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Lisbon/Ponta Delgada/Lisbon,

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Lisbon/Terceira/Lisbon,

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Lisbon/Horta/Lisbon,

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Funchal/Ponta Delgada/Funchal,

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Oporto/Ponta Delgada/Oporto,

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Lisbon/Santa Maria/Lisbon,

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Lisbon/Pico/Lisbon.

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On the Lisbon/Ponta Delgada/Lisbon route, at least one round trip a day, between 8.00 and 21.00, throughout the year; one trip a week may be combined with the Lisbon/Santa Maria/Lisbon route,

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on the Lisbon/Terceira/Lisbon route, at least four round trips a week, on different days, between 8.00 and 21.00, throughout the year; one trip a week may be combined with the Lisbon/Pico/Lisbon route,

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on the Lisbon/Horta/Lisbon route, at least three round trips a week, between 8.00 and 21.00, throughout the year, on non-consecutive days,

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on the Funchal/Ponta Delgada/Funchal route, at least one round trip a week, throughout the year,

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on the Oporto/Ponta Delgada/Oporto route, at least two round trips a week, throughout the year; one of these trips may be combined with Lisbon, from October to June inclusive,

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on the Lisbon/Santa Maria/Lisbon route, at least one round trip a week, which may be combined with the Lisbon/Ponta Delgada/Lisbon route,

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on the Lisbon/Pico/Lisbon route, at least one round trip a week, throughout the year, which may be combined with the Lisbon/Terceira/Lisbon route.

1.

The fare structure must include:

Each carrier must have the same fare structure for all the routes specified in section 1, whether the place of departure or destination is Lisbon or Oporto, and apply it without discrimination; however, promotions may be offered from time to time for point-to-point flights.

The fares must be displayed to the public, both at the points of sale and at the check-in counters.

2.

Residents and students will pay the following net amounts, after deduction of the discounts specified in point 1(c) and (d) above:

The fares and tariffs specified in point 1(b) and (f) and in point 2(a), (b) and (c) will be revised on 1 April 2005 on the basis of the inflation rate for the previous year published in the Grandes Opções do Plano [Major Planning Options] and notified, by 28 February 2005, by the Portuguese Civil Aviation Institute to the carriers operating the routes in question.

3.

The State will, under terms to be established by law, subsidise the journeys of residents and students, provided the criteria and fares specified in points 1 and 2 are applied. In 2005 the subsidy will be EUR 87 per round trip.

Passenger fares and cargo tariffs to or from any airport in the Autonomous Region of the Azores without a scheduled direct link to mainland Portugal or Funchal must be the same as those specified above. Passengers travelling between mainland Portugal and the Autonomous Region of the Azores and between the Autonomous Regions will be entitled to two flight coupons, one for each direction, and passengers travelling within the Autonomous Region of the Azores will be entitled to:

On days when an island has no direct service to mainland Portugal or to Funchal, residents and students may be routed via another gateway.

For passengers travelling to or from islands with no direct service to mainland Portugal or Funchal, the State will pay the cost of transport, as specified in Annexes A and B to Notice on the Imposition of Public Service Obligations No 2002/C 115/02, published in the Official Journal of the European Union C 115 of 16 May 2002.

A no-show penalty may be set, not exceeding 10 % of the relevant economy class reference fare.

These public service obligations will apply without prejudice to the conclusion of interline agreements with other carriers on fares for services from or to places other than Lisbon, Oporto and Funchal.

Carriers may combine air services and use the same flight numbers, provided this has been authorised by the Portuguese Civil Aviation Institute.

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30 tonnes per day on the Lisbon/Ponta Delgada/Lisbon route,

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25 tonnes on days when the minimum service required is operated on the Lisbon/Terceira/Lisbon route,

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The cargo and mail capacity on each flight will be detemined by applying the following formula:

C = W – (0,75 x S x 97)

where

C is the cargo and mail capacity, in kg, offered on a flight;

W is the total weight, in kg, of passengers, baggage, cargo and mail that can be transported in an aircraft in a given sector (allowed traffic load), obtained by subtracting the operating weight (aircraft, crew, fuel, catering and other operating items) from the maximum certified take-off weight;

S is the number of seats on the aircraft;

0,75 is the coefficient adopted for a load factor of 75 %

97 is the standard passenger and baggage weight of an adult passenger and his/her baggage (84 kg +13 kg) as specified in JAR-OPS 1 620 (Translator's note: the equation in Portuguese is C = P – (0,75 x S x 97). C is ‘capacidade de carga e correio’ and P is ‘peso total’.)

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carriers wishing to operate all the routes in question must submit their flight schedules for 2005 within 30 days following publication of this notice,

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flight schedules not covering all the routes specified in section 1 will not be accepted, unless they are offers under code-share schemes, in which case fulfilment of the public service obligations regarding minimum frequency will be assessed with reference to all the flights offered on the shared flight schedule. In this case, the following requirements must be met:

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within 30 days after receiving the flight schedules and having consulted the carriers, the Portuguese Civil Aviation Institute must notify carriers of its final decision on the schedules submitted,

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where a carrier announces that it intends to withdraw from or change its proposed flight schedule, the Portuguese Civil Aviation Institute must notify this fact to the other carriers, who may reformulate their flight schedules within the next 15 days,

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all carriers holding a valid operating licence issued by a Member State in accordance with Council Regulation (EEC) No 2407/92 on licensing of air carriers, and an appropriate air operator's certificate may operate these services,

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all carriers holding a valid operating licence and an appropriate air operator's certificate, as specified in the preceding paragraph, and which in addition meet the following requirements may operate these services:

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Given the special nature of these services, carriers will have to demonstrate that the majority of the cabin crew on the flights in question can speak and understand Portuguese.

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Carriers will be allowed, in accordance with the applicable legislation and regulations, to subcontract to other carriers any additional capacity needed to meet the requirements of the flight schedule, but they remain responsible for complying with their obligations and implementing the schedule.

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Carriers must submit to the Portuguese Civil Aviation Institute, within the set time limits and separately from any flight schedules for other services, the flight schedule for each service subject to these amended public service obligations, giving the following information:

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Interruption of the services in question without the advance notice provided for in the public service obligations set out above or failure to comply with those obligations will result in an administrative fine.

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If, 60 days after the publication of this notice, the flight schedules submitted do not correspond, overall, to a volume of scheduled air transport that is at least equivalent to the capacity specified in Annex I, or if, at any time, the total supply falls to levels below the abovementioned capacity threshold without this being justified by decreased demand, the Portuguese Government reserves the right to impose new public service obligations, in accordance with the law.

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Community carriers are informed that the Portuguese Civil Aviation Institute will monitor compliance with the public service obligations imposed.