BEFORE THE

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

__________________________________________

)

Application of )

)

AIRTRAN AIRWAYS, INC. )

) Docket No. OST-2012-

for an exemption pursuant to 49 U.S.C § 40109 )

to engage in foreign scheduled air transportation )

of persons, property and mail between Denver, ) 

Colorado (DEN) and San Jose del Cabo, )

Mexico (SJD). )

__________________________________________ )

APPLICATION OF AIRTRAN AIRWAYS, INC.

Communications with respect to this document should be sent to:

Bob Jordan Robert W. Kneisley

 President Associate General Counsel

AIRTRAN AIRWAYS, INC. Leslie C. Abbott

9955 AirTran Boulevard Senior Attorney

Orlando, FL 32827 SOUTHWEST AIRLINES CO.

 1901 L Street, N.W., Suite 640

Washington, D.C. 20036

 bob.kneisley@wnco.com

(202) 263-6284

November 2, 2012

NOTICE: ANY PERSON MAY FILE AN ANSWER TO THIS APPLICATION IN THIS 

DOCKET AND SERVED ON THE PERSONS LISTED ABOVE ON OR BEFORE 

NOVEMBER 19, 2012. 
1

BEFORE THE 

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

__________________________________________

)

Application of )

)

AIRTRAN AIRWAYS, INC. )

) Docket No. OST-2012-

for an exemption pursuant to 49 U.S.C § 40109 )

to engage in foreign scheduled air transportation )

of persons, property and mail between Denver, ) 

Colorado (DEN) and San Jose del Cabo, )

Mexico (SJD). )

__________________________________________ )

APPLICATION OF AIRTRAN AIRWAYS, INC.

Pursuant to 49 U.S.C. § 40109 and Subpart C of the Department’s Rules of

Practice, AirTran Airways, Inc. (AirTran) hereby applies for an exemption from 49 

U.S.C. § 41101 authorizing AirTran to engage in scheduled foreign air transportation of 

persons, property, and mail between Denver, Colorado (DEN) and San Jose del Cabo, 

Mexico (SJD). Currently three U.S. carriers are designated to provide scheduled service 

in this market: United Air Lines, Frontier Airlines, and Republic Airlines.

1

For the reasons 

given in this application, AirTran requests that the Department act as quickly as possible 

to: (1) revoke Republic’s authority in this market, and (2) grant authority to AirTran to 

serve this market, as proposed herein. 

Republic has not provided service between DEN and SJD since April 14, 2008,

and has no published service in the market through the end of its current schedule in 

 

1

Common air carrier names and designator codes are used herein.
2

May 2013.

2 Moreover, Republic has repeatedly made clear that the sole reason for its 

interest in the DEN-SJD market is to provide service “on behalf of, and under the trade 

name and designator code of, Frontier Airlines.”

3 Republic and Frontier are under 

common ownership of Republic Airways Holdings, and Frontier already holds a

separate designation in the DEN-SJD market. Thus, not only has Republic failed for 

several years to use the valuable route authority that the Department granted to it, but

its arrangement with Frontier means that two U.S. designations in this market are being 

used on behalf of one U.S. carrier. In contrast, AirTran would be an independent new 

entrant in the DEN-SJD market that will provide robust competition to both Frontier and 

United. AirTran is prepared to commence flying in the DEN-SJD market as soon as all 

regulatory approvals are received, and will provide year-round, large jet service that will 

offer additional seats and new travel options for consumers. Under these 

circumstances, there is no justification for allowing Republic to continue to hold separate 

and unused authority that would block AirTran’s competing – and far superior – service. 

Indeed, Republic has a multi-year history of not serving this market. Republic

initially requested DEN-SJD authority on February 2, 2007 to “operate regional jet 

service on behalf of, and under the trade name of, Frontier Airlines.”4It cancelled all 

flights a little more than a year later on April 14, 2008 and filed a dormancy notice 

shortly thereafter stating that “[a]ll services operated by Republic Airline Inc. (“Republic”) 

pursuant to an Airline Services Agreement with Frontier Airlines, Inc. have terminated.”

5

Two years later Republic reapplied for DEN – SJD authority “to introduce new U.S. –

 

2

Diio, inquiry on November 2, 2012; Republic and Frontier’s current schedules are open through May 15, 2013.

