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Societe Air France

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305, mgoldman@sgbdc.com

http://www.airfrance.com/

OST-98-3304 - Family Assistance Plans

March 11, 2004

Re: Amended Family Assistance Plan

By: Marie-Joseph Male

OST-99-6076 - Amendment of Air France's Foreign Air Carrier Permit

August 30, 2004

Re: Changes in Corporate Structure

The Department is aware that Air France and KLM Royal Dutch Airlines entered into an agreement to combine their businesses into a single airline group while maintaining two distinct operating companies; the terms of the combination are set out in the Air France/KLM Framework Agreement dated September 30, 2003, pursuant to the Framework Agreement. Air France has acquired the common shares of KLM in exchange for Air France shares and Air France warrants; on May 4, 2004, Air France and KLM announced that KLM shareholders had tendered the necessary amount of outstanding common shares of KLM and that the exchange offer was successful. As of May 24, 2004, Air France’s capital was held as follows: French State (44.07%); Air France employees (10.42%); public float (45.51%) of which 18.4% is held by former KLM shareholders.

In accordance with the Framework Agreement, Air France has incorporated a wholly-owned French subsidiary, named "Air France-Compagnie Aerienne," to which it will transfer all of its assets, liabilities, businesses and operations. The transfer, or "hive down" as it is referred to, is intended to enable Air France-Compagnie Aerienne to carry out the businesses and operations of Air France in the same manner as Air France conducted them prior to the exchange offer (including operations conducted pursuant to the Air France foreign air carrier permit). All permits, licenses, authorizations and contracts necessary for Air France to conduct business will be transferred or newly granted to Air France-Compagnie Aerienne (including the operating authority issued by the French DGAC). The "hive down" is scheduled to take place on September 15, 2004.

Air France submits that under these circumstances there is no need to submit an application to the Department for an amended foreign air carrier permit since the operating company will continue to be named "Societe Air France," the name of the company that currently holds the permit issued by Order 2002-5-8. As noted, that company, Societe2 Air France, will be a wholly-owned subsidiary of Air France-KLM, which will continue to be substantially owned and controlled by French nationals.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305, mgoldman@sgbdc.com

Order 2005-7-3
OST-2005-20077 - Violations of 49 USC 41712 and 14 CFR 399.84

Issued and Served July 5, 2005

Consent Order

This consent order concerns certain fare advertisements on Air France's U.S. website (www.airfrance.com/us) that failed to comply with the Department's rule on full fare advertising, 14 CFR 399.84. These advertising practices, in addition, constituted an unfair and deceptive trade practice and an unfair method of competition in violation of 49 U.S.C. § 41712. Based on these violations, the order assesses a compromise civil penalty of $29,500 and directs the carrier to cease and desist from future similar violations.

Certain Air France website advertisements, in late 2004 and early 2005, violated these Department requirements by displaying fares which did not include a fuel surcharge and which listed additional taxes and fees inappropriately. The website, in addition, offered sale fares on its initial screen without noting that additional fees and charges applied, although the screen did include the fuel surcharge. In subsequent screens, after a consumer selected an itinerary, the website gave information regarding taxes and fees but did not separately list the September 11th Security Fee.

By: Rosalind Knapp

OST-2007-29028 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

August 14, 2007

Application for an Exemption and Amended Foreign Air Carrier Permit - Bookmarked

Air France respectfully requests that the Department approve this plication on an expedited basis and issue "Societe Air France" an exemption and an amended air carrier permit pursuant to the May 3, 2007 and August 23, 2005 Notices authorizing Air France to engage in scheduled and charter air transportation of passengers, cargo and mail, as described herein, to the full extent provided by the existing U.S.-E.U. Agreement and any future amendments providing additional rights to European Community carriers, and authorizing Air France to accept payment and issue tickets where such services may commence under the U.S.-EU Agreement effective March 30, 2008, and for such further and additional relief as the Department may deem appropriate.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305

OST-2007-29028 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

October 9, 2007

Re: Additional Information

In connection with the Application of societe Air France for an Exemption and Amended Foreign Air Carrier Permit, filed in Docket OST-2007-29028 on August 14, 2007, we provide herewith additional information on the ownership of the Air France-KLM holding company. The Air France-KLM holding company owns 100% of the share capital of societk Air France.

