BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Application of HAINAN AIRLINES CO., LTD. For an amended foreign air carrier permit Docket No. OST-2007-0066 pursuant to 49 U.S.C. 41301 and exemption authority pursuant to 49 U.S.C. 40109 (China-US Scheduled Service APPLICATION OF HAINAN AIRLINES CO., LTD. FOR AN EXEMPTION AND AMENDED FOREIGN AIR CARRIER PERMIT Communications with respect to this document should be addressed to: Joel M. Chusid Executive Director, USA HAINAN AIRLINES CO., LTD. 18000 International Blvd., Suite 1188 Seattle, WA 98188 Email: joel@hnair.com January 14, 2015 Josh Romanow Peter Nelson PILLSBURY WINTHROP SHAW PITTMAN LLP 1200 Seventeenth Street, N.W. Washington, D.C. 20036 Tel: (202 663-8000 Fax: (202 663-8007 E-mail: romanow@pillsburylaw.com peter.nelson@pillsburylaw.com Counsel for Hainan Airlines Co., Ltd. NOTE: Any person who wishes to support or oppose this Application may: (1 file an answer, and (2 serve that answer on counsel identified above and all persons served with a copy of this application. Answers to the exemption application are due on January 30, 2015; answers to the foreign air carrier permit application are due on February 4, 2015. Hainan intends to poll on this application and will advise the Department of the results.
BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Application of HAINAN AIRLINES CO., LTD. For an amended foreign air carrier permit Docket No. OST-2007-0066 pursuant to 49 U.S.C. 41301 and exemption authority pursuant to 49 U.S.C. 40109 (China-US Scheduled Service APPLICATION OF HAINAN AIRLINES CO., LTD. FOR AN EXEMPTION AND AMENDED FOREIGN AIR CARRIER PERMIT Pursuant to 49 U.S.C. 40109 and 41301, Part 211 of the Department s economic regulations, and the Department s rules of practice, Hainan Airlines Co., Ltd. ( Hainan Airlines, an air carrier of the People s Republic of China, respectfully requests that the Department amend Hainan Airlines foreign air carrier permit to enable it to engage in scheduled air transportation of persons, property and mail between Shanghai, People s Republic of China (PVG, on the one hand, and Boston, Massachusetts (BOS, on the other hand. Hainan Airlines also requests exemption authority under 49 U.S.C. 40109 to the extent necessary so that it may exercise the rights requested in this Application prior to the issuance of an amended foreign air carrier permit. Consistent with the Department s notice of August 23, 2005 (Docket No. OST-2005-22228 (the August 23, 2005 Notice, Hainan Airlines requests that the Department process this application on an expedited basis and grant Hainan Airlines an amended foreign air carrier permit so that it can begin offering the proposed services as soon as 2
possible. In this regard, Hainan Airlines respectfully requests that the Department issue a single order (1 granting the requested exemption authority for a one-year period or until after the effective date of the requested amended permit authority; and (2 approving the amended foreign air carrier permit authority under the streamlined procedures set forth in the August 23, 2005 Notice, unless the Department deems it appropriate to proceed directly to a final order issuing an amended foreign carrier permit to Hainan Airlines. In support of this Application, Hainan Airlines states as follows: 1. Since Hainan Airlines began service in 1993, it has grown steadily, and inaugurated its first non-stop service to the United States on June 9, 2008 with flights between Beijing and Seattle. On September 3, 2013, Hainan successfully launched non-stop service between Beijing and Chicago, and on June 20, 2014 initiated service between Boston and Beijing. 2. Hainan Airlines has received several awards, including a five-star certification by Skytrax, a prestigious safety award, for four consecutive years. It has been voted the Best Airline in China by the readers of Premier Traveler Magazine twice and four times by the readers of Global Traveler magazine. Hainan Airlines is a service-oriented airline, providing features such as complimentary limo service for long-haul premium travelers in Beijing and in the United States, flat-bed seats, upgraded amenities and gourmet meals. As one of the launch customers for the Boeing 787 Dreamliner, Hainan Airlines aims to provide a high quality service option for passengers traveling between the People s Republic of China and Boston. 3
