ALASKA AIRLINES. INC. 

and 

AMERICAN AIRLINES, INC. 

lor transfer of international route authority 

pursuant to 49 U.S.C. §§ 40109,41105 

Application of 

ALASKA AIRLINES. INC. 

for amendment of exemption 

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) 

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) 

________________________________ ) 

Application of AMERICAN AIRLINES, INC. 

lor amendment of exemption 

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_____________________________ 

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Docket DOT-OST-2015-

Docket DOT -OST -2005-20406 

Docket DOT -OST -20 1 0-0222 

JOINT APPLICATION FOR TRANSFER OF INTERNATIONAL ROUTE AUTHORITY 

AND APPLICATIONS FOR AMENDMENT OF EXEMPTIONS 
Seattle, Washington 98188 

jercmv.rossl£1\!laskaair.com 

David Heflernan 

Cozen O'Connor 

The Army & Navy Club Building 

1627 I Street, N.W. 

Suite 1100 

Washington, D.C. 20006 

(202) 463-2537 

dhcrternanf@cozen.com 

Counsel to Alaska Airlines, Inc. 

DATED: February 11, 2015 

International Affairs 

Abigail Donovan 

Director, Congressional and Federal Affairs 

American Airlines, Inc. 

I I 0 I I t 11 N. W. 

Washington, D.C. 20036 

(202) 326-5153 

howard.kass;£V.aa.com robert. wi•ick(ci)aa.com 

abit.mil.donovan@aa.com 

NOTICE: The Joint Applicants plan to poll on this application and therefore request that any 

parties wishing to support or oppose this application notify the Joint Applicants 

immediately. 
ALASKA AIRUNES. INC. 

and 

AM ERICAN AIRLINES. INC. 

for transfer or international route authority 

pursuant to 49 U.S.C. *§ 40 I 09, 41105 

) ) 

) ) ) 

) 

) 

________________________________ ) 

Application of ALASKA AIRLINES, INC. 

for amendment of exemption 

) 

) 

) 

) 

) 

) 

________________________________) 

Application of AM ERICAN AIRLINES, INC. 

for amendment of exemption 

) 

) ) 

) 

) 

______________________________) ) 

Docket DOT-OST-2015-

Docket DOT-OST-2005-20406 

Docket DOT-OST-2010-0222 

.JOINT APPLICATION FOR OF INTERNATIONAL ROUTE AUTHORITY 

AND API>LJCATIONS FOR AMENDMENT OF EXEMPTIONS 

Alaska Airlines, Inc. ("Alaska .. ) and American Airlines. Inc. ("'American'') (collectively, the 

"Joint Applicants") hereby request that the Department of Transportation approve, pursuant to 49 

U .S.C. §§ 40109 and 41105 and Subpart C of the Department's Rules of Practice, the transfer to 

American of international route authority held by Alaska authorizing scheduled foreign air 
American's flights between Los Angeles and Mexico City. 2 The Joint Applicants request that both 

exemptions be reissued Jor a two-year period.3" 

American intends to commence double-daily service on the Los Angeles-Mexico City route 

on June 4, 2015. The Joint Applicants theretore request expedited approval of this application so 

that all necessary government approvals can be obtained in Mexico and so that marketing and sale 

can begin without dclay. 5 

Grant of this joint request lor international route transfer authority is undoubtedly in the 

public interest. Currently, the two designated U.S. carriers - Alaska and United - only operate two 

daily nights between Los Angeles and Mexico City. American intends to provide vigorous 

competition over the route by doubling the number of daily flights currently offered by Alaska and 

1 Alaska holds an exemption authorizing it to engage in scheduled foreign air transportation of persons, property and 

mail between Los Angeles and Mexico City. Notice of Action Taken dated August 25, 2014 (Docket DOT-OST2005-20406). American holds an exemption authorizing it to hold out codeshare service only between Los Angeles 

and Mexico City. Notice of Action Taken dated July 19, 2012 (Docket DOT-OST-2010-0222); renewal currently 

h d A . • . . . 1· AI k ' L A l M . c· h . B . . J 

- A as ·a as agree to mencan s acqu1slt1on o as ·as os nge es- exrco rty route aut orrty. egmnmg une 

4, 2015. American will opcmtc two daily Los Angeles-Mexico City flights using its own 8737-800 aircraft as detailed in 

Exhibits AA-1 and 2. Additionally, Alaska will place its two-letter designator code on American's Los Angeles-Mexico 

City flights, 

J Alaska and American wil l comply with all applicable code-sharing requirements, including 14 C.F.R. § 257. 