As reflected on the attached page 20 of the Air France-KLM Management Report for the 2006-2007 Fiscal Year, as of March 31, 2007, French interests own 51.4% of the share capital of Air France-KLM. (The complete Air France-KLM Management Report can be found at www.airfranceklm-finance.com/financial-publications.html) In addition, interests from other E.U. Member States, including the United Kingdom (14%), Germany (4%), Belgium (3%), and the Netherlands and Luxembourg (2%), own an additional 23% of the share capital of the Air France-KLM holding company. Thus, nationals from France and other E.U. Member States own a total of almost 75% of the share capital of the Air France-KLM holding company.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3306

Order 2007-10-23
OST-2007-29028 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

Issued and Served October 19, 2007

Order Granting Exemption and to Show Cause

We grant the request of Société Air France for an exemption under 49 U.S.C. §40109 to permit it (1) effective on the issue date of this order, to accept payments, issue tickets, and enter into charter contracts, and (2) effective March 30, 2008, to commence flight operations, for the services set forth below: a) foreign scheduled and charter air transportation of persons, property, and mail from any point or points behind any Member State of the European Union, via any point or points in any Member State and via intermediate points to any point or points in the United States and beyond; b) foreign scheduled and charter air transportation of persons, property, and mail between any point or points in the United States and any point or points in any member of the European Common Aviation Area; c) foreign scheduled and charter cargo air transportation between any point or points in the United States and any other point or points; d) other charters pursuant to the prior approval requirements set forth in 14 CFR Part 212 of the Department’s regulations; and e) transportation authorized by any additional route rights made available to European Community carriers in the future.

With respect to the applicant’s request for a foreign air carrier permit in this proceeding, we direct all interested persons to show cause why our tentative decision on that application, set forth above, should not be made final. Any interested person objecting to the issuance of an order making final our tentative findings and conclusions with respect to the applicant’s request for a foreign air carrier permit shall, no later than twenty-one calendar days after the date of service of this order, file with the Department.

By: Paul Gretch

OST-2007-29028 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

November 8, 2007

Response to Order Granting Exemption and to Show Cause

Air France is submitting this response to ensure that certain operating rights granted to it in its current FAC issued by Order 2002-5-8 will continue in force with the issuance to Air France of the FACP tentatively approved by Order 2007-10-23.

Air France's current FACP also authorizes Air France to engage in certain scheduled foreign air transportation consistent with the U.S.-France Open Skies Air Transport Agreement not encompassed in the U.S.-EU Open Skies FACP authority tentatively granted by the Department in Order 2007-10-23. Specifically:

• from points behind New Caledonia and/or Wallis and Futuna via New Caledonia and/or Wallis and Futuna to the United States;
• from points behind French Polynesia via French Polynesia and intermediate points to the United States and beyond; and
• from points behind Saint-Pierre and Miquelon via Saint-Pierre and Miquelon and intermediate points to the United States and beyond.

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305

Order 2008-3-16
OST-2007-29028 - Amended Foreign Air Carrier Permit and Exemption - US-EU Open-Skies

Issued January 16, 2008 | Served March 17, 2008

Final Order

By Order 2007-10-23, issued October 19, 2007, we directed all interested persons to show cause why we should not make final our tentative findings and conclusions stated therein and award an amended foreign air carrier permit in the form attached to the Order and subject to the conditions attached thereto. We gave interested persons 21 days to file objections to the Order. We said that if no objections were filed, all further procedural steps would be deemed waived, and the Department would enter an order (subject to Presidential review under 49 U.S.C. §41307) which would make final the findings and conclusions of the Order.

On November 8, 2007, Société Air France filed a response to Order 2007-10-23. Air France states that it seeks to retain authority to conduct operations to certain points, authority which it holds in its current foreign air carrier permit issued by Order 2002-5-8, to the extent that such authority is not encompassed by the new U.S.-EU permit authority tentatively granted to it by the Department in Order 2007-10-23. Specifically, Air France notes that, among other things, its current permit authorizes it to engage in scheduled foreign air transportation of persons, property, and mail: (a) From points behind New Caledonia and/or Wallis and Futuna via New Caledonia and/or Wallis and Futuna to the United States; (b) From points behind French Polynesia via French Polynesia and intermediate points to the United States and beyond; and (c) From points behind Saint-Pierre and Miquelon via Saint-Pierre and Miquelon and intermediate points to the United States and beyond.

With respect to Air France’s request that it be able to continue to serve the markets described above, we note that, consistent with the terms of the U.S.-EU Agreement cited by Air France, and with the terms of the U.S.-France Air Transport Agreement, Air France’s currently-effective foreign air carrier permit, issued by Order 2002-5-8, will remain in full force and effect to the extent that it authorizes the referenced services. Therefore, our action in finalizing Air France’s new foreign air carrier permit in this proceeding will not alter the carrier’s existing permit authority to conduct these services. In view of the above, we make final our tentative findings and conclusions as set forth in Order 2007-10-23, and award Air France the attached foreign air carrier permit for U.S.-EU authority.

By: Paul Gretch