FREQUENTLY ASKED QUESTIONS ABOUT CARGO TRANSFERS AT ALASKA NOTE: The following answers take into account the exemption authority established by USDOT in its Notice issued on August 19, 2010. 1. May a foreign flag carrier transfer cargo to a US flag carrier at ANC or FAI: A. On flights to the US? Yes,provided,ofcourse,thattheforeignflagcarrierhasreceivedauthoritytoserveAlaska. (Thishasalwaysbeenpossible.Itissimplyaconventionalinterlineconnection.) B. On flights from the US? Yes,butonlyiftheforeignflagcarrieroperatingthefirstsegment(USpointtoANCorFAI)is carryingthecargoonbehalfofaUSflagcarrierunderacodesharingorblocked-space arrangement,orifthecargo’sairwaybillhasotherwisebeenissuedbyaUSflagcarrier. 2. May a foreign flag carrier transfer cargo to an affiliated foreign flag carrier at ANC or FAI? Onlyiftheyarepermittedtodosopursuanttothesamerulesthatgovernunaffiliatedcarriers. A. Is there a certain percentage of ownership that entitles two distinct foreign flag carriers to be deemed a single carrier for purposes of on-line transfer authority? No.IfthetwocarriersoperateundertwoseparateAOCs,USDOTwilltreatthemastwocarriers regardlessoftheownershipstructure,andthetransferthereforewillbedeemedaninterlinetransfer ratherthanon-line. IfthecargoismovingtoorfromtheUS,suchtransfersarepermittedonlypursuanttothe “StevensAmendment,”whichrequiresthatthedomesticUSsegmentbeoperatedonbehalfofa USflagcarrierthroughablockedspaceagreement,acodesharingarrangement,orsomeother qualifyingarrangement,andthattheinterlineconnectiontakeplaceinAlaska. SeeQuestion4below. ForcargomovingfromapointoforiginoutsidetheUStoadestinationoutsidetheUS,such transfersarepermittedregardlessofwhetherthecarriersareaffiliatedornot. B. What percentage of ownership is required to transfer between foreign carriers? (Specific question: EVA owns 25% of Shanghai; can they transfer between each other?) IfthejourneyisbetweenapointoutsidetheUSandapointwithintheUS,twoforeigncarriersmay nottransfercargobetweeneachotherregardlessofwhetheroneofthemownssomeportionofthe other,exceptpursuanttothe“StevensAmendment”asdescribedbelowunderQuestion4. IfthejourneyisbetweenapointoutsidetheUSandanotherpointoutsidetheUS,transfers betweenforeigncarriersareallowed,whetherthecarriersareaffiliatedornot. Alaska International Airports System 3. May a foreign flag carrier transfer cargo to its own aircraft at ANC or FAI? Yes. A. Are there limitations on change of gauge or starburst transfers? Thereisnolimitonchangeofgaugeorstarbursttransferstoaforeignflagcarrier’sownaircraft atANCorFAI,subjecttotheconditionsinBandCbelow. B. Are there restrictions on the ability of a foreign flag carrier to transfer cargo to its own aircraft on flights to the US? Notreally.ThetransportationprovidedbetweenAlaskaandanotherpointintheUSmustbethe continuationoftransportationoriginatingoutsidetheUS,butthatwilltypicallybethecase. C. Are there restrictions on the ability of a foreign flag carrier to transfer cargo to its own aircraft on flights from the US? Again,notreally.ThetransportationbetweenAlaskaandthecarrier’shomelandmustbethe continuationoftransportationoriginatingbehindAlaska,eitherwithintheUSorinathird country.Becausethiswouldalwaysbethecasewithtransferredcargo,however,thisreallyis notarestriction. 