The Joint Applicants request also that the United States designate American for service in the Los Angeles-Mexico 

City market, and that the Department allocate u codeshare authorization to Alaska for its continuing Los AngelesMexico City codcsharc service. 

5 American is a citizen of the United States "ithin the meaning of 49 U.S.C. 40 I 02(a){ 15)( c) and is tit, willing and able 

to operate service in the Los Angeles-Mexico City market. American holds various certificates of public convenience 

and necessity and exemption authorities. Pursuant to Rule 24 of the Department's Rules of Practice, American requests 

that the Department take official notice of all infonnation previously tiled to establish its fitness. See Joint Application 

of American Ak lincs, Inc., US Airways. Inc., American Eagle Airlines, Inc .• PSA Airlines, Inc., and Piedmont 

Airlines. Inc,, Order Transferring Authority and Reissu ing Certificates, Order 2014-11-13, November 19, 2014 

(Doch.et DOT-OST-2013-0082), p. 3. 

2 
route through its codeshare with American. thereby allowing it to redeploy its aircraft on other 

routes and enhance its competitive presence elsewhere. 

I. THE TRANSFER SATISFIES ALL STATUTORY AND DEPARTMENT 

REQUIREMENTS AND IS CLEARLY IN THE PUBLIC INTEREST 

Two sections of the Transportation Code set forth the decisional criteria and standards the 

Department utilizes in approving international route transfers similar to the one proposed in this 

application: 

• Section 40 I 09 of the Transportation Code authorizes the Department to exempt carriers 

from certain statuto?' requirements where it ··decides that the exemption is consistent with 

the public interest."" In the context of a route transfer application, such as this one, the 

Department has stated that the ··primary criteria in detem1ining the ·public interest· arc 

whether the ... transfer would conflict with important international aviation policy objectives, 

whether the surviving entities are U.S. citizens, and whether they will be fit to hold the 

authority ... ;" and 

• Section 41105, under which the Department has approved the transfer of a variety of 

international operating authorities (including exemptions), further requires the Department 

to analyze the impact of the transfer on "the viability of the air carrier applicants, 

competition in the domestic airline indust:;r, and the trade position of the United States in 

the international air transportation market." 

As described below, the application satisfies each Section of the Transportation Code. 

double-daily service proposal also reduces the gap between U.S. and Mexican carriers on the route. If 

approved, Mexican carriers will otTer five daily nights to U.S. carriers' three daily nights. 

7 49 U.S.C. § 40109(c). 

H /d. See al.m 49 U.S.C. § 41105(b). 

3 
citizenship of either carrier or that each carrier is ''fit. willing and able·· to perfbnn the services 

proposed.9 It is also clear that the proposed transfer to American of the Los Angeles-Mexico City 

route satisfies the public interest standard set lbrth in Section 401 09( c) by creating numerous 

benefits Jbr consumers, as described below: 

• American's introduction of Los Angeles-Mexico City service at its only west coast gateway 

hub is an important element of its business plan to provide more service and more choice for 

its customers throughout Southern California and beyond; 

• American's proposal will increase the number of daily flights in the Los-Angeles-Mexico 

City market, as Alaska currently operates a single daily service. American plans to 

introduce two daily flights increasing the number of seats in the market by over 13 percent; 

• American has more than eight decades of experience serving the travel needs of Los 

Angeles and Southern California, and has the commitment and resources required to fully 

develop the Los Angeles-Mexico City market. At Los Angeles today, American operates 

nearly 200 daily departures to 54 destinations in seven countries, with more than 5,100 

employees. These numbers will increase as American continues to expand its Los Angeles 

international operations; 

• American will serve the market initially with two daily roundtrips utilizing 8737-800 

aircraft seating 160 passengers. American's growing presence at Los Angeles will 

additionally provide new online connecting options to passengers throughout the Western 

United States; 

• American will increase competition in the U.S.-Mexico market in general and the Los 

Angeles-Mexico City market in particular, providing valuable new intragateway 

competition at Los Angeles to existing service oflered by United, codeshare service offered 

by Delta and the services of the Mexican carriers. Similarly, American's new Los AngelesMexico City service will increase intergateway competition in the Western U.S.-Mexico 

City markets: and 

., Sec Footnote 5 inji·a establishing American's citizenship. Sec also Order 2007-7-3, May 7, 2007 (Docket DOTOST-2007-27790). establishing Alaska's citizenship. 

