Order 2010 - 9 -30 Served: September 30, 2010

U N I T E DS T A TE S O F A M E R I C A D E P A R T M E N T O F T R

A N S P O R T A T I O N UNITED STATES OF AMERICA

DEPA RTMENT OF TRA NSPORTATION OFFICE OF THE SECRETA RY WASHINGTON, D.C. Issued b y the Department of Transportation on the 30 th day

of September , 2010 Joint application of SKYWEST AIRLINES, INC., AT LA NTIC SOUTHE AST A IRLINES , INC., and EXPRESSJET AIRLINES, INC. for an exemption from the provisions of 49 U.S.C. § 41105 Docket DOT - OST -20 10 - 0 224

ORDER GRA NTING EXEMPTION Summary By this order, we exempt Sky West Airlines, Inc. (“SkyW est Airlines ”) , Atlantic Southeast Airlines, In c. (“ASA”) , and ExpressJet Airlines, Inc. (“ ExpressJet”), hereinafter the “Joint Applicants,” from the provisions of section 41105 of Title 49 of the United States Code (the Statute), subject to certain conditions. Background On September 2, 2010, ASA and ExpressJet jointly f iled an application for a pendente lite exemption from section 41105 of the Statute. The parties state that Sky West, Inc. (“Sky West” ) , the parent company of ASA and Sky West Airlines , entered into an agreement with ExpressJet H oldings, In c. (“ExpressJet Holdings”), the parent company of ExpressJet, under which ExpressJet Holdings will become a wholl y owned subsidiary of ASA. According to the parties, upon closing, a wholl y owned subsidiary o f ASA will merge into ExpressJet Holdings with ExpressJet Holdings surviving as a direct wholly owned subsidiary

o f ASA. ASA and ExpressJet will then operate as separate entities for approximately

1 2 to 18 months after which ASA and ExpressJet intend to merge into a single operating company. On September 20, 2010 , ASA and ExpressJet amended their application to include Sky West Airlines , an affiliate of ASA related b y common ownership . 1 1 The Jo int Applicants also filed a motion requesting that the Department shorten the answer period to September 29, 2010. B y letter dated September 24 , 2010, the Joint Applicants advised us that there were no objections to its request for a shortened answer period. B y Notice dated2

The Department has held that a stock acquisition resulting in common control of two or more air carriers having international route authority c onstitutes a de facto transfer subject to section 41105. The relief requested here would allow the Joint Applicants to operate under the common ownership of Sky West pending the Department’s action on a contemporaneou sl y filed de facto transfer application. 2 In support of this request, the Joint Applicants state that, upon consummation of the transaction, while Sky West Airlines , ASA , and ExpressJet will be subsidiaries of Sky West , each will remain a separate entity and will be operated as separate companies . They f urther contend that grant of the exemption request would be consistent with the past practice of the Department. Sky West Airlines holds interstate scheduled certificate authority, as well as interstate scheduled all - cargo authority, 3 blanket open - skies certificate authority, 4 and exemption authority to conduct foreign scheduled air transportation between Salt Lake City and Guadalajara, Mazatlan, San Jos e del Cabo, and Puerto Vallarta, Mexico. 5 The air car rier has also been designated under the U.S. - Mexico Air Transport Agreement to provide foreign scheduled air transportation in each of the above markets. ASA holds interstate scheduled certificate authority, 6 blanket open skies certificate authority, 7 and exemption authority to engage in foreign scheduled air transportation between points in the United States and points in Belize , 8 the Turks and Caicos, 9 and the Dominican Republic . 10 The air carrier also holds a route integration certificate. ExpressJ et holds interstate scheduled certificate authority, 11 as well as a number of designations under the U.S. - Mexico Air Transport Agreement , 12 which it operates as September 24 , 2010, the Department granted the Joint Applicants’ request for a shortened answer period, with answers due no later than September 29 , 2010. 2 On September 2, 2010, concurrent with the Jo int Appli cants’ exemption request in Docket DOT - OST -2010 - 0224 , SkyWest Airlines, ASA, and Expre ssJet jointly filed an application in Docket DOT - OST - 2010 - 0 225 for the Department’s approval under 49 U.S.C. § 41105 of the de facto transfer of the economic authorities held by ExpressJet Airlines to ExpressJet under the ownership of SkyWest. No answers have been filed. 3 See Order 78 - 1 - 86 and Order 81 - 12 - 131. S kyWest Airlines’ interstate scheduled passenger and all - cargo certificate authority has been reissued, most recently by Order 98 - 7 - 6 and Order 85 - 11 -49, respectively. 4 See Order 2008 -4 - 26. 5 See Notice of Action Taken, dated December 19, 2008 , in Docket DOT - OST - 2006 -25495 and Docket DOT - OST -2007 -29016. 6 See Order 93 -2 -23. This authority was most recently re issued by Order 98 - 7 - 6. 7 See Order 2008 -4 - 26. 8 See Notice of Action Taken, dated May 13, 2010, in Docket DOT - OST -2006 - 25018. 9 See Notice of Action Taken, dated November 20, 2009, in Docket DOT - OST - 2004 - 17960. 10 See Notice of Action Taken, dated July 15, 2009, in Docket DOT - OST -2006 - 24591. 11 See Order 2002 -4 - 8. 12 These designations include : Houston -Acapulco, Aguascalientes, Chihuahua, Ciudad del Carmen, Durango, Guadalajara, Huatulco, Ixtapa/Zihuatanejo, Leon/Guanajuato, Manzanillo,3

