UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation on December 9

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### NOTICE OF ACTION TAKEN

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_________ _______________________________________________________________________________________________________ This serves as notice to the public of the action described below, taken by the Department official indicated (no additional confirming order will be is sued in this matter).

Application of Frontier Airlines, Inc. (Frontier) filed 11/ 21 / 11 for:

XX E xemption for two years under 49 U.S.C. 40109 to provide the following service :

Scheduled foreign air transportation of persons, property, and mail betwee n Chicago, Illinois , on the one hand, and Cancun, Puerto Vallar t a, and San Jose del Cabo, Mexico, on the other hand. 1 2

Applicant rep: Robert E. Cohn (202) 637

- 4999 DOT Analyst: Brett D. Krug er (202) 366

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D I S P O S I T I O N

XX Granted , in par t ( i.e., exemption authority for Frontier to serve the Chicago

- Puerto Vallarta and Chicago

- San Jose del Cabo routes, subject to conditions ; see below)

XX Deferred, in part ( i.e., exemption authority for Frontier to serve the Chicago

- Cancun route, see Rem arks below)

The above action granting Chicago

- Puerto Vallarta and Chicago

- San Jose del Cabo exemption authority

was effective when taken: December 9 , 20 11

, 3 through December 9 , 201 3

.

The above action deferring on the remainder of the application was effe ctive when taken:

December 9 , 2011.

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.

1 Frontier proposes to begin year

- round service between Chicago and Cancun on or about January 31, 2012; seasona l service between Chicago and Puerto Vallarta on or about January 31, 2012; and seasonal service between Chicago and San Jose del Cabo on or about February 12, 2012.

2 Frontier intends to replace the services provided by Brendan Airways, LLC d/b/a USA 3000 Airlines (USA 3000) on the subject routes. By letter dated November 21, 2011, USA 3000 advised the Department that effective January 30, 2012, all of its U.S.

- Mexico services will cease.

3 Frontier may not begin scheduled foreign air transportation on th e subject routes until January 31, 2012 ( see conditions, below).

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Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations

indicated:

XX Holder’s certificate s of public convenience and necessity

XX Standard Exemption Conditions (attached)

____________________________________________________________________________________ Responsive Pleadings/ Remarks : Under the U.S.

- Mexico aviation agreement, three carriers may be designated to provide scheduled foreign air transportation of persons, property, and mail between Chicago and Cancun, Chicago and Puerto Vallarta, and Chicago and San Jose del Cabo. Currently, American Airlines, Inc. (American); United Air Lines, Inc. (United); and USA 3000 are designated to provide these services. USA 3000 has advised the Department that it will cease service in these markets on January 30, 2012. Fro ntier states in its application that it intends to provide replacement service in the Chicago

- Cancun and Chicago

- Puerto Vallarta markets on January 31, 2012, and in the Chicago

- San Jose

del Cabo market on F ebruary 12, 2012.

On December 6, 2011, AirTran Airways, Inc. (AirTran) filed a competing application for exemption authority to serve between Chicago and Cancun. 4 AirTran also filed an answer to Frontier’s application objecting to Frontier’s request to t he extent that it seeks authority to serve the Chicago

- Cancun market. AirTran states that it does not object to Frontier’s request to serve the Chicago

- Puerto Vallarta and Chicago

- San Jose del Cabo markets . We will therefore grant Frontier the requested exemption authority to serve between Chicago, Illinois, on the one hand, and Puerto Vallarta and San Jose del Cabo, Mexico,

on the other hand . We will consider subsequently the request s of Frontier and AirTran to serve between Chicag o, Illinois, and Cancu n, Mexico.

Effective Date for Startup/Designation: Frontier may begin marketing and selling the subject services

authorized here , but it cannot commence direct

- carrier services until January 31, 2012. As noted above, there are currently no designation o pportunities available in the subject markets until USA 3000 ceases service on January 30, 2012. Under the circumstances presented in this case, including the fact that no party opposed Frontier’s request for Chicago

- Puerto Vallarta and Chicago

- San Jose d el Cabo services

, we have decided that it is in the public interest to grant those portions of Frontier’s application. In this regard, we will withdraw the designation s of USA 3000 effective upon the departure of its last scheduled flights on January 30, 2012, and designate Frontier for the subject markets effective January 31, 2012.

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

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- 2, and the notic e requirements for

seasonal/intermittent services as set forth in Order 96

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- 24, at 5. Consistent with our standard policy, the dormancy notice period will begin on the carrier’s proposed start

- up dates for the subject services as follows: January 31, 2 012, for the Chicago

- Puerto Vallarta services; and February 12, 2012, for the Chicago

- San Jose del Cabo services.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found the applicant 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 application 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 or deferred , we denied all requests in the

referenced Docket. We may amend, modify, or revoke the auth ority granted in this Notice at any time without hearing at our discretion.

4 See AirTran application, Docket DOT

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- 2011

- 0225 , dated December 6, 2011.

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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: http :// www.regulations.gov

### A TTACHMENT 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 l imited 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 Sec urity 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, condition s, 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 gra nted shall be effective only during the period when the holder is in compliance with the conditions imposed above.

1/2008