BEFORE THE

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

__________________________________________

)

Application of )

)

AIRTRAN AIRWAYS, INC. )

) Docket No. OST-2011-

for 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 (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 

DECEMBER 21, 2011. 
1

BEFORE THE 

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

__________________________________________

)

Application of )

)

AIRTRAN AIRWAYS, INC. )

) Docket No. OST-2011-

for 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 lowfare competition in the Chicago – 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 support 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 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. 

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.-

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. – 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 Cancun, 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 service 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 an 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 the second largest 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 destinations 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 increase passengers in 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 doctrine.1

10. 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.

11. 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. 

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Ashbacker Radio Corporation v. FCC, 326 U.S. 327 (1945). See, e.g., National Airlines, Inc. v. CAB, 

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 not hear one application before it hears the other.” 
5

WHEREFORE, AirTran requests 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