4 
expansive network and growing presence at Los Angeles. In short, the proposed transfer meets the 

I . I D . . f' lo e cments tmportant to t 1e epartment m prev10us route trans cr cases. 

Finally, there is no doubt that the proposed transfer will bolster U.S. international aviation 

policy objectives. Indeed, the transfer typifies the sorts of market-driven changes that U.S. 

negotiators sought as they reached a new bilateral agreement with Mexico, under which designation 

limits for transborder routes are eliminated and carriers will decide service levels based on 

competitive forces. It is also consistent with the Department's long-sought policy objective of 

increasing competition and promoting consumer choice in the U.S.-Mexico aviation market. 

B. The Transfer Will Satisfy the Route Transfer Requirements Defined by Section 

41105 

In addition to satisfying the public interest test of Section 40109, the proposed transfer also 

meets the explicit transfer requirements of Section 41 105, which instructs the Department to 

consider the transfer's cflcct on: I) the viability of each of the involved caniers; 2) competition in 

the domestic airline industry; and, 3) the trade position of the United States in the international air 

transportation market. The proposed transfer easily meets all three requirements of Section 41105. 

1. Viability of the ,Joint Applicants Will Be Enhanced 

American is the largest carrier at Los Angeles carrying more than 13.3 million passengers 

on over 124,000 flights in 2014. American offers more peak day departures at Los Angeles, its west 

w See ,.for exumple. Order Approving Route Transfer, Order 2006-9-25, p.4 (approving transfer of the New YorkLondon route from United to Delta after finding Delta would oiTer the same or greater level of service than United, 

and that Delta's growth at JFK would enhance intragateway and intcrgatcway competition in the New York-London and U.S.-Landon markets). 

5 
Haneda service to better connect U.S. consumers and shippers with Tokyo. 11 American continues 

to invest in tenninal improvements and is transfonning its Los Angeles facilities, to provide more 

convenient and enjoyable travel experiences lor customers. 

Transfer to American of the Los Angeles-Mexico City route is another key element of its 

Los Angeles grov.1h strategy. and will significantly strengthen American's network and provide 

additional travel options and benefits tor consumers. Although American has served Mexico for 

more than sixty years, it has been prohibited from instituting Los Angeles-Mexico City service by 

the restrictions in the current U.S.-Mexico air transport agreement, which currently limits U.S. 

carrier operating designations to only two. As noted, the governments of Mexico and the United 

States signed a new bilateral, which by 2016 will penn it market-entry based upon consumer 

demand. Approval of this transfer application by the Department will immediately inject a new and 

robust competitive force into the market to the benefit of consumers without delay. 

Alaska will similarly benefit as it will be able to redeploy its resources to enhance services 

elsewhere on its network. Through the code-sharing agreement, Alaska will remain a marketing 

carrier in all of the distribution systems through which consumers purchase travel. Alaska also 

intends to maintain the other Mexico services it is currently operating. 

Unquestionably. the transtcr will enhance the viability of the Joint Applicants. American 

will be strengthened through the addition of an important new route at its west coast gateway, Los 

11 See American's Application, January 5, 2015, Docket DOT-OST-2010-0018. 

6 
competition in the domestic airline industry. As the Department knows, Los Angeles is American's 

west coast gateway to Asia and other international destinations. As American grows the 

international portion of its Los Angeles hub, American is also able to increase domestic service 

offerings to better compete with the other airlines serving the Los Angeles region, including Delta, 

Southwest. and United. Today. American provides nonstop service from Los Angeles to 54 

worldwide points. including 46 cities in the United States. (See Exhibit AA-3). American's Los 

Angeles-Mexico City service will offer connections to 53 cities, ensuring that the competitive 

benelits are enjoyed by consumers throughout Calilbrnia and the United States. Moreover, 

Alaska's redeployment or its resources and continuing expansion or services at Los Angeles, 

which includes plans fbr an overall increase in service from Los Angeles to other West Coast and 

Mexico destinations, will increase competition and service options lbr consumers. 

