BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

------------------------------------------------------------------------ : Application of : : CONTINENTAL AIRLINES, INC. : and : Docket DOT

- OST

- 2011

-

___ UNITED AIR LIN ES, INC. : : for exemption s pursuant to 49 U.S.C. § 40109 : ( San Francisco

- Guadalajara, Mexico ) :

------------------------------------------------------------------------

APPLICATION OF CONTINENTAL AIRLINES, INC. AND UNITED AIR LINES , IN C., FOR EXEMPTIONS Communications with respect to this document should be sent to:
Hershel I. Kamen Vice President

– International, Regulatory a nd Policy UNITED AIR LINES, INC. AND CONTINENTAL AIRLINES, INC. 1350 I Str eet, NW Washington, DC 20005

- 3389

THOMAS NEWTON BOLLING Managing Attorney, Regulatory CONTINENTAL AIRLINES, INC. P.O. Box 4607

– HQSLG Houston, TX 77210

- 4607 (713) 324

- 56906 thomas.bolling@coair.com DANIEL A. WEISS Managing Director, In ternational & Regulatory Affairs UNITED AIR LINES, INC. AND CONTINENTAL AIRLINES, INC. Jeffrey A. Manley Senior Regulatory Advisor UNITED AIR LINES, INC. 1025 Connecticut Avenue, NW Washington, DC 20036 (301) 229

- 8571 jeffrey.manley@united.com

March 11 , 2011
N otice : United and Continental are requesting expedited treatment of this application.

United will poll air carrier representatives in the attached Service List and will advise the Department of t he results.BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

------------------------------------------------------------------------ : Application of : : CONTINENTAL AIRLINES, INC. : and : Docket DOT

- OST

- 2011

-

___ UNITED AIR LINES, INC. : : for exemptions pursuant to 49 U.S.C. § 40109 : (San Francisco

- Guadalajara, Mexico) :

------------------------------------------------------------------------

APPLICATION OF CONTINENTAL AIRLINES, INC. AND UNITE D AIR LINES, INC., FOR EXEMPTIONS
Continental 1 applies, pursuant to 49 U.S.C. § 40109 and Rule 302 of the Department’s Rules of Practice, for an exemption from 49 U.S.C. § 41101 and designation under the U.S.

- Mexico Air Services Agreement, as amended, (“U .S.

- Mexico Agreement”) authorizing it to operat e scheduled foreign air transportation of persons, property and mail between San
Francisco , California and Guadalajara, Mexico (“San Francisco

- Guadalajara services”)

. United applies pursuant to 49 U.S.C. § 40 109 for an exemption from 49 U.S.C. § 41101 and a code

share designation to offer services in the San Francisco

- Guadalajara market by placing its code

on Continental ’s flights on the route. Continental and United (collectively “Joint Applicants”)
ask that this authority become effective as soon as possible and that the authority be effective for a period of at least two years. Moreover, the Joint Applicants request that the Department issue the requested authorities to “ Continental and /or United ” consist ent with other authorities reissued by the Department in Order 2011

- 3

- 14. 2 Continental and United will poll carrier

1 Common names are used for airlines. 2 Continental and Unit ed are wholly

- owned subsidiaries of United Continental Holdings, Inc. which currently operate separately pending the completion of their operational merger. DOT’s issuance of theApplication of Continental and United

Page 2 representative s served with this application and report the results to the Department in order to expedite approval. The Joint Applicant s state as follows in support of this application:
1. Awarding these exemption authorities and designations will permit Continental
and United to provide service t hat will meet travel and shipping demand on th e San Francisco

Guadalajara route , thereby incr eas ing the options available to the U.S. traveling and shipping public. The Joint Applicants urge the Department to act promptly so they can secure foreign authority, make final operating plans and begin marketing their San Francisco

- Guadalajara
service s well in advance of flight operations , which Continental plans to commence no later than June 9, 2011 , provided all necessary approvals have been secured. Authorizing Continental t o operate San Francisco

- Guadalajara service s and United to display the “ UA * ” designator code on
Continental ’s flights 3 will provide substantial consumer benefits by expanding the service options of the U.S. traveling public, offering online connections between points on both the
Continental and United network s via San Francisco 4 a nd providing the first U.S. carrier operated

non
- stop service in that city pair as well as offering competition for services operated by
AeroMexico 5 and , potentially, two other U.S. carriers on the route. The Joint Applicants will comply with the Departme nt’s rules on codesharing as set forth in Part 257 of the Department’s

authority jointly as requested would provide the m the flexibility to alterna te between operating and marketing carrier as needed (subject to redesignation by the U.S. government) pending their merger into a single carrier. 3 The Department has previously granted United exemption authority to codeshare with Continental on U.S.

