			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on February 2, 2007

NOTICE OF ACTION TAKEN -- DOCKETS OST-2004-19965

________________________________________________________________________
________________________________________________________

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 AMERICAN AIRLINES, INC. (AMERICAN)  and LAN PERU,
S.A. (LAN PERU) filed 10/22/04 for:

XX   Exemption for American for two years under 49 U.S.C. 40109 to
provide the following services: 

Scheduled foreign air transportation of persons, property, and mail (1)
between points in Peru, (2) between points in Peru and points in the
United States (either nonstop or via intermediate points in third
countries), (3) between points in Peru and points in third countries,
and (4) between points in the United States and points in third
countries.   American seeks this authority to display its designator
code on flights operated by Lan Peru. 

XX   Exemption for Lan Peru for one year under 49 U.S.C. 40109 to
provide the following services: 

Scheduled foreign air transportation of persons, property, and mail (1)
between points in the United States, 

(2) between points in the United States and points in Peru (either
nonstop or via intermediate points in third countries), (3) between
points in the United States and points in third countries, and (4)
between points in Peru and points in third countries.   Lan Peru seeks
this authority to display its designator code on flights operated by
American. 

XX   Statement of authorization for blanket code-share authority for
American under 14 CFR Part 212 to:

Display Lan Peru’s “LP” designator code in conjunction with
foreign air transportation on flights operated by American (or its
affiliates) (1) between points in the United States, (2) between points
in the United States and points in Peru (either nonstop or via
intermediate points in third countries), (3) between points in the
United States and points in third countries, and (4) between points in
Peru and points in third countries.  

XX   Statement of authorization for blanket code-share authority for Lan
Peru under 14 CFR Part 212 to:

Display American’s “AA” designator code in conjunction with
foreign air transportation on flights operated by Lan Peru (1) between
points in Peru, (2) between points in Peru and points in the United
States (either nonstop or via intermediate points in third countries),
(3) between points in Peru and points in third countries, and 

(4) between points in the United States and points in third countries.  

Applicant rep:  Carl B. Nelson (202) 496-5647 (American)   DOT Analyst: 
Thuy H. Cooper  (202) 366-5423

	            Marshall S. Sinick (202) 626-6657 (Lan Peru)

D I S P O S I T I O N

XX  Granted (subject to conditions and remarks, see below)

The above action granting exemption authority to American was effective
when taken: February 2, 2007, through February 2, 2009.

The above action granting exemption authority to Lan Peru was effective
when taken: February 1, 2007, through February 2, 2008.

The above action granting statements of authorization to American and
Lan Peru was effective when taken: 

February 2, 2007, and will remain in effect indefinitely, subject to the
conditions 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 Peru.

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

		XX  Lan Peru’s foreign air carrier permit

		XX  Standard Exemption Conditions (attached as Appendix B) 

		XX  Foreign Carrier Exemption Conditions (attached as Appendix C)

		XX  Conditions for Statements of Authorization (see below)

------------------------------------------------------------------------
------------------------------------------------------------------------
-------------------------------------------------------

Conditions:  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) American and Lan Peru 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) American and/or Lan Peru 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-2004-19965.

(c) American and/or Lan Peru 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 notices should be filed in Docket OST-2004-19965.

(d) The code-sharing operations conducted under this authority must
comply with 14 CFR 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; that the passenger liability of the
operating carrier be unaffected; and that the operating carrier shall
not permit the code of its U.S. code-sharing partner to be carried on
any flight that enters, departs, or transits the airspace of any area
for whose airspace the Federal Aviation Administration has issued a
flight prohibition.

(e) Any service provided shall be consistent with all applicable
agreements between the United States and Peru, and all applicable
agreements with other foreign countries involved.  Furthermore, (i)
nothing in the award of this blanket statement of authorization should
be construed as conferring upon American’s rights (including
code-share, fifth-freedom intermediate and/or beyond rights) to serve
markets where U.S. carrier rights are limited unless American notifies
us of its intent to serve such 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 American’s authority
by virtue of the blanket statement of authorization granted here, but
that are not being used by American, the holding of such authority will
not be considered as providing any preference for American in a 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 American nor Lan Peru shall give any force or effect to any
contractual provisions between themselves that are contrary to these
conditions.

Remarks: We note that American has conducted a safety audit of Lan Peru
under the Department’s Code-Share Safety Audit Program, and the FAA
has advised that it has reviewed the relevant audit and found it to be
acceptable.

------------------------------------------------------------------------
--------------------------------------------------------------------

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicants 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 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
Dockets.  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 



Appendix A

CODE-SHARE ROUTES

Code-share Flights between U.S. and Peru 

Routes					Operating Carrier

Miami, Florida – Lima, Peru			LP

Los Angeles, California – Lima, Peru		LP

Miami, Florida – Lima, Peru			AA

Dallas/Ft. Worth – Lima, Peru		AA

Code-share Flights between AA/AA* Peruvian Gateways and

Cities 					Operating Carrier

Arequipa, Peru				LP	

Chiclayo, Peru					LP

Cuzco, Peru					LP

Iquitos, Peru					LP

Juliaca, Peru					LP

Piura, Peru					LP

Puerto Maldonado, Peru			LP

Tacna, Peru					LP

Tarapoto, Peru					LP

Trujillo, Peru					LP

Buenos Aires, Argentina			LP

Guayaquil, Ecuador				LP

Quito, Ecuador				LP

Santiago, Chile				LP

Code-share Flights between LP/LP* U.S. Gateways and

Cities 					Operating Carrier

Calgary, Canada				AA

Mexico D. F., Mexico				AA

Montreal, Canada				AA

Toronto, Canada				AA

Vancouver, Canada				AA

Tokyo, Japan					AA

Appendix 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, the Transportation Security 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;

(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.

								

11/2006

Appendix 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, the Transportation Security Administration, and with all
applicable U.S. Government requirements concerning security, including,
but not limited to, 14 CFR Parts 129, 91, and 36 and 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.

11/2006

 The joint applicants include American affiliates American Eagle
Airlines, Inc., and Executive Airlines, Inc. d/b/a American Eagle.

 American holds underlying exemption authority to provide scheduled
combination service between the United States and Peru (see Notice of
Action Taken dated October 17, 2002, in Docket OST-1997-3073).

 Lan Peru holds underlying exemption authority to provide scheduled
combination service (1) between Lima and the coterminal points Miami,
Los Angeles, and New York, and (2) between Lima and Miami via Punta
Cana, Dominican Republic.  See Notice of Action Taken dated October 7,
2004, in Dockets OST-2002-11695, OST-2000-7265, and OST-1999-6192.

 The code-share partners provided a listing of specific code-share
markets that they intend initially to serve under this arrangement.  We
have reproduced it as Appendix A of this Notice.  

 Lan Peru also holds authority to display the code of Lan Chile Cargo,
S.A., on Lan Peru’s scheduled flights between Lima and both Miami and
Los Angeles. 

 We expect this notification to be received
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