BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Joint Application of UNITED AIRLINES, INC. and SKYWEST AIRLINES, INC. for an exemption pursuant to 49 U.S.C. § 40109 and designations (Houston-Mexico City, Mexico) Docket DOT-OST-2014-0129 Docket DOT-OST-2014-0130

REPLY OF THE CITY OF HOUSTON

Communications with respect to this document should be sent to: Mario C. Diaz Director Ian Wadsworth Chief Commercial Officer Department of Aviation CITY OF HOUSTON 16930 John F. Kennedy Blvd. Houston, TX 77032 (281) 233-3000 (281) 233-1859 (fax) Rachel B. Trinder Jol A. Silversmith ZUCKERT, SCOUTT & RASENBERGER, L.L.P. 888 Seventeenth Street, N.W. Washington, D.C. 20006-3309 (202) 973-7927 (202) 342-0683 (fax) rbtrinder@zsrlaw.com jasilversmith@zsrlaw.com For the City of Houston Dated: August 21, 2014BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Joint Application of UNITED AIRLINES, INC. and SKYWEST AIRLINES, INC. for an exemption pursuant to 49 U.S.C. § 40109 and designations (Houston-Mexico City, Mexico) Docket DOT-OST-2014-0129 Docket DOT-OST-2014-0130

REPLY OF THE CITY OF HOUSTON

The City of Houston (“Houston” o r the “City”) respectfully subm its this reply to the joint application filed on July 30, 2014 by United Airlines, In c. (“United”) and SkyWest Airlines, Inc. (“SkyWest”) (together, the “United carriers”), a nd the answer filed by Southwest Airlines Co. (“Southw est”) on August 14, 2014, regard ing the exemption authority requested by the United carriers, namely a U.S.-Mexic o operating carrier designation for SkyWest in the Houston-Mexico City market (repl acing United affiliate ExpressJet Airlines), as well a s a marketing carrier designatio n for United to allow it to display its “UA” designator c ode on SkyWest’s flights on that r oute. The City’s interest is in promoting additional services and com petition, and in seeing that all carriers desirous of providing Mexico services from Houston receive the authority they need. As the nati on’s largest U.S.-Mexico air s ervices gateway, and with one of the strongest regional ec onomies in the United States, H ouston is experiencing ongoing demand for additional Mexico services, including intere st from multiple U.S.

and Mexican carriers in starti ng up competitive services.Reply of the City of Houston Page 2

Recently, in connection with other requests for Houston-related Mexico authority, DOT has reaffirmed its willingness to consider designation real locations when in the public interest (e.g., in its notices in dockets DOT-OST-2014-0 058/DOT-OST-2014-

0059 and DOT-OST-2014-0100/DOT-OST- 2014-0101). Houston welcome s this procompetitive stance. However, t he City hopes very much that a b ilateral agreement with

Mexico can be reached before t he end of 2014 that will obviate the need for any carrier to seek reallocation of designations held by another carrier. Both United and Southwest have made substantial facility funding commitments to the City to accommodate current and future growth, and major exp ansion and development projects are underway at both George Bush Intercontinenta l (“IAH”) and William P. Hobby (“HOU” or “Hobby”) airports. At IAH, a new concourse at Terminal B recently opene d and a new 15 gate international terminal is being planned. At Hobby, a new inter national terminal will open in 2015, which will support new services between Houston and Me xico, the Caribbean,

and northern South America. Furt hermore, carriers from Mexico are seeking to add

new service to Houston.

In order for all affected carriers on both sides of the border to be able to provide

the services that traffic dem ands, unlimited third and fourth p assenger freedoms are

essential. If this liberalizati on of the U.S.-Mexico bilateral agreement can be achieved on a timely basis, then the grant of transfer requests such as that of the United carriers in these dockets will become either unnecessary or merely routi ne, and will not impact the opportunities remaining for other carriers desirous of serv ing the same city-pair. Houston is very much aware that the U.S. Government over many y ears has diligently sought expanded opportunities with Mexico, and that various obstacles remainReply of the City of Houston Page 3

to complete liberalization. T he City hopes that, at a minimum, an agreement providing

unlimited third and fourth freedom designations can be achieved before the end of this year so that the United carrier s, Southwest, and all other inte rested carriers have available to them the designatio ns they need in order to meet c urrent and future traffic

demand.

Respectfully submitted,

Rachel B. Trinder Jol A. Silversmith ZUCKERT, SCOUTT & RASENBERGER, L.L.P. 888 Seventeenth Street, N.W. Washington, D.C. 20006-3309 (202) 973-7927 (202) 342-0683 (fax) rbtrinder@zsrlaw.com jasilversmith@zsrlaw.com For the City of Houston Dated: August 21, 2014CERTIFICATE OF SERVICE I certify that on this 21st day of August 2014, a copy of the f oregoing was served on the parties named below in ac cordance with the Department’s Rules of Practice.

Jol A. Silversmith

msinick@ssd.com (Counsel for Alaska Airlines) rpommer@atlasair.com (Atlas Air) robert.wirick@aa.com , benjamin.slocum@aa.com , francis.heil@aa.com , and howard.kass@aa.com (American Airlines) sascha.vanderbellen@delta.com , chris.walker@delta.com , and sametta.c.barnett@delta.com (Delta Airlines) cefelts@fedex.com and nssparks@fedex.com (Federal Express) jhill@cooley.com and perkmann@cooley.com (Counsel for JetBlue Airways) matwood@cozen.com (Counsel for Kalitta Air) kevin.montgomery@polaraircargo.com (Polar Air Cargo) robert.cohn@hoganlovells.com and patrick.rizzi@hoganlovells.com (Counsel for Republic Airlines) ethan.blank@rjet.com (Republic Airlines) temerson@skywest.com (SkyWest Airlines) bob.kneisley@wnco.com and leslie.abbott@wnco.com (Southwest Airlines) dkirstein@yklaw.com and jyoung@yklaw.com (Counsel for Spirit Airlines) john.fredericksen@suncountry.com and thomas.ting@suncountry.com (Sun Country) hershel.kamen@united.com , dan.weiss@united.com , steve.morrissey@united.com , karine.faden@united.com , thomas.bolling@united.com , and abby.bried@united.com (United Airlines) sseiden@crowell.com and gmurphy@crowell.com (Counsel for United Airlines) anita.mosner@hklaw.com and jennifer.nowak@hklaw.com (Counsel for UPS) dsmalls@ups.com (UPS) john.varley@virginamerica.com and barbara.russell@virginamerica.com (Virgin America) paul.gretch@dot.gov , brian.hedberg@dot.gov , brett.kruger@dot.gov , reese.davidson@dot.gov , todd.homan@dot.gov , peter.irvine@dot.gov , and laura.remo@dot.gov (DOT) john.s.duncan@faa.gov and john.allen@faa.gov (FAA) ronald.williams@ustranscom.mil (USTRANSCOM) englets@state.gov and cristasa@state.gov (State Department) info@airlineinfo.com