3. Hainan holds a foreign air carrier permit issued by the Department authorizing it to engage in scheduled foreign air transportation of persons, property and mail between Beijing, People s Republic of China and Seattle; Beijing and Chicago; and Beijing and Boston; as well as authority to engage in charter foreign air transportation of persons, property and mail between a point or points in the People s Republic of China and a point or points in the United States (See Order 2013-11-26. 4. Authority Requested: Hainan Airlines hereby seeks authority to conduct scheduled foreign air transportation of persons, property and mail between Shanghai, People s Republic of China (PVG, on the one hand, and Boston, Massachusetts (BOS, on the other hand. Hainan intends to operate these scheduled flights using a B-787 aircraft with a two class configuration and proposes to operate initially three flights per week beginning in the second quarter of 2015. 5. Approval of Hainan Airlines request for an amended foreign air carrier permit is fully consistent with the Agreement between the Government of the United States of America and the People s Republic of China Relating to Civil Air Transport, signed September 17, 1980, as amended, which authorizes airlines designated by the Chinese government to operate scheduled combination services from any point or points in the People s Republic of China to any point or points in the United States. It would benefit travelers in both the United States and China by providing the first nonstop scheduled service in this market and would therefore serve the public interest. 6. The Government of the People s Republic of China has authorized Hainan Airlines to conduct the proposed flights from Shanghai to Boston. A copy of Hainan Airlines 4
authorization issued by the Civil Aviation Administration for China ( CAAC is attached hereto as Exhibit A. 7. Hainan Airlines hereby incorporates by reference the fitness and citizenship information contained in its earlier applications. See Docket OST-2007-0066. 8. An updated copy of Hainan Airlines Air Operator s Certificate (AOC is attached as Exhibit B. 9. An estimate showing the total traffic and the financial results of the proposed services for the first full year of normal operations is attached hereto as Exhibit C. 10. Grant of the authority sought herein will not result in a near-term increase in fuel consumption of ten million gallons or more, and therefore will not comprise a major regulatory action under the Energy Policy and Conservation Act of 1975, as defined in 14 C.F.R. 313(a(1. 11. Hainan Airlines has not been involved in any safety or tariff violations or any fatal accidents in the past five years. 12. Hainan Airlines maintenance program continues to comply with the provisions of ICAO Pilots and Airmen Annexes 1, 6 (Part 1 and 7. 13. The verification required by 14 C.F.R. 302.4(b is attached hereto as Exhibit D. For the reasons set forth above, Hainan Airlines is fully qualified to operate the services for which authority is herein requested, and grant of the authority will serve the public interest. [Remainder of this Page Intentionally Left Blank] 5
