1
/ UNITED STATES OF AMERICADEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY
WASHINGTON, D.C.
Issued by the Department of Transportation
on the19thday of July, 2007
Joint Application ofCAPITAL CARGO INTERNATIONAL AIRLINES, INC.
and
AIR TRANSPORT INTERNATIONAL, LLC
for a transfer of certain international authority pursuant to 49U.S.C.§41105 /
Docket OST-2005-23324
ORDER GRANTING DE FACTO TRANSFER OF AUTHORITY
Summary
By this order, we grant a de facto transfer under section 41105 of Title 49 of the United States Code (“the Statute”) of the certificate and other economic authorities held by Air Transportation International, LLC, (“ATI”) to ATI under the ownership and control of Cargo Holdings International, Inc., (“CHI”), the parent company of Capital Cargo International Airlines, Inc. (“CCIA”).
Background
On November29, 2005, in accordance with the provisions of section 204.5 of our rules (14CFR204.5) requiring carriers to notify us of substantial changes affecting their operations, CHI advised the Department that it had entered into an agreement to acquire all of the membership interests in ATI, a U.S. certificated air carrier.
On December 9, 2005, ATI and CCIA (collectively “the applicants”)jointly filed the subject application for approval of the de facto transfer of ATI’s international economic operating authorities to ATI under the ownership and control of CHI.[1]
The applicants state that the acquisition of ATI by CHI will not result in the actual transfer of any international economic authorities and maintain that each air carrier will continue to operate as separate subsidiary air carriers. While no actual transfer of economic authority is taking place in connection with the acquisition of ATI by CCIA’s parent, under the Department’s precedent, when two or more air carriers each with international route authority come under common control, a de facto transfer of authority has taken place under section 41105 of the Statute (49 U.S.C. §41105).[2] CHI’s acquisition of ATI results in common control of ATI and CCIA, both of which hold international route authority.
We received no objections to the application.
The Applicants
ATI, a Nevada limited liability company, holds interstate scheduled authority and interstate and foreign charter certificate authority authorizing it to engage in air transportation of persons, property, and mail.[3] ATI also holds certificate authority authorizing it to engage in foreign scheduled air transportation of property and mail between points in the U.S. and points in Austria, Belgium, Denmark, Germany, Finland, France, Ireland (Shannon), Luxembourg, The Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.[4]
CCIA, a Florida corporation, holds interstate scheduled authority and interstate and foreign charter all-cargo certificate authority.[5] The air carrier also holds exemption authority to engage in foreign scheduled air transportation betweenToledo, Ohio, on the one hand, and Saltillo, Guadalajara, and Monterrey, Mexico, on the other hand.[6]
Public Interest
Under section 41105 of the statute, the Department must determine whether a certificate transfer is consistent with the public interest. In determining whether a transfer is in the public interest, we must find that it will not conflict with important international aviation policy objectives and that the acquiring entity is a U.S. citizen and will be fit to hold the certificate and other economic authorities at issue. Further, section 41105(b) requires the Department to analyze the impact of the transfer on the viability of the air carrier applicants, competition in the domestic airline industry, and the trade position of the United States in the international air transportation market.
The applicants maintain that the transaction is fully consistent with the public interest standards under 49 U.S.C. § 41105. In this regard, the applicants state that the viability of ATI will be strengthened under the ownership of CHI, an independent well-capitalized company with several lines of businesses related to all-cargo air transportation. Moreover, the applicants contend that because each air carrier serves different markets and operates different aircraft types than the other, the combined operations of both air carrierswould not pose a threat to the competitive position of other U.S. air carriers operating in the domestic airline industry, nor would it result in the loss of any international certificate authority held by either air carrier. Finally, the applicants and the trade position of the U.S. will be enhancedby approval of the de facto transfer since ATI will benefit from CHI’s ownership and will continue to provide valuable international air services.
Decision
Our review of financial and other available information raises no issues that would lead us to question the fitness or citizenship of either airline as a result of this transaction. We find that ATI will remain a viable air carrier under the ownership of CHI, given the resources and experience of CHI. Additionally, since each air carrier intends to continue to operate as a separate subsidiary company, providing services in separate markets and similar to thosethat each provided prior to the consummation of this transaction, we would expect a negligible impact on domestic competition. Furthermore, as the two companies do not have overlapping route networks in limited-entry markets, we find that CHI’s acquisition of ATI will have no impact on U.S. international aviation policy objectives and will have no material effect on the trade position of the United States in the international air transportation market.
