OST-97-2886 / IMP Group Ltd. / September 5, 1997

Application of :

for a Foreign Air Carrier Permit pursuant to 49 U.S.C. § 40109(c)
(Unrestricted Transborder Service)

I.M.P. Group Limited c.o.b.a. Air Atlantic, a Division of I.M.P. Group Limited (Air Atlantic), a duly authorized and designated Canadian air carrier, hereby applies, pursuant to 49 U.S.C. § 41302, Part 211 of the Economic Regulations and Subpart Q of the Procedural Regulations of the Department of Transportation (the Department or DOT), for grant of a Foreign Air Carrier Permit authorizing Air Atlantic to provide scheduled and charter foreign air transportation of persons, property and mail between any point or points in Canada, on the one hand, and any point or points in the United States, on the

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other hand, without restriction or limitation. Air Atlantic also requests that it be granted authority to perform 5th freedom charters between points in the United States and points outside of the United States, subject to compliance with applicable DOT Regulations, including Part 212 of the Economic Regulations.

Air Atlantic requests that this application be processed pursuant to expedited non-hearing procedures under Subpart Q of the DOT's Procedural Regulations (14 CFR Section 302, 1701 et seq), and that the foregoing authority be granted for an indefinite period.

In support of this Application, and in accordance with Part 211 of the DOT's Economic Regulations, Air Atlantic states as follows:

1. The full name and address of Air Atlantic is as follows:

M . P. Group Limited c . o . b . a. Air Atlantic,
a Division of I.M.P. Group Limited
Suite 400
2651 Dutch Village Road
Halifax, Nova Scotia B3L 4T2

Air Atlantic is a corporation organized and existing under the laws of Canada. It is a wholly-owned subsidiary of I.M.P. Group International Inc., which is a Canadian corporation.

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2. The name and address of the government air transport authority having regulatory jurisdiction over Air Atlantic is as follows:  

Canadian Transportation Agency
15 Eddy Street, 18th floor
Hull, Quebec K1A ON9

3. Air Atlantic plans to provide scheduled and charter foreign air transportation between points in Canada and points in the United States without limitation. At the present time, Air Atlantic operates extensive scheduled and nonscheduled services within Canada, and currently operates daily scheduled transborder service between Halifax, Nova Scotia, and Boston, Mass. utilizing De Havilland DHC-8/100 aircraft, and between St. John, New Brunswick, and Boston, Mass. utilizing Jetstream 4100 aircraft, pursuant to its Canadian Transportation Agency License No. 951706 and an exemption granted to it by the Department by Order 96-9-45, served October 4, 1996, as renewed and amended by Notice of Action Taken issued August 15, 1997. A more detailed description of the foregoing service is set forth in Exhibit AA-100, infra.

In addition, Air Atlantic plans to provide on-demand charter foreign air transportation between points in Canada and points in the United States, and, subject to specific DOT approval as required, between points in the United States and points in third countries.

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4. A complete listing of the names, addresses and citizenship of all officers, directors and key operations management personnel of Air Atlantic is set forth in Exhibit AA-101, infra.

5. The sole shareholder of Air Atlantic is I.M.P. Group International Inc., which, as noted above, is a Canadian corporation owned and controlled by citizens of Canada. A list of the names and citizenship of all persons holding 5 percent or more of the capital stock of I.M.P. Group International is set forth in Exhibit AA-102, infra.

6. Neither Air Atlantic, nor any officer, director or major shareholder of Air Atlantic holds any interest, directly or indirectly, in any: (a) U.S. air carrier, (b) other foreign air carrier, (c) persons engaged in the business of aeronautics, or (d) any common carrier or person whose principal business is holding the stock or control of any air carrier.

7. Air Atlantic is not owned in whole or in part by the Government of Canada.

8. Air Atlantic has previously submitted a Certificate of Insurance on OST Form 6411, on file with the Department, reflecting Air Atlantic's maintenance of liability insurance coverage exceeding the limits of 14 CFR Part 250. A copy of that Certificate is set forth in Exhibit AA-103, infra.

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9. Air Atlantic holds License Nos. 965016 and 967557, issued to it on November 26, 1996 by the Canadian Transportation Agency, authorizing Air Atlantic to engage in scheduled and non-scheduled international air transportation service between points in Canada and points in the United States without limitation. That License is of indefinite duration. A copy of that License is set forth in Exhibit AA-104, intra.

