Laws of the People's Republic of China

No. 167

The Detailed Rules for the Business Permission for Non-scheduled Flights of Foreign Air Transport Enterprises (CCAR-119TR-R1) were passed at the executive meeting of the Civil Aviation Administration of China on June 7, 2006, are hereby promulgated, and shall go into effect as of July 21, 2006. Director General of the Civil Aviation Administration of China: Yang Yuanyuan

June 21, 2006

Detailed Rules for the business permission for Non-scheduled Flights of Foreign Air Transport Enterprises Chapter I General Rules

Article 1

In order to regulate the administration of the business permission for non-schedule flights of foreign air transport enterprises within the territory of mainland China and remain the order of air transport market, the present Detailed Rules are constituted in accordance with Article 176 of the Civil Aviation Law of the People's Republic of China and Article 4 of the Interim Provisions on the Administration of Non-scheduled Flights in the Civil Air Transportation.

Article 2

The present Detailed Rules shall be applicable to the business permission for non-schedule flights of foreign air transport enterprises (hereinafter referred to as the foreign air carrier) for engaging in carrying passengers, baggage, cargoes and mails between any foreign country and mainland China.

Article 3

The "business permission for non-schedule flights in the civil air transportation" as mentioned in the present Detailed Rules means the flights for commercial air transportation other than scheduled flights and overtime flights, and covers the irregular group charter flights, integrated tourism charter flights, public charter flights, social organization charter flights, charter flights with similar interests, charter flights for special activities, student charter flights, charter flights for self use, cargo charter flights, passenger and cargo charter flights, and sharing charter flights, etc.

Article 4

Given that a foreign air carrier wants to implement the operation of non-scheduled flights between the foreign country and the mainland China, the operation may not be implemented until the foreign air carrier files an application with the Civil Aviation Administration of China (hereinafter referred to as the CAAC) in accordance with the present Detailed Rules ,to get the business permission and accomplish the operational appraisal in the light of the Rules for the Operation Conformity Appraisal of Foreign Public Air Carriers.

Article 5

The CAAC shall carry out the mutual benefit principle to the business permission for non-scheduled flights. The CAAC shall force equal restrictions on the air transport enterprises of a foreign country if the aviation charging department of the foreign country forces irrational restrictions on the business permission for the non-scheduled flights carried out by the civil air transport enterprises of the People's Republic of China between China and the said country.

Chapter II Application for the Business Permission for Non-scheduled Flights

Article 6

Application for the business permission for any non-scheduled flight, an applicant shall be made with the CAAC within 7 days before the scheduled flight; otherwise, the CAAC may not accept the application, but except it is otherwise provided in the relevant air transport agreement or arrangement.

In case the rescuing staff or materials need to be transported under the condition of calamity or any other crucial or special circumstance, an applicant can submit an application to the CAAC within 3 days before the scheduled flight after the reasons are illustrated.

Article 7

Application for the business permission for any non-scheduled flight, an applicant shall illustrate the type of the business permission for the non-scheduled flight it plans to run.

Article 8

To make an application for the business permission for any non-scheduled flight, an applicant can directly submit an application or entrust an agent to submit the application.

Generally, an application shall be sent out via telegraph to the following SITA addresses: BJSSKCA, BJSZGCA; or to the following AFTN address: ZBBBYAYX.

Article 9

An applicant shall offer documents to illustrate the conditions as follows:

(1)

the name and address of the owners and the operators of the aircrafts;

(2)

the radio communication and signal codes of the aircrafts;

(3)

the frequency range of the radio used in the aircrafts;

(4)

the types, maximum take-off weight and maximum landing weight and number of seats available or tonnage of the aircrafts;

(5)

the expected takeoff and arrival locations, dates, times (UTC Time), route, and the points for entering into and outside the territory of mainland China;

(6)

the number of the flight and the flight sorties;

(7)

the name, address, contact person and contact information of the charter, the guarantor, and the reception entity;

(8)

the name, address, contact person and contact information of the agency providing agency services for the charter flight and obtaining a corresponding qualification;

(9)

the name, address, contact person and contact information of the airport ground service company providing ground services for the charter flight; and

(10)

the contract of charter.

