BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ______) Application of ) ) LIMITED ) DOCKET OST-2006- ) for an exemption from 49 U.S.C. § 41301 ) ( and -U.S.) ) ______)

APPLICATION OF LIMITED FOR AN EXEMPTION

Communications with respect to this document should be sent to:

John R. Mietus, Jr. William C. Evans Law Office of John Mietus, LLC 6701 Democracy Blvd., Suite 300 Bethesda, MD 20817-7500 (301) 571-9334 (240) 396-5362 fax [email protected]

Counsel for CARIBBEAN AIRLINES LIMITED

NOTICE: Any person may support or oppose this application by filing an answer no later than December 26, 2006 and serving a copy of the answer on counsel for Caribbean Airlines and upon persons served with this application. Caribbean Airlines is asking for expedited consideration.

December 8, 2006

BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ______) Application of ) ) CARIBBEAN AIRLINES LIMITED ) DOCKET OST-2006- ) December 8, 2006 for an exemption from 49 U.S.C. § 41301 ) (-U.S.) ) ______)

APPLICATION OF CARIBBEAN AIRLINES LIMITED FOR AN EXEMPTION

Pursuant to 49 U.S.C. § 40109(c), Caribbean Airlines Limited ("CAL"), an air

carrier newly formed, entirely owned, and effectively controlled by the Government of

the Republic of Trinidad and Tobago, respectfully requests an exemption from the

provisions of 49 U.S.C. § 41301 to the extent necessary to permit it to engage in: (a)

scheduled foreign air transportation of persons, property and mail over the following

routes contained in Annex I to the Air Transport Agreement between the Government of

Trinidad and Tobago and the Government of the , effective May 23, 1990:

from Trinidad and Tobago via the intermediate points of , Aruba, the Bahamas, , Belize, Bermuda, Bonaire and Curacao, the Cayman Islands, Dominican Republic, Grenada, Guadeloupe, Haiti, , Martinique, St. Kitts, and St. Lucia, to the U.S. Virgin Islands, San Juan, , , Orlando (seasonally July through September), Boston, and Washington, DC, and beyond San Juan to Zurich and Stockholm, beyond New York to , and beyond Miami and San Juan to Mexico and points in Central America except Belize; and (2) from Trinidad and Tobago via Antigua, Barbados, Grenada, St. Lucia and St. Maarten to San Juan and beyond to Jamaica;

(b) charter air transportation of persons, property and mail between points in Trinidad and

Tobago and points in the United States; and (c) other charters pursuant to 14 C.F.R. Part

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212. CAL requests that the Department grant its application expeditiously, as the

Trinidad and Tobago government has directed CAL to assume operations as the nation's flag carrier on January 1, 2007, and for an initial period of one year. CAL will poll the

U.S. airlines shown on the service list and report the results to the Department. In support of this application, CAL states as follows:

I. INTRODUCTION

1. BWIA West Indies Airways Limited and its corporate predecessors have

served as the local of much of the Western Caribbean from the airline's formation

by New Zealander Lowell Yerex in 1940, through Trinidad and Tobago's independence

from the in 1962, and to the present day. As an island nation, Trinidad

and Tobago relies very heavily on air transportation for its connection to the rest of the

world, and since independence the government traditionally has been deeply involved in

BWIA's management and financing. In an attempt to strengthen BWIA through access to

the private capital market, though, BWIA was partially privatized in 1995. See Docket

OST-1995-112.

2. The Trinidad and Tobago government has come to conclude that the path

BWIA had taken under privatization was not in the best interests of the traveling public

or the nation. The quality of BWIA's service -- though not of its safety (BWIA has an

enviable safety record) -- had become compromised by a lack of adequate capital, and the

government sought to restore that quality by again assuming control of the airline (it now

holds 97.188% of BWIA's equity) and studying a potential restructuring. However, after

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months of negotiations with BWIA stakeholders, BWIA management and the

government concluded that it would not be possible for BWIA to regain financial health.

The government therefore decided to wind up BWIA and create a new flag carrier that

could start both with a financial clean slate and many of BWIA's talented personnel and

useful assets. The process of winding down BWIA is underway, and the government wishes to prepare CAL to assume flag carrier operations by obtaining operating authority in various countries in advance of the January 1, 2007 transition.