WHEREFORE, based upon the foregoing information, Hainan Airlines respectfully requests that it be granted an exemption and amended foreign air carrier permit to engage in scheduled foreign air transportation of persons, property and mail as more fully described above. Respectfully submitted, Josh Romanow Peter Nelson PILLSBURY WINTHROP SHAW PITTMAN LLP 1200 Seventeenth Street, N.W. Washington, DC 20036 Phone: (202 663-8000 Fax: (202 663-8007 Email: romanow@pillsburylaw.com peter.nelson@pillsburylaw.com January 14, 2015 Counsel for Hainan Airlines Co., Ltd. 6
CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing application of Hainan Airlines Co., Ltd. for an amended foreign air carrier permit and exemption has been served by electronic mail this the 14 th day of January, 2015, upon each of the parties. David Henthorn Rick Mayfield Federal Aviation Administration david.e.henthorn@faa.gov rick.mayfield@faa.gov Yil Surehan Director, Airline Route Development Massachusetts Port Authority (Massport Boston Logan International Airport 1 Harborside Drive, Suite 200s East Boston, MA 02128 YSurehan@Massport.com Sascha Vanderbellen Chris Walker Delta Air Lines, Inc. sascha.vanderbellen@delta.com chris.walker@delta.com Robert Wirick Howard Kass American Airlines, Inc. robert.wirick@aa.com howard.kass@aa.com Nancy S. Sparks Bailey Leopard Federal Express Corporation gbleopard@fedex.com nssparks@fedex.com Russell E. Pommer Associate General Counsel & Sr. Director Regulatory Affairs Atlas Air Inc. rpommer@atlasair.com Anita Mosner Jennifer Nowak Counsel for UPS Holland & Knight anita.mosner@hklaw.com jennifer.nowak@hklaw.com Dan Weiss Steve Morrissey United Air Lines dan.weiss@united.com steve.morrissey@united.com Robert Silverberg Counsel for ABX Air, Inc. rsilverberg@sgbdc.com Mark W. Atwood Counsel for Kalitta Air matwood@cozen.com /s/peter Nelson Peter Nelson
TABLE OF EXHIBITS Exhibit A Exhibit B Exhibit C Exhibit D Authorization from the Government of the People s Republic of China Air Operator s Certificate Estimate of Traffic and Financial Forecast for Proposed Operations Verification
EXHIBIT A AUTHORIZATION FROM THE GOVERNMENT OF THE PEOPLE S REPUBLIC OF CHINA (ATTACHED 9
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EXHIBIT B AIR OPERATOR S CERTIFICATE 11
PUBLIC AIR TRANSPORT AIR OPERATOR S CERTIFICATE DUPLICATE A.T. REGISTERED NO.029 EXAMINED AND APPROVED OF THE OPERATION IN ACCORDANCE WITH THE CIVIL AVIATION LAW OF PEOPLE S REPUBLIC OF CHINA. Name: Hainan Airlines Company Limited Address: Hainan Airlines Plaza, No.7 Guoxing Road, Haikou City, Hainan Province Base Airport: Haikou Meilan International Airport Business Entity Type: Limited Liability Company Registered Capital: RMB 3,530,252,801 Legal Person: Di XIN Scope of Operation: Authorized domestic and international air passenger, cargo and mail transportation (include those to Hong Kong and Macau; services related to air transportation. Validity: from 05/10/2013 to 05/09/2016 Issued by: Civil Aviation Administration of China (Sealed 04/30/2014 12
EXHIBIT C ESTIMATE OF TRAFFIC AND FINANCIAL FORECAST FOR PROPOSED OPERATIONS Month # of Flights Passengers* Revenue* Total Costs* Profit* Unit: USD Unit: USD Unit: USD 20-Jun-15 5 948 2,077,952.41 1,762,430.49 315,521.91 31-Jul-15 13 2,492 5,252,910.60 4,582,319.28 670,591.31 31-Aug-15 13 2,547 6,454,409.80 4,582,319.28 1,872,090.51 30-Sep-15 13 2,437 4,477,171.09 4,582,319.28-105,148.20 31-Oct-15 14 2,535 3,840,145.06 4,934,805.38-1,094,660.33 30-Nov-15 12 2,045 2,953,581.69 4,229,833.19-1,276,251.49 31-Dec-15 14 2,624 4,242,980.60 4,934,805.38-691,824.79 31-Jan-16 13 2,492 5,207,121.35 4,582,319.28 624,802.06 29-Feb-16 12 2,121 3,270,864.32 4,229,833.19-958,968.86 31-Mar-16 14 2,386 3,225,145.10 4,934,805.38-1,709,660.28 30-Apr-16 13 2,354 3,671,307.07 4,582,319.28-911,012.22 31-May-16 13 2,492 4,870,530.20 4,582,319.28 288,210.91 Total 149 27,473 49,544,119.27 52,520,428.72-2,976,309.45 13
EXHIBIT D VERIFICATION (ATTACHED 14
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