3. The U.S. Trade Position Will Be Bolstered 

The proposed transfer will greatly enhance the United States' position in international trade. 

The Los Angeles-Mexico City market is the third largest U.S.-Mexico market. Today, Mexican 

carriers operate live daily flights, while Alaska and United operate one each. Therefore, approval of 

the proposed transfer will enhance the trade position of the United States in the tbllowing ways: 

The transfer will additionally benefit employees at both carriers. as American and A Iaska are strengthened 

through the expansion at Los Angeles, in American's case, and through Alaska's redeployment ofresources to other 

routes. The transfer of the Los Angeles-Mexico City route to American will have no adverse effect on Alaska's 

employees at Los Angeles. On the contr.Jry, Alaska's employees and consumers will benefit from Alaska's 

redeployment of its resources and continuing expansion of services at Los Angeles, which includes plans for an 

overall increase in service from Los Angeles to other West Coast and Mexico destinations. 

7 
will ollcr a highly attractive alternative to Mexican carrier services, while maintaining 

Alaska's presence in the market: 

• American's new Los Angeles-Mexico City service will increase intergateway 

competition tor consumers: and 

• American· s new Los Angeles-Mexico City service will introduce the oneworld alliance 

as an operator into the market and provide three-way alliance competition with Star 

(United) and SkyTeam (AeroMexico) at Los Angeles. 

The proposed transfer will have a positive effect on the trade position of the United States in 

the international air transportation market. Approval of this application will immediately inject into 

this important market a strong new competitor without the need to await ratification and 

implementation of the recent bilateral agreement. 

II. CONCLUSION 

The Joint Applicants' request will yield significant public interest benefits for consumers, 

which is the threshold question lor the Department when reviewing international route authority 

transfers. Allowing American to operate the Los Angeles-Mexico City route will introduce new 

night options lor consumers out of American's growing Los Angeles hub, thereby enhancing 

intragateway, intergateway, and interalliance competition. Alaska's customers will similarly benefit 

from an overall increase in service from Los Angeles to other West Coast and Mexico 

destinations. 

WHEREFORE. American Airlines, Inc. and Alaska Airlines, Inc. respectfully urge the 

Department to expeditiously approve the transfer of the Los Angeles-Mexico City route to 

8 
Jeremy Ross 

Senior Attorney. Litigation and Regulatory 

and Director. Legal 

Alaska Airlines, Inc. 

19300 International Boulevard 

Seattle, Washington 98188 

jcrcrm .ross'li\ llash:aair.com 

David Heffernan 

Cozen O'Connor 

The Anny & Navy Club Building 

1627 I Street. N.W. 

Suite 1100 

Washington, D.C. 20006 

(202) 463-2537 

dhc!Ternnn@cozen.com 

Counsel to Alaska Airlines, Inc. 

DATED: February II, 2015 

9 

Howard Kass 

Vice President - Regulatory Affairs 

Robert A. Wirick 

Managing Director, Regulatory and 

International Aflairs 

Abigail Donovan 

Director, Congressional and Federal Affairs 

American Airlines, Inc. 

1101 17111 Street. N.W. 

Washington, D.C. 20036 

(202) 326-5153 

howard. kass@.aa.com 

robert. wirickfa:.aa.com 

abigai l.donovanl'@aa.com 
DOT Docket OST-2015- XXX 

Exhibit AA-1 

Page 1 of2 

American Airlines Los Angeles-Maxie~ City Flight Schedule 

AA349 

Daily 

8737-800 

0920 

v 

1500 

3:40 

AMERICAN AIRLINES 

Los Angeles-Mexico City Nonstop Service 

Effective 

June 4, 2015 

Flight Number 

Frequency 

Equipment 

Los Angeles (LAX) 

Mexico City (MEX) 

Elapsed Time 

AA349 

Daily 

8737-800 

1815 

II 

1600 

4:15 

1 
DOT Docket OST-2015-XXX 

Exhibit AA-1 

Page 2 of2 

American Airlines Los Angeles-Mexico City Flight Statistics 

Annual Operating Statistics 

Aircraft 

Departures 

Segment Miles 

Plane Miles 

ASMs 

Effective June 04, 2015 

Fuel Burn (Gallons/Hour) 

Fuel Consumption (000 Gallons)" 

Seating Configuration 

First Class 

Economy Class 

Total 

16 

144 

160 

8737-800 

730 

1,545 

1,127,850 

180,456,000 

770 

2,007 

AIRCRAFT AVAILABILITY- American will use aircraft currently in its fleet. 

