BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) In the matter of the application of ) ) TRANS AMERICAN , S.A. ) Docket OST-2000- ) for an exemption from 49 U.S.C. §41301 ) )

APPLICATION FOR EXEMPTION

Communications with respect to this document should be addressed to:

Robert D. Papkin SQUIRE, SANDERS & DEMPSEY L.L.P. 1201 Avenue, N.W. P.O. Box 407 Washington, D.C. 20044 (202) 626-6601

Counsel to Trans American Airlines, S.A.

DATED: October 3, 2000 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) In the matter of the application of ) ) TRANS AMERICAN AIRLINES, S.A. ) Docket OST-2000- ) for an exemption from 49 U.S.C. §41301 ) )

APPLICATION FOR EXEMPTION

Trans American Airlines, S.A. (“Trans Am”),1 pursuant to 49 U.S.C. 40109, hereby requests an exemption from 49 U.S.C. 41301 and from any other provisions of Title 49 and the

Economic Regulations of the Department of Transportation (“Department”) to the extent necessary to permit Trans Am to engage in the scheduled foreign air transportation of persons, property and mail between Lima, Peru, and , . Trans Am requests that any exemption granted by the Department pursuant to this application remain in effect for a period of at least two years. Trans Am intends to commence scheduled service between Lima and Miami on December 1, 2000.

In further support of its application, Trans Am states as follows:

1 Trans American Airlines, S.A. transacts business as TACA Peru. Trans Am will hold out services between the United States and Peru under the trade name TACA Peru, and requests any approval necessary for the use of that name in the services that are the subject of this application. Application for Exemption Docket OST-2000-______October 3, 2000

The Applicant

Trans Am is a sociedad anonima organized and existing under the laws of the

Republic of Peru. Trans Am’s headquarters are located in Lima, Peru, from which it conducts all operations. Trans Am commenced domestic operations in October 1999. Domestic services are being conducted with B737-200 aircraft seating 111 passengers in two classes of service. These aircraft are dry-leased from TACA International Airlines, S.A. International services commenced in July 2000 with Trans Am’s institution of flights from Lima to Buenos Aires and

Sao Paulo. Trans Am also presently operates international services to San Jose, and

Mexico City. Future plans for expansion of international services expected to commence on

November 15, 2000, include flights from Lima to , La Paz and City.

Trans Am’s principal office is located at the following address:

Trans American Airlines, S.A. Av. Comandante Espinar 331 Miraflores Lima 18, Peru

Trans Am is a citizen of the Republic of Peru. Trans Am’s stock is forty-nine percent owned by Berly, S.A., a company organized under the laws of Peru and owned entirely by

TACA, S.A. TACA, S.A. is a Bahamian corporation whose ultimate owners are Salvadoran and who are also the principal shareholders of TACA International Airlines, S.A. The remaining fifty-one percent of Trans Am’s stock is owned by Daniel Ratti, a Peruvian citizen who is also

Chairman and President of Trans Am.

Trans Am’s Board of Directors consists of three persons all of whom, including the chairman, are citizens of Peru. Trans Am’s senior management team consists of thirteen

2 Application for Exemption Docket OST-2000-______October 3, 2000 persons, all of whom are Peruvian citizens. Exhibit A hereto lists each of Trans Am’s directors, key management officials and their citizenship. Exhibit B includes brief biographical information on certain key management officials of Trans Am.

Trans Am submits it is owned and controlled by Peruvian citizens. Trans Am’s majority shareholder is a citizen of Peru, half of its Board members are Peruvian, the Chairman of the

Board is a citizen of Peru, and all of its senior management is Peruvian. The Government of

Peru has licensed and designated Trans Am under the open skies agreement between the United

States and Peru with full knowledge of the ownership structure of Trans Am. Trans Am thus believes it fully satisfies the bilateral’s requirement that substantial ownership and effective control of the carrier lie in the hands of Peruvian citizens. Should the Department nevertheless be hesitant to make this finding, Trans Am submits it would be appropriate for the Department to waive the requirement. Waiver of the ownership and control standards in this instance would clearly be consistent with the public interest and in accordance with the Department’s practice in past cases.