3. CAL, a limited liability company organized under the laws of Trinidad and

Tobago and to be headquartered in Piarco (outside ), Trinidad, will begin operations with a substantial capital infusion from the government of Trinidad and

Tobago (which will hold 100% of the equity of the new airline) and core personnel and assets transferred from BWIA. It will use new-generation, leased Boeing 737-800 aircraft now employed by BWIA to operate initially to Miami and New York from Port of Spain and via Barbados as an intermediate point. CAL's operations will be overseen by the Civil Aviation Authority of Trinidad and Tobago, which the FAA has rated

Category 1 under the International Aviation Safety Assessment program.

4. By this application, CAL seeks exemption authority to the extent necessary to permit it to engage in: (a) scheduled foreign air transportation of persons, property and mail over the routes listed above, all of which are contained in Annex I to the Trinidad and Tobago-U.S. Air Transport Agreement1/; (b) charter air transportation of persons,

1/ Trinidad and Tobago selected Boston and Washington as the "two additional U.S. points" referred to in Annex I by diplomatic note No. 481 dated March 31, 1995. CAL does not request authority to serve the eastern Canadian point beyond New York that also is available under Annex I to carriers of Trinidad and Tobago.

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property and mail between points in Trinidad and Tobago and points in the United States; and (c) other charters pursuant to 14 C.F.R. Part 212, subject to prior Department approval in the form of a Statement of Authorization. CAL has chosen to request the broad authority available under the bilateral rather than seek to reproduce BWIA's current

DOT authority in Dockets OST-1995-112, OST-1999-6030, OST-2000-6995, OST-2000-

7317, and OST-2000-8211. While the Air Transport Licensing Authority of Trinidad and

Tobago has not yet issued CAL a formal license, CAL respectfully suggests that the

Department may proceed now to issue the requested exemption authority, which CAL would only exercise once "it holds a currently effective authorization from its homeland for such operations" under paragraph 1 of the Department's current Foreign Carrier

Exemption Conditions.2/ CAL later would expect to seek a permit under the

"streamlining" policy announced August 26, 2005 in Docket OST-2005-22228.

II. PUBLIC INTEREST

5. Under 49 U.S.C. §§ 40109(c) and 41302, the Department may issue a foreign

carrier an exemption if it finds that a grant is consistent with the public interest.

Elements of the public interest include whether: (a) the applicant is fit, willing, and able

to perform the transportation at issue and to comply with relevant U.S. laws; and (b) the

carrier has been designated by the government of its home country pursuant to the air

2/ CAL will file a copy of its homeland license with DOT as soon as practicable. Similarly, it will file an insurance certificate (OST Form 6411) with the Federal Aviation Administration, OST Form 4523 with DOT in Docket OST-1995-236, and copies of its family assistance plan in Docket OST-1998-3304 and passenger manifest plan in Docket OST-1998-3305. The latter plans are expected to be identical to those currently implemented by BWIA.

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transport agreement between the U.S. and that country. CAL clearly satisfies these standards.

6. CAL will be fit, willing, and able to provide scheduled and charter foreign air transportation to and from the United States. Its key personnel, many transferred from

BWIA, will possess substantial business and aviation experience, and CAL will have the financial resources, through a substantial capital infusion from its government, necessary

to serve the United States safely and without undue risk to passengers or shippers.

7. Aviation relations between the U.S. and Trinidad and Tobago are governed by the 1990 Air Transport Agreement described above. The government of Trinidad and

Tobago has designated CAL to operate on routes permitted under the Agreement by diplomatic note No. 2165 dated November 10, 2006.

8. This application is limited in duration and environmental impact3/ and should

not be controversial because CAL was created and authorized by its government to

perform the proposed air transportation and because that transportation is consistent with

the U.S.-Trinidad and Tobago agreement.

3/ As it will commence operations identical to those currently operated by BWIA, CAL estimates that its forecast U.S. operations would not result in a net change in fuel consumption of 10,000,000 gallons of fuel or more annually. Accordingly, issuance of the exemption will not constitute a "major federal action significantly affecting the quality of the human environment" within the meaning of section 102(2)(c) of the National Environmental Policy Act or a "major regulatory action" under the Energy Policy and Conservation Act, as implemented in Part 313 of the Department's Regulations (which also exempts short-time authority like that requested by CAL from the requirement for an energy statement.)