it learned of some data quality problems with a number of its
reports from that period and worked with Bureau of Transportation
Statistics (BTS) officials to resolve those problems.

D I S P O S I T I O N

XX  Granted  (subject to conditions, see below)

The above action with respect to Bahamasair’s exemption authority was
effective when taken:   July 26, 2004, through  July 26, 2005

The above action with respect to PSA’s exemption authority was
effective when taken:  July 26, 2004, through  July 26, 2006

The statements of authorization granted were effective when taken:  July
26, 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 overall state of
aviation relations between the United States and the Bahamas.

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

	   XX  Standard exemption conditions (attached)

The exemption authority granted to PSA is subject to the following
condition:

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 PSA
additional rights (including code-share, fifth-freedom intermediate
and/or beyond rights) to serve markets where U.S. carrier entry is
limited unless PSA 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 PSA’s authority by virtue of the route integration and
code-share authority granted

3

here, but that are not then being used by PSA, the holding of such
authority will not be considered as providing any preference for PSA 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 statements of authorization will remain in effect only as long
as (i) US Airways (and its affiliates) and Bahamasair 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)	US Airways(and its affiliates) and/or Bahamasair 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-2004-18017.2

(c)	US Airways (and its affiliates) and Bahamasair  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 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 granted here is specifically conditioned so that
neither US Airways (and its affiliates) nor Bahamasair shall give any
force or effect to any contractual provisions between themselves that
are contrary to these conditions.

Remarks:   With respect to Gulfstream’s comments, we have confirmed
with BTS staff that Bahamasair’s T-100 traffic reports are current and
the data quality problems have been resolved.   

________________________________________________________________________

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, 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.

											  05/2004

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.

											05/2004

 Initially, Bahamasair intends to place US Airways’ code on flights
operated by Bahamasair between the Bahamas and Fort Lauderdale, Miami,
Orlando, and West Palm Beach, as well as several intra-Bahamaian flights
(no local US-coded traffic).

 Initially, US Airways intends to place Bahamasair’s code on flights
operated by US Airways between the Bahamas and Boston, Charlotte, New
York, Philadelphia, and Washington, DC.

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

