OST-98-3692 / Polar Air Cargo / Amendment of Certificate of Public Convenience for Route 651 / March 31, 1998

NOTICE: Polar Air Cargo, Inc. requests that this application be processed by expedited non-hearing procedures under Subpart Q of the Department of Transportation's Procedural Regulations, 14 C.F.R. § 302.1701, et seq. Under Subpart Q, any person who wishes to support or oppose this application must file an answer with the Department of Transportation's Documentary Services Division and serve the answer on Polar Air Cargo, Inc. and on all persons served with this application by April 28, 1998.

Application of

POLAR AIR CARGO, INC. / OST-98-3692

for an amendment to its Certificate of Public Convenience and Necessity for Route 651 under 49 U.S.C. Section 41102

(foreign all-cargo service)

Polar Air Cargo, Inc. ("Polar Air" or "Polar") hereby requests an amendment to its Certificate of Public Convenience and Necessity for Route 651 authorizing Polar to engage in scheduled foreign air transportation of property and mail between any point or points in the United States and the following countries (in addition to those currently contained in Polar's Certificate for Route 651): Albania, Algeria, Armenia, Aruba, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belarus, Bosnia, Botswana, Brunei Darussalam, Bulgaria, Chile, Cote d'Ivoire, Costa Rica, Croatia, Czech Republic, Denmark, Dominican Republic, El Salvador, Estonia, Ethiopia, Finland, Georgia, Ghana, Greece, Grenada, Guatemala, Honduras, Hungary, Iceland, Israel, Jamaica, Jordan, Kenya, Kuwait, Kyrgyz Republic, Latvia, Liberia, Lithuania, Luxembourg, Macau, Macedonia, Malawi, Malta, Moldova, Morocco, Namibia, the

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Netherlands Antilles, Nicaragua, Norway, Oman, Poland, Portugal, Qatar, Romania, Senegal, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tadjikistan, Tanzania, Trinidad and Tobago, Tunisia, Turkmenistan, Uganda, Uzbekistan, Zaire and Zimbabwe. Polar also requests authority to integrate its operations under its amended Certificate with all services Polar is otherwise authorized to conduct pursuant to its exemption and certificate authority consistent with applicable international agreements. Polar further requests that its application be processed under the expedited procedures of Subpart Q of the Department's Procedural Regulations (14 C.F.R. § 302.1701, et seg.). In support of this application, Polar Air states as follows:

1. The Applicant

Polar Air is a corporation organized under the laws of the State of California, located at 100 Oceangate, 15' Floor, Long Beach, California 90802. Polar holds Certificates of Public Convenience and Necessity authorizing it to provide scheduled interstate and overseas transportation of property and mail, and scheduled foreign air transportation of property and mail to a number of foreign points. /1 Included among these certificates is a Certificate for Route 651 (Order 96-5-9) authorizing Polar to engage in scheduled foreign air transportation of property and mail between any point or points in the United States and Australia, Belgium, Egypt, Fiji, Germany, Hong Kong, India, Indonesia, Ireland, Malaysia, the Netherlands, New

1/ See, e.g., Orders 96-11-28, 96-9-16, 96-6-12 and 96-5-9.

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Zealand, Pakistan, Panama, Paraguay, Singapore, South Korea, Sri Lanka, Taiwan, Turkey, the United Arab Emirates, the United Kingdom and Uruguay. Polar Air also holds various exemptions authorizing it to provide scheduled foreign all-cargo air transportation and to integrate its operations under its certificates and exemptions. 2/

Since its certification nearly four years ago, Polar Air has made appropriate and timely use of the certificate and exemption authorities it has been granted. Polar Air is currently serving nineteen countries on a scheduled basis. By April 15, 1998, the Philippines and Venezuela should have been added to that list. 3/

2. Citizenship/Fitness

Polar Air is a citizen of the United States, as defined by 49 U.S.C. 40102(a)(1 5). Polar Air is owned and controlled by individuals who are United States citizens. All of Polar Air's shareholders and directors, and over two-thirds of its managing officers, are United States citizens. 4/ As DOT determined in the above-cited orders, Polar Air is fit, willing and able to perform the service for which authority is sought herein. Polar respectfully requests that the Department take official notice, pursuant to Rule 24(n) of its Rules of Practice, of all information

3/ On a scheduled basis, Polar Air currently operates between the U.S. and the following countries: Argentina, Australia, Brazil, Chile, Fiji, Finland, Hong Kong, India, Japan, Korea, the Netherlands, New Zealand, Russia, Singapore, Taiwan, Thailand, the United Arab Emirates and the United Kingdom.

