 

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on October 25, 2004

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

AMENDED AUTHORITY           

________________________________________________________________________
_________________________________

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

Scheduled foreign air transportation of persons, property, and mail
between (1) regional airports in the United Kingdom and any point or
points in the United States, via bmi’s authorized U.S. gateways, and 

(2) Philadelphia and Charlotte, on the one hand, and London (Gatwick) on
the other, for purposes of operating under its code share agreement with
US Airways, whereby bmi will place its code on flights operated by US
Airways.  bmi further requests any necessary exemption authority in
order to engage in code-sharing arrangements with US Airways.

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. 

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

DOT Analyst:  Sylvia Moore  (202) 366-6519

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By Notice of Action Taken dated October 1, 2004, in the above captioned
docket, the Department granted the joint applicants’ request, in part,
subject to conditions, but deferred action on the joint applicants’
request for authority to serve Aberdeen and Leeds Bradford, U.K. and
Toulouse, France, and to code-share to and from London (Gatwick).  

We are now approving the deferred portions of this joint application. 
With respect to Aberdeen, Leeds Bradford, and Toulouse, we have received
necessary security clearances.  With respect to London (Gatwick)
code-share authority, as we noted in our October 1 Notice, Continental
filed an objection to that portion of the joint application, 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 that portion of the applicants’ request. 
However, the U.S.-U.K. agreement provides that designated U.S. and U.K.
carriers may code share on routes where they have the authority to
exercise traffic rights.  In this case, bmi has been designated and
licensed by U.K. authorities for the gateway route segments between
London (Gatwick) and Charlotte and Philadelphia.  Thus, bmi is entitled
to exercise the necessary traffic rights and, therefore, is eligible
under the agreement to code share on those routes.

Although the U.S.-U.K. agreement does preclude code-sharing arrangements
between airlines that are designated on and serving the same gateway
route segment, that prohibition does not apply in this case since bmi is
not serving the routes with its own aircraft and crew.

As amended, our actions grant the applicants the following authority:

bmi 

Scheduled foreign air transportation of persons, property, and mail
between:

(1) regional airports in the United Kingdom and any point or points in
the United States;

(2) London (Gatwick), on the one hand, and Philadelphia and Charlotte,
on the other, and beyond  to any point or points in the United States;
and 

(3) any point or points in the United States and any point or points in
third countries 

for purposes of operating under its code share-agreement with US
Airways, whereby bmi will place its code on flights operated by US
Airways.

US Airways

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, in order to engage in code-sharing arrangements
with bmi.  

D I S P O S I T I O N

XX  Granted remainder of applicants’ requests (subject to conditions,
see below)

The above action with respect to the applicants’ exemption authority
was effective when taken: October 25,  2004, through October 1, 2006
(coextensive with the authority granted on October 1, 2004, in this
Docket).

The additional authority awarded by the statements of authorization
granted was effective when taken:  October 25, 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 aviation agreement
between the United States and the United Kingdom.

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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  Standard exemption conditions (Attachments B and C)

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 

4

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.

________________________________________________________________________
_____________________

On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found the carriers 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

	Ft. Myers (SW 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.

			Attachment B

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

										Attachment C

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

 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.

 Id.

 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.

