BEFORE THE OFFICE OF THE SECRETARY U.S. DEPARTMENT OF TRAN S PORTATION WASHINGTON D

. C

.

________________________________ _____ _____ ) Application of ) ) AIRTRAN AIRWAYS, INC. ) ) Docket No. OST
- 2011 - f or an exemption pursuant to 49 U.S.C § 40109 ) t o engage in foreign scheduled air transportation ) of persons, property and mail between Chicago , ) Illinois (MDW) and Cancun , Mexico (CUN)

. )

_____________________________________ _____ )

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

December 6 , 2011
NOTICE : ANY PERSON MAY FILE AN ANSWER TO THIS APPLICATION IN THIS DOCKET AND SERVED ON THE PERSONS LISTED ABOVE , ON OR BEFORE D ECEMBER 21, 2011

.1 BEFORE THE OFFICE OF THE SECRETARY U.S. DEPARTMENT OF TRAN S PORTATION WASHINGTON D

. C

.

________________________________ _____ _____ ) Application of ) ) AIRTRAN AIRWAYS, INC. ) ) Docket No. OST
- 2011 - f or an exemption pursuant to 49 U.S.C § 40109 ) to engage in foreign scheduled air transportation ) of persons, property and mail between Chicago , ) Illinois (MDW) and Cancun, Mexico

. )

_____________________________________ _____ )

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 Chicago Midway Airport (MDW) and Cancun,
Mexico (CUN )

. AirTran proposes to commence operations with daily 737

- 700 service beginning no later than March 11, 2012 and requests that the exemption authority specified in the application be granted as soon as possible for a period of at least two years. By awarding the requested authority to AirTran, the Department would facilitate new low

fare competition in the Chic ago
– Cancun market and the first such service at Midway Airport , which serves the entire Chicago region but is especially convenient to the south side of Chicago.
In s upport of this application, AirTran states the following :2 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 and operates pursuant to a separate FAA operating
certificate from Southwest.
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 Depa rtment’s Economic Reg ulations. Southwest ’s p resident and at least two

- thirds of its b oard of d irectors 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.
3. AirTran proposes to commence year

- round daily service between MDW and CUN beginning by March 11, 2012

. AirTran will provide this service using Boeing 737

- 700 aircraft configured for 137 seats

. 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. AirTran also holds current exemption authority from the Department to serve

numerous U.S.

- Mexico routes , as well several other international markets

. See
Dockets OST

- 2005

- 21134 (BWI

- CUN and ATL

- CUN) , OST

- 2005

- 21134 (MKE

- CUN) , OST

- 2011

- 0205 (SAT

- MEX, SAT

- CUN, SNA

- MEX, SNA

- SJD) , OST

- 2009

- 0201 (U.S.

–3 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.

- M e xico Air Transport Agreement (Agreement) as amended by the two governments on December 12, 2005. The Agreement a uthorizes 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, t hree U.S. carrier designations
are authorized on U.S.

– CUN routes . Annex I(B)(4

- 5).
6. Currently three U.S. carriers are designated under the U

. S

. - Mexico bilateral agreement to provide scheduled service between Chicago and C ancun, all from O’Hare Airport ( ORD ) : American Airlines , United Airlines , and USA3000. USA3000 is purported to be ceasing service soon, possibly as early as January 31, 2012. The termination of
USA3000’s ser vice would leave one U.S. carrier designation available in the Chicago

– Cancun market

. There is no nonstop service between MDW and CUN.
7. AirTran ’s proposal to serve CUN from MDW would provide a geographical diversity of service for the region and offer Chicago consumers a n important new competitive travel alternative. Together, AirTran and Southwest have an average of 220 daily departures at MDW serving 58 nonstop destinations. With 28% of the total Chicago market, AirTran/Southwest is t he second larges t carrier in the region , only slightly behind United . This large presence will allow AirTran to extend the benefits of
MDW

- CUN service to the greatest number of local passengers as well as provide a multiplicity of convenient connections to numerous destin ations beyond Chicago.4 8. AirTran already provides scheduled service to Mexico with nonstop flights in the
ATL

- CUN, BWI

- CUN and MKE

- CUN markets and has recently received approval to provide SAT

- CUN , SAT

- MEX, SNA

- MEX and SNA

- SJD service. AirTran ’s low

- cost competition has expanded these markets significantly and will undoubtedly lower fares
and increas e passengers i n the Chicago

– Cancun market as well, where the combined AirTran/Southwest presence is extensive. As noted above, AirTran’s proposed service will provide new convenient and reliable low

- cost travel options to passengers and shippers in both the United States and Mexico , and clearly is in the public interest.
9. On November 21, 2011, Frontier Airlines, Inc. (Frontier) applied for authority to
serve the ORD

- CUN market. AirTran submits this competing application today and requests that the Department give it contemporaneous consideration with the Frontier application pursuant to the Ashbacker d octrine. 1
10. The environmental impacts of AirTran ’s propose d 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” withi n the meaning of the Energy Policy and Conservation Act of 1975 or Part 313 of the Department’s Economic Regulations.
11. AirTran is prepared to accept and comply with the terms and conditions that the Department routinely imposes on exemption authority for s cheduled foreign air transportation.!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Ashbacker Radio Corporation v. FCC , 326 U.S. 327 (1945)

. See, e.g. , National Airlines, Inc. v. C AB , 392 F.2d 504 , 508 (C.A.C.D) 1968. “The Ashbacker doctrine requires that where a licensing agency has before it competing applications and the surrounding circumstances indicate that the grant of one would preclude the grant of another, the agency may no t hear one application before it hears the other.”5 WHEREFORE, AirTran r equests that the Department grant the requested exemption authority to enable AirTran to engage in scheduled foreign air transportation of persons, property and mail between MDW and CUN

. Respectfully submitted,

______________________ Robert W. Kneisley
December 6 , 2011