- Mexico markets operated Continental

. See Notice s of Action Taken dated January 4, 2011 in Docket DOT

- OST

- 2010

- 0295 and November 29, 2010, November 4, 2010 and September 18, 2009 in Docket DOT

- OST

- 2009

- 0192

. 4 Continental and United together serve 76 points through t heir combined San Francisco networks. 5 AeroMexico has recently proposed to start San Francisco

- Guadalajara flights on April 1, 2011. See Application of AeroMexico, dated March 2, 2011, in Docket DOT

- OST

- 2011

- 0042.Application of Continental and United

Page 3 Regulations . The code

- shar e authority requested here in will have no impact on Continental’s or
United’s Civil Reserve Air Fleet commitments.
2. The authorities sought by the Joint Ap plicants compl y fully with the terms of the
U.S.

- Mexico Agreement, as amended. Route 1(a) of th at a greement authorizes carriers designated by the United States to operate from “a point or points in the United States to a point or points in Mexico

. ” 6 The U.S.

- Mexico Agreement, as amended, further provides that “each Party shall be entitled to designate three airlines to provide scheduled combination services between any point or points in the United States

... and Guadalajara” 7 and that any designated U.S.

a irline “may enter into cooperative marketing arrangements” with another airline so long as both
airlines “hold the appropriate authority” and “meet the requirements normally applied to such arrangements.” 8

3. T he Department’s award of the Joint Applicant s’ requested authorities would not prejudice any other U.S. carriers that may seek to institute San Francisco

- Guadalajara services since operating and code

- share designations would remain available for allocation even after the Department approves this app lication

. 9

4

. Continental holds various certificates of publi c convenience and necessity and exemptions authorizing it to engage in scheduled air transportation of persons, property and mail, and Continental is fit, willing and able to provide the servic e for which it seeks authority

. ( S ee , e.g., Notice s of Action Taken dated January 4, 2011 in Docket DOT

- OST

- 2010

- 0295 , November 4, 2010 in Docket DOT

- OST

- 2010

- 0255 and September 10, 2010 in Docket DOT

- OST

- 2010

-

6 U.S.

- Mexico Agreement, Annex I, A (1) (a)

. 7 See Annex I, B (5)

. 8 See Annex III (1)

. 9 Based on currently published scheduled services, there are three U.S. carrier operating designations available on this route, a s well as a n umber of code

- share designations.Application of Continental and United

Page 4
0226

. ) United holds various certificates of public convenience and necessity and exemptions authorizing it to engage in scheduled foreign air transportation of persons, property and mail , and United is fit, willing and able to provide the service for which it seeks authority

. ( S ee , e.g. , Order 2010

- 5

- 17 and Notice s of Action Taken dated January 4, 2011 in Docket DOT

- OST

- 2010

- 0295 and November 29, 2010, November 4, 2010 and September 18, 2009 in Docket
DOT

- OST

- 2009

- 0192

. ) Both Continental and United currently offer services at both San
Francisco and Guadalajara and can start services in this new city pair expeditiously.
5

. Continental proposes to operate daily, year

- round service with B737

- 800 (16 First Class/144 Economy) or other appropriate aircraft in its fleet

. Continental anticipates no
diffi culty in obtaining fuel for these services. For the foregoing reasons, the Joint Applicants respectfully request that t he Department
grant Continental an exemption and designation authorizing it to operat e scheduled foreign air transportation of persons, p roperty and mail between San Francisco and Guadalajara , and grant
United a n exemption and code

- share designation authorizing it to display its “ UA * ” designator
code on Continental

- operated San Francis c o
- Guadalajara services

. The se authorities should be
is sued in the name of “Continental/and or United.” The Joint Applicants also ask that the Department grant them such other and different relief as is consistent with this application and with the public interest. Respectfully submitted,

DANIEL A. WEISS Managing Director, International & Regulatory Affairs UNITED AIR LINES, INC. AND CONTINENTAL AIRLINES, INC.CERTIFICATE OF SERVICE

I hereby certify that I have this date served a copy of the foregoing document on all persons named below by causing a copy to be sent via email:
carl.nelson@aa.com efaberman@wileyrein.com (Air Tran/Frontier) howard_kass@usairways.co m jhill@dowlohnes.com (Hawaiian/Jet Blue) jeff.morgan@delta.com jyoung@yklaw.com (Spirit) john.fredericksen@suncou ntry.com pmurphy@lopmurphy.com (USA3000) barbara.russell@virginamerica.com dkirstein@yklaw.com (Spirit) msinick@ssd.com (Alas ka) sascha.vanderbellen@delta.com donna.kooperstein@usdoj.gov dwight.moore@ustranscom.mil john.allen@faa.gov urskr@state.gov john.martin@flysfo.com kandace.bender@flysfo.com

Annalei Avanceña International Regulatory A dvisor

March 11 , 2011