"Silk Way" Airlines Limited Liability Company - Daily Airline Filings

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Jun 25, 2007 - Safety & Tariff Violations. Waiver of Liability Limits Under Warsaw/Montreal Convention ...... Shanno
BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Application of

1 1

"Silk Way" Airlines Limited Liability Company ) for a foreign air carrier permit pursuant to 49 U.S.C. § 41302 to engage in cargo charter service between the Republic of Azerbaijan and the United States

Docket OST 07-

1 1 1

1

1 )

APP1,ICATION OF SILK WA1' AIRLINES LIMITED LIABILITY COMPANY FOR A FOREIGN AIR CARRIER PERMIT Communications with respect to this document should be sent to: Zaur Akhundov President

Glenn P. Wicks Ekaterina A. Grimes Roncevert D. Almond

Kamran Gasimov General Director

The Wicks Group, PLLC 1215 17" Street NW Sumner Annex, Fourth Floor Washington, DC 20036

"Silk Way" Airlines Limited Liability Company Heydar Aliyev International Airport AZ 1109 Baku, Republic of Azerbaijan

(202) 457-7790 gvwicks(i2wicks-~roup.com For Silk Way Airlines

Dated:

June 25,2007

"Silk Way" Airlines Limited Liability Company requests that this application be NOTICE: decided on the basis of written submissions pursuant to 14 C.F.R. 3 302.207, and that the Department grant this application by proceeding directly to a final order as set forth in 14 C.F.R. § 302.210(a)(2). Any person who wishes to support or oppose this application must file an answer by July 16,2007, and serve that answer on "Silk Way" Airlines Limited Liability Company and on all persons served with this application.

BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

)

Application of

1

) "Silk Way" Airlines Limited Liability Company )

for a foreign air carrier permit pursuant to 49 U.S.C. 5 41302 to engage in cargo charter senrice between the Republic of Azerbaijan and the United States

Docket OST 07-

1 ) )

1 )

AI'I'LICATION OF SILK WAY AIRLINES LIMITED LIABILITY COMPANY FOR A FOREIGN AIR CARRIER I'EKMIT Pursuant to 49 U.S.C.

5 41302, (representing the recodified version of Section

402 11of the Federal Aviation Act of 1958 ("Act"), as amended), Part 21 1 of the Department of Transportation's ("Department") Economic Regulations, and Subpart B of the Department's Rules of Practice, "Silk Way" Airlines Limited Liability Company ("Silk Way Airlines" or "Silk Way") hereby applies for a foreign air carrier permit to engage in charter cargo air transportation operations between the Republic of Azerbaijan and the United States. Silk Way intends to operate primarily Ilyushin IL-76 type aircraft, including its new noise stage 4 compliant modification, for the proposed services. Silk Way respectfully requests that this application, to the extent possible, be decided on the basis of written submissions pursuant to 14 C.F.R.

5

302.207, and that the Department grant this application by proceeding directly to a final order as set forth in 14 C.F.R. 5 302.210(a)(2). Public Law 103-272, enacted July 5, 1994, revised and recodified the Act within Subtitle VII of Title 49, United States Code (Transportation). The provisions of section 402 of the Act are now contained in 49 U.S.C. 5 41302. Under the recodification, the terms of section 402 were not substantively changed.

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In support of this permit application, Silk Way submits as follow 1.

The full name and address of Silk Way is: "Silk Way" Airlines Limited Liability Company Heydar Aliyev International Airport AZ 1109, Baku, Republic of Azerbaijan Tel.: +994 12 493 38 60; 1-994 12 493 38 61 Fax: +994 12 493 38 59; +994 12 497 10 38

2.

Silk Way is a limited liability company founded and registered as a legal

entity on August 16,2001, under the applicable laws of the Republic of Azerbaijan. Silk Way is privately owned, with sixty percent (60%) of its assets owned by SW Holding Limited Liability Company, a company formed and existing under the laws of the Republic of Azerbaijan and effectively controlled by Mr. Zaur Akhundov, a national of the Republic of Azerbaijan. Forty percent (40%) of Silk Way's assets are directly owned by the International Handling Company Limited, a company founded and existing under the laws of the United Kingdom. Effective operational control of Silk Way is vested in its Management, all of which are Azerbaijan nationals. See Exhibits SILK WAY - 3 & SILK WAY - 4. Silk Way holds an Air Operator Certificate, initially issued by The State Concern of Civil Aviation "Azerbaijan Hava Yollari" as the Civil Aviation Authority of Azerbaijan (the "CAA") on October 9,2001, authorizing Silk Way to operate domestic and international commercial air services, such certificate is continuously renewable subject to applicable procedures.

3.

Exhibit SILK WAY - 8.

The air transport authority of Azerbaijan having regulatory jurisdiction over

Silk Way's air transportation operations is: Mr. Sabir M. Hasanov Head of Certification and State Registry Department State Concern of Civil Aviation "Azerbaijan Hava Yollari" of the Republic of Azerbaijan 11 Azadlig Avenue, AZ-1000, Baku, Azerbaijan 4.

Silk Way requests a foreign air carrier permit authorizing it to engage in

charter cargo air transportation operations (1) between any point or points in Azerbaijan and any point or points in the United States; and (2) between any point or points in the United States and

any point or points in a third country or countries subject to pertinent national, bilateral and international agreements, rules and regulations. As a result of Silk Way's intention to begin operating charter services and advertise its services in its own right as soon as possible, Silk Way is contemporaneously filing an Application for an Exemption that would authorize the services that are the subject of this application while the instant permit application is pending. 5.

Silk Way will primarily utilize Ilyushin IL-76 type aircraft in the United

States, or such other aircraft as it may have or acquire to conduct the proposed operations. Exhibits SILK WAY - 2 & SILK WAY - 10. All of the aircraft Silk Way intends to operate to the United States are registered in Azerbaijan and are maintained by qualified engineering personnel holding the appropriate certificates for technical maintenance. Line maintenance for Silk Way's aircraft is performed by "Silk Way Technics" at Heydar Aliyev International Airport/Baku, Azerbaijan (as per the Certificate of Conformity N US1017 issued by the CAA of Azerbaijan on March 15,2007). Heavy maintenance and overhaul of the aircraft is performed by "Volga-Dnepr Gulf (UAE) FZE" at Sharjah International Airport, United Arab Emirates. Exhibit SILK WAY - 11. Azerbaijan is a contracting state to the Convention on International Civil Aviation ("Chicago Convention"). Silk Way's aircraft are maintained in compliance with ICAO Annexes 1,6 (Part I), and 7. In addition, Silk Way's aircraft conform to type designs approved by the Interstate Aviation Committee, and have been issued civil airworthiness certificates in accordance with the provisions of ICAO Annex 8. 6.

Attached at Exhibits SILK WAY - I through SILK WAY - 18 are

responses to the evidentiary requests found in 14 C.F.R. 5 21 1.20 of the Department's Regulations. These exhibits, combined with the instant application, demonstrate that Silk Way is fit, willing, and able to perform the services that have been requested and to conform to the provisions of the Act and the Department's regulations in accordance with 49 U.S.C. § 41302. 7.

Silk Way has been designated by the Government of Azerbaijan to

perform foreign air transportation services between the United States and Azerbaijan as is

required by 49 U.S.C. 41302. By its letter N 11/3315 dated September 28,2006, the CAA of Azerbaijan designated Silk Way as a charter cargo carrier to provide service between Azerbaijan and the United States. This designation of Silk Way by the Government of Azerbaijan has been transmitted through formal diplomatic channels. In the absence of a formal bilateral Air Transport Agreement between the United States of America and the Republic of Azerbaijan, Silk Way's proposed operations to the United States shall be subject to, and based on, the principles of comity and reciprocity, pending ongoing contacts between the Governments of the two countries. $ee Exhibit SILK WAY - 16.

8.

Silk Way is qualified to operate to the United States. As this permit

application and exhibits demonstrate, Silk Way has assembled an experienced team of individuals to manage and develop the unique market opportunities associated with the establishment of its U.S. operations. Moreover, Silk Way has the financial and technical resources to maintain its domestic and international service. Silk Way has accumulated substantial operating experience over its more than five years of operations.