FUEL AVAILABILITY- American anticipates no difficulty in obtaining fuel from its existing suppliers at Los Angeles and 

Mexico City. 

11The environmental impact of American's proposed service is de minimis. Although the aggregate annual fuel usage of 

American's proposed service is expected to exceed 10 million gallons, American would use these aircraft in other markets in the 

absence of an order granting the operating authority American seeks in this application. Accordingly, the proposed service will not 

cause a near-term net annual change in aircraft fuel consumption of 10 million gallons or more of fuel consumption if the request 

were not granted. 

2 
DOT Docket OST-2015-XXX 

Exhibit AA·2 

Page 1 of2 

American Airlines Los Ang(31es-Mexico City Flight Schedule 

AA312 

Daily 

8737-800 

0010 

v 

0540 

3:30 

AMERICAN AIRLINES 

Los Angeles-Mexico City Nonstop Service 

Effective 

June 4, 2015 

Flight Number 

Frequency 

Equipment 

Los Angeles (LAX) 

Mexico City (MEX) 

Elapsed Time 

AA312 

Daily 

8737-800 

0925 

1\ 

0730 

3:55 

3 
DOT Docket OST-2015-XXX 

Exhibit AA-2 

Page 2 of2 

American Airlines Los Angeles-Mexico City Flight Statistics 

Annual Operating Statistics 

Aircraft 

Departures 

Segment Miles 

Plane Miles 

ASMs 

Effective June 04, 2015 

Fuel Burn (Gallons/Hour) 

Fuel Consumption (000 Gallons)A 

Seating Configuration 

First Class 

Economy Class 

Total 

16 

144 

160 

8737-800 

730 

1,545 

1,127,850 

180,456,000 

770 

2,007 

AIRCRAFT AVAILABILITY- American will use aircraft currently in its fleet. 

FUEL AVAILABILITY - American anticipates no difficulty in obtaining fuel from its existing suppliers at Los Angeles and 

Mexico City. 

AThe environmental impact of American's proposed service is de minimis. Although the aggregate annual fuel usage of 

American's proposed service is expected to exceed 10 million gallons, American would use these aircraft in other markets in the 

absence of an order granting the operating authority American seeks in this application. Accordingly, the proposed service will not 

cause a near-tenn net annual change in aircraft fuel consumption of 10 million gallons or more of fuel consumption if the request 

were not granted. 

4 
American's Los Angeles Hub Connects 58 Airports to LAX 

Shanghai ----

Brisbane** 

Reno Las Vegas 

Salt Lake City 

~ ~ Nashville 

NWArkansas 

Oklahoma City 

__ r_, Dallas/Fort Worth 

Austin 

e San Antonio 

El Paso 

Houston (IAH) 

Orlando 

Palm Beach 

Miami 

• Seasonal service; •• Service offered by Oantas; ••• Service offered by Iberia Airlines. •••• Service offered by Alaska Airlines 1AUanta service starts March 2015; 2 Guadalajara service starts June 2015 

Source: American Airlines and OAG flight schedules 

DOT Docket OST-2015-XXX 

Exhibit AA-3 

Page 1 of 1 

e Proposed service 

5 
todd. homan@do l. gov (De pari me 111 qj" Trcmsporl a/ ion) 

petcr.irvine@dot.gov (Depar1me111 l?/Tramporlalion) 

laura.rcmo@dot.gov (Deparlmenl ldTransporlalion) 

brctt.kruger@dot.gov (Deparlmem 

john.s.duncan@laa.gov (Federal Al'iation Adminislralion) 

dan.wciss@united.com (Uniled) 

steve.morrissey@united.com (United) 

gmurphy@crowell.com (Counselfor Uniled) 

sascha. vandcrbcllcn@dclta.com (De lui) 

chris. walkcr@dclta (De/tel) 

patrick.rizzi@hoganlovclls.com (Republic) 

bob.kneisley@wnco.com (Southwesl) 

jhill@cooley.com (.Je/Biue) 

dkirstein@yklaw.com (Spirit) 

barbara.russell@virginamerica.com (Virgin) 

matwood@cozen.com (Fronlier) 

Thomas. ting@suncountry .com (Sun Count1y) 

Kenneth C. Hines