BEFORE THE U.S. DEPARTMENT OF TRAN S PORTATION

WASHINGTON D

. C

.

________________________________ _____ _____ ) Application of ) ) AIRTRAN AIRWAYS, INC. ) ) Docket No. OST

- 2011

- For an exemption pursuant to 49 U.S.C § 40109 ) t o engage in foreign scheduled air transportation ) of persons, property and mail between San Antonio, ) Texas and both Mexico City and Cancun

, Mexico

, ) and between Orange County, California and ) both Me xico City and Los Cabos, Mexico. )

_____________________________________ _____ )

APPLICATION OF AIRTRAN AIRWAYS, INC

.

Communications with respect to this document should be sent to:

Bob Jordan Robert W. Kneisley President Associate General Counsel AIRTRAN AIRWAYS, INC. Leslie C. Abbott 9955 AirTran Boulevard Senior Attorney Orlando, FL 32827 SOUTHWEST AIRLINES CO. 1901 L Street, N.W. , Suite 640 Washington, D.C. 20036 bob.kneisley@wnco.com (202) 263

- 6284

November 1 4 , 2011

NOTICE : ANY PERSON MAY FILE AN ANSWER TO THIS APPLICATION IN THIS DOCKET AND SERVED ON THE PERSONS LISTED ABOVE , ON OR BEFORE NOVEMBER 29 , 2011

. AIRTRAN WILL POLL TH E U.S. CARRIERS ON T HE ATTACHED SERVICE LIS T REGARDING THIS APP LICATION AND WILL NO TIFY THE DEPARTMENT OF TH E RESULTS AS SOON AS POSSIBLE.1 BEFORE THE U.S. DEPARTMENT OF TRAN S PORTATION

WASHINGTON D

. C

.

________________________________ _____ _____ ) Application of ) ) AIRTRAN AIRWAYS, INC. ) ) Docket No. OST

- 2011

- For an exemption pursuant to 49 U.S.C § 40109 ) to engage in foreign scheduled air transportation ) of persons, property and mail between San Antonio, ) Texas and both Mexico City and Cancun, Mexico

, ) and between Orange County, California and ) both Mexico City and Los Cabos, Mexico. )

_________________________________ _____ ____ )

APPLICATION OF AIRTRAN AIRWAYS, INC

. Pursuant to 49 U.S.C. § 40109 and Subpart C of the Department’s Rules of

Practice, AirTran Airways , Inc. ( AirTran ) hereby applies for an exemption from 49

U.S.C. § 41101 authorizing AirTran to engage in scheduled foreign air transportation of

persons, property, and mail on the following f our U.S.

– Mexico routes: San Antonio

, Texas (SAT) and Mexico City , Mexico (MEX ) ; San Antonio , Texas and Cancun, Mexico

(CUN ) ; Orange County , California (SNA) and Mexico City , Mexico ; and Orange County

,
California and Los Cabos , Mexico ( SJD)

. Assuming receipt of all necessary approvals, AirTran proposes to commence

operations on the SAT

- MEX and SAT

- CUN routes on or about May 24, 2012

, and on

the SNA

- MEX and SNA

- SJD routes on or about June 1, 2012

. AirTran requests that

the exemption authority specified in the application be granted as soon as possible for a

period of at least two years.

In support of this application, AirTra n states the following :2

1. AirTran is a wholly owned subsidiary of Southwest Airlines Co. (Southwest) , a
Texas corporation with its principal place of business at 2702 Love Field Drive, Dallas,

Texas, 75235 . AirTran maintains its principal place of business at 9955 AirTran

Boulevard, Orlando, Florida

, 32827 and operates pursuant to a separate FAA operating

certificate from Southwest.

2. Southwest is a citizen of the United States as defined by Section 40102(a)(15) of

Title 49 of the United States Code and Section 204.2(c) of the Depa rtment’s Economic

Regulations. Southwest ’s p resident and at least two

- thirds of its b oard of d irectors and

other managing officers are citizens of the United States

. Southwest is under the actual

control of citizens of the United States and more than 75 percent of its voting interest is

owned or controlled by persons that are citizens of the United States. Additionally

, AirTran’s president and other managing officers are citize ns of the United States and

AirTran is under the actual control of citizens of the United States.

3. AirTran proposes to commence year round service between SAT and both MEX

and CUN on or about May 24, 2012. AirTran will provide this service using Boeing 737

- 700 aircraft configured for 137 seats and plans to offer daily to twice daily service in the

SAT

- MEX market

, and three times a week to daily service in the SAT

- CUN market

,
d e pending on demand and other market conditions

.

4. AirTran also proposes to commence year round service between SNA and both

MEX and SJD beginning on or about June 1, 2012

. AirTran will provide this service

using Boeing 737

- 700 aircraft configured for 137 seats

. AirTran plans to offer daily

service in the SNA

- MEX market

, and daily to twice daily service in the SNA

- SJD market

, depending on demand and other market conditions

.3

5. AirTran is fit, willing and able to conduct the services described in this

application. AirTran is an air carrier holding a Certificate of Public Convenience and

Necessity to engage in interstate scheduled air transportation of persons, property and

mail. See Order 97

- 11

- 28. Furthermore , AirTran holds current exemption authority

from the Department in the BWI

- CUN, ATL

- CUN and MKE

- CUN markets , as well in

several other international markets

. See Dockets OST

- 2005

- 21134 (BWI

- CUN and

ATL

- CUN)

, OST

- 2005

- 21134 (MKE

- CUN) , OST

- 2009

- 0201 (U.S.

