Order 2011-12-11

Served: December 19, 2011

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

Issued by the Department of Transportation

on the 18th day of October, 2011

Joint application of

SKYWEST AIRLINES, INC., 

 and 

ATLANTIC SOUTHEAST AIRLINES, INC. 

for approval of a de facto transfer of route authority under 

49 U.S.C. § 41105

Docket DOT-OST-2005-22152

Joint application of

 ATLANTIC SOUTHEAST AIRLINES, INC., 

 EXPRESSJET AIRLINES, INC., and

 SKYWEST AIRLINES, INC.

for approval of a de facto transfer of route authority under 

49 U.S.C. § 41105

Docket DOT-OST-2010-0225

ORDER GRANTING TRANSFER OF AUTHORITY

Summary

By this order, we grant a de facto transfer under section 41105 of Title 49 of the United States 

Code (“the Statute”) of the certificates and other economic authorities held by Atlantic Southeast 

Airlines, Inc. (“ASA”), and ExpressJet Airlines, Inc. (“ExpressJet”), to ASA and ExpressJet

under the control of SkyWest, Inc. (“SkyWest”), the parent company of ASA and SkyWest 

Airlines, Inc. (“SkyWest Airlines”). 

Background 

On September 2, 2010, ASA, ExpressJet, and SkyWest Airlines (collectively the “Joint 

Applicants”), filed the subject application, as amended,1for approval under 49 U.S.C. § 41105.2 

 

1 On September 20, 2010, ASA and ExpressJet amended their transfer application to include SkyWest Airlines. 

ASA and ExpressJet state that, while SkyWest is not a party to the ASA-ExpressJet merger, because SkyWest 

Airlines holds international route authority and is under common ownership with ASA, SkyWest Airlines must, in 

accordance with Department policy, be a party to the route transfer application at issue herein. The original de facto

transfer application submitted by ASA and SkyWest Airlines in Docket DOT-OST-2005-22152 is subsumed by the 

subject application. 

UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION
2

In the application, the Joint Applicants state that SkyWest and ExpressJet Holdings, Inc. 

(“ExpressJet Holdings”), the parent company of ExpressJet, entered into an agreement under 

which ExpressJet Holdings would become a wholly owned subsidiary of ASA. According to the 

parties, upon closing, ExpressJet will continue its operations as a wholly owned subsidiary of 

ASA for approximately 12 to 18 months after which ASA and ExpressJet intend to merge into a 

single operating company, with ASA as the surviving entity. The Joint Applicants maintain that 

SkyWest Airlines will continue to operate as a separate air carrier, wholly independent of ASA 

following ASA’s merger with ExpressJet, and that it will retain its common ownership 

arrangement with ASA. 

Interested persons were given 21 days to file objections to the application. No objections were 

received.

The Joint Applicants

ASA holds interstate scheduled certificate authority,

3

blanket open skies certificate authority,

4

a 

blanket route integration certificate,

5

and exemption authority to engage in foreign scheduled air 

transportation between Atlanta and Providenciales, Turks and Caicos; between Atlanta and 

Monterrey, Mexico;6between Detroit and Monterrey, Mexico;7between points in the United 

States and points in Belize;

8

and between points in the United States and points in the Dominican 

Republic.9 The air carrier also holds statements of authorization permitting it to display the 

designator code of Czech Airlines, KLM Royal Dutch Airlines, C.A.I. Compagnia Aerea Italiana 

S.p.A., and China Eastern Airlines Corporation Ltd. on certain flights it operates within the 

United States (in conjunction with services in foreign air transportation) and between the United 

States and third countries.

10

 ASA’s fleet consists of more than 169 aircraft having a passenger 

seating capacity between 50 and 76 seats.

ExpressJet holds interstate scheduled certificate authority11 and serves several U.S.-Mexico citypair markets,

12 which it operates as Continental Express pursuant to a code-share agreement with 

 

2 The Joint Applicants also filed an application in Docket DOT-OST-2010-0224 for a pendente lite exemption 

from section 41105 to the extent necessary to allow the acquisition of ExpressJet to be completed prior to our action 

on the transfer request. By Order 2010-9-30, as amended by Order 2010-10-2, the Department granted a pendente 

lite exemption with the condition that ASA, ExpressJet, and SkyWest Airlines remain separate entities until our 

decision on the de facto transfer application had been made. 