4/ See Order 94-6-24.

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previously filed to established Polar Air's fitness to provide foreign all-cargo air transportation. Polar Air has no subsidiaries and does not have a financial interest in any other entity.

3. Proposed Form of Authority

By this application, Polar Air seeks to have its Certificate of Public Convenience and Necessity for Route 651 amended so as to authorize Polar to provide scheduled foreign air transportation of property and mail between any point or points in the United States, on the one hand, and the following countries, on the other hand (in addition to those currently contained on Polar's Certificate for Route 651): Albania, Algeria, Armenia, Aruba, Austria, Azerbaijan, Bahamas, Bahrain, Barbados, Belarus, Bosnia, Botswana, Brunei Darussalam, Bulgaria, Chile, Cote d'Ivoire, Costa Rica, Croatia, Czech Republic, Denmark, Dominican Republic, El Salvador, Estonia, Ethiopia, Finland, Georgia, Ghana, Greece, Grenada, Guatemala, Honduras, Hungary, Iceland, Israel, Jamaica, Jordan, Kenya, Kuwait, Kyrgyz Republic, Latvia, Liberia, Lithuania, Luxembourg, Macau, Macedonia, Malawi, Malta, Moldova, Morocco, Namibia, the Netherlands Antilles, Nicaragua, Norway, Oman, Poland, Portugal, Qatar, Romania, Senegal, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tadjikistan, Tanzania, Trinidad and Tobago, Tunisia, Turkmenistan, Uganda, Uzbekistan, Zaire and Zimbabwe. 5/

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4. Relevant Bilateral Authority

Polar Air's request for certificate authority to serve the above-identified countries is consistent with the relevant bilateral agreements and/or supported by principles of comity and reciprocity:

a) Polar's request for authority to serve the following countries is based on Open Skies agreements containing no restrictions on designation, points served or capacity for all-cargo service: Aruba, Austria, Brunei Darussalam, Costa Rica, Czech Republic, Denmark, El Salvador, Finland, Guatemala, Honduras, Iceland, Jordan, Luxembourg, the Netherlands Antilles, Nicaragua, Norway, Romania, Sweden, Switzerland and Uzbekistan.

b) Polar's request for authority to serve the following countries is consistent with the applicable bilateral agreements, which contain no restrictions on designations or capacity for all-cargo service: Bahamas, Barbados, Chile, Cote d'Ivoire, Dominican Republic, Greece, Hungary, Israel, Jamaica, Liberia, Macau, Morocco, Poland, Portugal, Senegal, Spain, Trinidad and Tobago and Zaire.

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c) Although currently there is no bilateral agreement in place between the U.S. and the following countries, Polar Air's request for authority is supported by principles of comity and reciprocity: Albania, Algeria, Armenia, Azerbaijan, Bahrain, Belarus, Bosnia, Botswana, Bulgaria, Croatia, Estonia, Ethiopia, Georgia, Ghana, Grenada, Kenya, Kuwait, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Malawi, Malta, Moldova, Namibia, Oman, Qatar, Slovakia, Slovenia, Tadjikistan, Tanzania, Tunisia, Turkmenistan, Uganda and Zimbabwe. 6/

d) Polar's request for certificate authority to serve South Africa is consistent with the Air Transport Agreement in place between the U.S. and the Republic of South Africa. Although that Agreement contains no limitations on designations, it does contain frequency limitations applicable to all-cargo service. Polar Air currently holds an allocation of three U.S.-South Africa frequencies (Order 98-1-6). At all times, Polar's operations under its amended certificate will be consistent with any applicable frequency limitations. Moreover, because South Africa is a limited entry market, Polar expects that its amended certificate, with respect to South Africa, will be issued for a renewable five-year term, consistent

6/ The former Republics of the Union of Soviet Socialist Republics, including Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, Tadjikistan and Turkmenistan, have acceded as successor states to the former U.S.-U.S.S.R. Air Transport Agreement, which forms a basis for a finding of comity and reciprocity. Similarly, Bosnia, Croatia, Macedonia and Slovenia have acceded to the former U.S.-Yugoslavia Air Transport Agreement, and Slovakia has acceded to the former U.S.-Czechoslovakia Air Transport Agreement, establishing a basis of comity and reciprocity with these countries.