Article 10

To make an application for the business permission for any non-scheduled flight for the first time, an applicant shall submit the documents as follows except for those prescribed in Article 9 , :

(1)

the duplicated documentation of the business permission for air transportation and operating regulation released by the capable department of the country (region) where the air transport enterprise is fitted for its qualification for pubic air transportation;

(2)

the duplicated documentation of the nationality registration certificate and the airworthiness certificate of the aircraft, the permission for using the radio on the aircraft and the noise certificate; and

(3)

the duplicated documentation of the certifications which can show that the applicant has purchased the insurance for the aircraft, passenger, goods or the liability to the third party on the ground.

Article 11

Whether an application is lodged by the applicant itself or by an agent, the applicant shall be responsible for the authenticity of the documents submitted.

Article 12

The CAAC may make other additional conditions to the business permission for any non-scheduled flight which may prevent or destroy public interests.

Article 13

The CAAC shall accept the application if the application materials are entire and abide by statutory forms; the CAAC shall inform the applicant of all the contents which should be supplemented and corrected once and for all on the spot or within 3 days if the application materials are not entire or do not abide by statutory forms; and the date when the application materials are received shall be considered as the date of acceptance if the CAAC does not inform the applicant within the time limit.

Chapter III Determination on the Business Permission for Non-scheduled Flights

Article 14

The CAAC shall implement the examination within 4 days as of the day of the acceptance of an application, and make a written decision on approval or disapproval.

Article 15

The CAAC shall make a decision on approval if the application of an applicant complies with the conditions and standards prescribed in the present Detailed Rules.

The CAAC shall, when it makes a decision on disapproval, explain and inform the applicant of the right to apply for administrative reconsideration or institute an administrative lawsuit.

Chapter IV Restrictive Conditions on the Business Permission for Non-scheduled Flights

Article 16

An applicant shall run the non-scheduled flights in accordance with the flight plan as approved by the CAAC, and may not change it at random.

Article 17

In general, an applicant may not run any of the following acts in the non-scheduled flights, unless it is specially authorized by the CAAC in accordance with foreign relations, economic and trade relations, public requirements or any other reason:

(1)

Carrying out non-scheduled flights between any two points within the territory of mainland China;

(2)

Carrying out combined flights between any two points or more points within the territory of mainland China;

(3)

Carrying out non-scheduled flights between the territory of mainland China and any third country (region);

(4)

Carrying out non-scheduled flights on the flight course or flight section for scheduled flights;

(5)

Carrying passengers in non-scheduled cargo charter flights;

(6)

Carrying out non-scheduled flights by using wet-lease aircrafts;

(7)

Through the computer reselling system, retailing the chartered seats or berths to the general public or reselling them to any other charter;

(8)

Carrying out combined charter flights of the passenger and cargo; or

(9)

Conveying weapons and materials for battles.

Article 18

An applicant shall, before it obtains the business licensing for non-scheduled flights of carrying dangerous goods, lodge an application with the CAAC under the Provisions on the Administration of the Civil Air Transportation of Dangerous Goods in China, and can not transport dangerous goods until it is approved.

Article 19

On the condition that an applicant applies for using a wet-lease aircraft for running non-scheduled flights under a special circumstance, it shall explain the reasons to the CAAC in advance. In case the CAAC deems that the reasons are set up, the applicant shall submit a written application within 15 days before the expected flight, and shall submit the following documents except the documents mentioned in Articles 9 and 10:

(1)

the aircraft wet-lease agreement;

(2)

the agreement between the lessor and lessee on the security liabilities for the wet-lease aircraft; and

(3)

the business permission for international air transportation released by the relevant department in charge of the country (region) where the lessor of the aircraft is located.

Article 20

The operation shall be dealt with consistently by an air transport agent with corresponding qualifications if an applicant plans to transport passengers or goods from the territory of mainland China to any point of a foreign country.