3

See Order 98-7-6. 

4

See Order 2008-4-26.

5

See Order 2010-12-24.

6

See Notice of Action Taken, dated May 4, 2011, in Docket DOT-OST-2011-0089.

7

See Notice of Action Taken, dated May 4, 2011, in Docket DOT-OST-2011-0089.

8

See Notice of Action Taken, dated May 13, 2010, in Docket DOT-OST-2006-25018.

9

See Notice of Action Taken, dated June 3, 2011, in Docket DOT-OST-2006-24591. 

10 See Department action dated March 16, 2001, in Docket DOT-OST-2000-8207; Department action dated 

October 18, 2006, in Docket DOT-OST-2004-19214; Notice of Action Taken, dated December 23, 2008, in Docket 

DOT-OST-2001-10417; and Notice of Action Taken, dated May 6, 2011, in Docket DOT-OST-2011-0065.

11 See Order 2002-4-8. This authority was most recently amended by Order 2005-12-4. 

12 These markets include: Houston-Acapulco, Aguascalientes, Chihuahua, Ciudad del Carmen, Durango, 

Guadalajara, Huatulco, Ixtapa/Zihuatanejo, Leon/Guanajuato, Manzanillo, Mazatlan, Mexico City, Monterrey, 

Morelia, Oaxaca, Puebla, Puerto Vallarta, Queretaro, Saltillo, San Jose del Cabo, San Luis Potosi, Tampico, Toluca, 

Torreon, Tuxtla Gutierrez, Veracruz, and Villahermosa; and Los Angeles-Leon/Guanajuato.
3

Continental Airlines, Inc. ExpressJet’s foreign operations are conducted under the provisions of 

section 206.5 of our rules (14 CFR 206.5), which permits air carriers holding an effective 

certificate issued under section 41102 of the Statute to operate under the exemption provisions of 

14 CFR 298 Subpart B when using aircraft having an original design capacity of no more than

60 passenger seats or 18,000 pound payload. The air carrier’s fleet consists of more than 269 

aircraft having a passenger seating capacity between 37 and 50 seats.

SkyWest Airlines holds interstate scheduled certificate authority, as well as interstate scheduled 

all-cargo authority,13 blanket open-skies certificate authority,14 and exemption authority to engage 

in foreign scheduled air transportation between several U.S.-Mexico city-pair markets.15 The air 

carrier also holds several statements of authorization permitting it to display the designator code 

of various foreign air carriers on certain flights it operates within the United States (in 

conjunction with services in foreign air transportation) and between the United States and third 

countries. SkyWest Airlines’ fleet consists of more than 308 aircraft having a passenger seating 

capacity between 30 and 90 seats.

TRANSFER OF AUTHORITY

The Department has held that a stock acquisition resulting in common control of two or more air 

carriers having international route authority constitutes a de facto certificate transfer subject to 

section 41105.16 Thus, the Joint Applicants request that the Department approve (1) a de facto

transfer of ASA and ExpressJet’s authority to ASA and ExpressJet under the ownership and 

control of SkyWest; and (2) a de jure transfer of ExpressJet’s international route authority, 

consisting of U.S.-Mexico designations, to ASA upon their eventual merger into a single 

operating entity.

Public Interest

Section 41105 of the Statute provides that no route authority may be transferred unless such 

transfer is approved by the Department as being consistent with the public interest. The primary 

criteria in determining the “public interest” are whether the certificate transfer would conflict 

with the important international aviation policy objectives and whether the surviving entities are 

U.S. citizens and whether they will be fit to hold authority. Further, section 41105(b) requires 

the Department to analyze the impact of the transaction on the viability of the air carrier 

applicants, competition in the domestic airline industry, and the trade position of the United 

States in the international air transportation market. 

 

13 See Order 78-1-86 and Order 81-12-131. SkyWest Airlines’ interstate scheduled passenger and all-cargo 

certificate authority was reissued, most recently by Order 98-7-6 and Order 85-11-49, respectively.

