UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on October 14, 2014

 NOTICE OF ACTION TAKEN -- DOCKETS DOT-OST-2014-0158 and DOT-OST-2014-0159 

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 9/10/14 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 

Monterrey, 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 exemption authority was effective when taken: October 14, 2014, through 

October 14, 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, three U.S. carriers may be 

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

the Houston-Monterrey market. Currently, United and ExpressJet are designated to provide these 

services. United intends to replace its own-aircraft service in the market with United Express service 

provided by SkyWest beginning on or about March 5, 2015, and states that no additional designations 

will be required. 

 1 SkyWest states that it will display the “UA” designator code of United in the Houston-Monterrey market beginning 

on or about March 5, 2015. 2 United holds certificate authority to provide scheduled foreign air transportation of persons, property, and mail in 

the Houston-Monterrey market. See Orders 1992-5-20 and 2013-4-11. The joint applicants state that beginning on 

or about March 5, 2015, United plans to replace its own-aircraft service with service operated by SkyWest.
On September 25, 2014 Southwest Airlines Co. (Southwest) filed an answer to the Joint Application. 

Southwest notes the applicants’ assertion that SkyWest will substitute the current services provided by 

United in the subject market, but Southwest questions the timing of United’s return of its designation. 

Southwest points out that the joint application states that “United will retain its operating designation until 

the Department has taken action on the Joint Application, the Joint Applicants have begun providing the 

service requested herein, and United has given notice to the Department that its operating designation is

no longer required.”3

 Southwest asserts that United appears to contemplate holding all three designations 

for the Houston-Monterrey market for an unspecified period of time, and that even if United relinquishes 

its designation, United will continue to control two of the three designations for the Houston-Monterrey

city pair. 

Southwest states that it does not oppose the joint application, but notes that it plans to offer a broad range 

of services to Mexico from Houston’s William P. Hobby airport in the future. Southwest urges the 

Department to make clear that (1) United and its partner carriers will not be permitted to occupy more 

than one designation if doing so would block a competing U.S. carrier application, and (2) United and its 

partner carriers may not occupy all three U.S. carrier designations for any period of time in the HoustonMonterrey market.

On October 3, 2014, the joint applicants filed a joint reply. The joint applicants note that Southwest does 

not oppose the joint application, and the joint applicants urge the Department to promptly approve their 

request.

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, we recognize the concerns raised by Southwest, particularly with respect to the 

subject markets being fully subscribed for an unspecified period of time. In light of the joint applicants’ 

assertions that SkyWest will simply replace the own-aircraft services that United provides and that 

additional designations will not be required, we have decided to handle the designation withdrawal of 

United in a manner consistent with our handling of other recent requests of the joint applicants as set forth 

below.4

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

Express service authorized here, but SkyWest cannot commence the United Express Houston-Monterrey

service until March 5, 2015.

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

operated by SkyWest commencing on March 5, 2015. 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-Monterrey market, but in no case effective later than 11:59 PM on 

March 4, 2015, and designate SkyWest for Houston-Monterrey service effective March 5, 2015.

5

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 March 5, 2015, SkyWest’s proposed start-up date for the 

subject services.

 3 Joint Application, at 3, n. 4.

4 See e.g., Notice of Action Taken dated May 12, 2014, in Dockets DOT-OST-2014-0060 and DOT-OST-2013-

0114; Notice of Action Taken dated May 27, 2014, in Dockets DOT-OST-2014-0058 and DOT-OST-2014-0059; 

Notice of Action Taken dated July 29, 2014, in Dockets DOT-OST-2014-0100 and DOT-OST-2014-0101; and 

Notice of Action Taken dated September 3, 2014, in Dockets DOT-OST-2014-0129 and DOT-OST-2014-0130. 5 We will also provide the necessary notification to the Government of Mexico confirming United’s authority to 

provide code-share service in the market.
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

(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.

1/2008