– Montego Bay,

Jamaica), OST

- 2009

- 0200 (U.S.

– Aruba)

. Pursuant to Rule 24 of the Department’s

Rules of Practice, AirTran asks the Department to take official notice of all data on file

necessary to establish AirTran’s fitness.

6. The requested exemption authority is fully consistent with the terms of the U.S.

-

M exico Air Transport Agreement (Agreement) as amended by the two governments on

December 12, 2005. The Agreement a uthorizes carriers designated by the U.S. to

operate “[f]rom a point or points in the United States to a point or points in Mexico.”

Annex I(A)(1)(a). Pursuant to the amended Agreement, two U.S. carrier designations

are available on U.S.

– MEX routes and t hree U.S. carrier designations are authorized

on U.S.

– CUN and U.S.

– SJD routes . Annex I(B)(4

- 5).

7. U.S. carrier d esignations are available on all four routes for which AirTran is

seeking authority in this application. Currently, no U.S. carriers provide nonstop service

in the SAT

- MEX market and therefore two designations are available. In the SAT

- CUN

market, United Air L ines and Delta Air Lines each hold authority to operate scheduled

combination nonstop service, leaving one designation available

. There is no U.S.

carrier nonstop service between Orange County and any Mexico destination and4

therefore two designations are available in the SNA

- M EX m arket and three designations

are available in the SNA

- SJD market

.

8. AirTran already provides scheduled service to Mexico with nonstop flights in the

ATL

- CUN, BWI

- CUN and MKE

- CUN markets . AirTran ’s low

- cost competition has

expanded these markets significantly and will undoubtedly have an even greater impact

on U

. S

. – Mexico service once its schedule is linked with Southwest ’s vast domestic

network . Southwest is the largest carrier at both San Antoni o and Orange County

Airport s and would offer AirTran passengers on these international flights numerous

domestic connecting opportunities. Importantly, many of these connections would be to

small or medium sized cities without current nonstop service to M exico. AirTran’s

proposed service will provide new convenient and reliable low

- cost travel options to

passengers and shippers in both the United States and Mexico

, and clearly is in the

public interest.

9. The environmental impacts of AirTran ’s propose d services are de minimis , and

will therefore not lead to a near

- term annual increase in aircraft fuel consumption of 10

million gallons or more. Accordingly , grant of this application will not constitute a “major

regulatory action” within the meaning of the Energy Policy and Conservation Act of 1975

or Part 313 of the Department’s Economic Regulations.

10. AirTran is prepared to accept and comply with the terms and conditions that the

Department routinely imposes on exemption authority for scheduled foreign air

transportation.5

WHEREFORE, AirTran requests that the Department act expeditiously in

granting the requested exemption authority to enable AirTran to engage in scheduled

foreign air transportation of persons, property and mail on the four U.S.

– Mexico routes

listed above

. Respectfully submitted,

______________________ Robert W. Kneisley

November 1 4 , 20116 Certificate of Service

I hereby certify that on November 14, 2011, a copy of the foregoing was served via e

- mail on the following persons:

msinick@ssd.com (Alaska Airlines) carl.nelson@aa.com (American Airlines) sascha.vanderbellen@delta.com (Delta Air Lines) jeff.morgan@delta.com (Delta Air Lines) sametta.c.barnett@delta.com (Delta Air Lines) rsilverberg@sgbdc.com (ExpressJet) robert.cohn@hoganlovells.com (Frontier/Republic Airlines) patrick.rizzi@hoganlovells.com (Frontier/Republic Airlines) jhill@dowlohnes.com (JetBlue Airways) dkirstein@yklaw.com (Spirit Airlines) jyoung@yklaw.com (Spirit Airli nes) John.Fredericksen@suncountry.com (Sun Country Airlines) jeffrey.manley@united.com (United Air Lines) her shel.kamen@united.com (United Air Lines) howard_kass@usairways.com (US Airways) benjamin.slocum@usairways.com (US Airways) pmurphy@lopmurphy.com (USA3000) john.varley@virginamerica.com (Virgin America) jegillick@zsrlaw.com (Virgin America)

esta.rosenberg@dot.gov (DOT) brian.hedberg@dot.gov (DOT paul.gretch@dot.gov (DOT) john.all en@faa.gov (FAA) ursk@dos.gov (DOS)

and via U.S. mail:

Alan Murphy Airport Director John Wayne Orange County Airport 18601 Airport Way

, Santa Ana, CA 92707

Frank Miller Aviation Director San Antonio International Airport 9800 Airport Boulevard, San Antonio, TX 78216

__________________________ Leslie C. Abbott