UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation on March 10, 2015

NOTICE OF ACTION TAKEN -- DOCKET DOT-OST-2014-0222 ________________________________________________________________________________________________________________

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).

Application of Southwest Airlines Co. (Southwest) filed 12/11/14 for:1

XX Exemption 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 (1) Mexico City, Mexico; and (2) San Jose del Cabo, Mexico, on the other hand.2

Applicant rep: Robert W. Kneisley (202) 263-6284 DOT Analyst: Brett D. Kruger (202) 366-8025

D I S P O S I T I O N

XX Granted, subject to conditions.

The above action granting Houston-Mexico City and Houston-San Jose del Cabo exemption authority 

was effective when taken: March 10, 2015, through January 22, 2017.

3

Action taken by: Paul L. Gretch, Director

 Office of International Aviation

XX The authority granted is consistent with the overall state of aviation relations 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 Holder’s certificates of public convenience and necessity

 XX Standard Exemption Conditions (attached)

____________________________________________________________________________________

Background: Under the U.S.-Mexico aviation agreement, two U.S. carriers may be designated to 

provide scheduled foreign air transportation of persons, property, and mail between Houston and Mexico 

City; and three U.S. carriers may be designated to provide scheduled foreign air transportation of 

persons, property, and mail between Houston and San Jose del Cabo. Currently, SkyWest and United are 

designated to provide service between Houston and Mexico City; and SkyWest, Spirit, and United are 

 1 Our action here addresses the remaining portion of Southwest’s pending request in this Docket. On January 22, 

2015, the Department granted exemption authority to Southwest, permitting it to serve the Houston-Cancun and 

Houston-Puerto Vallarta markets. In that Notice of Action Taken, the Department deferred action on Southwest’s 

request for exemption authority to serve the Houston-Mexico City and Houston-San Jose del Cabo markets. 2 Southwest proposes to begin daily service in these markets beginning on or about October 15, 2015. 3 We are approving Southwest’s exemption authority through January 22, 2017, coextensive with its existing 

exemption authority in this Docket.
2

designated to provide service between Houston and San Jose del Cabo, leaving those markets fully 

subscribed.

Southwest asserts that in the Houston-Mexico City and Houston-San Jose del Cabo markets, two U.S. 

carrier designations are being used on behalf of one U.S. airline, United. In those circumstances, 

Southwest requests (1) that the Department withdraw one of the two authorities held by United and its 

United Express partner SkyWest in both the Houston-Mexico City and Houston-San Jose del Cabo 

markets; and (2) that the Department grant Southwest’s request for exemption authority and 

corresponding designations.

Responsive Pleadings: The Southwest Airlines Pilots’ Association (SWAPA) and Spirit filed answers 

in support of Southwest’s application. United and SkyWest filed an answer opposing the withdrawal of 

one of their designations to accommodate Southwest’s application and urging instead that the 

Department grant extrabilateral authority to Southwest without disrupting existing United and/or United 

Express service. The City of Houston filed an answer stating that it has no desire to lose any of its 

existing service, and it urges the Department to explore all opportunities available so that all carriers can 

obtain the necessary authority. 

Southwest, SWAPA, the City of Houston, and United and SkyWest each filed replies. United and 

SkyWest filed a surreply and Southwest filed a contingent answer.4

Diplomatic Development: In light of the circumstances of this case, the U.S. Government asked the 

Mexican Dirección General de Aeronáutica Civil (DGAC) whether it would favorably consider an 

application for extrabilateral authority in the subject markets. In doing so, the Department noted that the 

United States has positively considered requests from the DGAC to grant certain extrabilateral authority 

to Mexican carriers. The DGAC advised the Department that it will, on the basis of reciprocity, 

favorably consider an application from Southwest for Houston-Mexico City and Houston-San Jose del 

Cabo services. 

Decision: We have decided to approve the balance of Southwest’s request for exemption authority. In 

doing so we note the representations of the DGAC that it will favorably consider a request from 

Southwest to serve the Houston-Mexico City and Houston-San Jose del Cabo markets on an 

extrabilateral basis. Therefore, we find that the public interest warrants our approval of Southwest’s 

application, and that we can proceed to such approval without needing to withdraw or otherwise place in 

issue the designations or authorities of any of the currently authorized U.S. carriers in these city-pair 

markets. 

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. Consistent with our standard 

policy, the dormancy notice period will begin on October 15, 2015, Southwest’s proposed start-up date 

for the subject services.

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 policy; (2) grant of the application 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 

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

hearing at our discretion.

 4 We grant the motions for leave to file otherwise unauthorized documents.
3

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:

http://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.

 

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