In reviewing foreign carrier applications for operating authority, the Department’s policy has been to require that the carrier demonstrate that it is substantially owned and effectively controlled by citizens of its homeland. This policy is reflected in Article 3.2 of the U.S.-Peru open skies agreement. The Department has, however, approved waivers from this requirement in numerous cases where it has determined that non-homeland ownership and control would not be inimical to aviation interests of the United States:

In this regard, for many years, the United States government has followed a general policy, reflected in our bilateral aviation agreements, of requiring that substantial ownership and effective control of foreign air carriers operating to this

3 Application for Exemption Docket OST-2000-______October 3, 2000

country be vested in nationals of their home countries…At the same time, we have been prepared to waive that policy in specific cases where we have been able to find that the proposed non-homeland ownership and control would not be inimical to U.S. aviation policy or interests.2

The Department has found on many prior occasions that waiver of the control and ownership standards was justified, would serve the public interest and would not be inimical to

U.S. aviation interests, including cases involving Peruvian carriers. Most recently, the

Department waived its ownership and control standards in a case involving the Peruvian carrier

Lan Peru, S.A. Despite evidence that forty-nine percent of the carrier’s stock is owned by

Chilean interests and that only four of seven directors are Peruvian, the Department nevertheless approved a waiver. In approving the waiver, the Department stated “despite the presence of non- homeland interests, we found that there was nothing in the ownership and control of the carrier that would be inimical to U.S. aviation policy or interests.”3

The Department also approved recently a waiver for the Peruvian cargo carrier Cielos del

Peru, S.A. Seventy percent of Cielos’ stock is owned by Argentine citizens, the chairman of

Cielos’ board of directors is an Argentine citizen and recent former CEO of the Argentine carrier

STAF, and fewer than all of its senior management are Peruvian citizens. The Department nevertheless approved a waiver of its ownership and control standard, citing the U.S.-Peru open skies agreement and noting again that approval would not be inimical to U.S. interests.4

In other cases involving liberal bilateral relationships, the Department has not hesitated to approve waivers from its ownership and control standards, and has in fact approved previously

2 Application of Air , N.V., Order 99-3-21, March 23, 1999. 3 Notice of Action Taken, Docket OST-99-6192, September 17, 1999. 4 Notice of Action Taken, Docket OST-95-617, August 31, 1999.

4 Application for Exemption Docket OST-2000-______October 3, 2000 applications from carriers in which TACA International Airlines, S.A. has held a substantial interest.5 Trans Am submits that the existence of open skies agreements between the United

States and Peru and between the United States and El Salvador justifies approval of a waiver in this instance.

The Proposed Service

Trans Am plans to begin scheduled service between Lima and Miami on

December 1, 2000, utilizing A319 and A320 aircraft dry-leased from Lineas Aereas

Costarricenses, S.A. These aircraft will be configured to seat 12 business class and 108 coach class and 12 business class and 138 coach class passengers, respectively. The aircraft will also carry belly cargo and mail in amounts up to 16,500 lbs. and 20,800 lbs., respectively. Service between Lima and Miami will be offered at a level of seven weekly roundtrip frequencies.

Consistent with its Peruvian license and the terms of the open skies agreement between the

United States and Peru, Trans Am requests from the Department an exemption permitting it to engage in the scheduled foreign air transportation of persons, property and mail between Lima,

Peru, and Miami, Florida.

Fitness

Trans Am’s operations are regulated by the Government of Peru. Peru is a contracting State to the Convention on International Civil Aviation (“Chicago Convention”) and observes all applicable ICAO standards. Appended hereto as Exhibit C is a copy of Trans Am’s

5 See, e.g., Application of Nicaraguense de Aviacion S.A., Order 92-7-6, July 6, 1992 (approving a waiver of the ownership and control standards notwithstanding TACA International Airlines’ ownership of forty-nine percent of NICA’s stock, noting that although TACA might derive some economic benefit from its investment, approval of the waiver was nonetheless justified). See also Application of Aerolineas Centroamericanas, S.A., Order 92-9-2,

5 Application for Exemption Docket OST-2000-______October 3, 2000 homeland operating license authorizing it to serve Lima-Miami. This license represents all of the authority Trans Am requires from the Peruvian Government to provide the service described herein. The address of the Peruvian aeronautical authority is:

Direccion General de Transporte Aereo del Peru Av. 28 de Julio No. 800 Lima, Peru

The aircraft that will be utilized to perform the proposed services will be maintained by

Aeromantenimiento, S.A. of El Salvador, which is an FAA-approved foreign repair station, in accordance with programs that comply with the provisions of ICAO Pilots and Airmen Annexes

1, 6 (Part 1) and 7.

Trans Am maintains liability insurance in compliance with the requirements of 14 C.F.R.

