			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on December 23, 2004

July 21, 2004

NOTICE OF ACTION TAKEN -- DOCKET OST-2002-135274-19375

________________________________________________________________________
________________________________________

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 CONTINENTAL AIRLINES, INC. filed 610/12/17/04 (amended
12/6/04)   for: 

		

XX  Exemption for two years under 49 U.S.C. 40109 to provide the
following serviceRenewal of exemption for two years under 49 U.S.C.
40109 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail
between New York/Newark and Moscow, Russia, as well as integration
authority to combine this authority with Continental’s other existing
exemption and certificate authority.   Continental intends to begin
service on this route on March 25, 2006. 

XX  Allocation of seven (7 ) U.S.-Russia code-share frequencies:

Continental requests seven (7) U.S.-Russia frequencies to permit
Continental to offer daily New York/Newark-Moscow service during the
peak season.   

XX  Waiver from 90-day dormancy condition:

Continental requests a waiver of the Department’s standard dormancy
conditions imposed on frequency allocations to enable Continental to
operate fewer than daily flights during the off-peak seasons.  

Applicant rep:   R. Bruce Keiner, Jr.   (202) 624-2615     DOT Analyst: 
Linda L. LundellThuy H. Cooper   (202) 366-23365423

D I S P O S I T I O N

XX  Granted (subject to conditions, see below)

The exemption authority granted was effective when taken:   July 21,
2004  December 23, 2004, through July 21, 2006   December 23, 2006.

The frequency allocation and waiver of dormancy conditions was effective
when taken: December 23, 2004, and will remain in effect indefinitely,
subject to the conditions described below.

Action taken by:   Paul L. Gretch, Director	

		      Office of International Aviation	

XX   The Annexes to the U.S.-Russia Air Transport Agreement (Agreement)
expired on January 22, 2001.  However, the operations proposed by
Continental are in conformance with the Annexes agreed to by both sides
ad referendum on April 11, 2002.  

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

XX  Holder’s certificate of public convenience and necessity

		XX  Standard Exemption Conditions (attached)

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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 granted should be construed as
conferring upon Continental rights (including fifth-freedom intermediate
and/or beyond rights) to serve markets where U.S. carrier entry is
limited unless Continental 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 such carrier to use the limited-entry route rights that
are included in Continental’s authority by virtue of the route
integration authority granted here, but that are not then being used by
Continental, the holding of such authority by route integration will not
be considered as providing any preference for Continental in a
competitive carrier selection proceeding to determine which carrier(s)
should be entitled to use the authority at issue.

Remarks:  Continental advised us that it had polled all the parties
served with its application for exemption, frequency allocation, and
waiver of the standard dormancy conditions and that none had objected. 
Under those circumstances, we decided to grant Continental’s request
for waiver of the Department’s standard dormancy conditions normally
imposed on frequency allocations, to allow the carrier to adjust its New
York/Newark-Moscow service in accordance with seasonal demand.  However,
should the carrier decide not to institute services using all or a
portion of the seven U.S.-Russia frequencies or discontinue all or
portion of the seven U.S.-Russia frequencies (other than seasonally),
the carrier will be required immediately to notify the Department of
such and to return the unused frequencies for reallocation.  

________________________________________________________________________
________________________________________

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicant qualified to provide
the 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 application 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.

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

   Continental amended its application to revise the proposed startup
date from May 5, 2005, to March 25, 2006.  Continental states that a
later startup date will provide more time for the carrier to implement
the proposed service at Moscow’s Domodedovo Airport.

   Continental had received New York-Moscow authority for codeshare
services with Delta, and was allocated 3.5 U.S.-Russia frequencies for
those services (see Notice of Action Taken, dated August 21, 2003, in
Docket OST-03-15502).  On February 13, 2004, Continental advised the
Department that it was not codesharing with Delta on the New York-Moscow
route, and the 3.5 frequencies reverted to the Department for
reallocation.

 Continental intends to operate daily flights during the May-September
peak season, five weekly flights in spring and fall, and four weekly
flights in the winter.

    This notice should
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