BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

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1 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Application of KUWAIT AIRWAYS CORPORATION Docket No. OST to Amend Foreign Air Carrier Permit APPLICATION OF KUWAIT AIRWAYS CORPORATION TO AMEND FOREIGN AIR CARRIER PERMIT Communications concerning this document should be sent to: Henry C. Cashen II Douglas N. Jacobson DICKSTEIN SHAPIRO MORIN & LAW OFFICES OF DOUGLAS N. OSHINSKY LLP JACOBSON LLC 2101 L Street, N.W. 513 Saddle Ridge LN, Suite 101 Washington, D.C Rockville, MD ( ( Attorneys for Kuwait Airways Corporation November 26, 2003 NOTICE: Any person may support or oppose this application by filing an answer and serving a copy of the answer upon counsel for Kuwait Airways and all persons named on the attached Service List on or before December 17, 2003.

2 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Application of KUWAIT AIRWAYS CORPORATION Docket No. OST to Amend Foreign Air Carrier Permit Dated: November 26, 2003 APPLICATION OF KUWAIT AIRWAYS CORPORATION TO AMEND FOREIGN AIR CARRIER PERMIT Pursuant to 49 U.S.C , Part 211 of the Department of Transportation s (the "Department" regulations (14 C.F.R. Part 211 and Subpart B of the Department s Rules of Practice (14 CFR , et seq., Kuwait Airways Corporation ( Kuwait Airways hereby applies for an amendment to its Foreign Air Carrier Permit ( Permit, which was most recently issued by Order Kuwait Airways is requesting that its Permit be amended to include authority to provide additional nonstop operations between Kuwait and New York, NY and to add the intermediate point of Athens, Greece in addition to the current intermediate point of Amsterdam, The Netherlands in the conduct of service between Chicago, Illinois and Kuwait. This application replaces and supersedes Kuwait Airways' Application to Amend Foreign Air Carrier Permit filed in Docket OST on December 13, In support of this application, Kuwait Airways submits the following information in accordance with Part 211 s requirements for applications to amend foreign air carrier permits (14 C.F.R : I. INFORMATION REQUIRED BY PART 211 A. Background Information ( (a

3 Page (a: Identification of Applicant The applicant is: Kuwait Airways Corporation Kuwait International Airport P.O. Box 394 Safat, Kuwait Kuwait Airways Corporation is a public institution formed under the laws of the State of Kuwait by virtue of Law No. 21/1965. The company is wholly owned by the Government of Kuwait and controlled by citizens of Kuwait (b: Kuwait Air Transport Authority The name and official address of the government air transport authority of the State of Kuwait having regulatory jurisdiction over Kuwait Airways is: Exhibit 1. Kuwait. Directorate General of Civil Aviation State of Kuwait P.O. Box 17 Safat, Kuwait (i: Operating Authority Certified evidence, in English, of Kuwait Airways operating authority is attached as (o: Governmental Assistance As noted in paragraph (a above, Kuwait Airways is wholly owned by the Government of (q: Reciprocity and Comity Civil aviation relations between the United States and Kuwait are harmonious and continue to be conducted on the basis of comity and reciprocity. Although there is no air transport agreement between the United States and Kuwait, the Department has determined on

4 Page 3 numerous occasions that sufficient reciprocity and comity exist between the U.S. and Kuwait to support Kuwait Airways authority to operate to the United States. 1 Moreover, the Government of Kuwait continues to grant fifth freedom traffic rights to the designated carriers serving Kuwait, subject to reciprocity. While no U.S. carrier is currently providing direct U.S.-Kuwait service, Kuwait has a long history of granting authority to U.S. carriers that request the authority to conduct operations similar to those provided by Kuwait Airways (r: Kuwait s Policy Toward U.S. Applications See response to paragraph (q above (s: Safety and Tariff Violations Kuwait Airways has not been involved in any safety or tariff violations during the preceding five years. In addition, Kuwait Airways aircraft have not been involved in any fatal accidents during the preceding five years. B. Description of Proposed Service ( (b Kuwait Airways Permit issued by Order authorizes it to operate four roundtrip flights per week between Kuwait and New York, NY and to operate twice weekly roundtrip service between Kuwait and Chicago, Illinois, via the intermediate point of Amsterdam, The Netherlands. On December 13, 2002, Kuwait Airways applied for exemption authority to operate a fifth flight between Kuwait and New York, NY on a nonstop basis. See Docket OST See e.g., Order (authorizing renewal of Kuwait Airways foreign air carrier permit; Docket 50257, 60 Fed. Reg. 19,317 (April 17, 1995 (authorizing amendment of Kuwait Airways permit; Order (authorizing renewal of Kuwait Airways foreign air carrier permit; Order (granting exemption to conduct foreign air transportation between Kuwait and Chicago, IL; Order (authorizing renewal of Kuwait Airways foreign air carrier permit; Order (authorizing Kuwait Airways foreign air carrier permit.

