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OST-00-7747

Aero Continente Chile S.A.

Counsel: Aero Continente, Lawrence Wasko, 202.862.4370

Applicant proposes to inaugurate scheduled combination service as soon as possible between Chile and the United States using B767 aircraft configured with 18 business class and 195 economy class seats. The aircraft to be used is currently in AC Chile's fleet and maintenance is and will be performed by qualified engineering personnel from AC Chile holding appropriate certificates for technical maintenance under the laws of Chile. Applicant will request issuance of Foreign Air Carrier Specifications pursuant to Part 129 of the Federal Aviation Regulations. AC Chile proposes to schedule daily round trip service between Santiago, Chile and Miami, Florida. Charter service would be operated only in response to market demand and depending upon the availability of aircraft.

Applicant projects that in the first full calendar year of scheduled service, assumed to be FY ended September 30, 2001, using B767 aircraft, it will generate revenues totaling $29.7 million and that operating expenses would amount to $27.1 million during the period -resulting in gross operating income of $2.6 million U.S, dollars.  AC Chile is substantially owned and controlled by Chilean Nationals. A majority of the shares of stock, 51%, are owned by one individual, Jorge Portilla Barraza, a Chilean citizen. The remaining shares are owned by Aero Continente, S.A., a citizen of Peru.

Counsel: Aero Continente, Lawrence Wasko, 202.862.4370

Aero Continente Chile S.A.

Counsel:  Lawrence Wasko, 202-862-4370

Aero Continente Chile S.A.

Enclosed herewith for inclusion in the above referenced dockets is an original plus seven copies of the Amended Page 2 to Exhibit ACC-5. This change identifies the correct name of the current General Manager. All other information remains valid.

Counsel: Aero Continente, Jacuelyn Gluck, 202.862.4370

Aero Continente Chile S.A.

Exemption from 49 U.S.C. § 41301 to engage in (1) scheduled foreign air transportation of persons, property and mail from points behind Chile via Chile and intermediate points to a point or points in the United States and beyond; (2) charter foreign air transportation pursuant to the Air Transport Agreement between the United States and Chile; and (3) other charters subject to Part 212 of our rules.

Based on the record in this case, we found that Aero Continente Chile is financially and operationally qualified to perform the services authorized above. However, we are unable to find that Aero Continente is substantially owned and effectively controlled by Chilean nationals. Aero Continente Chile states that it is owned 51 % by Jorge Portilla Barraza, a citizen of Chile and 49 % by Aero Continente, S.A., a Citizen of Peru. In spite of the fact that we are unable to find that Aero Continente Chile is substantially owned and effectively controlled by homeland nationals, we find it appropriate to waive our ownership and control requirements. The carrier is properly licensed and designated by the Government of Chile to perform the proposed services, and there is no evidence on the record which would suggest that the ownership of the carrier would be inimical to U.S. aviation policy or interests. By memorandum dated September 18, 2000, the FAA advised us that it knew of no reason why we should act unfavorably on Aero Continente Chile's application.

By:  Paul Gretch

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