Exhibit SILK

WAY - 9.

9.

A grant of Silk Way's instant application is in the public interest as Silk

Way will represent a recognized institutional presence in the market of cargo air transportation. Silk Way represents the continued evolution of the aviation system of Azerbaijan and will be a highly qualified and well capitalized entrant into the newly-developing US.-Azerbaijan aviation market. As such, the Department should act expeditiously in granting the authority requested herein by Silk Way. 11.

A grant of Silk Way's application would not constitute a "major regulatory

action" under 14 C.F.R. Part 313. Specifically, Silk Way's annual fuel consumption will not exceed 10 million gallons. Thus, a grant of the permit application will not constitute a "major regulatory action" within the meaning of Section 102(2)(c) of the National Environmental Policy Act as implemented by 14 C.F.R. § 313.4. As a result, Silk Way is not required to submit

additional information about the energy consumption and energy efficiency consequences of its service proposal.

WHEREFORE, Silk Way respectfully requests that the Department issue Silk Way a foreign air carrier permit as requested herein, or grant it such other or further relief as the Department determines to be appropriate and consistent with the public interest. Respectfully submitted,

Ekaterina A. Grimes Roncevert D. Almond The Wicks Group, PLLC 1215 1 7 ' ~Street, NW Sumner Annex, Fourth Floor Washington, DC 20036

For Silk Way Airlines

BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

1 1

Application of

1

Silk Way Airlines

)

for a foreign air carrier permit pursuant to 49 U.S.C. 5 41302 to engage in cargo charter operations between Azerbaijan and the United States

Docket OST 200--

1 1 1 1

DECLARATION I, Kamran Gasimov, state that I am the General Director of Silk Way Airlines; that I am authorized to make this Declaration on behalf of Silk Way Airlines; that I have read the attached application and exhibits and that the factual statements set forth therein are true and correct to the best of my knowledge and belief; and that the copy of the Operating Certificate issued to Silk Way Airlines by the State Concern of Civil Aviation of the Republic of Azerbaijan included among the exhibits is a true and correct copy of such certificate.

I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct.

LIST OF EXHIBITS EXHIBIT

CONTENTS

SILK WAY - 1

Corporate Information & Government Oversight

SILK WAY - 2

Service Proposal

SILK WAY - 3

Officers, Directors, and Key Personnel

SILK WAY - 4

Ownership Information

SILK WAY - 5

Stockholding of Officers, Directors, and Key Personnel

SILK WAY - 6

Relationship with the Government

SILK WAY - 7

Insurance Coverage

SILK WAY - 8

Operator Certificate

SILK WAY - 9

Operating History

SILK WAY - 10

Aircraft Inventory

SILK WAY - 11

Maintenance Arrangement

SILK WAY - 12

Agreements With Other Carrier Affecting Service Proposal

SILK WAY - 13

Financial Data Summaries

SILK WAY - 14

Financial Projections

SILK WAY - 15

Governmental Financial Assistance

SILK WAY - 16

Bilateral Agreement & Designation

SILK WAY - 17

Safety & Tariff Violations

SILK WAY - 18

Waiver of Liability Limits Under Warsaw/Montreal Convention

EXHIBIT SILK WAY - 1 CORPORATE INFORMATION & GOVERNMENT OVERSIGHT I.

Background Information "Silk Way" Airlines Limited Liability Company ("Silk Way Airlines" or "Silk Way") is a

limited liability company founded and registered as a legal entity on August 16, 2001, under the applicable laws of Azerbaijan (Registration Certificate Number 973, dated August 16,2001). Silk Way holds an Air Operator Certificate, initially issued to it by The State Concern of Civil Aviation "Azerbaijan Hava Yollari" as the Civil Aviation Authority of Azerbaijan (the "CAA"), on October 9, 2001, and continuously renewed subject to applicable procedures. Silk Way is registered with the International Civil Aviation Organization "ICAO (ICAO Code: AZQ), is an associated member of IATA (IATA Code: ZP*), and is a trustee member of The

International Air Cargo Association (TIACA). Silk Way specializes in cargo transportation services, and is a major operator in commercial air cargo services in Azerbaijan, both on domestic and international air routes. Silk Way's annual revenue for 2003 was USD $39,277,368.28; the revenue for 2004 was USD $73,631,888.19; and the revenue for 2005 was USD $85,918,112.26. Its revenue for 2006 was USD $ 125,509,192.71. Silk Way is an Azerbaijan flag carrier, with management and operational control vested in Silk Way's officers and key management personnel, who are all nationals of Azerbaijan. A list of such personnel can be found in exhibit SILK WAY - 3. Silk Way is governed by the General Meeting of its holding members and its Directors. The General Meeting, based on Silk Way's Charter, has the authority to amend the

Charter, establish the executive bodies of the company, approve annual financial statements of the company, make decisions with respect to its reorganization or liquidation, establish subsidiaries, branches and other affiliates and representative offices, as well as other key governing decisions. The General Meeting delegates day to day operational management decision-making to the General Director and key management personnel subject to supervision and review by the General Meeting and Directors. A list of Silk Way's Directors can be found in exhibit SILK WAY - 3.

11.

Specific Corporate Information a. Name and Address of Applicant: "Silk Way" Airlines Address: Heydar Aliyev International Airport AZ 1109, Baku, Republic of Azerbaijan Tel.: +994 12 493 38 60; +994 12 493 38 61 Fax: +994 12 493 38 59; +994 12 497 10 38 b. Corporate Form & Country of Organization: As noted above, Silk Way is a limited liability company organized under the laws of

Azerbaijan and incorporated on August 16,200 1. The name and address of the governmental authority having regulatory jurisdiction over Silk Way's air transportation operations is: Mr. Sabir M. Hasanov Head of Certification and State Registry Department State Concern of Civil Aviation "Azerbaijan Hava Yollari" of the Republic of Azerbaijan 11 Azadlig Avenue, AZ-1000, Baku, Azerbaijan

EXHIBIT SILK WAY - 2 SERVICE PROPOSAL Silk Way requests a foreign air carrier permit authorizing it to engage in charter cargo air transportation operations (1) between any point or points in Azerbaijan and any point or points in the United States; and (2) between any point or points in the United States and any point or points in a third country or countries subject to pertinent national, bilateral and international rules and regulations. Silk Way intends to begin operating the requested services immediately after the Department issues the requested authority. Silk Way intends to operate primarily Ilyushin IL-76 type aircraft, including its noise stage 4 compliant modification aircraft for the proposed services. Silk Way may further expand the proposed services using other types of aircraft in the future.

EXHIBIT SILK WAY - 3 OFFICERS, DIRECTORS. AND KEY PERSONNEL The following are the names, residence addresses, and business addresses of all Silk Way's key management personnel as defined in Section 211.20(d) of the Department's Regulations. All key management personnel are citizens of the Azerbaijan Republic. Silk Way's Board of Directors consists of citizens of the Azerbaijan Republic and the Kingdom of Morocco. The individuals listed below are not related by blood or marriage. Because Silk Way has been providing direct air service for more than one year, it is not necessary to summarize the business experience of its directors, officers, or key management personnel.

