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There are many ETOPS certification levels, such as 120 (2 hours), 180 (3 hours), or 300 (5 hours). However, what is the reason behind ETOPS 207? Is there anything specific at that point? Why not make it ETOPS 210 (3.5 hours) altogether?

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ETOPS 138 and 207 are 15% extensions of ETOPS 120 and 180.

The reason for that is that with the ETOPS 120 rule, most of the Atlantic could be covered when using Kangerlussuaq (Greenland), Gander (Newfoundland), Lajes Field (Azores) and Keflavik (Iceland) as alternative airports. Only some small triangles of the Atlantic were outside the 120 minutes flight time limit from these airports. To cover the whole Atlantic, the next step up in ETOPS (180) would be necessary. But since that is such a big difference, a 15% extension of 120 minutes, ETOPS 138, was approved which allows for covering all of the Atlantic with few extra requirements.

For ETOPS 180 it is similar, but then for the Pacific. Normally ETOPS 180 is sufficient to cross the Pacific, but ETOPS 207 allows the 777-200ER/-200LR/-300ER to cross the Pacific ocean even when Eareckson Air Station on the western end of the Alaskan Aleutian Islands is closed.

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There is nothing specific as such. It was given mainly as an extension to the 180 min ETOPS in North Pacific Area on a case by case basis. From 14 CFR Part 121, Appendix P to Part 121 - Requirements for ETOPS and Polar Operations:

207-minute ETOPS in the North Pacific Area of Operations. (1) The FAA grants approval to conduct ETOPS with maximum diversion times up to 207 minutes in the North Pacific Area of Operations as an extension to 180-minute ETOPS authority to be used on an exception basis.

This exception may be used only on a flight-by-flight basis when an ETOPS Alternate Airport is not available within 180 minutes for reasons such as political or military concerns; volcanic activity; temporary airport conditions; and airport weather below dispatch requirements or other weather related events.

Basically, ETOPS 207 (180 min + 15 percent) is an operational extension of ETOPS 180 (before ETOPS 240 and 330 were certified) to be used in case a 180-min alternate airport was not available due to some reason.

From Boeing Aero:

Note that 207-minute ETOPS is not subject to the new ETOPS requirements for "beyond-180-minute flight operations.” Flown since 2000, this authority arose as a 15 percent operational extension, for limited use on an exception basis, to 180-minute ETOPS authority. it is thus considered an extension of and subject to the requirements for the traditional 180-minute “twinjet ETOPS” diversion authority.

Note that there is a similar ETOPS rule over North Atlantic routes - the 138 min ETOPS, which is nothing but ETOPS 120, plus an additional 15% in case alternate airports are not available (if I'm not wrong, for the Atlantic, the alternate airports are Keflavik and Lajes).

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