BEFORE THE 

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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Application of )

)

Southwest Airlines Co. )

)

For an exemption pursuant to 49 U.S.C. § 40109 to ) Docket No. DOT-OST-2014-0222

engage in foreign scheduled air transportation of )

persons, property and mail between Houston Hobby )

International Airport and Cancun, Mexico City, )

Puerto Vallarta, and San Jose del Cabo, Mexico )

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ANSWER OF SPIRIT AIRLINES

Communications with respect to this document should be sent to:

Joanne W. Young

David M. Kirstein

Kirstein & Young, PLLC

1750 K Street, N.W. 

Suite 200

Washington, D.C. 20006

(202) 331-3348

(202) 331-3933

Attorneys for

SPIRIT AIRLINES, INC.

December 29, 2014
BEFORE THE 

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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

Application of )

)

Southwest Airlines Co. )

)

For an exemption pursuant to 49 U.S.C. § 40109 to ) Docket No. DOT-OST-2014-0222

engage in foreign scheduled air transportation of )

persons, property and mail between Houston Hobby )

International Airport and Cancun, Mexico City, )

Puerto Vallarta, and San Jose del Cabo, Mexico )

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ANSWER OF SPIRIT AIRLINES

Spirit Airlines (“Spirit”) submits this Answer in support of Southwest Airlines (“Southwest”) 

position, as set forth in its Application for an exemption to engage in foreign scheduled air transportation 

between Houston Hobby International Airport (“HOU”) and Cancun (“CUN”), Mexico City (“MEX”), 

Puerto Vallarta (“PVR”), and San Jose del Cabo (“SJD”), Mexico, to the effect that one of the two 

designations held by United Airlines (“United”) in the HOU/MEX and HOU/SJD markets be reallocated 

to Southwest. Where a single carrier holds all or a majority of U.S. carrier designations in a city pair 

market under the US - Mexico Air Transport Agreement, blocking new entry, Spirit believes the public 

interest in enhanced competition and the resulting consumer benefits, strongly favor new entry,

particularly where this will inject new low fare competition. 

As discussed by Southwest, under the current U.S.-Mexico Air Transport Agreement, U.S. 

carriers are limited to two or three designations per city pair, restricting both competition and consumer 
Answer of Spirit Airlines

Docket No. OST-2014-0222

Page 2

benefits.1 Currently, in some city pair markets, such as HOU/MEX and HOU/SJD, U.S. legacy carriers

and their affiliates hold all two or a majority of three U.S. carrier designations. In these city pair markets, 

the legacy carriers and their affiliates do not compete but instead dominate these markets through 

coordination of operations, marketing and distribution.2 While the grant of dual designations does not 

impede the public interest when other U.S. carrier entry is possible, the public is directly harmed when a 

new entrant is prevented from entering the market because a dual designation is marketed under the 

legacy carrier brand.

3

The Department has recognized there may be a time when dual authority is no longer in the 

public interest and has always reserved its right to amend, modify, or revoke the authority it grants.

4

 

Specifically and as pointed out by Southwest in granting dual authority to United and SkyWest in the 

HOU-MEX market, the Department stated:

should a competing U.S. carrier present a firm proposal to provide scheduled

Houston-Mexico City service, we would be prepared to reconsider 

whether, in those circumstances, award of the authority granted here continues 

to be in the public interest.5

Spirit urges the Department to advance the public interest and support new entry and competition 

by exercising the discretion it has reserved by reassigning one of the two United held designations in each 

of the HOU/MEX and HOU/SJD markets to Southwest. The reallocation of a duplicate U.S. carrier 

designation would advance the Department’s principle objective of maximizing public benefits through 

 

1

U.S. –Mexico Air Transport Agreement Annex 1(B)(4),(5), December 12, 2005 .

2

See Application of Southwest Airlines Co., DOT-OST-2014-0222 2(December 11, 2014).

3

Congress defines the public interest in the Airline Deregulations Act to include the following: (1) the availability of 

a variety of adequate, economic, efficient, and low-priced services; (2) avoiding unreasonable industry 

concentration, excessive market domination, monopoly powers, and other conditions that would tend to allow at 

least one air carrier unreasonably to increase prices, reduce services, or exclude competition in air transportation; 

(3) encouraging, developing, and maintaining an air transportation system relying on actual and potential 

competition to provide efficiency and low price; and (4) encouraging entry into air transportation markets by new 

and existing air carriers to ensure a more effective and competitive airline industry. 49 U.S.C. 40101 (a)(4),(10), 

(12), (13) (1994). 

4

See Notice of Action Taken, issued Sept. 3, 2014, in Dockets DOT-OST-2014-0129 and -0130; Notice of Action 

Taken, issued Sept. 18, 2014 in Docket DOT-OST-2014-0154; Notice of Action Taken issued July 29, 2014 in Dockets 

DOT-OST-2014-0100 and -0101. 

5

Notice of Action Taken, issued Sept. 3, 2014, in Dockets DOT-OST-2014-0129 and -0130. 
Answer of Spirit Airlines

Docket No. OST-2014-0222

Page 3

the promotion of competition and valuable consumer benefits. Preventing city pair domination by certain 

carriers and their partners will generate “new low-cost travel options for a large number of U.S. 

consumers.”

6 As shown in the Appendix to Southwest’s Application, low fare carrier entrance into a 

market previously dominated by legacy carriers can result in fare reductions of up to 25%. Such 

significant reductions will offer new travel options to millions of passengers who previously may have 

been unable to afford a flight to Mexico.

Accordingly, given the benefits derived by the traveling public from enhanced competition, Spirit 

believes the Department should grant Southwest’s request to: (1) withdraw one of the two designations 

currently held by United and its partner carriers in both the HOU-MEX and HOU-SJD markets; and (2) 

provide Southwest authority and corresponding designations to service HOU-MEX and HOU-SJD 

markets. 

Respectfully submitted, 

Joanne W. Young

David M. Kirstein

Kirstein & Young, PLLC

1750 K Street NW, Suite 200

Washington, D.C. 20006

Counsel for the Spirit Airlines

December 29, 2014

 

6

Application of Southwest Airlines Co. at 4. 
Certificate of Service

I hereby certify that on this 29th day of December 2014, a copy of the foregoing Answer in 

Support of Southwest Airlines Co. on behalf of Spirit Airlines was served by email on the parties named 

below:

gmurphy@crowell.com

sseiden@crowell.com

dan.weiss@united.com

steve.morrissey@united.com

thomas.Ting@suncountry.com

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

perkmann@cooley.com

jhill@cooley.com

Robert.Land@jetblue.com

stephen.lachter@lachterlaw.com

matwood@cozen.com

sascha.vanderbellen@delta.com

chris.walker@delta.com

robert.wirick@aa.com

howard.kass@aa.com

marshall.sinick@squirepb.com

john.varley@virginamerica.com

bob.kneisley@wnco.com

leslie.abbott@wnco.com

susan.kurland@dot.gov

brian.hedberg@dot.gov

brett.kruger@dot.gov

reese.davidson@dot.gov

todd.homan@dot.gov

peter.irvine@dot.gov

cristinasa@state.gov

info@airlineinfo.com

__________________________

 David M. Kirstein