OST-97-2486 | DATED: May 7, 1997

NOTICE: The Joint Applicants request that this application be processed pursuant to the expedited non-hearing procedures under Subpart Q of the Department's Rules of Practice, 14 C.F.R. 302.1701 et seq. Any person who wishes to support or oppose this application must file an answer by June 4, 1997 and serve that answer on the Joint Applicants and on all persons served with this application.

Joint Application of

for transfer of a Foreign Air Carrier Permit pursuant to 49 U.S.C. § 41303

DATED: May 7, 1997

Pursuant to 49 U.S.C. § 41303, ALM Antillean Airlines N.V. ("ALM") and ALM 1997 Airline N.V. ("ALM 1997") (collectively, the "Joint Applicants") hereby file this application for transfer of ALM's foreign air carrier permit to ALM 1997, thereby authorizing ALM 1997 to engage in scheduled foreign air transportation of persons, property and mail between a point or points in the Netherlands Antilles; the intermediate points Santo Domingo, Dominican Republic; Port-au-Prince, Haiti; and Kingston and Montego Bay, Jamaica; and the co-terminal points Miami, Florida; New York, New York; and San Juan, Puerto Rico, and to operate charters to and from the U.S. in accordance with DOT's regulations.

The Joint Applicants respectfully request that this application be processed under the expedited non-hearing procedures of Subpart Q of the Department of Transportation's (the "Department") Rules of Practice, 14 C.F.R. Section 302.1701 et seq.

Joint Application For Permit Transfer

Page 2

In support of this application, the Joint Applicants state as follows:

1. ALM was granted its current foreign air carrier permit by Order 81-1199 (September 17, 1981). That permit authorizes ALM to operate scheduled foreign air transportation of persons, property and mail between a point or points in the Netherlands Antilles and the coterminal points of Miami, New York and San Juan via specified intermediate points in the Caribbean. /1 The permit also authorizes ALM to operate charters pursuant to Part 212 of the Department's Regulations.

2. ALM is owned by the Government of the Netherlands Antilles. The airline has provided service to the U.S. in its present corporate form since the 1960's. Starting in 1978, ALM has been losing money on these services. In an effort to reduce costs and avoid further loses on the essential air services ALM has been providing, the Government has decided to reorganize ALM, which will result in the transfer of all of ALM's assets to a newly formed Antillean corporation, ALM 1997. So that ALM 1997 may continue to provide the same high quality air

1/ The Netherlands Antilles consists of five islands -- Bonaire, Curacao, St. Maarten, Saba and St. Eustatius -- and is a constituent part of the Kingdom of the Netherlands. Air services between the U.S. and the Netherlands Antilles are provided under the terms of the 1957 Air Services Agreement between the U.S. and the Kingdom of the Netherlands. At the time ALM's foreign air carrier permit was last reissued, Aruba was also a part of the Netherlands Antilles. Aruba has since obtained separate status within the Kingdom and is no longer a part of the Netherlands Antilles. ALM continues to serve Aruba on the understanding that its permit, when re-issued in 1981, included the right to serve Aruba, which was unaffected by the change in Aruba's status within the Kingdom in 1986. To avoid confusion, in transferring ALM's permit to ALM 1997, the Department may want to revise the route description to list Aruba as an intermediate point to conform to the revised Kingdom juristic structure.

Joint Application For Permit Transfer

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service between the Netherlands Antilles and the United States currently offered by ALM, the Joint Applicants request the transfer to ALM 1997 of the foreign air carrier permit issued to ALM. /2

3. The full name and address of ALM 1997 are as follows:

ALM 1997 Airline N.V.

Aeropuerto Hato

Curacao

NETHERLANDS ANTILLES

5. The name and address of the air transport authority of the Government of the Netherlands Antilles having regulatory jurisdiction over ALM 1 997 is:

The Department of Civil Aviation Netherlands Antilles

Seroe Mahuma

Curacao

NETHERLANDS ANTILLES

2/ ALM 1997 is contemporaneously filing an exemption application requesting the Department to issue it an exemption that would authorize ALM 1997 to initiate service to the U.S. as a replacement for ALM while this permit transfer application is pending.