3

Docket OST-2010-0152; Notice of Seasonal/Intermittent Service by Republic Airline Inc., June 23, 2011.

4

Docket OST-2007-27199; Application of Republic Airline Inc. for an Exemption, p. 2, February 2, 2007.

5

Docket OST-2007-27199; Dormancy Notice of Republic Airline Inc., p. 1, (U.S. – Mexico Routes), June 23, 2008.
3

Mexico service under the Frontier brand and designator code” beginning “on or about

December 16, 2010.”

6 However, Republic did not initiate service on that date but

instead requested a waiver of the Department’s dormancy requirements stating that “in 

light of ongoing economic uncertainty and recent increases in fuel costs....Republic now 

anticipates that its first [DEN-SJD] ERJ-190 flight will take place on April 3, 2011.”7The 

Department approved Republic’s waiver request subject to a requirement that “the 

carrier [ ] institute service in the Denver-San Jose del Cabo market no later than April 3, 

2011.”8 Yet, Republic did not begin service by that date and instead notified the 

Department on June 23, 2011 that:

“its Denver-San Jose del Cabo...service on behalf of, and under the trade 

name and designator code of, Frontier Airlines, Inc., will be operated on a 

seasonal/intermittent basis...to provide Republic with the necessary 

flexibility to address demand fluctuations, the difficult operating 

environment and oil at $100-plus per barrel, change-of-gauge 

determinations, and aircraft substitutions by Frontier.”9

Even with this further desired flexibility, Republic still did not operate a single DEN-SJD 

flight. Notwithstanding its lack of any service in the market, Republic filed an application 

on April 19, 2012 to renew its exemption authority so it could “continue to provide 

scheduled foreign air transportation.....under the Frontier Airlines, Inc. (“Frontier”) brand 

and designator code.”

10 The Department granted the renewal application and Republic’s 

authority now extends through May 14, 2014.11 

 

6

Docket OST-2010-0152; Joint Application of Republic Airline Inc. and Frontier Airlines, Inc. for Exemptions, pp. 1 

and 4, June 11, 2010.

7

Docket OST-2010-0152; Motion of Republic Airline Inc. for Dormancy Waivers, p. 2, March 14, 2011.

8

Docket OST-2010-0152; Approval of Motion of Republic Airline Inc. for Dormancy Waivers, p. 1, March 17, 2011. 

9

Docket OST-2010-0152; Notice of Seasonal/Intermittent Service by Republic Airline Inc.; June 23, 2011(emphasis 

added).

10 Docket OST-2010-0152; Application to Renew Exemption Authority of Republic Airline Inc., p. 1, April 19, 2012.

11 Docket OST-2010-0152; Notice of Action Taken (NOAT), May 14, 2012.
4

However, Republic is on notice, consistent with the Department’s longstanding 

policy to ensure limited-entry U.S.-Mexico authority is fully utilized that: 

“...should another carrier apply to serve a city-pair market served 

intermittently with a proposal to serve on a regular basis, [the Department]

would have to reconsider whether, in the circumstances presented, award 

of the intermittent authority continues to be in the public interest.”12

Indeed the Notice of Action Taken (NOAT) granting Republic’s renewal specifically 

referenced the Order containing this language.13 

Significantly, all of the Department’s various grants of DEN-SJD authority to 

Republic took place in the context of unopposed applications. At the time, therefore, the 

Department’s approvals of Republic’s applications were understandable and in the 

public interest. Now that AirTran is filing this competing application and is prepared to 

promptly begin year-round, large jet service in the market, however, a continuation of 

Republic’s authority for yet-to-be-provided “seasonal/intermittent” service is no longer in 

the public interest. Moreover, even if Republic were to begin providing such service, it 

obviously would not compete with that of its affiliated carrier Frontier. Instead, Republic 

and Frontier would together utilize two U.S. designations in a limited-entry market to 

provide consumers with a single carrier option. For all these reasons we request that 

the Department act expeditiously to revoke Republic’s authority and grant AirTran’s 

application.14 

 