10. Air Atlantic was initially founded in March, 1986. Throughout its existence, and currently, Air Atlantic has operated scheduled and nonscheduled air services within Canada, and operates scheduled services between the United States and Canada, using both large and small aircraft. As noted previously, Air Atlantic currently operates daily scheduled service between Halifax, Nova Scotia, and Boston, Mass. utilizing De Havilland DHC-8/100 aircraft, and between St. John, New Brunswick, and Boston, Mass., utilizing Jetstream 4100 aircraft. A more detailed description of the transborder scheduled service currently operated by Air Atlantic is set forth in Exhibit AA-100, infra.

11. A complete listing of all aircraft owned or leased and operated by Air Atlantic is set forth in Exhibit AA-105, infra.

12. All aircraft operated by Air Atlantic are maintained in accordance with the approved maintenance program summarized in Exhibit AA-106, infra. Air Atlantic's maintenance program conforms to the ICAO

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standards in all respects, and Canada is a Contracting State to the Convention on International Civil Aviation.

13. Air Atlantic is not currently a party to any agreements or cooperative working arrangements with any U.S. or foreign air carrier, except for its participation as a "Canadian Partner" pursuant to a joint marketing and code-sharing agreement with Canadian Airlines International Ltd. and other standard industry interline agreements.

14. Air Atlantic's financial reports are confidential, and are not required to be filed or published for public inspection by the Government of Canada. Moreover, the Canadian Transportation Agency no longer requires U.S. air carriers to file financial statements in connection with applications for transborder authority pursuant to the February 1995 Agreement. Accordingly, Air Atlantic hereby requests a waiver of the requirement contained in Section 211.20(n) of the DOT's Economic Regulations which requires Air Atlantic to file current financial statements (in U.S. dollars) with this application. Air Atlantic respectfully submits that grant of the requested waiver is warranted on the basis of reciprocity, and is necessary to avoid defeating the policy and practice of the Government of Canada in allowing closely-held corporations to keep their financial reports confidential.

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15. Air Atlantic receives no financial support from the Government of Canada.

16. In light of the substantially deregulated regime governing transborder air services between Canada and the United States established by the February 24, 1995 Bilateral Air Transport Services Agreement, and in view of the broad scope of the authority at issue, Air Atlantic has not prepared any traffic or financial forecast with respect to the services proposed in this application.

17. On February 24, l99S, the United States and Canada signed a comprehensive new bilateral air transport services agreement, substantially eliminating most existing restrictions limiting the operation of transborder air services between the two countries. Pursuant to the l99S Agreement, numerous U.S. and Canadian air carriers have recently been granted unrestricted "all points to all points" scheduled and nonscheduled authority by both the Canadian Transportation Agency (CTA) and the U.S. Department of Transportation. Canada has formally designated Air Atlantic to provide service to the United States pursuant to the February l99S Agreement by Diplomatic Note No. 0143, dated April 12, 1996.

18. The Government of Canada follows a policy of granting Canada-Third Country 5th freedom traffic rights to U.S. carriers.

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19. During the past five years, Air Atlantic has not been involved in any safety or tariff violations, or any fatal accidents.

20. Air Atlantic has previously submitted three signed copies of CAB Form 263.

21. Grant of Air Atlantic's application will not constitute a "major action" affecting energy consumption within the meaning of Part 313 of the Department's Special Regulations.

22. On the basis of its substantial existing operations and the authorizations issued to it by the Canadian CTA and U.S. DOT, Air Atlantic submits that it has been found to be fit, willing and able to operate air services of comparable scope to the air services proposed in this application. Inasmuch as the service proposed by Air Atlantic is wholly consistent with the terms of the 1995 Agreement, grant of this application is presumptively consistent with the public interest.

WHEREFORE, Air Atlantic respectfully requests the Department to issue it a Foreign Air Carrier Permit pursuant to 49 U.S.C. § 41302 to authorize Air Atlantic to provide scheduled and nonscheduled foreign air transportation of

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persons, property and mail between points in Canada and points in the United States, without limitation.

Respectfully submitted,

September 5, 1997