UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on July 29, 2014

 NOTICE OF ACTION TAKEN -- DOCKETS DOT-OST-2014-0100 and DOT-OST-2014-0101 

This serves as notice to the public of the action described below, taken by the Department official 

indicated (no additional confirming order will be issued in this matter). 

Joint Application of UNITED AIRLINES, INC. (United) and SKYWEST AIRLINES, INC. d/b/a 

UNITED EXPRESS (SkyWest), filed 6/9/14 for:

XX Exemption for SkyWest for two years under 49 U.S.C. 40109 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, on the 

one hand, and Puerto Vallarta and San Jose del Cabo, Mexico, on the other hand.

1 2

Applicant Representatives: Gerald F. Murphy and Steven J. Seiden (202) 624-2500 

DOT Analyst: Brett D. Kruger (202) 366-8025

D I S P O S I T I O N

XX Granted, subject to conditions (see below)

The above action granting exemption authority was effective when taken: July 29, 2014, through July 29, 

2016.

Action taken by: Paul L. Gretch, Director

 Office of International Aviation

XX The authority granted is consistent with the aviation agreement between the United States and 

Mexico.

Except to the extent exempted or waived, this authority is subject to the terms, conditions, and 

limitations indicated:

XX The holders’ certificates of public convenience and necessity

 XX Standard Exemption Conditions (attached)

Responsive Pleadings/Remarks: Under the U.S.-Mexico aviation agreement, three U.S. carriers may be 

designated to provide own-aircraft scheduled foreign air transportation of persons, property, and mail in 

the Houston-Puerto Vallarta and Houston-San Jose del Cabo markets. Currently, United and ExpressJet

are designated to provide these services. The joint applicants state that they intend to replace the United 

Express services provided by ExpressJet in the markets with United Express services provided by 

SkyWest beginning on or about November 1, 2014, and that no additional designations will be required.

 1 SkyWest states that it will display the “UA” designator code of United in the Houston-Puerto Vallarta and 

Houston-San Jose del Cabo markets on a seasonal basis beginning on or about November 1, 2014. 2 United holds certificate authority to provide scheduled foreign air transportation of persons, property, and mail in 

the Houston-Puerto Vallarta and Houston-San Jose del Cabo markets using its own aircraft and by placing its code 

on services provided by ExpressJet Airlines, Inc. (ExpressJet). See Orders 2000-5-31, 2010-5-17, and 2013-4-11. 

The joint applicants state that United plans to substitute the service that ExpressJet currently provides in the markets 

with service operated by SkyWest.
On June 24, 2014 Southwest Airlines Co. (Southwest) filed an answer to the Joint Application. 

Southwest notes the applicants’ assertion that SkyWest will substitute the current services provided by 

ExpressJet in the subject markets, but Southwest questions the timing of ExpressJet’s return of its 

designations. Southwest points out that the joint application states that “ExpressJet will retain its 

operating designations until the Department has taken action on the Joint Application, the Joint 

Applicants have begun providing the service requested herein, and ExpressJet has given notice to the 

Department that its operating designations are no longer required.”3

 Southwest asserts that United 

appears to contemplate holding all three designations for each market for an unspecified period of time, 

and that even if ExpressJet relinquishes its designations, United will continue to control two of the three 

designations for both city pairs. 

Southwest states that it does not oppose the joint application, but notes that it plans to serve Puerto 

Vallarta and San Jose del Cabo from Houston’s William P. Hobby airport in the future. Southwest urges 

the Department to put the joint applicants on notice that if either markets are fully subscribed, one of their 

authorities and corresponding designations in the markets are subject to being rescinded if Southwest 

were to actively seek competing authority to serve the Houston-Puerto Vallarta or Houston-San Jose del 

Cabo markets.

On July 1, 2014, the joint applicants filed a joint reply. The joint applicants contend that Southwest’s 

answer is without merit. The joint applicants again assert that SkyWest’s services will simply replace the 

existing ExpressJet services in the subject markets, and that no additional designations will be required.

Decision: We have decided in the circumstances presented, including the fact that no party opposed the 

application, that it is in the public interest to grant SkyWest the requested exemption authority. In 

reaching this decision, we recognize the concerns raised by Southwest, particularly with respect to the 

subject markets being fully subscribed for an unspecified period of time. In light of the joint applicants’

assertions that SkyWest will simply replace the services that ExpressJet provides and that additional 

designations will not be required, we have decided to handle the designation withdrawal of ExpressJet in 

a manner consistent with our handling of other recent requests of the joint applicants as set forth below.