14 C.F.R. § 211.20(d). Kev Management Personnel

Chief Engineer

I Igor Furgal

Tel: (+99412) 493-38-60

( Heydar Aliyev

Baku, Azerbaijan

I Bilga Settlement,

Public Relations Manager

Alishan Kadirov

Chief Pilot

Amirzade Elshad

Safety Inspection

International Airport, AZ 1109, Baku, Azerbaijan Tel: (4-99412) 493-38-61 Heydar Aliyev International Airport, AZ 1109, Baku, Azerbaijan Tel: (4-99412)493-38-61 Heydar Aliyev International Airport, AZ 1109, Baku, Azerbaiian Tel: (+99412) 493-38-61 Heydar Aliyev ~nternationilAirport, AZ 1109, Baku, Azerbaijan Tel: (4-99412) 493-38-61

Hotel of Aviation Union Baku, Azerbaijan 3 Yasamal, # 98, app.34 Baku,Azerbaijan Surahan District, Amiradjani settlement, 816,. auu.51 Baku, Azerbaijan 9 Micro District, A. Memmedov Street, # 119, app.53 Baku, Azerbaijan

i Quality Control Manager

Sergey Ermak

Heydar Aliyev International Airport, AZ 1109, Baku, Azerbaijan Tel: (+99412) 493-38-61

Bakixanov settlement, A. Anapli Street, No. 43A

Board of Directors

President

N m Zaur Akhundov

Director

Jaouad Dbila

Business Address "SW Holding Limited Liability Company" Heydar Aliyev International Airport, B&U - ~zeibaijan "International Handling Company" Craigmuir Chambers, Road Town P.O. Box 71, British Virgin Islands

EXHIBIT SILK WAY - 4 OWNERSHIP INFORMATION Silk Way is a privately owned limited liability company. Sixty percent (60%) of Silk Way's assets are owned by SW Holding Limited Liability Company, a company formed and existing under the laws of the Republic of Azerbaijan and effectively controlled by Mr. Zaur Akhundov, a national of the Republic of Azerbaijan. Forty percent (40%) of Silk Way's assets are directly owned by the International Handling Company Limited, a company founded and existing under the laws of the United Kingdom. Effective operational control of Silk Way is vested in its Management and Board of Directors, as set forth in exhibit SILK WAY - 3.

EXHIBIT SILK WAY - 5 STOCKHOLDINGS OF OFFICERS. DIRECTORS, AND KEY PERSONNEL Silk Way officers, directors, and key personnel do not hold any interest in: (1) any U.S. carrier; (2) any foreign air carrier; (3) any person engaged in the business of aeronautics; or (4) any common carrier, or any person whose principal business is the holding of stock in, or control of, any air carrier.

EXHIBIT SILK WAY - 6 RELATIONSHIP WITH THE GOVERNMENT OF AZERBAIJAN As noted in exhibit SILK WAY - 1, Silk Way is a limited liability company organized under the laws of Azerbaijan. In accordance with the Republic of Azerbaijan's Civil Code, Articles 87 and 89, Silk Way is a separate legal entity having an independent balance sheet, separate property, and the rights to conclude contracts, acquire real, personal and intangible property rights, and bear independent liability. Silk Way acts under free-market principles whereby the State is not liable for any commitments of Silk Way, and Silk Way is not liable for any obligations of the State. Therefore, Silk Way has the authority to independently control its managerial decisions, and its officers, directors, and key personnel are charged with, and implement, that responsibility.

EXHIBIT SILK WAY - 7 INSURANCE COVERAGE Silk Way's insurance coverage meets the requirements of 14 C.F.R. Part 205. Its aircraft and services are insured by "AZAL SIGORTA JOINT-STOCK INSURANCE COMPANY" that in turn underwrites its policy through "AON LIMITED, AVIATION. An executed copy of OST Form 6411 (Certificate of Insurance) from Silk Way's insurer is attached hereto. The originally executed Form will be submitted to the Department by hand delivery.

Reference : C071SILW003 AGENCY DISPLAY OF ESTIMATED BURDEN The public reporting burden for this collection of infomation is estimated to average 30 minutes per response. If you wish to comment on the accuracy of the estimate of make suggestions for reducing this burden. p h s e biiect p u r comments to the Oepartment ofTranrporlation at the fallowing address:

U.S. Department of Transportation

U.S. Department of Transportation Officeof Aviation Analysis, X-56 400 7th Street SW. Washlngton, D.C. 20590

Ofiice of the Secretary of Transportation

OM0 No. 21064030 Expires 2-28-C

FOREIGN AIR CARRIERS CERTIFICATE OF INSURANCE POLICIES OF INSURANCE FOR AIRCRAFT ACCIDENT BODILY INJURY AND PROPERTY DAMAGE LIABILITY FILING INSTRUCTIONS: File an original of this form with the F M , AirTransportation Div., AFS-260,800 IndependenceAve, SW. Washington. D.C. 20591. (Please type information, except signatures.) THIS CERTIFIES THAT:

AZAL SIGORTA JOINT-STOCK INSURANCE COMPANY, 9 MARDANOV QARDA SHLARI STREET, BAKU 37000, AZERBAIJAN PARTICIPATION 100% (Name of Insurer)

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has issued a policy or policies of Aircraft Liability lnsurance to SlLK WAY LIMITED AIRLINES CARRYING O N BUSINESS AS SILK WAY AIRLINES, BAKU INTERNATIONAL AIRPORT. AZ1109 BAKU, AZERBAIJAN (Name and address of Insured Foreign Air Canier) until ten (10) days after written notice from the insurer or carrier of the intent effective from 151h ~ e b r u a r 2007 ~, to terminate coverage is received by the Department of Transportation. NOTE: Part 205 of the Depaltment's Regulations does not allow for a predetermined termination date, and a certificate showing such a date is unacceptable. 1.

The Insurer (Check one) is licensed to issue aircrafl insurance policies in the United States; is licensed or approved by the government of

to issue aircraft insurance policies, or

UNITED KINGDOM

is an approved surplus line insurer in the State(s) of 2.

The insurer assumes, under the policy or policies listed below, aircraff accident iiability insured to minimums at least equal to the following during operation, maintenance, or use of aircraft in "foreign air transportation' as that term is defined 49 U.S.C. 40102. (Complete appiicable section(s) below): A. CANADIAN CHARTER AIR TAXI OPERATIONS WITH PART 294 AUTHORIN ONLY The aircraft covered by this policy have: (1) 30 w fewer passenger seats and a maximum payload capacity of 7,500 pounds or less: andlor (2) a maximum authorized takeoff weight on wheels of no more than 35,000 pounds. (Check separate or combined coverage as appropriate): Separate Coverages: Policy No.

Mfnimum Limit Type of Liabflity

Each person

Each Occurrence

Combined Bodily Injury (Excluding Passengers other than cargo attendants) and Property Damage Liability

$75.000

$2,000.000 '(See note)

Passenger Bodily Injury

$75,000

$75.000 x 7556 of total number of passenger seats installed in aircraft

Combined Coverage: This combined coverage is a single limit of liability for each occurrence at least equal to the required minimums stated above for bodily injury (excluding passengers), property damage, and passenger bodily injury. Policy No.

Amunt of Coverage

U.S. Dollars

This Policy covers CARGO operations only and excludes passenger iiability lnsurance.

* NOTE:

If the aircraft covered by this policy have more than 30 passenger seats or more than a maximum payload capacity of 7,500 pounds, the minimum limlt per occurrence shall be $20.000.000

OSTFORM6411

B.

FOREIGN AIR CARRIERS OPERATING SMALL AIRCRAFT The aircraft covered by this policy are SMALL AIRCRAFT (i.e., with 60 or fewer passenger seats or with a maximum payload capacity of 18.000 pounds or less). (Check separate or combined coverage as appmpriate):

Separate Coverages:

Minimum Limit

Policy No.

Each Occurrence

Type of Liability

Each person

Combined Bodily injury (Excluding Passengers other than cargo attendants) and Property Damage Liability

$300,000

$2,000,000

Passenger Bodily Injury

$300,000

5300,000 x 75% of total number of passenger seats installed in aircraft

Combined Coverage: This combined coverage is a single limit of liability for each occurrence at least equal to the required minimums staled above for bodily injury (excluding passengers), property damage, and passenger bodily injury. Policy No.

17 C.

Amount of Coverage

U.S. Dollars

This policy covers CARGO operations only and excludes passenger liability insurance.

FOREIGN AIR CARRIERS OPERATING LARGE AIRCRAFT The aircrafl covered by this policy are LARGE AIRCRAFT (i.e., with more than 60 passenger seats or with a madmum payload capacity of more than 18.000 pounds). (Check separate or combinedcoverage as appropriate): Separate Coverages:

Minimum Limit

Policy No.

rn

3.

Each person

Each Occurrance

Combined Bodily injury (Excluding Passengers other than cargo attendants) and Properly Damage Liability

$300,000

$20,000,000

Passenger Bodily Injury

$300.000

$300,000 x 75% of total number of passenger seats installed in aircraft

Combined Coverage: This combined coverage is a single limit of liability for each ocwrrence at least equal to the required minimums stated above for bodily injury (excluding passengers), propedy damage, and passenger bodily injury.