205, and has submitted its Certificate of Insurance on OST Form 6411. A copy of Trans Am’s insurance certificate is attached as Exhibit D. Trans Am has not had any tariff violations or been involved in any fatal accidents in the past five years. Trans Am will shortly submit its passenger manifest data collection statement and has already filed its family assistance plan.

Trans Am’s financial statements are appended as Exhibit E. Trans Am operates without assistance from the Peruvian Government.

Public Interest Factors

Service between the United States and the Republic of Peru is governed by the

Air Transport Agreement between the two countries signed on June 10, 1998. In accordance with Annex I to the Agreement, Peruvian carriers may operate scheduled combination services between points in Peru and the United States subject to certain transitional limitations contained

September 1, 1992 (approving a waiver despite a forty-nine percent non-homeland interest in Aerolineas held by

6 Application for Exemption Docket OST-2000-______October 3, 2000 in Annex IV. Trans Am has been authorized by the Peruvian Government to operate up to seven weekly roundtrip frequencies on the Lima-Miami route utilizing A319 and A320 equipment.

Trans Am expects to be designated for this service shortly. The United States has recognized consistently that the inclusion of a point in a bilateral agreement to which the United States is a party and the designation of a qualified foreign carrier by its home country government for service to that point satisfy all relevant public interest requirements for grant of the exemption authority. 6

Environmental Considerations

Trans Am submits that its application raises no environmental or energy issues.

All of Trans Am’s operations will be conducted in accordance with applicable noise abatement requirements utilizing modern, fuel-efficient Stage 3 aircraft. Approval of this application will not result in a near-term increase in fuel consumption of ten million gallons or more.

WHEREFORE, Trans American Airlines, S.A. respectfully requests that it be granted an exemption from 49 U.S.C. 41301 to the extent necessary to permit Trans American to conduct scheduled foreign air transportation of persons, property and mail between Lima, Peru and

Miami, Florida, as more fully described herein, or such other relief as the Department deems necessary and proper.

Panamanian investors). 6 See, S.REP. No. 96-329, at 4 (1979), reprinted in 1980 U.S.C.C.A.N. 54, 57 (“The negotiation of a bilateral agreement itself represents a determination by the Government of the United States that the grant of route authority provided for under the bilateral is in the ‘public interest.’”).

7 Application for Exemption Docket OST-2000-______October 3, 2000

Respectfully submitted,

______Robert D. Papkin SQUIRE, SANDERS & DEMPSEY L.L.P. 1201 Pennsylvania Avenue, N.W. P.O. Box 407 Washington, D.C. 20044 (202) 626-6601

Counsel to Trans American Airlines, S.A.

DATED: October 3, 2000

8 Exhibit A

TRANS AMERICAN AIRLINES, S.A.

Board of Directors

Name and Title Citizenship

Daniel Ratti Peru President and Chairman of the Board

Julio Ferradas Peru Director

Jose Guillermo Rojas Costa Rica Director

Luis Ortiz Costa Rica Director Exhibit A

TRANS AMERICAN AIRLINES, S.A.

Key Management Officials

Name and Title Citizenship

Daniel Ratti Peru President and General Manager

Jaime Prieto Peru Operations Manager

Eduardo Magnasco Peru Maintenance Manager

Raul Burneo Peru Planning Manager

Raul Farje Peru Airports Manager

Maria de la Soledad Aramburu Peru Commercial Manager

Alfonso Abel Kau Peru General Accountant

Carlos Gomez Peru Disbursements Accountant

Julio Ferradas Peru Legal Advisor

Walter Ludwig Plate Peru Chief, Maintenance, Engineering and Planning

William Meza Peru Chief, Line Maintenance Name and Title Citizenship

Gianfranco Giachetti Peru Chief Instructor

Segundo Leon Peru Chief, Reservations

Juan Giachetti Peru Chief, Cabin Crews and On-Board Service Exhibit B

TRANS AMERICAN AIRLINES, S.A.

Biographies

Daniel Ratti, President and General Manager

Mr. Ratti serves as president and general manager of Trans Am. Mr. Ratti is a highly- experienced aviation professional who has served previously as president of Carnival Airlines, which he founded, and as executive vice president of Challenge Air International, which he also founded. During his tenure at Carnival, Mr. Ratti had supervisory responsibility for all operations, including financial and administrative, marketing and sales, operations, maintenance, and airport functions. Earlier in his career, Mr. Ratti worked with Airline Management and Marketing, Inc., performing feasibility studies for Asocoflores, Global Airlines, Air Panama, Reslink and Challenge Air International. Mr. Ratti has also served as executive vice president of AEROTAL, vice president of Air Florida, financial manager of Aeroperu and as financial advisor to INDUPERU. Mr. Ratti is a citizen of Peru.

