BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

------------------------------------------------------------------------ ----- Application of : : UNITED AIR LINES, INC

. and : Docket DOT

- OST

- 2013

-

____ SKYWEST AIR LINES, INC. : : for exemptions pursuant to 49 U.S.C. § 40109 : and designations ( Houston

- Queretaro, Tampico : and Villahermosa , Mexico) :

------------------------------------------------------------------------ ----- APPLICATION OF UNITED AIR LINES , INC. AND SKYWEST AIRLINES, INC. FOR EXEMPTIONS AND DESIGNATIONS Communications with respect to this document should be sent to: Hershel I. Kamen Senior Vice President

- Alliances, Regulatory and Policy Daniel A. Weiss Managing Director

- International Affairs and Regulatory UNITED AIR LINES, INC. 77 West Wacker Drive HDQIZ Chicago, IL 60601 (312) 997

- 7573 hershel.kamen@united.com dan.weiss@united.com Steve Morrissey Managing Director

- Regulatory Affairs and Policy Karine R. Faden Managing Counsel

- Regulatory, Antitrust & Competition UNITED AIR LINES, INC. 1225 New York Avenue, N.W. Suite 1100 DCAIZ/DCALD Washington, DC 20005 (202) 521

- 4373 (202) 521

- 4363 steve.morrissey@united.com karine.faden@united.com

January 1 8 , 2013 Thomas Newton Bolling Vice President and Deputy General Counsel Jonathan T. Linde Senior Counsel

- Regulatory, Antitrust & Competition UNITED AIR LINES, INC. 77 West Wacker Drive HDQLD Chicago, IL 60601 (312) 997

- 8341 thomas.bolling@united.com jonathan.linde@united.com Todd Emerson General Counsel SKYWEST AIRLINES, INC. 444 South River Road St. George, UT 84790 (435) 634

- 3530 temerson@skywest.com Lorraine B. Halloway Gerald F. Murphy CROWELL & MORING L LP 1001 Pennsylvania Avenue, N.W. Washington, DC 20004 (202) 624

- 2500 lhalloway@crowell.com gmurphy@crowell.com Counsel for United Air Lines, Inc. and SkyWest Airlines, Inc.

NOTICE : The a pplicants have request ed expedited treatment of this application. United will poll

U.S. carrier representatives and inform the Department of the results.BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

------------------------------------------------------------------------ Application of : : UNITED AIR LINES, INC. and : Docket DOT

- OST

- 2013

-

____ SKYWEST AIRLINES, INC. : : for exemptions p ursuant to 49 U.S.C. § 40109 : and designations (Houston

- Queretaro , Tampico : and Villahermosa , Mexico) :

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

APPLICATION OF UNITED AIR LINES , INC. AND SKYWEST AIRLINES, INC. FOR EXEMPTIONS AND DESIGNATIONS United 1 and SkyWest (d/b/a United Express) apply , pursuant to 49 U.S.C. § 40109 and Subpart C of the Department's Rules of Practice , for exemption s from 49 U.S.C. § 4 1101 authorizing them to provid e scheduled foreign air transportation of per sons, property and mail between Houston and Queretaro, Tampico and Villahermosa , Mexico (the “ Houston

- Mexico
R outes”) beginning in June 2013 and the U.S.

- Mexico designations necessary to offer such service

. United and SkyWest each ask for the requested exemption authority to be granted on a seasonal basis to allow United to codeshar e on flights operated by S kyWest using CRJ

- 700 aircraft . In addition, SkyWest requests an operating designation for the se Houston

- Mexico Routes, and United requests a n amendm ent to its existing codeshare designation to permit it to display its “UA” designator code on SkyWest ’s flights

. 2 United and SkyWest ask that their exemption authorit ies become effective as soon as possible and that the authorit ies be effective for a period of at least two years, subject to the Department’s standard conditions. United and

1 Common names are used for airlines. 2 See U.S. Dept. of Transp., U.S. Carrier Code

- Share Notification , dated August 15, 2011 (notifying Mexican authorities of United’s authority to co deshare on ExpressJet flights on various U .S.

- Mexico routes ).Application of United and SkyWest

Page 2
SkyWest also ask the Department to issue the necessary notices to Mexican authorities confirming the carriers’ authority to serve the Houston

- Mex ico R outes

. United and SkyWest state as follows in support of this application : 1. Awarding Houston

- Queretaro / Tampico/Villahermosa exemption authority to SkyWest (d/b/a United Express) and corresponding codeshare

- only exemption authority for United to display its “UA” designator code on flights operated by SkyWest on the se Houston

Mexico R outes will permit them to provide service to meet seasonal demand in th ese markets using SkyWest’ s CRJ

- 700 aircraft . United and SkyWest urge the Department to act promptly on this application so that they can secure foreign authority, make final operating plans and begin marketing the Houston

- Queretaro / Tampico/Villahermosa flights well in advance of operations, which they plan to commence no later than June 2013, pr ovided all necessary approvals have been secured. 3
2. United and SkyWest’s service on the Houston

- Mexico R outes will provide substantial consumer benefits by expa nding the service options available to the U.S. traveling public , including the online connections between points on United’s network served via its
Houston hub . United and SkyWest will comply with the Department’s rules on codesharing as set forth in Part 257 of the Department’s Regulations.
3. The authority sought by United and SkyW est fully complies with the terms of the
U.S.

- Mexico Air Transport Services Agreement (“U.S.

- Mexico Agreement”), as amended

. Route 1(a ) of the U.S.

- Mexico Agreement authorizes carriers designated by the United States to operate from “a point or point s in the United States to a point or points in Mexico.” U.S.

- Mexico Agreement, Annex I, A(1)(a). Further, the U.S.

- Mexico Agreement permits the United States to

3 United will poll airline representatives and advise the Department of the results.Application of United and SkyWest

Page 3
designate two airlines to provide scheduled combination services between any point or points in th e United States and Queretaro / Tampico/Villahermosa ( see U.S.

- Mexico Agreement, Annex I, B(4) ) and permits designated airlines to enter into cooperative marketing arrangements with another airline provided they both hold appropriate authority and meet the r equirements applied to such arrangements. See id

. , Annex III (1) . Lastly, the United States is authorized to allocate up to 10 codeshare designations for each non

- stop city pair segment. See id. , Annex III (3)

. Sufficient designations are available for SkyWest to operate on the Houston

- Mexico Routes and for United to codeshare on the SkyWest

- operated services

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

. See , e.g., Orders 2007

- 4

- 19 (Blanket Open Skies), 2010

- 5

- 17 (U.S.

- Mexico) and 2011

- 3

- 14 (Contin ental/United route transfer); and Notices of Action Taken dated July 18, 2012 in Docket DOT

- OST

- 2012

- 0113 (Chicago

- Monterrey) and October 11, 2011 in Docket DOT

- OST

- 1996

- 1368 (Houston

- Mazatlan). Pursuant to Rule 24 of the Department’s Rules of Practice, U nited request s that the Department take official notice of all data that has been filed to establish its fitness.
5. SkyWest holds various certificates of public convenience and necessity and exemptions authorizing it to engage in scheduled air transportati on of persons, property and mail between the U.S. and foreign countries, and SkyWest is fit, willing and able to provide the service for which it seeks authority

. See, e.g ., Order 2008

- 4

- 26 (Blanket Open Skies); and Notices of Action Taken dated October 2, 2012 in Dockets DOT

- OST

- 2006

- 25495 (Salt Lake City

- Guadalajara/Mazatlan/San Jose del Cabo) and DOT

- OST

- 2007

- 29016 (Salt Lake City

-