OST-97-2444 | May 5, 1997

Application of

for an exemption and reallocation of U.S.-Ecuador all-cargo frequencies

DATED: May 5, 1997

Pursuant to 49 U.S.C. § 40109 and Rule 400 of the Department Rules of Practice, Polar Air Cargo, Inc. ("Polar Air") hereby requests an exemption from 49 U.S.C. 41101 to the extent necessary to operate scheduled foreign air transportation of property and mail between the United States and Ecuador. /1 Polar Air also requests reallocation of two of the three narrow-body cargo frequencies allocated to Millon Air, Inc., either permanently or until such time as Millon Air resumes use of the frequencies to Ecuador. Polar Air is prepared to begin service between Miami, Florida and the coterminal points Quito and Guyaquil, Ecuador via Brazil at a frequency of one B-747F flight per week within 30 days of receiving the necessary approvals from the Ecuadorian government. Polar Air also requests this

1/ Polar Air also requests authority to integrate service pursuant to the exemption authority requested herein with the authorities contained in its certificate of public convenience and necessity and such other exemption authorities as it may have, to the extent consistent with applicable international agreements.

Application of Polar Air Cargo, Inc.

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exemption authority be immediately effective and remain in effect for a period of two (2) years.

In support of its application, Polar Air states as follows:

1. Polar Air is a corporation organized on June 22, 1990, under the laws of the State of California. Polar Air holds certificates of public convenience and necessity authorizing it to provide scheduled interstate and overseas transportation of property and mail, and to provide scheduled foreign air transportation of property and mail between a point or points in the United States and a number of foreign points. In addition, Polar Air holds various exemptions authorizing it to provide foreign all-cargo air transportation.

2. Polar Air is a citizen of the United States as defined by 49 U.S.C. §40102(a)(15). Polar Air is owned and controlled by individuals who are themselves United States citizens. All of its shareholders and directors, and over two-thirds of its managing officers are citizens of the U.S.

3. Polar Air has been previously found to be fit willing and able to engage in interstate overseas and foreign scheduled air transportation of property and mail. /2 Polar Air requests the Department to take official notice pursuant to Rule 24 of its Procedural Regulations of data filed to establish such fitness. Polar Air has no subsidiaries nor any financial interest in any other entity.

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4. Polar Air proposes to operate one weekly scheduled wide-body allcargo flight over the routing shown in Attachment A. Polar Air plans to provide these services with B-747-100 and -200 aircraft from its own fleet. These aircraft are capable of carrying up to 200,000 pounds of cargo.

5. The requested exemption is consistent with the bilateral agreement between the United States and Ecuador. The U.S.-Ecuador Air Transport Agreement provides that carriers of each party are entitled to operate up to 15 weekly narrow-body all-cargo frequencies. Millon Air received its three frequencies by Orders 91-10-37 and 95-2-19.

6. Millon Air ceased operations in October 1996 and its frequencies have since gone unused. The Department has suspended Millon Air's certificate authority under 14 C.F.R. 204.7 and the carrier is thus unable to provide air service to Ecuador or anywhere else. It is not clear that Millon Air will choose to resume U.S.-Ecuador service if and when it is able to resume operations.

7. Polar Air's proposed service is consistent with the public interest. The three frequencies allotted to Millon Air are valuable commodities and should not be wasted while Millon Air is unable or unwilling to utilize them for the indefinite future. Further, since Millon Air's exit from the U.S.-Ecuador market, there is a great need for all-cargo service that is not being met. Polar Air will be able to fill the void created when Millon Air ceased operations.

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8. As indicated previously, Polar Air is willing begin Miami-Quito/Guayaquil via Brazil service within 30 days of receiving the necessary approvals by the Government of Ecuador. Polar Air is prepared to pursue such approvals immediately upon grant of this exemption.

WHEREFORE, Polar Air Cargo, Inc. respectfully requests that the Department grant it an exemption authorizing it to operate scheduled air transportation of property and mail between the United States and Ecuador, and to integrate that service with services offered be Polar Air pursuant to its authority it outstanding certificates of public convenience and necessity and other exemption authorization to the extent consistent with applicable international agreements. Polar Air also requests the Department reallocate two of the three frequencies currently granted to Millon Air, and such other and different relief as the Department may deem in the public interest.

Respectfully submitted,

/s/ Alfred J. Eichenlaub

Alfred J. Eichenlaub

Lisa A. Harig

GINSBURG, FELDMAN & BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 700

Washington, D.C. 20036

(202)637-9034

Attorneys for

POLAR AIR CARGO, INC.

DATED: May 5, 1997