AH0723001

Policy No.

rn

Type of Liabiiity

Amount of Coverage

U.S. Dollars

500,000,000

This policy covers CARGO operations only and excludes passenger liability insurance. Make and Model

The policy or policies listed in this certificate insure@)(Check One):

FAA or Foreign Flag Registration No.

Operations conducted with all aircraft operated by the Insured O Operations conducted with the following types of aircraft: Operations with the fOll0~ingaircraft: (Use additional pageif necessaly) 4.

Each policy listed in this certificate meets or exceeds the requirements in 14 CFR Parl 205. AON LIMITED. AVlATiON (Name of insurer)

(Name of Broker, ifappiicable) 8 DEVONSHIRE SQUARE,

(Address)

(Address)

(City, State, Zip Code)

LONDON EC2N 4PL (City, Stale. Zip Code)

Contad (person who can vefifythe effectivenessof the coveage)

ASOMMERVILLE AUTHORISED SIGNATORY (of&erwplhorized representative)

-

/ (Area Code, Phone Number)

020 7 8 8 ~ 660 ' 1 020 7216 3149 (Ana Cads, FAXNumber)

(Sfgnatue. ifappiicable)

(Area Cad%Phone No be,)

/Are

/ +

bignaturd

~~'"EBRUARY. 2007 [Date)

(Date)

ode. FAXNumber)

EXHIBIT SILK WAY - 8 OPERATOR CERTIFICATE A copy of Silk Way's current Air Operator Certificate, issued by the CAA of Azerbaijan, is attached hereto. Silk Way's Air Operator Certificate was most recently issued on November 30,2006, and will be valid until the October 8, 2008. The Air Operator Certificate grants Silk Way the right to operate domestic and international commercial air services subject to the oversight of the CAA of Azerbaijan. Subject to compliance with the national requirements and regulations of the CAA of Azerbaijan, Silk Way's Air Operator Certificate is routinely extended every two years.

EXHIBIT SILK WAY - 9 OPERATING HISTORY Silk Way Airlines was founded and initially certified on October 9, 2001. Silk Way is an operator certified in the Azerbaijan Republic, and is an Azerbaijan flag carrier. The airline operates ad hoc cargo charters and charter programs around the world with Ilyushin IL-76 and Antonov AN-12 all-cargo aircraft. Since November 30, 2006, Silk Way also operates its own corporate Jet airplane, a GULFSTREAM GIV-X (GF50). Beginning from May 07, 2007 Silk Way Airlines operates brand new IL-76TD-90 aircraft manufactured by Tashkent Aircraft Production Corporation named after V.P.Chkalov, Uzbekistan and equipped with the ITC-90A-76 engines. This aircraft powered by nC-90A-76 engines complies with the provisions and standards of Aviation Rules AR-36, Stage IV and ICAO Annex 16, Volume 1, Chapter 4 (environmental protection). The first flight by the newly modified IL-76TD-90 aircraft was operated en route Baku-Luxembourg-Baku on May 10,2007. Silk Way Airlines is expecting to expand its fleet with such modernized aircraft in the near future. The airline operates ad hoc cargo charter flights and charter programs to such destinations as Dubai (U.A.E.), Urumqi (PRC), Kabul (Afghanistan), Kandahar (Afghanistan), Baghdad (Iraq), Istanbul (Turkey), Tbilisi (Georgia), Dushanbe (Tajikistan), Luxembourg (Luxembourg), Hahn (Germany), Neubrandenburg (Germany), Trenton (Canada), Cold Lake (Canada), Lyneham (United Kingdom), Chatearoux (France), Bratislava (Slovakia), Eindhoven (Netherlands), and Tel Aviv (Israel). Overall, Silk Way operates to over 50 destinations worldwide.

Silk Way Airlines is the largest all-cargo airline in Azerbaijan and the region, operating a continually growing fleet of Ilyushin IL-76 freighters. The company performed over 3,250 landings worldwide in the year 2003; 4,870 landings in the year 2004; and 7,240 landings in the year 2005. At year-end of 2002, Silk Way won the annual tender for NATO and German Ministry of Defense ISAF program flights for transportation of relief goods into Afghanistan. Silk Way also operates long-term programs for the Canadian Department of National Defense and the French Army. Silk Way has broad experience in the transportation of such cargo as oil well equipment, construction materials and heavy industrial equipment and machinery, sea and 20-foot containers, vehicles and spare parts, humanitarian and relief cargo, food, entertainment equipment, and large shipments of general cargo, hazardous materials (carried in accordance with IATA Dangerous Goods Regulations). Since its dynamic start in 2001 and over the past five years, Silk Way has consistently expanded the scope of its operations. In December of 2003 Silk Way obtained a Canadian Foreign Air Operator Certificate (FAOC No. F-10469) to operate flights to and from Canada using IL-76 and AN-12 aircraft. In May of 2003 Silk Way became a trustee member of The International Air Cargo Association (TIACA). In March of 2005 Silk Way received its registration with the United Nations (Vendor ID 23931) as an approved supplier for tendering humanitarian cargo transportation. In November of 2005, the Civil Aviation Authorities of China (CAAC) granted CCAR-129 Operations Specifications No. AZQ-F-008-HB to Silk Way for operating non-scheduled cargo flights to the People's Republic of China.

Silk Way is an active and generous contributor to the development of the Azerbaijani air cargo transportation industry and its infrastructure. In November of 2004 Silk Way completed the construction of, and commissioned, a new apron (134,907 m2) and ten (10) aircraft parking lots at Baku's Heydar Aliyev International Airport. Silk Way is also a founder of the Baku Cargo Terminal (BCT) at the Heydar Aliyev Intemational Airport. Built in 2005, the BCT employs state of the art operation, information and management technologies. Since the year of 2006 Silk Way started the construction project of its own Maintenance Centre "SILK WAY Technics" which will perform all types of aircraft maintenance at the Heydar Aliyev International Airport, Baku (Republic of Azerbaijan). At the present time "Silk Way Technics" operates the line maintenance and periodic checks: Form 1, Form 2, Form 3, and Form 4 for IL-76 aircraft (as per Appendix to the Certificate of Conformity N US/017, PAGE l), and all forms of line maintenance for GULFSTREAM GIV-X (G450) (as per Appendix to the Certificate of Conformity N US/017, PAGE 5) at Heydar Aliyev International Airport, BakuIAzerbaijan. Named after the legendary ancient trade route, Silk Way is participating in restoring old Great Silk Route and contributes to the development of the "TRACECA (Transport Corridor Europe Caucasus Asia) program." TRACECA is an Intergovernmental Commission established on September 8, 1998, at the "TRACECA International Conference for Restoration of the Historical Silk Route" in Baku, Azerbaijan, by a "Basic Multilateral Agreement on International Transport for Development of the Europe

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Caucasus

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Asia Corridor (Basic Multilateral

Agreement)" and its technical annexes. The Basic Multilateral Agreement has been signed and ratified by twelve (12) states: Azerbaijan, Bulgaria, Georgia, Kazakhstan, Kyrgyzstan, Armenia, Moldova, Romania, Tajikistan, Turkey, Ukraine, and Uzbekistan. The objectives of the Basic

Multilateral Agreement are to develop the economic relations, trade and transport communications in the regions of Europe, the Black Sea, the Caucasus, the Caspian Sea and Asia; to facilitate access to the international markets of road, air, and railway transportation, and commercial maritime navigation; to ensure traffic safety, security of goods and environmental protection; to harmonize transportation policy and the legal framework in the field of transportation; and to create equal conditions of competition between different types of transport. Working closely with the European Union, TRACECA aims to integrate member states into the international economy by improving and enhancing trade and transport. Silk Way also closely cooperates with the "Eurasian - Group of Companies (EAS)"

- an

international group of companies specializing in cargo transportation. EAS serves as the General Sales Agent of Silk Way. In particular, EAS provides Silk Way with representation in several countries through such EAS offices as Eurasian MMC, Baku (Azerbaijan); Eurasian Cargo USA, Houston (USA); Eurasian Cargo USA, New York (USA); Euro-Asian S.A.R.L., Luxembourg; Eurasian-Cargo, Dortmund (Germany); Eurasian Cargo Ltd, London (UK); Eurasian, Istanbul (Turkey); Euro-Asia, Dubai (UAE); Eurasian LLC, Actual (Kazakhstan); Eurasian Air Service, Bishkek (Kyrgyzstan); Eurasia, Kiev (Ukraine); Euro-Asian, Moscow (Russian Federation); Eurasia Cargo, Tbilisi (Georgia); Eurasia, Kabul (Afghanistan). The EAS companies cooperate with Silk Way to increase the numbers of charter flights operated by Silk Way, and promote new charter and scheduled programs with the purpose of maintaining safe and stable utilization of its aircraft, thereby expanding Silk Way's relations with the shipping public and customers in cargo air transportation markets.

