UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on October 1, 2004

   NOTICE OF ACTION TAKEN -- DOCKET OST-2004-18932           

________________________________________________________________________
_________________________________

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   US Airways, Inc.  and British Midland Airways
Limited d/b/a bmi filed   8/19/04  for:

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

Scheduled foreign air transportation of persons, property, and mail
between any point or points in the United States, and regional airports
in the United Kingdom directly and via intermediate points, and beyond
the United Kingdom to any point or points in third countries, and to
integrate this authority with US Airways’ existing certificate and
exemption authority.  US Airways further requests any necessary
exemption authority (including the right to integrate such authority
with its existing certificates and exemptions) in order to engage in
code-sharing arrangements with bmi. 

XX  Statement of authorization for US Airways under CFR Part 212 to:

Permit US Airways to display the “BD” code of bmi on flights
operated by US Airways between 

(1) points in the United States and regional airports in the United
Kingdom, either nonstop or via third-country intermediate points; (2)
points in the United States; and (3) Philadelphia, PA; and Charlotte,
NC; on the one hand, and London (Gatwick) on the other. 

XX  Statement of authorization for bmi under 14 CFR Part 212 to:

Permit bmi to display the “US” code of US Airways on flights
operated by bmi between (1) points in the United States and regional
airports in the United Kingdom, either nonstop or via third-country
intermediate points; (2) points in the United Kingdom; and (3) points in
the United Kingdom and points in third countries beyond the United
Kingdom, either nonstop or via third-country intermediate points. 

Continental Airlines filed an answer stating that it did not object to
the joint application to the extent the carriers seek authority to code
share between points in the United States and regional airports in the
United Kingdom, between points within the United States or within the
United Kingdom, or between points in the United Kingdom and points
beyond the United Kingdom.  Continental states that it does object to
the award of code-share authority to the carriers between points in the
United States and London (Gatwick), stating that such an award would be
extrabilateral and that the aviation relationship between the United
States and the United Kingdom does not  support the grant of this
portion of the applicants’ request.

The Joint Applicants filed a reply, stating that the authority they
request to serve London (Gatwick) is in fact fully consistent with the
provisions of the U.S.-U.K. Agreement.

Applicant reps: Howard Kass (703) 872-5230 (US Airways), Marshall Sinick
(202) 626-6651 (bmi)

DOT Analysts:  Sylvia Moore  (202) 366-6519, Thuy Cooper (202) 366-5423

2

D I S P O S I T I O N

XX   Approved in part; deferred in part (see below)

The above action with respect to US Airways’ exemption authority was
effective when taken: October 1, 2004, through October 1, 2006

The statements of authorization granted were effective when taken: 
October 1, 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, to the extent 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 US Airways’
certificates of public convenience and necessity 

XX  bmi’s exemption authority (Notice of Action Taken dated August 14,
2003 in 

OST-2001-9978)

	   XX  Standard exemption conditions (Attachment B)

______________________

Remarks:  In granting this authority, we are deferring action on the
Joint Applicants’ request to the extent that it would permit them to
code-share on flights to or from London (Gatwick).  We are also
deferring action on the Joint Applicants’ request to code-share on
flights to or from Aberdeen, Leeds Bradford, or Toulouse.

Conditions: 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 requested should be construed as
conferring upon US Airways rights (including fifth-freedom intermediate
and/or beyond rights) to serve markets where U.S. carrier entry is
limited unless US Airways 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 carriers(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 US Airways’ authority
by virtue of the route integration exemption granted here, but that are
not then 

being used by US Airways, the holding of such authority by route
integration will not be considered as providing any preference for US
Airways in a competitive carrier selection proceeding to determine which
carrier(s) should be entitled to use the authority at issue.

The authority granted to serve intermediate and beyond points is limited
to countries with which the United States has signed open-skies
agreements and/or countries for which the carrier holds authority to
serve under certificates or exemptions issued by the Department, and for
which it holds route integration authority by virtue of either the
present action or other action of the Department.

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 bmi 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/or bmi 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-20043-18932.

 

(c)	US Airways and/or bmi 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 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 US Airways rights (including code-share, fifth
freedom intermediate and/or beyond rights) to serve markets where U.S.
carrier entry is limited unless US Airways 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 (ii)
should there be a request by any carrier to use the limited-entry route
rights that are included in US Airways’ authority by virtue of the
blanket statement of authorization 

granted here, but that are not then being used by US Airways, the
holding of such authority will not be 

considered as providing any preference for US Airways in a competitive
carrier selection proceeding to determine which carrier(s) should be
entitled to use the authority at issue.

(f)	The authority granted here is specifically conditioned so that
neither US Airways nor bmi shall give any force or effect to any
contractual provisions between themselves that are contrary to these
conditions.

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On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found US Airways 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 or deferred, 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 A

Proposed Initial Routes

“US” code on flights operated by bmi

Manchester to

	Aberdeen

	Edinburgh

	Glasgow

	Toulouse

*Paris to

	Leeds Bradford

“BD” code on flights operated by US Airways

Philadelphia to

	Manchester

London (Gatwick)

Glasgow

Charlotte to

	London (Gatwick)

	Philadelphia

	Newark

Philadelphia and Charlotte to

	Boston

	Southwest Florida Regional

	Pittsburgh

	Raleigh/Durham

	Cleveland

	St. Louis

	Baltimore

	Kansas City

* With respect to the request for code-sharing on bmi’s flights
between Paris (CDG) and Leeds/Bradford, U.K., the US Airways’ traffic
to/from this U.K. destination via Paris will be carried on a
blind-sector basis.

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

 US Airways also applied on behalf of its affiliated carriers, Piedmont
Airlines, Inc.; and PSA Airlines.

 See Attachment A for the Routes US Airways and bmi initially propose to
serve.

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

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

 We note that the code-share arrangement as submitted did not include
provisions regarding exclusive dealings between the code-share parties. 
Should the parties subsequently amend their code-share agreement or any
other agreement affecting the code-share services to include a provision
relating to an exclusive arrangement between the parties, that amended
language must first be submitted for consideration by the Department.

