BEFORE THE
U.S. DEPARTMENT OF TRANSPORTATION
WASHINGTON, D.C.
Application of
HAINAN AIRLINES CO., LTD.
For an amended foreign air carrier permit
pursuant to 49 U.S.C. § 41301 and exemption
authority pursuant to 49 U.S.C. § 40109
(China-US Scheduled Service)
)
)
)
)
)
)
)
)
)
)
)
Docket No. OST-2007-0066
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: [email protected]
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: [email protected]
[email protected]
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
pursuant to 49 U.S.C. § 41301 and exemption
authority pursuant to 49 U.S.C. § 40109
(China-US Scheduled Service)
Docket No. OST-2007-0066
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: [email protected]
[email protected]
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 14th day of
January, 2015, upon each of the parties.
David Henthorn
Rick Mayfield
Federal Aviation Administration
[email protected]
[email protected]
Russell E. Pommer
Associate General Counsel & Sr. Director
Regulatory Affairs
Atlas Air Inc.
[email protected]
Yil Surehan
Director, Airline Route Development
Massachusetts Port Authority (Massport)
Boston Logan International Airport
1 Harborside Drive, Suite 200s
East Boston, MA 02128
[email protected]
Anita Mosner
Jennifer Nowak
Counsel for UPS
Holland & Knight
[email protected]
[email protected]
Sascha Vanderbellen
Chris Walker
Delta Air Lines, Inc.
[email protected]
[email protected]
Robert Wirick
Howard Kass
American Airlines, Inc.
[email protected]
[email protected]
Nancy S. Sparks
Bailey Leopard
Federal Express Corporation
[email protected]
[email protected]
Dan Weiss
Steve Morrissey
United Air Lines
[email protected]
[email protected]
Robert Silverberg
Counsel for ABX Air, Inc.
[email protected]
Mark W. Atwood
Counsel for Kalitta Air
[email protected]
/s/Peter Nelson
Peter Nelson
TABLE OF EXHIBITS
Exhibit A
Authorization from the Government of the People’s Republic of China
Exhibit B
Air Operator’s Certificate
Exhibit C
Estimate of Traffic and Financial Forecast for Proposed Operations
Exhibit D
Verification
EXHIBIT A
AUTHORIZATION FROM THE
GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA
(ATTACHED)
9
10
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*
20-Jun-15
31-Jul-15
31-Aug-15
30-Sep-15
31-Oct-15
30-Nov-15
31-Dec-15
31-Jan-16
29-Feb-16
31-Mar-16
30-Apr-16
31-May-16
Total
5
13
13
13
14
12
14
13
12
14
13
13
149
948
2,492
2,547
2,437
2,535
2,045
2,624
2,492
2,121
2,386
2,354
2,492
27,473
Revenue*
Unit: USD
2,077,952.41
5,252,910.60
6,454,409.80
4,477,171.09
3,840,145.06
2,953,581.69
4,242,980.60
5,207,121.35
3,270,864.32
3,225,145.10
3,671,307.07
4,870,530.20
49,544,119.27
13
Total Costs*
Unit: USD
1,762,430.49
4,582,319.28
4,582,319.28
4,582,319.28
4,934,805.38
4,229,833.19
4,934,805.38
4,582,319.28
4,229,833.19
4,934,805.38
4,582,319.28
4,582,319.28
52,520,428.72
Profit*
Unit: USD
315,521.91
670,591.31
1,872,090.51
-105,148.20
-1,094,660.33
-1,276,251.49
-691,824.79
624,802.06
-958,968.86
-1,709,660.28
-911,012.22
288,210.91
-2,976,309.45
EXHIBIT D
VERIFICATION
(ATTACHED)
14
15