Silk Way Airlines has interchange and code-sharing relations with "Azerbaijan Hava Yollari" Cargo Airlines (AZAL Cargo), as well as an interline agreement with "Cargolux Airlines International S.A."

EXHIBIT SILK WAY - 10 AIRCRAFT INVENTORY SILK WAY currently operates seven (7) Ilyushin IL-76 aircraft, three (3) Antonov AN12 aircraft, one (1) modernized Ilyushin IL-76-90 aircraft (Stage 4) and one (1) corporate Jet

GULFSTREAM G450 aircraft as listed below. SILK WAY plans to continue expanding its fleet of aircraft in the near future. Specifically, in the near future, Silk Way expects to start operating one (1) more modernized and noise stage 4 compliant Ilyushin IL-76TD-90 aircraft. SILK WAY currently owns the following aircraft: Aircraft Type & Serial No. IL-76TD, 0053460820 AN-12BK, 8345605 GULFSTREAM GIV-X (G450), 4045

Registration No. 4K-AZ19 4K-A223 4K-A2888

Countrv of Registration AZERBAIJAN AZERBAIJAN AZERBAIJAN

SILK WAY currently leases the following aircraft:

EXHIBIT SILK WAY-I 1 MAINTENANCE ARRANGEMENTS Silk Way will utilize primarily Ilyushin IL-76 aircraft or such other aircraft as it may have or acquire to conduct the proposed operations. Silk Way's aircraft inventory is set forth in exhibit SILK WAY - 10. Line maintenance for Silk Way's aircraft is performed by "Silk Way Technics" at Heydar Aliyev International AirportIBaku, Azerbaijan (as per the Certificate of Conformity N US1017 issued by the CAA of Azerbaijan on March 15, 2007).

Heavy

maintenance and overhaul of the aircraft is performed by "Volga-Dnepr Gulf (UAE) FZE" at Sharjah International Airport, United Arab Emirates. Azerbaijan is a contracting state to the Convention on International Civil Aviation ("Chicago Convention"). Silk Way's aircraft are maintained in compliance with ICAO Annexes

1, 6 (Part I), and 7. In addition, Silk Way's aircraft conform to type designs approved by the Interstate Aviation Committee, and have been issued civil airworthiness certificates in accordance with the provisions of ICAO Annex 8.

EXHIBIT SILK WAY - 12 AGREEMENTS WlTll OFHER CARRIERS AFFECTNG SILK WAY'S SERVICE PKOI'OSAI. As was stated in exhibit SILK WAY - 9, Silk Way Airlines has interchange and codesharing relations with "Azerbaijan Hava Yollari" Cargo Airlines (AZAL Cargo), as well as an interline agreement with "Cargolux Airlines International S.A." These cooperative working arrangements with the referenced carriers, however, will not affect Silk Way's services proposed by this application.

EXHIBIT SILK WAY - 13 FINANCIAL DATA SUMMARIES Silk Way is providing the Department with abbreviated audited statements for years 2005 - 2006. Silk Way respectfully requests that in addition to the attached statements, the Department consider its extensive operations over the past years as sufficient to demonstrate the capability of Silk Way to operate to the United StatesJ

1 Indeed, -

the Department has pernlitted foreign air carriers to operate to the U.S. where such financial statements were completely or partially unavailable. &, Application of East Line Airlines for an Exemption, Notice of Action Taken, Docket OST-99-5606; Application of Atlant-Sovuz for an Exemption, Order 95-12-19; Application of Antonov Design Bureau for an Exemption, Order 93-5-37; b l i c a t i o n of Air Foyle Limited and Antonov Design Bureau for Exemptions, Order 91-10-1 1.

AzerW'jan Republic Baku Clty

Azarbaycan Respublikasr

Baiu sjsharr

> consulting

ii5lBr.J accuracy>> consuf f ing

MMC

LTU

STATEMENT On Financial and Economic Condition of a Civil Aviation Enterprise Baku, I 5 August, 2006 Name of the Enterprise: "Silk Way"AiiIines International Airport, -421 109, Baku, Azerbaijan. Postal Address: Heydar Tel.:(+99412) 493 38 60; 493 38 61; Fax: (i99412)493 38 59. Examined: a) "M & J Accuracy Consulting" MMC, Baku, Azerbaijan.

Reached Conclusion: 1. Financial and economic condition indices of the Emteqxise reports of 01.01.2004 31.12.2005 testify that the CA ENTERPRISE COMPLIES WITH THE REOUIREMENTS TO THE STATED OPERATIONS. 2. Basic indices of opera^ findings and ob.m-wtiolls resulted from the analysis of the b c i a l and economic condition of the CA It'mterprise: 2.1. The Enterprise revenue by 31.12.2004 comprised 72,203,429.56 AZN. which equals to 73,631,888.19 USD at the Central Bank exchange rate; by 31.12.2005 it comprised 78,924,377.93 AZN, equal to 85,918,112.26 USD at the Central Bank exchange rate. The Enterprise operations in yeas 2004 - 2005 were efficient. Net income in 2004 constituted 1,002,646.82 AZN, or 1,022,482.99 USD; in MOS it ~ i m si,179,310.75 AZN. equal to 1,283,813.13 USD. 2.2. Bringing in new investments in the beginning of 2006 enabled the Enterprise Management to adopt a new stntegy, to start cargo @ODS and to boost scheduled and charter flights, both domestic and &en&o& by &craft IL-76 and AN- 12.

As of 31.12.2005 the Enteqnke had no errears of wages, of budget or socialfunds.

"Silk Way"Airlines reports and substantiated forecast testify to the ability of the Enteqnise to accumulate and sustain sufficient fan& tw ensure safe aircraft operations in compliance with the rules and quirements in the fiield of Civil Aviafion and to keep up stable and efficient business.

Azerbaijan Republic Baku City

"M&J accuracyq consulting"

~wurar;y

consu, SI +L: "U~ ~~V~

L T D

M M C

STATEMENT NQIM32 On Financial and Econoatic Condition of a lilivi,il Aviation Eate~prive Baku, 20 May, 2007 Name of the Enterprise: "Silk Way" Airlines Postal Address: Hey& Aliyev International Airport, AZ1109, Baliu, Azerbaijan. Tel.: (+994 12) 493 38 60,(+W'12) 493 38 61; Fax: (-t-994 12) 493 38 59.

Emmined: a) ''MU accuracy" consulting LTD. Baku, Azerbaijan. Reached Conclusion: 1. Financial and economic condition indices of the .ii~~tr.r.prise repons of O1.O0l. a 0 3.3 1.12.2006 testify that the C A FNTQPRTSB 60MPLIES WITH THE R E O WMENTS TQ

-

Basic indices o f o p ~findings ~ , rmd observations resulted from the analysis of the financial and economic condition of the CAEnterprise: 2.

