Air Madrid Lineas Aereas S.A. d/b/a AirMadrid

OST-2006-25289 - Foreign Air Carrier Permit - Spain-US Scheduled Passenger

June 20, 2006

Application for a Foreign Air Carrier Permit

AirMadrid focuses primarily on the leisure travel market, while welcoming business travelers as well. The carrier has designed its services and fares to cater to this traffic mix, and will bring its established and successful formula to the Madrid‑Los Angeles and Madrid‑Miami markets. As an additional public benefit, based on July 2006 schedule listings, AirMadrid's Los Angeles service will represent the only nonstop or direct flights in the market, and its Miami service will bring fresh competition to a city‑pair dominated by two legacy carriers (American and Iberia) that code‑share reciprocally in that market.

AirMadrid was founded in December 2003 by a group of companies and individuals in the tourism sector. Flight operations commenced May 30, 2004, with a fleet of two Airbus A330-200 aircraft. In late 2004 AirMadrid was acquired by its current ownership, which substantially increased capitalization to enable expansion of the carrier's fleet and markets. Today AirMadrid's domestic and European services link Madrid and Barcelona with destinations in the Balearic Islands, Canary Islands, France, Israel, Italy and Romania.

Simultaneously, AirMadrid has established and expanded a pattern of transatlantic scheduled service linking Madrid and other Spanish cities with Central and South America, including points in Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama and Peru. These markets are served with AirMadrid's long-haul fleet currently comprised of seven Airbus aircraft, a mix of A310, A330 and A340 aircraft.

Counsel: Garofalo Goerlich, Aaron Goerlich, 202-776-3970, agoerlich@ggh-airlaw.com