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5. No Substantial Change in Operations

Polar Air will utilize Boeing 747 freighter aircraft or other suitable aircraft for its proposed operations. Operations utilizing the new authority will be comparable in stage length and equipment to the operations Polar has been conducting under its domestic and foreign scheduled certificates and exemption authorities. Therefore, Polar's operations under the amended Certificate requested herein would not constitute a "substantial change in operations" under Part 204 of the Department's regulations. In conducting service under the amended Certificate for Route 651 requested herein, Polar Air will continue to conform to all terms, conditions and limitations that the Department has attached to the Certificate.

Because this application conforms to the provisions of the applicable bilateral agreements or is founded upon a basis of reciprocity and comity and is otherwise non-controversial, Polar respectfully requests a waiver of the requirements contained in 14 C.F.R. § 201.4 and Subpart Q of the Department's Procedural Regulations to file any further evidentiary information herewith. Polar will, of course, provide any further information the Department's deems necessary to process this application.

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6. Opening Argument

Polar Air's introduction of new scheduled all-cargo service in markets covered by this application will permit the continued worldwide growth Polar has enjoyed since its certification in 1994. The requested authority will enable Polar Air to be more responsive to the growing U.S. shipper and consignee demands for traditional 747 all-cargo lift between the U.S. and the African, Asian, Caribbean, European, Middle Eastern and Latin American markets at issue. Grant of the authority also will improve Polar's route flexibility and facilitate greater integration of Polar's expanding international services. It will, as well, strengthen Polar Air's ability to compete effectively with the foreign air carriers that now dominate the air freight market in many of these regions.

The countries for which authority is here sought are likely to respond in a positive manner to any new scheduled all-cargo service proposed by Polar Air. The amended certificate, in turn, would position Polar to implement such services as soon as conditions warrant. Given the dynamics of the increasingly global economy, this flexibility to respond quickly to shifting patterns of air freight demand would materially enhance the value to the U.S. of the route rights for which it has negotiated or to which its carriers are otherwise entitled. For these reasons, an expedited grant of the authority requested would serve the public interest.

Grant of the requested authority is also consistent with DOT precedent. The Department has previously granted broad all-cargo certificate authority covering a

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wide range of foreign points to several U.S. carriers to facilitate their worldwide cargo operations. See, e.g., Order 95-6-26 (Federal Express Corporation) and Order 91-1-44 (United Parcel Service Co.).

7. Term of the Certificate

Polar Air requests that its amended Certificate for Route 651 be issued on a permanent basis consistent with the current term of Polar's Certificate for Route 651. 7/

WHEREFORE, Polar Air Cargo, Inc. respectfully requests an amendment to its Certificate of Public Convenience and Necessity for Route 651 authorizing Polar Air to engage in the scheduled foreign air transportation of property and mail detailed above, and to integrate its operations under the amended Certificate with all services Polar is otherwise authorized to conduct pursuant to its exemption and certificate authority consistent with applicable international agreements. Polar Air also requests that the Department grant it such other and different relief as the

7/ Because South Africa is currently a limited entry market, Polar expects that the Certificate, as it pertains to South Africa and any other similarly situated country, would be issued for a renewable five-year term, consistent with Department practice with regard to certificates for limited entry markets.

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Department deems to be consistent with the public interest and with this application.

Respectfully submitted,

JEFFREY A. MANLEY

CATHLEEN P. PETERSON

GINSBURG, FELDMAN & BRESS, CHARTERED

1250 Connecticut Avenue, N.W.

Suite 800

Washington, D.C. 20036

(202) 637-9057

Attorneys for POLAR AIR CARGO, IN

DATED: March 31, 1998