12 Order 96-11-24, at 5 (Dec. 2, 1996).

13 See NOAT issued May 14, 2012, conditions p. 1.

14 DOT withdrawal and reallocation of unused authorities on limited entry routes to new entrant carriers is not 

without recent precedent. See, e.g., Order 2008-5-27 in Docket No. OST-2007-006 (2007/2008 U.S.-Columbia 

Combination Frequency Allocation Proceeding), where DOT reallocated seven unused Columbian authorities held 

by American Airlines to Spirit Airlines. 
5

In prior pleadings Republic asserted that its proposed DEN-SJD service would 

allow Frontier to make “efficient use of large regional jets operated by Republic.”15 But, 

if Frontier wishes to change aircraft gauge or frequencies in this market in response to 

seasonal demands, it already has the ability to do so under its own designation. Further, 

if Republic wishes to gain access to the market in its own name at some point in the 

future, it can do so via a code-share designation on flights provided by its affiliated 

carrier Frontier.16 

AirTran has an established track record of providing low-fare competition in both 

domestic and international markets and would be a vigorous competitor to both Frontier 

and United. As a wholly-owned subsidiary of Southwest Airlines, AirTran’s service 

would benefit from Southwest’s large presence in Denver. Combined, the two carriers 

serve 55 nonstop destinations with 164 weekday departures and carry 28.3% of the 

Denver passengers.17

A side-by-side comparison illustrates the far greater public benefits that AirTran’s 

service would provide compared to Republic’s unused authority.

AirTran Republic

Service Proposal Year round (with seasonal 

frequency adjustments)18

No service

 

15 Docket OST-2010-0152; Application to Renew Exemption Authority of Republic Airline Inc., p. 2, April 19, 2012.

16 It should be noted that the Department has previously selected new entrant carriers in contested U.S. – Mexico 

route proceedings over applicants with access to the market via code-share relationships. See, e.g., 2005 Los 

Angeles-Mexico City Combination Service Proceeding, Docket OST-2005-20406 (Order 2005-05-01)(selecting 

Alaska Airlines due, in part, to its new entrant status and greater public benefits than airlines with existing codeshare relationships in the market); see also Los Angeles-San Jose del Cabo Exemption Proceeding, Docket OST2000-8361 (Order 2001-1-11) (selecting Alaska over Continental and American, in part, due to the greater public 

benefits that would result from its new entrant status versus carriers with an existing code-share presence). 

17 YE 1Q 2012; Source: Diio Mi and US DOT O&D, includes International.

18 Service will be provided daily from November through April and twice-weekly from May through October.
6

Aircraft Type Boeing 737-700 (137 seats); 

two classes of service

No service 

Start-up Date As soon as all required 

regulatory approvals are 

received

No service

Current Access to 

Market

No, new entrant carrier Yes, sister company Frontier 

currently provides service 

Service to be 

Provided by 

Carrier Applicant

Yes, service would be 

operated and marketed by 

AirTran

No, service would only be

provided under Frontier’s 

brand and code; no Republic 

service in the market

In further support of this application, AirTran states the following:

1. AirTran is a wholly owned subsidiary of Southwest Airlines Co. (Southwest), a 

Texas corporation with its principal place of business at 2702 Love Field Drive, Dallas, 

Texas, 75235. AirTran maintains its principal place of business at 9955 AirTran 

Boulevard, Orlando, Florida, 32827. AirTran and Southwest were granted a Single 

Operating Certificate by the FAA on March 1, 2012. 

2. Southwest is a citizen of the United States as defined by Section 40102(a)(15) of 

Title 49 of the United States Code and Section 204.2(c) of the Department’s Economic 

Regulations. Southwest’s president and at least two-thirds of its board of directors and 

other managing officers are citizens of the United States. Southwest is under the actual 

control of citizens of the United States and more than 75 percent of its voting interest is 

owned or controlled by persons that are citizens of the United States. Additionally, 

AirTran’s president and other managing officers are citizens of the United States and 

AirTran is under the actual control of citizens of the United States. 
7

3. AirTran is prepared to commence year-round service as soon as all required 

government approvals are received. The service would be offered daily from November 

through April and twice weekly from May through October. AirTran will provide this 

service using Stage III Boeing 737-700 aircraft configured for 137 seats and offer two 

classes of service.