3/ The stock of ALM 1997 is wholly owned by a holding company, ALM 1997 Holding N.V., a Netherlands Antilles corporation. The Government owns approximately 95% of the stock of the holding company; KLM Royal Dutch Airlines owns the remaining 5%. ALM was originally the West Indies Division of KLM. The Government of the Netherlands Antilles acquired ALM from KLM in 1969. See Exhibit ALM-1, attached.

Joint Application For Permit Transfer

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6. The Joint Applicants request transfer of ALM's foreign air carrier permit to ALM 1997 thereby authorizing ALM 1997 to engage in scheduled and charter foreign air transportation of persons, property and mail. As explained, ALM 1997 intends to provide scheduled foreign air transportation as the corporate successor to ALM, following a re-organization of ALM that the Government of the Netherlands Antilles has decided to undertake. ALM 1997 intends to operate ALM's current schedule as soon as possible so as to maintain uninterrupted service between the Netherlands Antilles and the United States. The carrier therefore requests the Department to grant this application as expeditiously as possible to facilitate the continuation of the service between the Netherlands Antilles and the U.S. that ALM has provided for over 30 years.

ALM 1997 will operate its services with the same three (3) leased MD-82 aircraft and four (4) leased DHC-8-300 aircraft ALM currently uses. See Exhibit ALM- 1 .

7. The attached Exhibits ALM-1 through ALM-5 contain responses to the information requests set forth in Section 211.20 of the Department's Regulations. /4 The present application and exhibits demonstrate that ALM 1997 is fit, willing, and able to operate the services proposed.

8. The grant of this application will be consistent with the public interest. The services that ALM 1997 proposes to operate are provided for in the 1957 Air

Joint Application For Permit Transfer

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Transport Services Agreement between the U.S. and the Kingdom of the Netherlands pertaining to air services between the U.S. and Kingdom territory in the Caribbean, or have been authorized by the Department on the basis of comity and reciprocity. ALM 1997 will be designated by representatives of the Kingdom to operate services to and from the U.S. under the 1957 Agreement.

9. The services that ALM 1997 proposes to operate will provide numerous public benefits. The air services available between points in the U.S. and the islands of Curacao and Bonaire are quite limited, and are essential to the islands' tourist-based economy; Curacao is the most populous of the five island territories that comprise the Netherlands Antilles and is the seat of the Central Government. /5 Any interruption of these services would have a severe adverse effect on the economy of the Netherlands Antilles, would reduce the air service options available to U.S. and Antillean consumers traveling between points in the U.S. and Netherlands Antilles, and would reduce competition in the U.S.Netherlands Antilles air travel market.

10. Grant of this application will not constitute a major action within the meaning of 14 C.F.R. Part 313. As a result, ALM 1997 need not submit additional information about the energy consumption and energy efficiency consequences of its proposal.

6/ American Airlines is the only U.S.-flag carrier that operates scheduled passenger service to Curacao from the United States. United Airlines presently serves Curacao and the island of Bonaire through a code-sharing arrangement with ALM.

Joint Application For Permit Transfer

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WHEREFORE, on the basis of the foregoing, the Joint Applicants respectfully request that the Department transfer the foreign air carrier permit issued to ALM Antillean Airlines N.V. by Order 81-11-99 to ALM Airline 1997 N.V. (re-worded as requested herein), and that the Department grant the parties such other or further relief as its determines to be appropriate and consistent with the public interest.

Respectfully submitted,

BRUCE H. RABINOVITZ

LISA A. HARIG

GINSBURG, FELDMAN & BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 700

Washington, D.C. 20036

(202) 637-9036

Counsel for

THE JOINT APPLICANTS

DATED: May 7, 1997

Attachments: Verifications

Exhibits List

Exhibits ALM-1 to ALM-5 (Exhibits ALM-2 and ALM-3 are being

filed separately accompanied by a Rule 39 Motion)