2.1. The Enterprise revenue by 3 1.12.2003 comprised 3h,672,4cHi.81 AZN, which qua11 t~ 39,277,368.28 USD at the Central Bank exchange rate; by 31.12.2004 comprised 72,203,429.56 AZN, which equals to 73,631,888.19 USD at the Centrai Bank exchange tate., by 3 1.12.2005 it comprised 78,924,377.93 AZN, equal to 85,918,112.26 USD at the Central Bank exchange rate and by 31.12.2006 comprised 109,368,710.53 AZN, equal to i25,509,1,192.71 USD at the Cetmal Bank exchange rate. The Enterprise operations in yeas 2003 - 2004 2005 1036 were efficient. Net income in 2003 it was 188,578.88 AZN, equat to 191,528.42 USD; in 2034 ccrnstituted 1,002,646.82 AZN, or 1,022,482.99 USD;in 2005 it was 1,179,310.75 AZN, equal to 1,283,813.13 USD and in 2006 it was 1,864,870.80AZN, equal to Z,I40,085.&4USD. 2.2. The correctly carried policy of the Enterprise Managdent to adopt a new strareby, to expand geography oftha wmptuly flights and to boost scheduled 4 charter flights, both domestic and international, by aircraft IL-76 and AN-12.

-

-

As of31.12.2006 the E n w e had ao arrears& wages, ofbudget or social M s .

"Silk Way" Airlines reports and substantiated forecast testif) to {he nbibllity of the Enterprise to accumulate and sustain sufficiertt &nds to ensure safe airman ~pemtionsin complimcc with the rules and requirements in the field of Civil Aviation and to keep up dable and efficient business.

Director,

20 May, 2007

. A

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&ASPIAN PLAZA., C. Cabbani 44. ~ e l f f s x (*00412) : 497-4749 43:' 3 1 09.E-mail: [email protected] -.

.-

.

.

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EXHIBIT SILK WAY - 14 FINANCIAL PROJECTIONS

Silk Way has not prepared financial projections for the first twelve months of proposed operations due to the fact that Silk Way needs to establish a market presence before it will be able to set forth an accurate assessment of costs and revenues for the US market. As stated in exhibit SILK WAY - 13, Silk Way requests that the Department permit it the same treatment as other foreign air carriers that received Department authority to operate to the U.S. where financial statements and/or projections were completely or partially unavailable. 2

2 &,Application of East Line Airlines for an Exemption, Notice of Action Taken, Docket OST-99-5606; Application of Atlant-Soyuz for an Exemption, Order 95-12-19; Application of Antonov Design Bureau for an Exemption, Order 93-5-37; kplication of Air Fovle Limited and Antonov Design Bureau for Exemptions, Order 9 1-10-11.

EXHIBIT SILK WAY - 15 GOVERNMENTAL FINANCIAL ASSISTANCE Silk Way does not receive, and does not expect to receive, any financial assistance from the Government of Azerbaijan.

EXHIBIT SILK WAY - 16 BILATERAL AGREEMENT &DESIGNATION OF SILK WAY Silk Way has been designated by the Government of Azerbaijan to perform foreign air transportation services between the United States and Azerbaijan as is required by 49 U.S.C. 41302. By its letter N 1113315 dated September 28, 2006, the CAA of Azerbaijan designated Silk Way as a charter cargo carrier to provide service between Azerbaijan and the United States. This designation of Silk Way by the Government of Azerbaijan has been transmitted through formal diplomatic channels. In the absence of a formal bilateral Air Transport Agreement between the United States of America and the Republic of Azerbaijan, Silk Way's proposed operations to the United States shall be subject to, and based on, the principles of comity and reciprocity, pending ongoing contacts between the Governments of the two countries.

EXHIBIT SILK WAY - 17 SAFETY & TARIFF VIOLATIONS In the five years preceding the instant application, Silk Way was involved in one accident resulting in the loss of life. The accident involved its IL-76 aircraft, operated by Silk Way under AZAL Cargo's call sign that stalled while climbing and crashed in the vicinity of Urumqi Airport (China). The seven-member crew of the aircraft died in the crash. Overloading and weather conditions were determined to be the causes of the crash. Following the accident, Silk Way, under the oversight of the CAA of Azerbaijan, has undertaken a broad program of safety enhancing measures that include modification to its Flight Operations Manual, additional crew training programs, and internal safety audit programs. Silk Way has not been involved in any tariff violations.

EXHIBIT SILK WAY - 18 WAIVER OF LIABILITY LIMITS UNDER WARSAWIMONTREAL CONVENTION Attached are four copies of OST Form 4523 (Waiver of liability Limits under Warsaw Convention) as is required by 14 C.F.R.

5 211.20(t).

submitted to the Department by hand delivery.

The originally executed Form will be

0 Docket OST 95-236 U.S. Department o f Transportation ORce of the Secretary of Transportation

AGREEMENT

The undersigned carriers (hereinafter referred to as 'the Carriers') hereby agree as follows: 1. Each of the Carriers shall, effective May 16, 1966, include the following in its conditions of carriage, including tariffs embodying conditions of carriage filed by il with any government: T h e Carrler shall avail itself of the limitation of liability prov;deo in the Convention for tne Unflcatlon of Cenan Rules Relating to ntemationa Carnage by Air sgned at Warsaw October 12th. 1929, or prov deo in the said Convent~onas amended by tne PrOtOco sgned at The Hague September 28th. 1955. nowever in accoroance with Aticle 22(1) of sad Convent on, or said Convention as amended by sala Protoco tne Carrler agrees tnal, as to all interna1:onal transponalion oy the Carr:er as defined in the said Convention or said Convention as amended by said Protocol, which, accordingto the contract of carriage. includes a point in the United States of America as a point of origin, point of destination, or agreed stopping place (1) The limit of liabilitvfor each passenger for death. wounding. or other bodily iniurv shall be the sum of US $75.000 (nc usive of .egal fees and &sts, exiept that, in case of a claim brougnt in a State where provls.on 1s maoe tor separate award of legal fees an0 costs, the 1im.t shall oe tne sdm of US $58,000 exclusive of legal fees and costs (2) The Carrier shall not, with respect to any claim arising out of the death, wounding, or other bodily injury of a Passenger, avail itself of any defense under Article 20(1) of said Convention or said Convention as amended by said Protocol. Notning herein shall bedeemed to affect tne r~ghtsand I ab 11t.esof tne Carrlerw tn regard to any clalm brought oy, on behalf of, or in respect of any person who has wlllfu ly c a ~ s e ddamage wn ch resJlteo in death, wound.ng or other bodhy n.] ~.r y of a passenger." 2. Each Carrier shall. at the time of deliverv of the ticket. furnish to each oassenoer whose transoortation is ooverned bv' the ~, Convention, or the convention as amended by the Hague ~ r o t o c band ~ , by the special contract describedin paragraph I, the fOllOWlnD notice, which shall be minted in tvoe at least as iaroe as 10 ooint modern tvDe and in ink contrasting with the stock on iil each ticket; (ii) a piece of paper kither in the ticket envelope wiih the ticket or &ached to the ticket: or 61) on the ticket envelope: ~

~

~~

"ADVICE TO INTERNATIONAL PASSENGER ON LIMITATION OF LlABlLiN Passengers on a iournev involvlnsan ultimate destination or a stop in a country other than the country of origin are advised that the pr&isions o f a treat; known i s the Warsaw Convention may be applicableto the entire journey, including any portion entirelv within the countrv of oriain or destination. For such Dassenuers on a iournev to, from. or with an asreed stoppinu . . place in the unite St t o f ~ k e r l c a yhe C vention and speciaicontra~tsof carriage embodied in applicable tariffs provide thatthe liabilitv of 4%Y~~'Y8m

-.

.--.

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[(name of carrier) and certain other] carriers parties to such special contracts for death of or personal injury to passengers is limited in most cases to proven damages not to exceed US $75,000 per passenger, and thatthis liability up to such limit shall not oepend on neg :gene on the panof the carrier For sbch passengers traveling by a carrier nota pany to s ~ c specal h contracts or on a oLrney not to, from, or having an agreed stopping . - .place in the Unlleo States of Amenca, lab lltr of the carr.er for death or personal injury to passengers is limitedin most cases to approximately US $10,000 or US $20.000: The names of Carriers parties to such special contracts are available at all ticket offices of such carriers and may be examined on request. Additional protection can usually be obtained by purchasing insurance from a private company. Such insurance is not affected by any limitation of the carrier's liability underthe Warsaw Convention or such specialcontracts of carriage. For further information please consult your airline or insurance company representative."