14 See Order 2008-4-26.

15 These markets include: Salt Lake City-Guadalajara, Mazatlan, and San Jose del Cabo, Mexico (See Notice of 

Action Taken, dated November 3, 2010, in Docket DOT-OST-2006-25495); Salt Lake City-Puerto Vallarta, Mexico 

(See Notice of Action Taken, dated November 3, 2010, in Docket DOT-OST-2007-29016); and Houston-Puebla, 

Puerto Vallarta, San Jose del Cabo, San Luis Potosi, and Villahermosa, Mexico (See Notice of Action Taken, dated 

November 18, 2010, in Docket DOT-OST-2010-0273).

16 See Federal Express Corporation and The Flying Tiger Line, Order 89-3-21, at 2, note 2. See also Order 2001-

12-15 and Order 2009-9-4.
4

The Joint Applicants maintain that the transactions are fully consistent with the public interest 

standards under 49 U.S.C. § 41105. In this regard, the applicants state that ASA and SkyWest 

Airlines will each remain highly viable air carriers independently operating under the ownership 

and control of SkyWest. Moreover, the Joint Applicants contend that while ExpressJet will 

cease to provide air transportation following the merger with ASA, the merger of the two air 

carriers will produce administrative, operational, managerial, and financial synergies that would 

otherwise not be fully realized through their separate operations. 

The air carriers also assert that the proposed transactions will have no effect on domestic 

competition since neither ASA, ExpressJet, nor SkyWest Airlines holds out scheduled service 

under their own brands. Furthermore, the Joint Applicants state that the proposed transactions 

will have no effect on the relevant international air transportation markets as the air service 

agreements with countries SkyWest Airlines, ASA, and ExpressJet are authorized to serve are 

generally liberalized. In addition, the Joint Applicants state that while each air carrier serves 

Mexico, numerous other U.S. air carriers also serve Mexico and the U.S.-Mexico bilateral 

aviation agreement provides for multiple designations in every city-pair.

Decision

Our review of financial and other available information raises no issues that would lead us to 

question the fitness or citizenship of ASA, ExpressJet, or SkyWest Airlines as a result of these

transactions.17 Moreover, after careful review of applications, we have determined that the 

proposed transfers meet our standards for approval and are consistent with the public interest.

We believe that ASA will remain a viable air carrier under the ownership of SkyWest, given the 

resources and experience of SkyWest. Moreover, the merger of personnel, equipment, and 

financial resources of ASA and ExpressJet should produce synergies that will enhance the 

viability of the surviving air carrier. In addition, our examination of the record in this case 

indicates that the proposed transfers should not have an undue effect on domestic airline 

competition. Furthermore, the Department of Justice, which has primary responsibility for 

evaluating the likely effects of proposed transactions on domestic competition, has decided not to 

oppose either acquisition on antitrust grounds. 

We have also found that the proposed transfers will have no negative effect on the trade position 

of the United Stated in international air transportation markets. With the exception of Mexico, 

none of our aviation agreements with any of the countries involved restricts the number of U.S. 

air carriers that may provide operations. Under the U.S.-Mexico Air Transport Agreement, as 

many as three and as few as two U.S. air carriers may be designated to provide scheduled 

passenger air transportation between specific designated city-pair markets. While the proposed 

transfers will result in the Joint Applicants holding all available designations in the HoustonPuebla, Villahermosa, and San Luis Potosi city-pair markets, under the U.S.-Mexico Air 

Transport Agreement multiple U.S. air carriers may serve these points albeit through alternative 

U.S. gateway cites. Thus, to the extent that the Joint Applicants have overlapping authority in 

limited entry U.S.-Mexico city pair markets, the air carriers coming under common ownership 

 

17 The Department recently concluded continuing fitness reviews of the Joint Applicants and found that each 

remained fit to conduct operations as a U.S. certificated air carrier. 
5

should not have a significant adverse impact on competition, as other airlines are free to serve 

those markets through alternative U.S. gateway cities. Taking into consideration these 

circumstances and the fact that no party has opposed the applications, we are persuaded that the 

proposed transfers will not produce significant adverse consequences in any of the foreign 

markets where the air carriers operate that would warrant withholding approval of the proposed 

transfers. 

