UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC



### Issued by the Department of Transportation on November 18 , 2010

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 2010

- 0 2 73

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 CONTINENTAL AIRLINES, INC. ( Continental )

, UNITED AIR LINES, INC. ( United ) 1 , and SKYWEST AIRLINES, INC. (Skywest)

, filed 10/ 29 /10 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 Puebla, San Luis Potosi, Villahermosa, Puerto Vallarta, and San Jose del Cabo

, Mexico , on the other hand

. 2

XX E xemption for Continental under 49 U.S.C. 40109 to provide the following service: 3

Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, on the one hand, and Puebla, San Luis Potosi, and Villahermosa, Mexico, on the other hand. 4

Applicant R ep s : Ger ald F. Murphy (202) 624

- 2615 (Skywest) and Hershel I. Kamen (202) 624

- 2617 (Continental and United)

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: November 18

, 2010

, through

November 18 , 2012

.

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.

1 United holds certificate authority to offer code

- share service between Houston, Texas, on the one hand, and Puebla, Puerto Vallarta, San Luis Potosi, Villahermosa, and San Jose del Cabo, Mexico, on the other hand ( See

Order 2010

- 5

- 17). United requests he re that the Department issue an amended code

- share notification to the Government of Mexico, allowing United to offer these services by placing its designator code on flights operated by Skywest.

2 Skywest proposes to use the requested authority to provide seasonal service as a United Express carrier beginning in March, 2011.

3 Continental holds certificate authority to offer service between Houston, on the one hand, and Puerto Vallarta and San Jose del Cabo, on the other hand ( See Order 2000

- 5

- 31) , and it will continue to operate with its own aircraft and, on a seasonal basis, by code sharing with Skywest.

4 Continental proposes to serve these markets on seasonal basis by placing its designator code on Skywest’s flights.Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations

indicated:

XX The holder s’ certificates of public convenience and necessity

XX Standard Exemption Conditions (attached)

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

.

T he dormancy notice period will begin on March 1 , 2011, the beginning of the month in which the

a pplicants propose commencement of the subject services

.

The exemption authority granted to Continental is limited to code

- share services only.

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

- shar e 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 holdin g 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 c ontract 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 Continental, 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 author ity 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

Docket. We may amend, modify, or revoke the authority granted in this Notice at a ny 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

i ssuance 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.govATTACHMENT

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 Departm ent 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

n ew 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 t o 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.



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