Order 2001-1-13 - Aero Continente Chile, LADECO, Linea Aerea Nacional-Chile Sociedad Anonima, Lan Chile, Air Ansett New Zealand, Air New Zealand, Singapore Airlines, Royal Brunei Airlines - Final Order (Foreign Air Carrier Permits and Exemptions)

Aero Continente Chile, S.A./LADECO, S.A./Linea Aerea Nacional-Chile Sociedad Anonima, Lan Chile, S.A./Air Ansett New Zealand Limited/Air New Zealand Limited/Singapore Airlines Limited and Royal Brunei Airlines Sdn. Bhd.

Order 2001-1-13 OST-2000-8393	Issued January 16, 2001 Served January 18, 2001	Final Order	Foreign Air Carrier Permits and Exemptions
		Appendix: Current Department Authority Being Amended By This Order

By this order, the Department finds that it is in the public interest to modify the proposals announced in Show-Cause Order 2000-11-25 concerning the reporting requirement on certain foreign air carriers in connection with a new multilateral agreement involving the United States and various APEC members, and to finalize the requirement as modified.

The purpose of our show-cause order was to provide a fair and effective vehicle for allowing us to exercise that right. Therefore, we tentatively found that it was in the public interest for the Department to be informed of specified changes in the ownership of the voting stock of the foreign air carriers covered by the agreement, and that those foreign air carriers should provide the necessary information.

After carefully considering all matters of record, including all of the comments filed in response to our tentative decision, we have decided to affirm our initial determination that it is in the public interest for the foreign air carriers to provide the information we need to effectively monitor the operation of the agreement provision at issue. We have also determined, however, that it is in the public interest to modify the proposed reporting requirement to meet many of the issues and concerns raised in response to the tentative decision.

First, we will only require reporting of transactions in which U.S. nationals are the beneficial shareholders. We agree that this change is consistent with the purpose of filing the information we have requested.
Second, we will only require reporting of two types of transactions: (1) transactions that involve an upward change in the beneficial control by a U.S. national shareholder of 20 percent or more of the foreign air carrier's outstanding stock, and (2) transactions that result in an overall accumulated total holding by a U.S. national shareholder of beneficial control of 40 percent or more of the foreign carrier's outstanding stock.5 We appreciate the concerns of SIA and ANZ that a five-percent threshold could place an undue burden on the affected carriers.
Third, instead of advance notification, we will require the foreign air carriers involved to notify the Department no later than 30 days after any transaction meeting the above-cited parameters. We agree that the proposed advance notice requirement could have proven difficult to implement and could have had unintended adverse effects. Moreover, to the extent that the reporting carrier is unaware at the time of the transaction of the subject upward change in control by a U.S. national, the 30-day period will run from the date that the carrier either actually became aware of it, or through due diligence should have become aware of it, whichever is earlier.
Fourth, we will not require foreign air carriers to notify the Department when their homelands begin to implement the terms of the Agreement in relation to the United States. We agree that diplomatic channels are available for this purpose.

By: Francisco Sanchez