Accordingly, we conclude that the approval of the de facto transfer of ASA and ExpressJet’s

certificates and other economic authorizations to ASA and ExpressJet under the ownership of 

SkyWest is in the public interest. Regarding the transfer of ExpressJet’s international route 

authority, consisting of U.S.-Mexico designations, we will notify the Government of Mexico of 

the impending designation of ASA to serve the U.S.-Mexico city-pair markets currently served 

by ExpressJet, but we will not formally designate ASA in any of these markets until such time as 

ASA provides us with a date certain for the commencement of its operations. Upon notification 

by ASA of a date certain, we will withdraw the designation of ExpressJet in the relevant U.S.-

Mexico city-pair market effective upon the departure of its last scheduled flight and designate 

ASA. However, should ASA desire to operate aircraft having an original design capacity of 

more than 60 passenger seats or 18,000 pound payload in any of the U.S.-Mexico city-pair 

markets currently served by ExpressJet, the air carrier would first need to obtain certificate or 

exemption authority to serve the specific city-pair market.

ACCORDINGLY, 

1. We grant the request of Atlantic Southeast Airlines, Inc., and ExpressJet Airlines, Inc., for 

approval under 49 U.S.C. § 41105 of the de facto transfer of the certificates and other economic 

authorities held by Atlantic Southeast Airlines, Inc., and ExpressJet Airlines, Inc., to Atlantic 

Southeast Airlines, Inc., and ExpressJet Airlines, Inc., under the ownership of SkyWest, Inc. 

2. The authority granted here may only be used in a manner consistent with the terms of the air 

transport agreements between the United States and our aviation partners. 

3. Unless disapproved by the President of the United States under 49 U.S.C. § 41307, this order

shall become effective on the 61st day after its submission for section 41307 review or upon the 

date of receipt of advice from the President or his designee under Executive Order 12597 and 

implementing regulations that he or she does not intend to disapprove the Department’s order 

under that section, whichever occurs earlier.18

 

18 This order was submitted for section 41307 review on October 18, 2011. The 61st day is December 19, 2011. 

Since the President or his designee did not disapprove this order before that date it became effective on December 

19, 2011. .
6

4. We will serve a copy of this order on the persons listed in Attachment A. 

By:

SUSAN L. KURLAND

Assistant Secretary

for Aviation and International Affairs

An electronic version of this document is available on the World Wide Web at

http://www.regulations.gov
7

 Attachment A

SERVICE LIST FORATLANTIC SOUTHEAST AIRLINES, INC., EXPRESSJET 

AIRLINES, INC., AND 

SKYWEST AIRLINES, INC.

MS EILEEN M GLEIMER

MS LORRAINE B HALLOWAY

MR GERALD F MURPHY

CROWELL & MORING LLP

1001 PENNSYLVANIA AVE NW

WASHINGTON DC 20004

MR PETER LYNCH

ASST CHIEF COUNSEL 

FOR ENFORCEMENT (AGC-300)

FEDERAL AVIATION ADMINISTRATION

800 INDEPENDENCE AVE SW

WASHINGTON DC 20591

MR ROBERT SILVERBERG

1101 30TH STREET NW

SUITE 120

WASHINGTON DC 20007

MR BRAD HOLT

PRESIDENT

ATLANTIC SOUTHEAST AIRLINES, INC.

A-TECH CENTER

900 TOFFIE TERRACE

ATLANTA GEORGIA 30354

MR WILLIAM J WEBER (AFS-900)

CERTIFICATION SECTION MANAGER 

FEDERAL AVIATION ADMINISTRATION

45005 AVIATION DRIVE SUITE 131 

DULLES VA 20166

MR TODD EMERSON

GENERAL COUNSEL

SKY WEST AIRLINES INC

444 SOUTH RIVER ROAD

SAINT GEORGE UTAH 84790

MR THOMAS M HANLEY

PRESIDENT AND CHIEF EXECUTIVE OFFICER

EXPRESSJET AIRLINES INC

700 NORTH SAM HOUSTON PARKWAY WEST

SUITE 200

HOUSTON TEXAS 77067

MR CLAY MORITZ

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E-36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590

MR BERNARD STANKUS RTS-42

OFFICE OF AIRLINE INFORMATION

DOT/RSPA/BTS E-36

1200 NEW JERSEY AVE SE

WASHINGTON DC 20590