3. [This Agreement was Rled with the Civil Aeronautics Board of the United States. The Board approved it by Order E23680, adopted May 13.1966. The Agreement (Agreement 18900) became effective May 16, 1966. On January 1,1985. this Agreement became the responsibility of the Department of Transportation (DOT) by operation of law.] 4. This Agreement may be signed in any number of counterparts, all of which shall constitute one Agreement. Any Carrier may become a party to this Agreement by signing a counterpart hereof and depositing it with DOT.

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5. Any Carrier party hereto may withdraw from this Agreement by giving twelve (12) months'written notice o with rawal to DOT and the other Carriers parties to the Agreement. j 0 I \ (Signature and Date) U E fd;a m \[I,/ 'Either alternative may be used. (Prinled Name and Tie)

..,.,-

A

(Name and Address of Carrier) OST Form 4523 IFormerEv CAB Form 263)

C.4wT@22 s d f ~ ~ tAc/Ozq f,

LawLeicud

82&9&~.

0 Docket OST 95-236 U.S. Department o f Transportation Office of the Secretary of Transportation

AGREEMENT

The undersigned carriers (hereinafter referred to as 'the Carriers") hereby agree as follows: 1. Each of the Carriers shall, effective May 16, 1966, include the following in its conditions of carriage, including tariffs embodying conditions of carriage filed by it with any government:

"The Carrier shall avail itself of the limitation of IiabiliN orovided in the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at w i r s i i ' 0 c t o b e r 12th. 1929, or provided in the said Convention as amended by the Protowl signed at The Hague September 28th. 1955. However, in accordance with Article 22(1) of said Convention, or said Convention as amended by said Protocol, the Carrier agrees that, as to all international transportation by the Carrier as defined in the said Convention or said Convention as amended bv said Protocol. which. according to the contract of Carriage. includes a point in the United States of America as a point of origk point of desiination, or agreed stopping place (1) The limit of liability for each passenger for death, wounding, or other bodily injury shali be the sum of US $75.000 lnCluS ve of ~egalfees and costs, except tnat n case of a calm brought in a State wnere provls on s maoe for Separate award of .egal fees an0 costs tne ltm t shal. be tne sum of US $58 000 exc JS ve of legal fees and cosis (2) The Carrier shall not, with respect to any claim arising out of the death, wounding. or other bodily injury of a passenger, avail itseifof any defense under Article 20(1) of said Convention or said Convention as amended by said Protocol Nothing herein shali be deemed to affect the rights and liabilities of the Carrier with regard to any claim brought by, on behalf of, or in respect of any person who has willfully caused damage which resulted in death, wounding, or other bodily injury of a passenger.' 2. Each Carrier shall. at the time ofdetivew of the ticket. furnish to each Dassenaerwhose transportation is governed bv the Convention, or the convention as amended by the ~ a ~ ~ur oet o A 1and , by the spkciai contract described i n paragraph I, the following notice, which shall be ~ r i n t e din tvDe at least as iarae as 10 point modern type and in ink contrasting with the stock on Ii) in the ticket envelope with the ticket or iitached to the ticket: or (ii) on the ticket each ticiet: (ii) a piece of paper kither envelope:

"ADVICE TO INTERNATIONAL PASSENGER ON LIMITATION OF LlABlLilY PaSSengerS on ai0Urney involvingan ultimate destination or a stop in a country other than the country of origin are advised that the proiisions o f 8 treaty known i s the Warsaw Convention may be applicable to the entire journey, including any portion entirely within the country of orisin or destination. For such passengers on a journey to, from, or with an agreed stopping place In tne Unde St t of Amer ca ne C ventlon and specla contracts of carnage emooo ed n appi~cabieterlffs provloe that lne Ilabli.h of 22L2[certain v .I' Itname of carrier) and certain other1 carriers parties to such special contracts for death of or personal iniury passengers is . . to . k i t e d in most cases to proven damages not i o exceed US $75.000 per passenger, and thatthis liability up to such limit shall not depend on negligence on the oart of the carrier. For such Dassenaers traveling bv a carrier not a Dartv to such special wntracts Or on a journey not to, from, or having an agreed stopping place in the united States of ~mehca,.liabiiit~ of ihe carrier for death or personal injury to passengers is limited in most cases to approximately US $10.000 or US $20,000.

&tz&

The names of Carriers parties to such special contracts are available at all ticket offices of such carriers and may be examined on request. Additional protection can usually be obtained by purchasing insurance from a private company. Such insurance is not i of carriage. affected bv anv limitation of the carrier's liabilitv under the Warsaw Convention or such s ~ e c i acontracts - For further informalion please consult your airline or insurance company representative."

. .

Board c s of tne Unlteo States Tne Board approve0 11oy Oroer E3 [Tn s Agreement was file0 w~ththe CIVI A e r ~ n a ~ t ~ 23680 adooled Mav 13 1966 The Aareement 1Aoreement 18900I oecame effcctlve Mav 16 1966 On JanJaw 1 1985 thls ~~reehent'becam;theresponsibillt~~f the ~ e i a i i m e nof t ~rans~brtation (DOT) by operation of law.] 4. This Agreement may be signed in any number of counterparts, all ofwhich shali constitute one Agreement. Any Carrier may become a party to this Agreement by signing a counterpart hereof and depositing it with DOT.

I >-a

5. Any Carrier Party hereto may withdraw from this Agreement by giving twelve (12) months'written notice o with rawal to DOT and the other Carriers parties to the Agreement. (Signature and Date) 'Either alternative may be used. (Printed Name and Title)

0.e&;as \id

h w (Name and Address of Camer) gfk &d i ~ p & a

OST Form 4523 (Formerlv CAB Form 2631

A

0 Docket OST 95-236 U.S. Department o f Transportation Office of the Secretary of Transportation

AGREEMENT

The undersigned carriers (hereinafter referred to as 'the Carriers") hereby agree as follows: 1. Each of the Carriers shall, effective May 16. 1966, include the following in its conditions of carriage, including tariffs embodying conditions of carriage filed by it with any government: "The Carrier shall avail itself of the limitation of iiabilitv orovided in the Convention for the Unification of Certain Rules r 1929, or provided in the said Convention as amended Relating to International Carriage by Air signed a t ~ a r s a k b c t o b e 12th. by the Protocol signed at The Hague September 26th. 1955. However, in acwrdance with Article 22(1) of said Convention, or said Convention as amended by said Protocol, the Carrier agrees that, as to all international transportation by the Carrier as defined in the said Convention or said Convention as amended bv said Protocol, which. according to the contract of Carriage. - . includes a point in the United States of America as a point of origh, point of desiination, or agreed stopping place (1) The limit of liability for each passenger for death, wounding, or other bodily injury shall be the sum of US $75,000 inclusive of legal fees and wsts, except that, in case of a claim brought in a State where provision is made for separate award of legal fees and costs, the limit shall be the sum of US $58,000 exclusive of legal fees and costs. (2) The Carrier shall not, with respect to any claim arising out of the death, wounding, or other bodily injury of a Passenger, avail itself of any defense under Article 20(l) of said Convention or said Convention as amended by said Protocol. Nothing herein shail be deemed to affect the rights and liabilities of the Canierwith regard to any claim brought by, on behalf of, or in respect of any person who has willfully caused damage which resulted in death, wounding, or other bodily injury of a passenger." 2. Each Carrier shall, at the time of deliveN of the ticket. furnish to each vassenser whose transportation is governed bv the Convention, or the ~onventio"as amended by the Hague protocol, and by the special w i t r a c t describedin paragraph 1, the following notice, which shall be printed in tvDe at least as large as 10 point modern type and in ink contrasting with the stock on (i) each ticket: (ii) a piece of paper either in the ticket envelope with the ticket or anached to the ticket: or (ii) on the ticket envelope: "ADVICE TO INTERNATIONAL PASSENGER ON LIMITATION OF LIABILITY Passengers on a iourney involving an ultimate destination or a stop in a country other than the wuntry of arigin are advised t o entire journey, including any portion that the proiisions o f a treaty known i s the Warsaw Convention may tie a p p i i c a b ~ ~the entirely within the countrv of origin or destination. For such passengers on a iourney to, from, or with an agreed stopping place and speciai contracts of carr/age embodied in applicable tariffs pro"ihe that the liability of [certain [(name of carrier) and certain other] carriers parties to such special contracts for death of or personal injury to passengers is limited in most cases to proven damages not to exceed US $75,000 per passenger, and thatthis liability up to such limit shall not depend on nwlisence on the Dart of the carrier. For such Dassenaers travelins bv a carrier not a Party to such special contracts oron ajo6ney not to, frim, or having an agreed stopping plice in the ~ n i t e bStates of~me;ica;liabilit~ of ihe carrier for death or personal injury to passengers is limited in most cases to approximately US $10.000 or US $20.000. The names of Carriers parties to such special contracts are available at all ticket offices of such carriers and may be examined on request. Additional proteclion can usually be obtained by purchasing lnsurance from a private company. Such Insurance is not affected by any limitation of the carrier's liability underthe Warsaw Convention or such special contracts of carriage. For further information please consult your airline or insurance wmpany representative." 3. [ThasAgreement was f!,eo with the Clvl.Aerona~ticsBoard of tne Unlteo States. The Board approve0 it by Oraer E23880. aoODted Mav 13.1966. The Aareement (Asreement 189001became effective Ma9 16. 1966. On JanJaW 1.1985. thls ~~reeinent'becam~theresponslbllit~~f the ~ e i a r t m e nof t ~rans~brtation (DOT) by operation of law.] 4. This Agreement may be signed in any number of counterparts, all ofwhich shall constitute one Agreement. Any Carrier may become a party to this Agreement by signing a counterpart hereof and depositing it with DOT.