4. AirTran is fit, willing and able to conduct the services described in this 

application. AirTran holds a Certificate of Public Convenience and Necessity to engage 

in interstate scheduled air transportation of persons, property and mail. See Order 97-

11-28, reissued by Order 2000-9-10 and transferred to Southwest Airlines Co. and 

AirTran Airways, Inc. by Order 2011-11-17. AirTran also holds current exemption 

authority from the Department to serve numerous U.S. - Mexico routes, as well several 

other international markets. See, e.g., Dockets OST-2012-0001 (MDW-CUN), OST2005-21134 (BWI-CUN and ATL-CUN), OST-2011-0205 (SAT-MEX, SAT-CUN, SNAMEX, SNA-SJD), OST-2009-0201 (U.S. – Montego Bay, Jamaica), and OST-2009-0200 

(U.S. – Aruba). Pursuant to Rule 24 of the Department’s Rules of Practice, AirTran 

asks the Department to take official notice of all data on file necessary to establish 

AirTran’s fitness.

5. The requested exemption authority is fully consistent with the terms of the U.S.-

Mexico Air Transport Agreement (Agreement) as amended by the two governments on 

December 12, 2005. The Agreement authorizes carriers designated by the U.S. to 

operate “[f]rom a point or points in the United States to a point or points in Mexico.” 

Annex I(A)(1)(a). Pursuant to the amended Agreement, three U.S. carrier designations 

are authorized on U.S. – SJD routes. Annex I(B)(4-5). As noted previously, the three 
8

available designations are currently held by United Air Lines, Frontier Airlines, Inc. and 

Republic Airline, Inc. 

6. The environmental impacts of AirTran’s proposed services are de minimis, and 

will therefore not lead to a near-term annual increase in aircraft fuel consumption of 10 

million gallons or more. Accordingly, grant of this application will not constitute a “major 

regulatory action” within the meaning of the Energy Policy and Conservation Act of 1975 

or Part 313 of the Department’s Economic Regulations.

7. AirTran is prepared to accept and comply with the terms and conditions that the 

Department routinely imposes on exemption authority for scheduled foreign air 

transportation. 

WHEREFORE, AirTran’s proposed DEN-SJD service will provide independent 

competition and significant new low-cost travel options for passengers and shippers in 

both the United States and Mexico. Accordingly, AirTran requests that the Department

act as quickly as possible to: (1) revoke Republic’s authority in the DEN-SJD market,

and (2) grant the exemption authority requested by AirTran to enable it to provide 

service between DEN and SJD as proposed herein, as soon as all regulatory approvals 

are received. 

Respectfully submitted,

______________________

Robert W. Kneisley

November 2, 2012
CERTIFICATE OF SERVICE

I hereby certify that on November 2, 2012, a copy of the foregoing was served 

via e-mail on the following persons:

msinick@ssd.com (Alaska Airlines)

francis.heil@aa.com@aa.com (American Airlines)

sascha.vanderbellen@delta.com (Delta Air Lines)

robert.cohn@hoganlovells.com (Frontier Airlines & Republic Airline)

patrick.rizzi@hoganlovells.com (Frontier Airlines & Republic Airline

robert.land@jetblue.com (JetBlue Airways)

jhill@dowlohnes.com (JetBlue Airways)

dkirstein@yklaw.com (Spirit Airlines)

jyoung@yklaw.com (Spirit Airlines)

John.Fredericksen@suncountry.com (Sun Country Airlines)

dan.weiss@united.com (United Air Lines)

howard_kass@usairways.com (US Airways)

Benjamin.slocum@usairways.com (US Airways)

pmurphy@lopmurphy.com (USA3000)

barbara.russell@virginamerica.com (Virgin America)

jegillick@zsrlaw.com (Virgin America)

susan.kurland@dot.gov

paul.gretch@dot.gov

brian.hedberg@dot.gov

brett.kruger@dot.gov

todd.homan@dot.gov

esta.rosenberg@dot.gov

john.allen@faa.gov 

urskr@state.gov

Kim Day

Manager of Aviation

Denver International Airport

kim.day@diadenver.net

info@airlineinfo.com

__________________________

Leslie C. Abbott