Article 21

To run non-scheduled flights within the territory of mainland China, an applicant shall accept the ground services offered by the relevant service department with corresponding qualifications and terminate an agency agreement for ground services with it, and may not accept the ground services offered by any foreign enterprise or individual within the territory of mainland China, unless the said applicant has been authorized for offering ground services by itself or for using ground services provided by any other foreign air transport enterprise or Taiwan, Hong Kong or Macao air transport enterprise for the scheduled flights it operates.

Article 22

To operate non-scheduled flights, an applicant shall pay airway expenses, take-off and landing expenses and other expenses in accordance with the relevant provisions.

Chapter V Loading Statistics for the Business Permission for Non-scheduled Flights

Article 23

An applicant shall fill in and report a Statistical Form on the Transport Businesses of Foreign Airliners stated in the Appendix to the present Detailed Rules within 10 days after the operation of a non-scheduled flight, and confirm the accuracy and integrity of the contents it fills in.

Chapter VI Legal Liabilities

Article 24

The principal and other persons directly responsible shall be given administrative sanctions if the department in the CAAC and its functionaries for accepting applications go against the relevant provisions in the present Detailed Rules when approving the business permission for non-scheduled flights to the applicants and are under any of the following circumstances, and if the circumstances are severe:

(1)

Refusing to accept an application in line with statutory conditions;

(2)

Failing to agree the permission to an applicant which accords with the permission conditions or within the statutory term;

(3)

Failing to notify the applicant of the contents that should be completed and corrected once and for all when the application materials submitted by the applicant are inadequate or do not abide by statutory forms; or

(4)

Failing to illustrate the reasons for refusing the application or the disapproval.

Article 25

In case any working staff of the department for accepting applications in the CAAC try to accept properties or want to get other interests when approving the business permission for non-scheduled flights from the applicants, if a crime is constructed, he shall bear criminal liabilities; and if a crime is not constructed, he shall be imposed upon administrative sanctions.

Article 26

If an applicant conceals the relevant conditions or offers false materials when applying for the business permission for non-scheduled flights, the CAAC may not accept the application or authorize the approval, and shall render it a warning, and any application for the business permission for non-scheduled flights submitted by the said applicant may not be accepted within 6 months as of the day when the warning is rendered.

Article 27

In the event that an applicant gets the business permission for non-scheduled flights through cheats, bribes or any other unjustifiable means, the CAAC shall call off the said permission, and impose a fine of 10,000 Yuan up to 30,000 Yuan on it, and any application for the business permission for non-scheduled flights presented by the said applicant may not be agreed within one year as of the day when the permission is called off or the fine is imposed.

Article 28

If an applicant that has been permitted to run non-scheduled flights commits any of the following acts, the CAAC may give a warning or a fine of 10,000 Yuan up to 30,000 Yuan to it in accordance with the difference of the circumstances:

(1)

Discretionarily changing the flight plan as approved by the CAAC;

(2)

Reselling for profiteering, leasing or conveying the business permission for non-scheduled flights;

(3)

Running business operations beyond the scope of the business permission for non-scheduled flights;

(4)

Hiding the relevant conditions, offering false materials or rejecting to offer true documents which can reflect the conditions to the civil aviation administrative body responsible for the supervision and examination; or

(5)

Any other illegal act presented by the law or regulation.

Chapter VII Supplementary Rules

Article 29

The time range presented in the present Detailed Rules shall be reckoned by working days, excluding legal holidays.

Article 30

The present Detailed Rules shall be carried out by analogy if an aircraft owner or operator of Hong Kong or Macao Special Administrative Region applies for the business permission for non-scheduled flights between Hong Kong or Macao Special Administrative Region and the mainland China, or if an aircraft owner or operator of Taiwan Area applies for the business permission for non-scheduled flights between Taiwan Area and the mainland China.

Article 31

The present Detailed Rules shall go into effect as of July 21, 2006. The Provisions on the Administration of Non-scheduled Flights in the Foreign Civil Air Transportation promulgated by the Civil Aviation Administration of China on November 23, 1990 shall be concurrently abolished.

Appendix: Statistics on the Transport Volume of Foreign Airliners (omitted)