Jaime Prieto Arrieta, Operations Manager

Mr. Prieto is operations manager of Trans Am. Mr. Prieto has extensive aviation industry experience, including work with Export Air del Peru where Mr. Prieto served as general and operations manager responsible for all of the carrier’s operational, financial, administrative and legal activities. Mr. Prieto was also responsible for obtaining all of Export Air’s domestic and international route permits, and supervised the carrier's training programs for DC-8 and B727 domestic crewmembers. Prior to joining Export Air, Mr. Prieto served more than twenty-five years with the Peruvian air force, attaining the rank of colonel. During his tenure with the Peruvian Air Force, Mr. Prieto held positions with the Armed Forces Staff, Peruvian Embassy to , the Engineering Service as well as other offices. Mr. Prieto has more than 9,000 hours of flight time, nearly 7,000 of which are as pilot-in-command. Mr. Prieto is a citizen of Peru.

Eduardo Magnasco, Maintenance Manager

Mr. Magnasco serves as maintenance manager for Trans Am. Mr. Magnasco holds an aeronautical mechanical engineering degree from the Peruvian Air Force Officer’s School. He also holds a maintenance inspector license from the Peruvian DGAC (3117). Mr. Magnasco was previously with the Peruvian Air Force, and has worked for the Peruvian DGAC as Sub Director of Aeronautical Material. Mr. Magnasco was also employed by Faucett Airlines as Director of Quality Assurance and as Maintenance Manager for American Airlines. He is a citizen of Peru.

Raul Burneo Seminario, Planning Manager

Mr. Burneo serves as executive vice president of Trans Am. Prior to joining Trans Am, Mr. Burneo served as executive vice president of Americana de Aviacion, general manager of Aero Continente, general manager of Aeroperu, assistant general manager of FAUCETT, and commercial vice president of Aeroperu. Mr. Burneo also worked previously with COFIDE, INDUPERU, Arthur Young and Aerolineas Peruanas, S.A. Mr. Burneo is a citizen of Peru.

Raul Farje, Airports Manager

Mr. Farje manages Trans Am’s airport operations. He has extensive experience in air traffic control and as a flight dispatcher. Mr. Farje worked with CORPAC S.A. between 1975 and 1990 where he handled ground control, aerodrome control, approach control, area control and radar control. Mr. Farje also worked as a flight dispatcher between 1989 and 2000 for DC-10, B727, B737, A320 and A319 aircraft. In 1993, he became Assistant Airport Manager for Grupo TACA, serving in that position until this year when he became Airports Manager in Peru. Mr. Farje is a Peruvian citizen.

Maria de la Soledad Aramburu, Commercial Manager

Mrs. Aramburu serves as Trans Am’s commercial manager. She has more than twenty years of experience in aviation marketing and sales. Mrs. Aramburu served as general sales agent for LACSA between 1981 and 1999, and has also worked with Aerolineas Argentinas, and Aeroperu. Mrs. Aramburu is a citizen of Peru.

Alfonso Abel Kau Robles, General Accountant

Mr. Kau is general accountant for Trans Am and has an extensive background in airline accounting. Prior to joining Trans Am, Mr. Kau spent more than twenty years working with Aeroperu, rising from deputy accountant to administrative and financial manager. Mr. Kau is a citizen of Peru.

Carlos Marcelo Gomez Fernandez, Disbursements Accountant

Mr. Gomez serves as Trans Am’s disbursements accountant. Prior to joining Trans Am, Mr. Gomez worked as an accountant with Americana de Aviacion, Expreso Aereo and Aeroperu. Mr. Gomez is a Peruvian citizen.

2 Julio Mariano Ferradas Platas, Legal Advisor

Mr. Ferradas serves as legal advisor to Trans Am. Mr. Ferradas has practiced law since 1968, and has completed studies pertaining specifically to air and space law at the National Institute of Air and Space Law in Buenos Aires. Mr. Ferradas has extensive experience advising air carriers, and between 1991 and 1999 served as counsel to LACSA, COPA, , ACES and . During the period 1972 through 1996, Mr. Ferradas served in the Peruvian Air Force, attaining the rank of Colonel. During this time, Mr. Ferradas served as advisor to the Peruvian Ministry of Transportation, Communication, Housing and Construction and as an alternate representative to the International Civil Aviation Organization in Montreal. Mr. Ferradas is a citizen of Peru.