5. Any Carrier party hereto may withdraw from this Agreement by DOT and the other Carriers parties to the Agreement. (Signalure and Date) 'Either alternative may be used. (Primed Name and We) (Name and Address of OST Form 4523 lFarrnerlv CAB Form 2631

0.l

0 Docket OST 95.236 U.S. Department of Transportation Office of the Secretary of Transportation

AGREEMENT

The undersigned carriers (hereinafter referred to as "the Carriers') hereby agree as follows: 1. Each of the Carriers shall, effective May 16, 1966, include the following in its conditions of carriage, including tariffs embodying conditions of camage filed by it with any government: "The Carrier shail avail itself of the limitation of liability provided in the Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at Warsaw October 12th, 1929, or provided in the said Convention as amended by the Protocol signed at The Hague September 28th. 1955. However, in accordance with Article 22(1) of said Convention, or said Convention as amended by said Protocol, the Carrier agrees that, as to ail international transportation by the Carrier as defined in the said Convention or said Convention as amended by said Protocol, which, according to the contract of Carriage, includes a point in the United States of America as a point of origin, point of destination, or agreed stopping place (1) The limit of liability for each passenger for death, wounding, or other bodily injury shall be the sum of US $75,000 inclusive of legai fees and costs, except that, in case of a claim brought in a State where provision is made for separate award of legai fees and costs, the limit shall be the sum of US $58.000 exclusive of legai fees and costs.

(2) The Carrier shall not, with respectto any claim arising out 01 the death, wounding. or other bodily injury of a passenger, avail itself of any defense under Article 20(1) of said Convention or said Convention as amended by said Protocol. Nothing herein shail be deemed to affect the rights and liabilities of the Carrier with regard to any claim brought by, on behalf of, or in respect of any person who has willfully caused damage which resulted in death, wounding, or other bodily injury of a passenger." 2. Each Carrier shall, at the time of delivery of the ticket, furnish to each passenger whose transportation is governed by the Convention, or the Convention as amended by the Hague Protocol, and by the special contract described in paragraph 1, the following notice, which shall be printed in type at least as large as 10 point modern type and in ink contrasting with the stock on (I) each ticket: (ii) a piece of paper either placed in the ticket envelope with the ticket or attached to the ticket: or (iii) on the ticket envelope:

"ADViCE TO INTERNATIONALPASSENGER ON LIMITATION OF LlABlLilY Passengers on a journey involving an ultimate destination or a stop in a country other than the country of origin are advised that the provisions of a treaty known as the Warsaw Convention may be applicable to the entire journey, including any portion entirely within the country of origin or destination. For such passengers on a journey to, from, or with an agreed stopping place in the Unite St t of America he C vention and special contracts of carriage embodied in applicable tariffs provide that the liability of [certain I' [(name of carrier) and certain other] carriers parties to such special contracts for death of or personal injury to passengers is limited in most cases to proven damages not to exceed US $75,000 per passenger, and thatthis liability up to such limit shail not depend on negligence on the part of the carrier. For such passengers traveling by a carrier not a party to such special contracts or on a journey not to, from, or having an agreed stopping place in the United States of America, liability of the carrier for death or personal injury to passengers is limited in most cases to approximately US $10,000 or US $20,000.

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The names of Carriers pades to such special contracts are available at all ticket offices of such carriers and may be examined on request. Additional prolection can usually be obtained by purchasing insurance from a private wmpany. Such insurance is not affected by any limitation of the carrier's liability under the Warsaw Convention or such specialcontracts of carriage. For further information please consult your airline or insurance company representative." 3. [This Agreement was filed with the Civil Aeronautics Board of the United States. The Board approved it by Order E23680, adopted May 13,1966. The Agreement (Agreement 18900) became effective May 16,1966. On January 1,1985, this Agreement became the responsibility of the Department of Transportation (DOT) by operation of law.] 4. This Agreement may be signed in any number of counterparts, all of which shall constitute one Agreement. Any Carrier may become a party to this Agreement by signing a counterpart hereof and depositing it with DOT.

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5. Any Carrier party hereto may withdraw from this Agreement by giving twelve (12) months'written notice 0 with raWal to DOT and the other Carriers parties to the Agreement. (Signahire and Date) 'Either allemaSve may be used. 8%~(printed Name and XBe)

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(Name and Address of

OST Form 4525 iformerlv CAB Fonn 263)

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CERTIFICATE OF SERVICE

I hereby certify that I have on this day served a copy of the foregoing document upon all persons named on the attached service list via electronic mail.

Ekaterina A. Grimes

Dated: June 25,2007

Service List Marshall S. Sinick 2021626-6600 Squire, Sanders & Dempsey 1201 Pennsylvania Avenue, N.W. Suite 400 Washington, DC 20004 For: ALASKA AIRLINES, INC. FAX: 2021626-6780)

Brian Hunt 3171240-7433 General Counsel 7337 W. Washington Street Indianapolis, IN 46231 For: AMERICAN TRANS AIR (FAX: 3171240-7091)

Carl Nelson 2021496-5647 AMERICAN AIRLINES 1101 17th Street, N.W. Suite 600 Washington, DC 20036

Shannon Edwards 5031412-9361

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(FAX: 2021496-5660)

Jonathan Moss 2021663-6655 Wihner Cutler Pickering Hale and Dorr 1455 Pennsylvania Ave, N.W. Washington, DC 20004 For: UNITED AIRLINES (FAX: 2021772-6670)

Scott Yohe 2021216-0700 Vice-President, Government Affairs 1275 K Street NW Suite 1200 Washington, DC 20005 For: DELTA AIRLINES, INC. (FAX: 2021216-0824) Deputy Assistant Secretary for Transportation Affairs Department of State B u r e a u of Economics a n d Business Affairs, EBITRA, Room 5830 2201 C Street, N.W. Washington, DC 20250 (FAX: 2021647-4324) Kevin P. Montgomery 2021828-1002 POLAR AIR CARGO 1747 Pennsylvania Ave., N.W., Suite 875 Washington, DC 20006 (FAX: 2021828-1003)

EVERGREEN INTERNATIONAL, INC. 1401 New York Ave., N.W., Suite 530 Washington, D.C. 20005-2147 (FAX: 2021638-4593) Margot Wiegele 9071249-5142 NORTHERN AIR CARGO, Inc. 3900 West International Airport Road Anchorage, AK 99502 (FAX: 9071249-5190)

Roger Rapier 2021267-8115 (ATO-R) Office of International Aviation Federal Aviation Administration 800 Independence Ave., S.W. Washington, DC 20591 (FAX:2021267-9208) Angelia Bird 9011434-8589 FEDERAL EXPRESS CORPORATION 3620 Hacks Cross Rd. Memphis, TN 38125 (FAX: 9011434-9289)