Accordingly, we conclude that the approval of the de facto transfer of ATI’s certificate and other economic authorizations to ATI under the ownership and control of CHI is in the public interest.[7]
ACCORDINGLY,
1.We transfer the certificate for Route 558 and other economic authority held by Air Transportation International, LLC, to Air Transportation International, LLC, under the ownership of Cargo Holdings International, Inc.
2.Unless disapproved by the President of the United States under 49 U.S.C. § 41307, this order shall become effective on the 61st day after its submission for section 41307 review or upon the date of receipt of advice from the President or his designee under Executive Order 12597 and implementing regulations that he or she does not intend to disapprove the Department’s order under that section, whichever occurs earlier.[8]
3.We will serve a copy of this order on the persons listed in Attachment A.
By:
ANDREW B. STEINBERG
Assistant Secretary
for Aviation and International Affairs
An electronic version of this document is available on the World Wide Web at:
1
SERVICE LIST FOR CAPITAL CARGO INTERNATIONAL AIRLINES, INC.and
AIR TRANSPORT INTERNATIONAL, LLC
MR GREGORY S WALDEN
PATTON BOGGS LLP
COUNSEL FOR AIR TRANSPORT
INTL LLC
2550 M STREET NW
WASHINGTON DC 20037 / MR JONATHAN BLANK
PRESTON GATES ELLIS &
ROUVELAS MEEDS LLP
COUNSEL FOR CAPITAL CARGO
INTL AIRLINES, INC.
1735 NEW YORK AVE NW STE 500
WASHINGTON DC 20006 / MR PETER LYNCH AGC-300
ASST CHIEF COUNSEL FOR
ENFORCEMENT
FEDERAL AVIATION ADMINISTRATION
800 INDEPENDENCE AVE SW
WASHINGTON DC 20591
MR CHARLES E CARNES
POI FOR AIR TRANSPORT INTL LLC
FAA LITTLE ROCK FSDO
1701 BOND STREET
LITTLE ROCK AR 72202-5733 / MR DON BRIGHT K-25
OFFICE OF AIRLINE INFO
DEPT OF TRANSPORTATION
400 SEVENTH ST SW
WASHINGTON DC 20590 / MR WILLIAM J WEBER
CERTIFICATION SECTION MANAGER
FAA AFS-900
45005 AVIATION DRIVE SUITE 131DULLES, VA20166
MR JAMES K SIZER POI
CAPITAL CARGO INTL AIRLINES INC
FAA ORLANDO FSDO
5950 HAZELTINE NATIONAL DR SUITE 500
ORLANDO FL 32822-5023 / MANAGER ASW-200
FLIGHT STANDARDS DIVISION
FAA SOUTHWEST REGION HDQ
2601 MEACHAM BLVD
FORT WORTH TX 76137-4298 / MANAGER ASO-260
FLIGHT STANDARDS DIVISION
FAA SOUTHERN REGION HDQ
P O BOX 20636
ATLANTA GA 30320
[1]The applicants also filed an application (Docket OST-2005-23326) for an exemption from section 41105 to the extent necessary to allow the acquisition of ATI to be completed prior to our action on the de facto transfer request. By Order 2006-2-17, issued February 24, 2006, we granted the exemption, on the condition that ATI and CCIA remain separated entities until our decision on the de facto transfer request. The applicants informed us that the ATI acquisition was consummated on February 28, 2006, and that the air carrier is now a wholly-owned subsidiary of CHI.
[2]SeeOrder 2000-9-4.
[3]See Order 94-9-34, issued September23,1994. In this order, the Department limited ATI’s scheduled authority to operations involving the transport of property and mail since the air carrier did not provide evidence from the Federal Aviation Administration authorizing the transport of passengers in scheduled service.
[4]See Order 94-10-6, issued September 23, 1994.
[5]See Order 96-6-18, issued June 7, 1996.
[6]See Notice of Action Taken, dated December 12, 2005, in Docket OST-2005-22149. CCIA also filed an application in Docket OST-2005-22750, requesting that the Department issue it a section 41102 certificate to engage in foreign scheduled air transportation of property and mail between Toledo, Ohio, on the one hand, and Saltillo, Guadalajara, and Monterrey, Mexico, on the other hand.
[7]The de facto transfer of a foreign certificate is subject to Presidential review under 49 U.S.C. § 41307.
[8]This order was submitted for section 41307 review on July 19, 2007. The 61st day is September 18, 2007. Since the President’s designee did not disapprove this order before that date, it became effective on September 18, 2007.