Walter Ludwig Plate Lopez, Chief, Maintenance, Engineering and Planning

Mr. Plate serves as chief of Trans Am’s maintenance, engineering and planning office. Prior to joining Trans Am in 1999, Mr. Plate served as chief of Aeroperu’s engineering and planning department and as chief of Americana de Aviacion’s engineering and maintenance department. Previously, Mr. Plate worked with Corsair, Aerochasqui, PAF Maintenance Service and Implementacion y Suministros. Mr. Plate is a Peruvian citizen.

William Americo Meza Reynoso, Chief, Line Maintenance

Mr. Meza is Trans Am’s chief of line maintenance. Prior to joining Trans Am, Mr. Meza served for approximately twenty years with Aeroperu in various positions, rising to chief, stations systems. Mr. Meza is a citizen of Peru.

Gianfranco Giachetti Escudero, Chief Instructor

Mr. Giachetti is Trans Am’s chief instructor, and holds an air transport pilot license from the FAA as well as an airline transportation pilot’s license and a flight engineer’s license from the Peruvian DGTA. Mr. Giachetti has served as a flight crewmember on B757, 767 and 727 aircraft and has approximately 9,500 hours of flight time, with 2,300 as pilot-in-command. Mr. Giachetti worked previously with Aeroperu and with Professional Air S.A. and Aerocondor, S.A. Mr. Giachetti is a citizen of Peru.

Segundo Lisandro Leon Martinez, Chief, Reservations

Mr. Leon serves as reservations chief for Trans Am. Mr. Leon has more than twenty years of experience in airline sales departments and worked previously with Centro Formacion Turistica, Transportes Aereos del Peru and Faucett. Mr. Leon is a citizen of Peru.

3 Juan Giachetti Bogardus, Chief, Cabin Crews and On-Board Service

Mr. Giachetti serves as chief of Trans Am’s cabin crews and on-board services. Mr. Giachetti has significant experience in on-board services, and worked previously with Faucett (chief, on- board services), Aeroperu (manager, on-board services), LACSA (catering and quality control advisor) and Canadian Airlines International (passenger services manager) in the cabin services area. Mr. Giachetti is a Peruvian citizen.

4 Exhibit C

TRANS AMERICAN AIRLINES, S.A.

Operating License Exhibit D

TRANS AMERICAN AIRLINES, S.A.

Certificate of Insurance Exhibit E

TRANS AMERICAN AIRLINES, S.A.

Financial Data CERTIFICATE OF SERVCE

I hereby certify that one copy of the foregoing Application of Trans American Airlines,

S.A. has this day been served on each of the following individuals via first class mail, postage prepaid.

______Robert D. Papkin

DATED: October 3, 2000

Carl B. Nelson, Jr. Associate General Counsel American Airlines, Inc. 1101 17th Street, NW Washington, DC 20036

Jeffrey Manley Wilmer, Cutler & Pickering 2445 M Street, N.W. Washington, D.C. 20006

D. Scott Yohe Delta Air Lines, Inc. 1629 K Street, NW Washington, DC 20037

Glenn P. Wicks The Wicks Group 900 19th Street, N.W. Suite 350 Washington, D.C. 20006

Herschel I. Kamen Staff Vice President, International and Regulatory Affairs , Inc. 1600 Smith Street, Dept: HQSGV , 77002

i Vance Fort WORLDCRORP 13873 Park Center Road Suite 490 Herndon, VA 22071

Donald T. Bliss O’Melveny & Myers 555 13th Street, NW Washington, DC 20004

Stephen L. Gelband Hughes, Morella & Gelband 1000 Potomac Street, NW Suite 300 Washington, DC 20007

Nathaniel P. Breed, Jr. Shaw, Pittman, Potts & Trowbridge 2300 N Street, NW Washington, DC 20037

Allan I. Mendelsohn Deputy Assistant Secretary for Transportation Affairs U.S. Department of State 2210 C Street, NW Room 5830 Washington, DC 20520

Director, Flight Standards Service U.S. Federal Aviation Administration 800 Independence Avenue, SW Room 821—AFS-1 Washington, DC 20591

David Vaughn Kelly, Drye and Warren 1200 19th Street, NW Suite 500 Washington, DC 20036

ii