4

Effective Date for Start-up/Designation: United may begin marketing and selling the subject United 

Express services authorized here, but SkyWest cannot commence the United Express Houston-Puerto 

Vallarta and Houston-San Jose del Cabo services until November 1, 2014.

The joint applicants state that United Express service operated by ExpressJet will be replaced with United 

Express service operated by SkyWest commencing on November 1, 2014. Under the circumstances 

presented in this case, as noted above, we have decided that it is in the public interest to grant SkyWest 

the requested exemption authority. In this regard, we will withdraw the designations of ExpressJet

effective upon the departure of its last scheduled flights in the Houston-Puerto Vallarta and Houston-San 

Jose del Cabo markets respectively, but in no case effective later than 11:59 PM on October 31, 2014, and 

designate SkyWest for Houston-Puerto Vallarta and Houston-San Jose del Cabo services effective 

November 1, 2014.5

Conditions: The U.S.-Mexico exemption authority granted is subject to the dormancy notice 

requirements set forth in condition 7 of Appendix A of Order 88-10-2, and the notice requirements for 

seasonal/intermittent services as set forth in Order 96-11-24, at 5. Consistent with our standard policy, 

the dormancy notice period will begin on November 1, 2014, SkyWest’s proposed start-up date for the 

subject services.

 3 Joint Application, at 3, n. 4.

4 See e.g., Notice of Action Taken dated May 12, 2014, in Dockets DOT-OST-2014-0060 and DOT-OST-2013-

0114; and Notice of Action Taken dated May 27, 2014, in Dockets DOT-OST-2014-0058 and DOT-OST-2014-

0059.

5 We will also provide the necessary notification to the Government of Mexico confirming United’s authority to 

provide code-share service in the markets.
The code-share operations conducted under this authorization are subject to the following conditions:

(a) The code-sharing operations conducted under this authority must comply with 14 CFR 257 and 

with any amendment to the Department’s regulations concerning code-share arrangements that 

may be adopted. Notwithstanding any provisions in the contract between the carriers, our 

approval here is expressly conditioned upon the requirements that the subject foreign air 

transportation be sold in the name of the carrier holding out such service in computer reservation 

systems and elsewhere; that the carrier selling such transportation (i.e., the carrier shown on the 

ticket) accept responsibility for the entirety of the code-share journey for all obligations 

established in its contract of carriage with the passenger; and that the passenger liability of the 

operating carrier be unaffected; and

(b) The authority granted here is specifically conditioned so that neither United nor SkyWest shall 

give any force or effect to any contractual provisions between themselves that are contrary to these 

conditions.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found the 

applicants qualified to provide the exemption services authorized.

Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our 

action was consistent with Department policy; (2) grant of the authority was consistent with the public 

interest; and (3) grant of the authority would not constitute a major regulatory action under the Energy 

Policy and Conservation Act of 1975. To the extent not granted, we denied all requests in the referenced

Dockets. We may amend, modify, or revoke the authority granted in this Notice at any time without 

hearing at our discretion.

Persons entitled to petition the Department for review of the action set forth in this Notice under the 

Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of 

issuance of this Notice. This action was effective when taken, and the filing of a petition for review will 

not alter such effectiveness.

An electronic version of this document is available on the World Wide Web at:

www.regulations.gov
ATTACHMENT

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating authority from the government of each country served;

(2) Comply with applicable requirements concerning oversales contained in 14 CFR 250 (for scheduled 

operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insurance coverage, and for certifying that coverage to the 

Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a Department Order, comply with the 

requirements of 14 CFR 203, concerning waiver of Warsaw Convention liability limits and defenses;

(6) Comply with all applicable requirements of the Federal Aviation Administration, the 

Transportation Security Administration, and with all applicable U.S. Government requirements 

concerning security, including, but not limited to, 49 CFR Part 1544. To assure compliance with all 

applicable U.S. Government requirements concerning security, the holder shall, before commencing any 

new service (including charter flights) to or from a foreign airport, contact its Principal Security Inspector 

(PSI) to advise the PSI of its plans and to find out whether the Transportation Security Administration has 

determined that security is adequate to allow such airport(s) to be served; 

(7) Comply with such other reasonable terms, conditions, and limitations required by the public interest 

as may be prescribed by the Department of Transportation, with all applicable orders and regulations of 

other U.S. agencies and courts, and with all applicable laws of the United States.

The authority granted shall be effective only during the period when the holder is in compliance with the 

conditions imposed above.

1/2008