UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on May 27, 2014

 NOTICE OF ACTION TAKEN -- DOCKETS DOT-OST-2014-0058 and DOT-OST-2014-0059 

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). 

Joint Application of UNITED AIRLINES, INC. (United) and SKYWEST AIRLINES, INC. d/b/a 

UNITED EXPRESS (SkyWest), filed 4/18/14 for:

XX Exemption for SkyWest for two years under 49 U.S.C. 40109 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, and 

Leon/Guanajuato, Mexico.

1 2

Applicant Representatives: Gerald F. Murphy and Steven J. Seiden (202) 624-2500 

DOT Analyst: Brett D. Kruger (202) 366-8025

D I S P O S I T I O N

XX Granted, subject to conditions (see below)

The above action granting amended exemption authority was effective when taken: May 27, 2014, 

through May 27, 2016.

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 

Mexico.

Except to the extent exempted or waived, this authority is subject to the terms, conditions, and 

limitations indicated:

XX The holders’ certificates of public convenience and necessity

 XX Standard Exemption Conditions (attached)

Responsive Pleadings/Remarks: Under the U.S.-Mexico aviation agreement, two U.S. carriers may be 

designated to provide own-aircraft scheduled foreign air transportation of persons, property, and mail 

between Houston, Texas and Leon/Guanajuato, Mexico. Currently, United and ExpressJet are designated 

to provide these services. United states that it intends to replace its own-aircraft services in the market 

with United Express services provided by SkyWest beginning on or about October 26, 2014.

 1 SkyWest states that it will display the “UA” designator code of United in the Houston-Leon/Guanajuato market 

beginning on or about October 26, 2014. 2 United holds certificate authority to provide scheduled foreign air transportation of persons, property, and mail 

between Houston and Leon/Guanajuato using its own aircraft and by placing its code on services provided by 

ExpressJet Airlines, Inc. (ExpressJet). See Orders 2000-5-31, 2010-5-17, and 2013-4-11. The joint applicants state 

that beginning on or about October 26, 2014, United plans to replace its own-aircraft service with United Express 

service operated by SkyWest.
On May 5, 2014 Southwest Airlines Co. (Southwest) filed an answer to the Joint Application. Southwest 

notes that with an approval of the instant application, the two designations available to U.S. carriers to 

serve the Houston-Leon/Guanajuato market would continue to be used on behalf of a single U.S. carrier. 

Southwest states that it does not oppose the joint application, but notes that it plans to serve 

Leon/Guanajuato from Houston’s William P. Hobby airport in the future. Southwest urges the 

Department to put the joint applicants on notice that their authority and corresponding designations in the 

market are subject to being rescinded if Southwest were to actively seek competing authority to serve the 

Houston-Leon/Guanajuato market.

On May 12, 2014, the City of Houston filed a reply. The City of Houston expresses support for 

Southwest’s request, and also states that it welcomes United and SkyWest’s commitment to their 

Houston-Mexico services. The City of Houston states that the limited number of U.S.-carrier 

designations available in each U.S.-Mexico city-pair market severely limits competition and operational 

flexibility for carriers. The City of Houston further states that it is hopeful that the upcoming U.S. 

negotiations with Mexico will result in the removal of designation limits.

Decision: We have decided in the circumstances presented, including the fact that no party opposed the 

application, that it is in the public interest to grant SkyWest the requested exemption authority. In 

reaching this decision, however, we recognize the concerns raised by Southwest and the City of Houston. 

In this regard, we note that should a competing U.S. carrier present a firm proposal to provide scheduled 

Houston-Leon/Guanajuato service, we would be prepared to reconsider whether, in those circumstances, 

award of the authority granted here continues to be in the public interest.

Effective Date for Start-up/Designation: United may begin marketing and selling the subject United 

Express services authorized here, but SkyWest cannot commence the United Express HoustonLeon/Guanajuato services until October 26, 2014.

The joint applicants state that United’s own-aircraft service will be replaced with United Express service 

operated by SkyWest commencing on October 26, 2014. Under the circumstances presented in this case, 

as noted above, we have decided that it is in the public interest to grant SkyWest the requested exemption 

authority. In this regard, we will withdraw the designation of United effective upon the departure of its 

last scheduled flight in the Houston-Leon/Guanajuato market, but in no case effective later than 11:59 PM 

on October 25, 2014, and designate SkyWest for Houston-Leon/Guanajuato services effective October 

26, 2014.3

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 26, 2014, SkyWest’s proposed start-up date for

the subject services.

The code-share operations conducted under this authorization are subject to the following conditions:

(a) The code-sharing operations conducted under this authority must comply with 14 CFR 257 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 liability of the 

operating carrier be unaffected; and

 3 We will also provide the necessary notification to the Government of Mexico confirming United’s authority to 

provide code-share service in the market.
(b) The authority granted here is specifically conditioned so that neither United nor SkyWest shall 

give any force or effect to any contractual provisions between themselves that are contrary to these 

conditions.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found the 

applicants 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 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 requests in the referenced

Dockets. 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 

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:

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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