4. What rules govern cargo transfers between foreign carriers and US flag carriers that have“revenue relationships”? Pursuanttothe“StevensAmendment,”aforeignflagcarriermaycarryinternationalcargo betweenAlaskaandanotherpointintheUSthatithasreceivedfrom,orwilltransferto, anotherforeignflagcarrieratAlaskaiftheUSsegmentisoperatedunderablockedspace orcodeshareagreementwithaUSflagcarrier,withanairwaybillissuedbyaUSflagcarrier. A. What details and restrictions are associated with BSAs (blocked space agreements)? Nospecialrestrictionsgoverntheuseofablockedspaceagreementforthispurpose. Itmustbeatypicalblockedspaceagreement(i.e.,anagreementinwhichtheUSflag carrierpurchasesfromtheforeignflagcarrier,andassumesthefinancialriskassociatedwith,some portionofthecapacityonaforeignflagcarrier’saircraft).Theshipperofthecargodealsonlywith theUSflagcarrier,andthecargomovesundertheUSflagcarrier’sairwaybill.TheUSflagcarrier isrequiredtodisclosetotheshippertheidentityoftheforeignflagcarrierthatwillactuallytransport thecargo. B. What details and restrictions are associated with code sharing arrangements? Similarly,nospecialrestrictionsgoverntheuseofacodesharingarrangementforthispurpose. Itmustbeatypicalcodesharingagreement(i.e.,anagreementinwhichaUSflagcarriersellsair transportationdirectlytotheshipperandinwhichtheforeignflagcarrieragreestocarrythecargo forafeechargedtotheUSflagcarrier.)TheshipperofthecargodealsexclusivelywiththeUSflag carrier.TheUSflagcarrierisrequiredtodisclosetotheshippertheidentityoftheforeignflag carrierthatwillactuallytransportthecargo. PO Box 196960 :: Anchorage, AK 99519 Fairbanks 6450 Airport Way :: Fairbanks, AK 99709 International t. 907.266.2526 AnchorageAirport.com Airport t. 907.474.2500 dot.state.ak.us/faiiap Alaska International Airports System C. What details and restrictions govern term arrangements? Therearenospecialrequirementsassociatedwiththeuseofatermarrangementtosatisfythe requirementthatinternationalcargocarriedwithintheUSbyaforeignflagcarrierandinterlinedat AlaskabecarriedonbehalfofaUSflagcarrier.TheprincipalrequirementsarethattheUSflag carrierbetheselleroftheairtransportationandthatthecargoistransportedontheUSflag carrier’sairwaybill. D. What are additional mechanisms for required “revenue relationships” such as using air way bills or code sharing arrangements? SeetheanswertoCabove. 5. What is the process for utilizing current bilateral and transfer rights? A. What is the process for foreign carriers to exercise cargo transfer and/or additional rights granted under bilateral agreements? WherecargotransferrightsareexplicitlysetforthinabilateralagreementwiththeUS,aforeignflag carrierdesignatedtoprovideairtransportationundertheagreementmustapplytoUSDOTeither foranamendmentofitsforeignaircarrierpermitorfor“exemptionauthority”allowingittoenjoy therightsspelledoutintheagreement. B. Is “exemption authority” for service outside their current permit necessary for bilateral rights? Yes–either“exemptionauthority”oranactualamendmentoftheircurrentpermit(although obtaining“exemptionauthority”isusuallyamuchquickerprocess). 6. What additional rights, if any, do carriers need to pick up local cargo for a westbound return? (Specific question: May China Airlines pick up seafood in ANC on westbound return to Asian destination?) AforeignflagcarrierthatisauthorizedbyUSDOTtoserveAlaska(eitherinitsforeignaircarrierpermit orin“exemptionauthority”)needsnoadditionalrightsinordertopickupcargoinAlaskaonits westboundreturn.AforeignflagcarrierwhosecurrentauthoritydoesnotincludeAlaskaasa destinationcanobtainthenecessaryauthorityveryquicklyandeasily,however.Indeed,inanorder issuedonAugust19,2010,DOTindicateditswillingnesstoawardforeignflagcarriersauthorityto servenewpointsintheUSprovidedtheyareservedviaapointinAlaska. PO Box 196960 :: Anchorage, AK 99519 Fairbanks 6450 Airport Way :: Fairbanks, AK 99709 International t. 907.266.2526 AnchorageAirport.com Airport t. 907.474.2500 dot.state.ak.us/faiiap Alaska International Airports System.