UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC



### Issued by the Department of Transportation on September 10, 20 10

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 20 10

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This se rves 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).

Application of CONTINENTAL AIRLINES, INC. ( Continental ), filed 9 / 3/10

, for:

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

Scheduled foreign air transportation of per sons, property, and mail between: (1) Los Angeles, California, and Leon/Guanajuato, Mexico; and (2) Houston, Texas, and Morelia, Mexico. 1 2

Applicant rep: R. Bruce Keiner, Jr. (2 02) 624

- 2500 DOT Analyst: Linda L. Lundell (202) 366

- 2336

D I S P O S I T I O N

XX Granted, subject to conditions (see below)

The above action was effective when taken: September 10 , 20 10

, through Septembe r 10 , 201 2

.

Action taken by: Paul L. Gretch, Director

Office of International Aviation

XX The exemption auth ority granted is consistent with the aviation agreement between the United

States and Mexico

.

Except to the extent exempted or waive d, 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)

- see next page

-

1 Continental proposes to use the requested authority to provide seasonal flights either by placing its CO* code on

the small

- aircraft flights of ExpressJet Airlines, Inc. (Express Jet) or by operating its own large

- aircraft flights “to meet fluctuating de mand.” Continental states that it plans to commence these services on October 1, 2010.

2 We note that ExpressJet already holds the underlying economic authority to provide the small

- aircraft services described in Continental’s instant application pursu ant to exemption authority under Part 298 of the Department’s regulations for small

- aircraft (60

- seats or less) operations, 14 C.F.R., Subpart B

, Part 298.11. We further note that ExpressJet holds the required designation, under the U.S.

- Mexico aviation a greement, to operate small

- aircraft

services in the Houston

- Morelia market, and it is currently serving that route. By letter dated September 3, 2010, to Paul L. Gretch, Director of the Office of International Aviation, Department of Transportation, Expre ssJet requests that it be designated for small

- aircraft services in the Los Angeles

- Leon/Guanajuato market, so that it can provide seasonal service on that route, beginning October 1, 2010, using Continental’s CO* code. By letter dated September 7

, Expre ssJet advises the Department that no party served with a copy of its designation request opposes it. We will handle this designation request separately.Conditions : The U.S.

- Mexico exemption authority gran ted 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 dorma ncy notice period will begin on October 1, 2010, the applicant’s proposed start

- up date for the subject services.

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 expre ssly 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 sh own 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 Continental nor ExpressJet shall give any force or effect to any contractual provisions between themselves that are contrary to

these conditions.

Remarks: We acted on this application without await ing expiration of the 15

- day answer period with the consent of all parties served with a copy of this application.

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

Dock et. 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 C FR §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.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 reporti ng 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 Ord er, 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 servi ce (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. age ncies 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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