BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) Application of ) ) ALASKA AIRLINES, INC. ) Docket DOT-OST-2010- _______ ) for an exemption pursuant to 49 U.S.C. 40109 ) (San Jose-Los Cabos) ) )

APPLICATION FOR EXEMPTION

Communications with respect to this document should be addressed to:

Kyle Levine, Esq. Marshall S. Sinick, Esq. Associate General Counsel, Squire, Sanders & Dempsey L.L.P. Commercial Law and Litigation 1201 Pennsylvania Avenue, N.W. Alaska Airlines, Inc. Washington, D.C. 20004 19300 International Boulevard (202) 626-6651 Seattle, Washington 98188 msinick@ssd.com

Megan Lawrence, Esq. Counsel to Alaska Airlines, Inc. Managing Director, Government Affairs and Community Relations Alaska Airlines, Inc. 19300 International Boulevard Seattle, Washington 98188

DATED: July 29, 2010BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) Application of ) ) ALASKA AIRLINES, INC. ) Docket DOT-OST-2010- _______ ) for an exemption pursuant to 49 U.S.C. 40109 ) (San Jose-Los Cabos) ) )

APPLICATION FOR EXEMPTION

Pursuant to 49 U.S.C. 4 0109, 14 C.F.R. 302 and th e Economic and Procedural

Regulations of the Department of Transportati on (the “Department”), Alaska Airlines, Inc.

(“Alaska”) hereby requests an exemption from 49 U.S.C. 41101 a nd, to the extent

necessary, from the Department’s regulations to permit Alaska to engage in the scheduled

year round foreign air transportation of pe rsons, property and mail between San Jose,

California, and Los Cabos (San Jose del Ca bo), Mexico. Alaska requests that this

exemption be granted for at least a two-year peri od. Alaska inte nds to begin service on this

route on November 20, 2010, and requests prompt approval so that marke ting and selling

can begin without delay.

In further support of its exemption request, Alas ka states as follows:

1. Alaska’s principal headquarter s are located at 19300 International

Boulevard, Seattle, Washington. Alaska is in corporated under the laws of the State ofApplication of Alaska Airlines, Inc. Docket DOT-OST-2010-____ July 29, 2010

2 Alaska and is a wholly-owned subsidiary of Alaska Air Group, Inc. (“AAG”). AAG is

incorporated under the laws of the State of Delaware.

2. Alaska is a citizen of the United St ates within the meaning of 49 U.S.C.

40102(a)(15). The president and at least two- thirds of Alaska’s directors and other

managing officers are U.S. citizens. Additionally, to Alaska’s knowledge, U.S. citizens

hold at least seventy-five per cent of Alaska’s voting stock.

3. Alaska has repeatedly been found fit, willing and able to provide interstate

and foreign air transportation. The Department is requested to take official notice of

Alaska’s continuing fitness. See, e.g ., Order 00-5-31.

4. Alaska will operate year round se rvice between San Jose and Los Cabos

(San Jose del Cabo) beginning November 20, 2010. Initial plans call fo r the operation of

three weekly roundtrip flight s utilizing B737-800 or B737-700 aircraft seating up to 160

passengers. Alaska’s proposed schedule is attached to this application as Exhibit A.

5. On December 12, 2005, the United States and Mexico signed an

amendment to the Air Transport Agreement of August 15, 1960, broadening air transport

services between the two countries and perm itting designated U.S. carriers to operate

from “a point or points in the United States to a point or points in Mexico.” 1

Additionally, the December 2005 agreement permits the United States to designate up to

three carriers to serve Los Cabos (San Jose del Cabo) from any U. S. point. The route

covered by this application is clearly within the scope of the amendments to the Air

Transport Agreement and Alaska believes sufficient designations are available for its

proposed service. All public interest considerations are therefore satisfied.Application of Alaska Airlines, Inc. Docket DOT-OST-2010-____ July 29, 2010

3 6. Alaska submits that its applicatio n raises no environmental or energy

issues. Alaska’s flights will be operated with aircraft that meet all applicable noise

abatement requirements. Nor will approval of this application result in an increase in fuel

consumption of ten million gallons or more.

WHEREFORE , Alaska Airlines, Inc. respectfully requests that the Department

of Transportation grant Alaska exemption au thority for two years to operate scheduled

service in foreign air transportation as more fu lly described herein, or such other relief as

the Department deems necessary and appropriate.

Respectfully submitted,

____________________________ Marshall S. Sinick, Esq. Squire, Sanders & Dempsey L.L.P. 1201 Pennsylvania Avenue, NW Washington, D.C. 20004 Phone: (202) 626-6651 Msinick@ssd.com

Counsel to Alaska Airlines, Inc.

DATED: July 29, 2010

1 Annex I(A)1(a)Exhibit A

Alaska Airlines, Inc.

Proposed Year Round Schedule

Dep Arr Type Seats Days of Operation Effective Fuel (gals)

SJC-SJD 1030 1430 737-800/ 737-700 160 Wednesday, Saturday, Sunday 11/20/2010 2,700/2,400

SJD-SJC 1520 1735 737-800/ 737-700 160 Wednesday, Saturday, Sunday 11/20/2010 2,700/2,400CERTIFICATE OF SERVICE

I hereby certify that one copy of the fore going Application for Exemption has this day been served on each of the following individuals via e-mail.

________________________ Marshall S. Sinick, Esq.

DATED: July 29, 2010

hkamen@coair.com ; dan.weiss@coair.com sascha.vanderbellen@delta.com ; sametta.c.barnett@delta.com ; jeff.morgan@delta.com jeffrey.manley@united.com anbird@fedex.com dvaughan@kelleydrye.com ; dfisher@kelleydrye.com efaberman@wrf.com howard_kass@usairways.com dkirstein@yklaw.com jhill@dowlohnes.com mlbenge@zsrlaw.com pmurphy@lopmurphy.com carl.nelson@aa.com brian.gillman@mesa-air.com Linda.lundell@dot.gov esta.rosenberg@dot.gov brian.hedberg@dot.gov