5 Page On that same date Kuwait Airways submitted an application to amend its foreign air carrier permit. See Docket OST By Notice of Action Taken dated January 13, 2003, the Department granted an exemption permitting Kuwait Airways to operate a fifth roundtrip flight, on a nonstop basis, between Kuwait and New York. See Docket OST By Notice of Action Taken dated November 19, 2003, the Department renewed Kuwait Airway's exemption to operate a fifth roundtrip flight, on a nonstop basis, between Kuwait and New York for an additional one-year period. The Department has not yet taken any action on Kuwait Airways' application to amend its Permit filed on December 13, On November 26, 2003, Kuwait Airways applied for exemption authority authorizing it to engage in foreign air transportation of passengers, property and mail between Kuwait and Chicago, Illinois via the intermediate points of Athens, Greece and Amsterdam, The Netherlands, at a frequency of two roundtrip flight per week. Kuwait Airways' Permit currently authorizes Kuwait Airways to provide twice weekly service between Kuwait and Chicago, Illinois, via the intermediate point of Amsterdam, The Netherlands. as follows: Therefore, Kuwait Airways hereby requests the Department to amend its Permit to read PERMIT TO FOREIGN AIR CARRIER (as amended and reissued KUWAIT AIRWAYS CORPORATION A Flag Carrier of Kuwait is authorized, subject to the following provisions, the provisions of the Federal Aviation Act of 1958,as-amended and the orders, rules, and regulations of the Department of Transportation, to engage in scheduled foreign air transportation, carrying persons, property and mail, as follows: A. Between a point or points in Kuwait and the terminal point New York, NY, via the intermediate points London, England and Frankfurt, Germany or on a nonstop basis;.

6 Page 5 B. Between a point or points in Kuwait; the intermediate points Amsterdam, The Netherlands, and Athens, Greece; and the terminal point Chicago, IL. The holder shall also be authorized to engage in charter trips in foreign air transportation, subject to the terms, conditions, and limitations of the Department s regulations governing charters. This permit and the exercise of the privileges granted in it shall be subject to the terms, conditions and limitations in both the order issuing this permit and the attachment to this order, as well as the following: 1. In the conduct of the operations authorized in A. above, the holder shall not operate more than five roundtrip flights per week, provided that it shall not operate more than one roundtrip flight per week via Frankfurt. 2. In the conduct of the operations authorized in B. above, the holder shall not operate more than two roundtrip flights per week. Kuwait Airways requests Fifth Freedom authority to operate between Chicago and Athens, Greece, which is the same authority that it currently has for service between Chicago and Amsterdam, New York and Frankfurt and New York and London. As requested by section (p of the Department's regulations, a summary of the traffic and financial results for the first full year of normal operations of the additional flight to and from New York and the service between Chicago, Athens and Kuwait is attached at Exhibit 2. C. Financial Material ( (c Pursuant to (c, attached as Exhibit 3 are financial summaries setting forth, in U.S. dollars, Kuwait Airways profit and loss statements and balance sheets for the two most recent available fiscal years. D. Ownership and Control ( (d The ownership and control of Kuwait Airways has not changed since the preceding application, filed in Docket No. OST , which served as the basis of granting Kuwait Airways existing Permit.

7 Page 6 F. Maintenance Program ( (e Kuwait Airways aircraft maintenance program continues to comply with the provisions of ICAO Pilots and Airmen Annexes 1, 6 (Part 1 and 7. F. Verification ( Attached as Exhibit 4 is a verification statement signed by Mr. Faisal Al-Zaid, Senior Regional Director of Kuwait Airways, as required by 14 C.F.R II. AMENDMENT OF KUWAIT AIRWAYS FOREIGN AIR CARRIER PERMIT IS IN THE PUBLIC INTEREST The amendment of Kuwait Airways Permit is in the public interest. Kuwait Airways is the designated, transatlantic, flag carrier of Kuwait, providing scheduled passenger and cargo service between Kuwait and the United States. Kuwait Airways officers, directors and key management personnel have extensive aviation-related experience. Kuwait Airways has been engaged successfully in international aviation operations for more than 50 years and has conducted U.S.-Kuwait flight operations since Kuwait Airways is currently the only air carrier serving Kuwait from the United States. Kuwait Airways has experienced an increase in the number of passengers traveling between Kuwait and the United States. Moreover, as noted above, the Department has a long history of recognizing reciprocity and comity between the United States and Kuwait regarding air transport operations and Kuwait has granted operating authority to any U.S. carrier that has requested such authority. III. ENERGY POLICY AND CONSERVATION ACT STATEMENT The amendment of Kuwait Airway s Permit will not constitute a major regulatory action under the Energy Policy and Conservation Act of 1975, as defined by 14 C.F.R (a(1, since the amendment of Kuwait Airways Permit will not result in a near-term increase in fuel consumption in excess of 10 million gallons.

8 Page 7 IV. CONCLUSION Kuwait Airways is fit, willing and able to perform the air transportation requested in this application and will continue to conform to the provisions of the laws of the United States and the rules, regulations and requirements of the Department with respect thereto, and believes that such transportation is in the public interest. WHEREFORE, we respectfully request that the Department amend Kuwait Airways Foreign Air Carrier Permit to include the authority set forth above as soon as possible. A copy of this document has been served in accordance with the attached certificate of service. Respectfully submitted, /s/ Henry C. Cashen II Henry C. Cashen II DICKSTEIN SHAPIRO MORIN & OSHINSKY LLP 2101 L Street, N.W. Washington, D.C ( Douglas N. Jacobson LAW OFFICES OF DOUGLAS N. JACOBSON, LLC Suite Saddle Ridge LN Rockville, MD ( Attorneys for Kuwait Airways Corporation Dated: November 26, 2003

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