BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

___________________________________________ ) Application of ) ) COMPASS AIRLINES, INC ) Docket No. OST-2010- ) for exemptions pursuant to 49 U.S.C. § 40109 ) (Detroit, Michigan – Monterrey, Mexico; ) U.S. – Canada Open Skies ) ) ) ___________________________________________ ) APPLICATION OF COMPASS AIRLINES FOR AN EXEMPTION Communications with respect to this document should be directed to: Kenneth P. Quinn Jennifer E. Trock PILLSBURY WINTHROP SHAW PITTMAN LLP 2300 N Street NW Washington, DC 20037 Phone: (202) 663-8000 Fax: (202) 663-8007 Email: kquinn@pillsburylaw.com jennifer.trock@pillsburylaw.com Counsel for Compass Airlines NOTICE: Compass requests expedited treatment of this application. Compass will poll the parties and advise the Department of the results. August 11, 20102 BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

___________________________________________ ) Application of ) ) COMPASS AIRLINES, INC ) Docket No. OST-2010- ) for an exemption pursuant to 49 U.S.C. § 40109 ) (Detroit, Michigan – Monterrey, Mexico) ) ) for an exemption pursuant to 49 U.S.C. § 40109 ) (U.S. – Canada Open Skies) ) ___________________________________________ ) APPLICATION OF COMPASS AIRLINES FOR AN EXEMPTION
Pursuant to 49 U.S.C. § 40109, Subpart C of th e Rules of Practice of the Department of Transportation (the “Department”), the U.S.-Can ada Open Skies Air Transport Agreement, and the U.S.-Mexico Air Transport Agreement, Comp ass Airlines, Inc. (“Compass”), respectfully requests an exemption from 49 U.S.C. § 41101 authorizing Compass to provide scheduled foreign air transportation of pe rsons, property, and mail: (1) between Detroit, Michigan and Monterrey, Mexico; and (2) a point or points in the United States, via intermediate points, and to a point or points in Canada and beyond. Compass requests that the exemptions be effective for a period of two years or such l onger period as the Department deem s fit to grant. Compass seeks expedited approval of this application and intends to conduct a polling of a ll carrier parties listed on the service list. In support of this application, Compass states the following:
1. Compass is fit, willing, and able to provide the proposed services described in this application. It holds certificates of public conve nience and necessity authorizing it to engage in3 scheduled interstate and fo reign air transportation of persons, property, and mail. Detroit-Monterrey Service
2. The Department previously granted Compa ss an exemption for Detroit – Monterrey on October 22, 2007. 1 On July 1, 2010, and concurrent with its acquisition by Trans States Holdings (“Trans States”), Compass surrendered its authority and ceased service on the above referenced route. 2
3. On August 6, 2010, the Department completed its continuing review under 14 C.F.R. Part 204 of Compass’s change in ownership and c onfirmed that Compass remains a U.S. citizen. Compass asks the Department take not e of its previous fitness filings.
4. Compass seeks exemption authority to provi de scheduled foreign air transportation of persons, property, and mail on flights between Detroit and Monterrey. The U.S.-Mexico services proposed herein are an ticipated to remain the same as those services the Department authorized in Docket OST-2007-29323. 5. The proposed service will provide significant be nefits to travelers and shippers, and will enhance competition in the U.S.-Mexico ma rket and will support the development of Compass’ U.S.-Mexico services. Compass’ pr oposed service is cons istent with the Air Transport Agreement between the U.S. and Mexico, as amended. Pinnacle is the only other carrier serving the Detroit-Monterrey route, and additional designations remain available. 3
6. Compass will provide the Detroit – Monter rey service under a f ee-for-service with Delta Airlines as Delta C onnection, using DL*’s code. 4 Delta and Compass have previously

1 DOT Notice of Action Taken, OST-2007-29323 (Oct. 22, 2007). 2 Letter from T. Campbell to E. Rosenberg dated June 30, 2010 available at www.regulations.gov

. 3 Agreement Between the Government of the United States of America and the Government of the United Mexican States Amending the Air Transport Agreement of August 15, 1960, as Amended and Extended, Annex III, Cooperative Marketing Arrangements at ¶ 3 (Entered into force Jul. 18, 2006). 4 The Delta codeshare designation authorized by OST-2008-0374 remains unchanged. Delta has separate4 requested and been granted authority for Delta to place its code on Compass’ flights in the market. 5 Compass requests that the Department notify the Mexican aviation authority that Delta’s code will be placed on Compass’ flights in this market. United States – Canada
7. The Department previously granted Compass an exemption for the U.S. – Canada service on August 6, 2007. 6 On June 30, 2010, and concurre nt with its acquisition by Trans States Holdings (“Trans States”), Compass su rrendered its authority and ceased service to Canada. 7
8. On August 6, the Department completed its post-ownership change continuing fitness review under 14 C.F.R. Part 204 and conf irmed that Compass remains a U.S. Citizen. Compass asks the Department take not e of its previous fitness filings.
9. Compass seeks exemption authority to provi de scheduled foreign air transportation of persons, property, and mail on flights between the United States and Canada. The U.S.- Canada services proposed herein are anticipate d to remain the same as those services the Department authorized in Docket OST-2008-28132.
10. Compass will provide U.S. – Canada se rvice under a fee-for-s ervice arrangement with Delta Airlines as Delta Connection.
11. The proposed service will provide significant be nefits to travelers and shippers, and will enhance competition in the U.S.-Canada ma rket and will support the development of Compass’s U.S.-Canada services. Compass’s proposed service is consistent with the Open Skies
exemption authority for this route. See Order 2010-3-12 (Mar. 9, 2010). 5 Notice of Action Taken, Docket OST-2008-0374 (Dec. 23, 2008). The Delta codeshare designation authorized by OST-2008-0374 remains unchanged. Delta has separate exemption authority for this route. See Order 2010-3- 12 (Mar. 9, 2010). 6 DOT Notice of Action Taken, OST-2007-28132(Aug. 6, 2007), as amended by DOT Notice of Action taken (June 19, 2008). 7 Letter from T. Campbell to E. Rosenberg dated June 30, 2010 available at www.regulations.gov

.5 Agreement between the U.S. and Canada, as amended. WHEREFORE, Compass respectfully reques ts an exemption from 49 U.S.C. § 41101 to provide scheduled foreign air tr ansportation of persons, property , and mail between (1) Detroit, Michigan and Monterrey, Mexico, and (2) a point or points in the U.S., via intermediary points, to a point or points in Canada. Compass asks th at the exemption be issu ed for a two-year period, or such longer period as the Department may d eem appropriate, and seeks expedited approval of this application.

Respectfully submitted,

Kenneth P. Quinn Jennifer E. Trock PILLSBURY WINTHROP SHAW PITTMAN LLP 2300 N Street, N.W. Washington, D.C. 20037 Tel: (202) 663-8000 Fax: (202) 663-8007 E-mail: kquinn@pillsburylaw.com jennifer.trock@pillsburylaw.com Counsel for Compass Airlines

August 11, 2010