Continental Express pursuant to a code share agreement with Continental Airlines, In c. Expres sJet ’s foreign operations are conduct ed 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 CF R 298 Subpart B when using aircraft having an original design capacity o f no more than 60 passenger seats or 18,000 pound payload. No answers opposing the Joint Applicants’ exemption request were filed. Decision We have decided to grant the Joint Appl icants’ request for an exemption from the provisions of section 41105 until we have ruled on the de facto transfer request. The Joint Applicants correctly noted that our grant of exemptions in cases such as this is contingent upon the air carriers involve d, in this case Sky West Airlines , ASA , and ExpressJet remaining separate and independently operated corporations until a ruling has been made in the underlying de facto transfer case. In this case, as in previous cases, 13 we see no reason to withhold exemp tion authority pending Departmental action on the certificate transfer application. A s long as Sky West Airlines , ASA , and ExpressJet remain separate entities, should we disapprove the proposed transfer, either in whole or in part, Sky West could divest its elf of ASA and ExpressJet . The Joint Applicants should not construe our grant of this exemption as a decision to approve the related de facto transfer application or any aspect of that application. AC CORDINGLY, 1. We exempt Sky

West Airlines, Inc., Atlantic Southeast Airlines, In c., and ExpressJet Airlines, Inc., from the provisions of section 41105 of the Statute, to the extent necessary to allow them to operate under the common ownership of Sky West, Inc., pending the Department’s final action on the de f acto transfer application in Docket DOT - OST - 20 10 - 0 225 , subject to the condition that, pending such final action, Sky West Airlines, Inc., Atlantic Southeast Airlines, Inc., and ExpressJet Airlines, Inc. , continue to be maintained and operated as separate corporations. 2. This authority

shall be effective until 90 days after the Department issues its final order on the joint application of Sky West Airlines, In c., Atlantic Southeast Airlines, In c., and ExpressJet Airlines, In c., in Docket DOT - OST - 20 10 - 0 225 for a pproval of a transfer of route authority under section 41105 of the Statute. 3. We may

amend, modify, or revoke this order at any time and without hearing. Mazatlan, Mexico C ity, Monterrey, Morelia, Oaxaca, Puebla, Puerto Vallarta, Queretaro, Saltillo, San Jose Del Cabo, San Luis Potosi, Tam pico, Toluca, Torreon, and Tuxtla Gutierrez; and Los Angeles -Leon/Guanajuato. 13 See Order 89 - 1 - 60, p. 4; Order 97 - 9 - 3, p. 3; Order 9 7 - 11 - 8, p. 5; Order 99 -4 - 5, p. 4; and Order 2001 - 9 - 16, p. 4.4

4. We will serve a cop y of this order on the persons listed in Attachment A. By :

SUSAN L. KURLAND A ssistant Secretary for Aviation and International Affairs An electronic version of this document is available on the World W ide Web at http://www.regulations.govAttachment A SERVICE LIST FOR SKYWEST AIRLINES, INC., AT LA NTIC SOUTHE AST A IRLINES, INC., AND EXPRESSJET AIRLINES, INC.

MS EILEEN M GLEIMER MS LORRAINE B HA LLOWAY MR GERALD F MURPHY CROW ELL & MORING LLP 1001 PENNSYLVANIA A V E NW WA SHINGTON DC 20004 MR PETER LYNCH AS STCHIEF COUNSEL FOR ENFORCEMENT (AG C -300 ) F EDERAL AV IA

TION ADM INISTRA

TION 800 INDEPENDENCE A VE SW WA SHINGTON DC 20591

MR ROBERT SILVERBERG 11 01 30 TH STREET NW SUITE 120 WA SHINGTON DC 20007 MR BRAD HOLT PRESIDENT ATL AN TIC SOUTHEA STAIRLINES, INC. A-TECH CENTER 900 TOFFIE TERRACE ATL AN TA

GEORGIA

30354

MR WILLIAM J WEBER (AF S -900 ) CERTIFICA

TION SECTION M AN AG ER FEDERAL AV IA

TION ADM INISTRA

TION 45005 A VI ATI ON DRIVE SUITE 131 DULLES VA

20166 MR TODD EMERSON GENERAL COUNSEL SKY WEST AIRLINES INC 444 SOUTH RIVER ROAD SAINT GEORGE UTAH 84790

MR THOM AS M HANLEY PRESIDENT AND CHIEF EXECUTIVE OFFICER EXPRESSJET AIRLINES INC 700 NORTH SAM HOUSTON PARK WA Y W EST SUITE 200 HOUSTON TEXA

S 77067 MR CLA Y MORITZ OFFICE OF AIRLINE INFORMA TION DOT/RSPA

/BTS E -36 1200 NEW JERSEY A

VE SE WA SHINGTON DC 20590

MR BERNARD STANKUS RTS -42 OFFICE OF AIRLINE INFORMA TION DOT/RSPA

/BTS E -36 1200 NEW JERSEY A

VE SE WA SHINGTON DC 20590