UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, DC



### Issued by the Department of Transportation on September 28 , 2010

NOTICE OF ACTION TAKEN

-- DOCKET DOT

- OST

- 2010

- 0 222

_________________________________________________________________________________________________________ This serves as notice to the public of the action described below, taken by the Departme nt official indicated (no additional confirming order will be issued in this matter).

Application of AMERICAN A IRLINES, INC. ( American )

, filed 9 / 20 /10

, for:

XX Amendment of e xemption under 49 U.S.C. 40109 to provide the following service: 1

S cheduled foreign air transportation of persons, property, and mail between (1) Sacramento, California, an d Guadalajara, Mexico; and (2) San Jose, California, and Guadalajara, Mexico. 2

Applicant rep: Carl B. Nelson, Jr. (202) 496

- 5647 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 28

, 2010, through September 7, 2012 (coextensive with American’s existing authority in this docket).

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

Mex ico.

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.

- see next page

-

1 The Department earlier granted American’s application, filed in Docket DOT

- OST

- 2010

- 0222, for exemption authority to serve the Los Angeles

- Mexico City/Guadalajara/La Paz/ Loreto/Mazatlan/Ixtapa/Zihuatanejo/ Manzanillo/Puerto Vallarta, San Diego

- Puerto Vallarta, and San Francisco

- Puerto Vallarta markets ( see Notice of Action Taken dated September 7, 2010, in the instant docket). In the instant application, American seeks to add two

additional U.S.

- Mexico city

- pair markets to the exemption authority already granted in this docket.

2 American states that it will use the additional exemption authority requested here by placing its AA* designator code on the flights of Alaska Airlines, Inc. (Alaska) or Horizon Air (Horizon), as soon as all regulatory approvals are obtained. In this regard, we note that Alaska currently holds the necessary underlying economic authority to provide direct

- carrier (own

- aircraft) service in the Sa cramento/San Jose

- Guadalajara markets ( see Notice of Action Taken dated September 28, 2010, in Docket DOT

- OST

- 2010

- 0234). Horizon, on the other hand, does not currently hold this authority.The code

- share operations conducted under this authorization are subject to the fo llowing conditions:

(a) The code

- sharing operations conducted under this authority must comply with 14 CFR 25 7 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 liabilit y of the operating carrier be unaffected; and

(b) The authority granted here is specifically conditioned so that neither American nor its code

share partner ( s ) 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 awaiting expiration of the 15

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

On the basis of data officially noticeable under Rule 24(g ) of the Department's regulations, 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 p olicy; (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 request s in the referenced

Docket. 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 Depart ment’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 v ersion 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) Co mply 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 othe rwise 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 Transporta tion 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

determin ed that security is adequate to allow such airport(s) to be served; and

(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.

1/08