 

			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on May 4, 2006

NOTICE OF ACTION TAKEN -- DOCKET OST-2006-24169

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________________________________________________________

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).

Applicant:  Shanghai Airlines Co., Ltd. 					Date Filed:  March 10, 2006

Relief requested:  Exemption from 49 U.S.C. § 41301 to engage in
scheduled foreign air transportation of (1) persons, property and mail
between any point or points in the People’s Republic of China, on the
one hand, and any point or points in the United States, on the other
hand, pursuant to a codeshare agreement with United Air Lines, Inc.
(United);  and 

(2) property and mail between Shanghai, People’s Republic of China, on
the one hand, and Los Angeles, California, on the other hand, pursuant
to a wet lease arrangement with an authorized U.S. or foreign air
carrier.

If renewal, date and citation of last action:  New authority

Applicant representative:  Charles F. Donley II (202) 626-6840

DOT Analyst:  Shelita A. Smith  (202) 366-1226

Responsive pleadings:  None filed

DISPOSITION

Action:  Approved						Action date:  May 4, 2006 

Effective dates of exemption authority granted:  May 4, 2006 – May 4,
2007

Basis for approval (bilateral agreement/reciprocity): United
States-China Air Transport Services Agreement

 

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

   X    Standard exemption conditions (attached)          

Special conditions/Partial grant/Denial basis/Remarks:  Based on the
record in this case, we found that Shanghai Airlines is financially and
operationally qualified to perform the services authorized above.  We
also found that Shanghai Airlines is substantially owned and effectively
controlled by homeland nationals.  All of Shanghai Airlines’ board of
directors and key management officials are citizens of China.  By
memorandum dated April 11, 2005, the Federal Aviation Administration
(FAA) advised us that it knew of no reason why we should act unfavorably
on Shanghai Airlines’ application. 

Action taken by:  Paul L. Gretch, Director	

		   Office of International Aviation	

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Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) the applicant is qualified to perform the
proposed operations; (2) our action was consistent with Department
policy; (3) grant of the authority was consistent with the public
interest; and (4) 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/deferred/dismissed, 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 

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.

 Shanghai Airlines proposes to place its code on United’s U.S.-China
and beyond gateway flights, and to display United’s designator code on
flights operated by Shanghai Airlines, initially between Shanghai and
the domestic Chinese points Chengdu, Qingdao, Shenyang and Dalian.

05/2004

