UNITED STATES OF AMERICA

 DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

Issued by the Department of Transportation on January 22, 2015

NOTICE OF ACTION TAKEN -- DOCKET DOT-OST-2014-0222 ________________________________________________________________________________________________________________

This serves as notice to the public of the action described below, taken by the Department official 

indicated (no additional confirming order will be issued in this matter).

Application of Southwest Airlines Co. (Southwest) filed 12/11/14 for:

XX Exemption under 49 U.S.C. 40109 to provide the following service:

Scheduled foreign air transportation of persons, property, and mail between Houston, Texas, on 

the one hand, and (1) Cancun, Mexico; (2) Mexico City, Mexico; (3) Puerto Vallarta, Mexico; and 

(4) San Jose del Cabo, Mexico, on the other hand.1

Applicant rep: Robert W. Kneisley (202) 263-6284 DOT Analyst: Brett D. Kruger (202) 366-8025

D I S P O S I T I O N

XX Granted, in part (i.e., exemption authority for Southwest to serve the Houston-Cancun and 

Houston-Puerto Vallarta markets, subject to conditions; see below)

XX Deferred, in part (i.e., exemption authority for Southwest to serve the Houston-Mexico City and 

Houston-San Jose del Cabo markets, see Remarks below)

The above action granting Houston-Cancun and Houston-Puerto Vallarta exemption authority was 

effective when taken: January 22, 2015, through January 22, 2017.

The above action deferring on the remainder of the application was effective when taken: 

January 22, 2015.

Action taken by: Paul L. Gretch, Director

 Office of International Aviation

XX The authority granted is consistent with the aviation agreement between the United States and 

Mexico.

Except to the extent exempted or waived, this authority is subject to the terms, conditions, and limitations 

indicated: XX Holder’s certificates of public convenience and necessity

 XX Standard Exemption Conditions (attached)

____________________________________________________________________________________

Responsive Pleadings/Remarks: Under the U.S.-Mexico aviation agreement, three carriers may be 

designated to provide scheduled foreign air transportation of persons, property, and mail between 

Houston and Cancun, Houston and Puerto Vallarta, and Houston and San Jose del Cabo. Two carriers 

may be designated to provide scheduled foreign air transportation of persons, property, and mail between 

 1 Southwest proposes to begin daily service in all four markets beginning on or about October 15, 2015.
2

Houston and Mexico City. Currently, Spirit Airlines, Inc. (Spirit), and United are designated to provide 

service between Houston and Cancun; and SkyWest Airlines, Inc. d/b/a United Express (SkyWest) and 

United are designated to provide service between Houston and Puerto Vallarta, leaving one available 

designation available for each of those markets. SkyWest, Spirit, and United are currently designated to 

provide service between Houston and San Jose del Cabo; and SkyWest and United are currently 

designated to provide service between Houston and Mexico City, leaving those markets fully subscribed.

Southwest asserts that in the Houston-Mexico City and Houston-San Jose del Cabo markets, two U.S. 

carrier designations are being used on behalf of one U.S. airline, United. In those circumstances, 

Southwest requests (1) that the Department withdraw one of the two authorities held by United and its 

United Express partner SkyWest in both the Houston-Mexico City and Houston-San Jose del Cabo 

markets; and (2) that the Department grant Southwest’s request for exemption authority and 

corresponding designations. 

The Southwest Airlines Pilots’ Association (SWAPA) and Spirit filed answers in support of Southwest’s 

application. The City of Houston filed an answer stating that it has no desire to lose any of its existing 

service, and it urges the Department to explore all opportunities available so that all carriers can obtain 

the necessary authority. United and SkyWest filed an answer to Southwest’s application objecting to 

Southwest’s requests for Houston-Mexico City and Houston-San Jose del Cabo authority.2

 Southwest, 

SWAPA, the City of Houston, and United and SkyWest each filed replies. United and SkyWest filed a 

surreply and Southwest filed a contingent answer.

In the circumstances presented, including the fact that no party opposes the application to the extent that 

Southwest seeks to serve the Houston-Cancun and Houston-Puerto Vallarta markets, we will approve 

Southwest’s requests for Houston-Cancun and Houston-Puerto Vallarta exemption authority.3

 We will 

consider subsequently the requests of Southwest to serve the Houston-Mexico City and Houston-San 

Jose del Cabo markets. 

Conditions: The U.S.-Mexico exemption authority granted is subject to the dormancy notice 

requirements set forth in condition 7 of Appendix A of Order 88-10-2. Consistent with our standard 

policy, the dormancy notice period will begin on October 15, 2015, Southwest’s proposed start-up date 

for the subject services.

On the basis of data officially noticeable under Rule 24(g) of the Department's regulations, we found the 

applicant qualified to provide the exemption services authorized.

Under authority assigned by the Department in its regulations, 14 CFR Part 385, we found that (1) our 

action was consistent with Department policy; (2) grant of the application was consistent with the public 

interest; and (3) grant of the authority would not constitute a major regulatory action under the Energy 

Policy and Conservation Act of 1975. To the extent not granted or deferred, we denied all requests in the 

referenced Docket. We may amend, modify, or revoke the authority granted in this Notice at any time 

without hearing at our discretion.

Persons entitled to petition the Department for review of the action set forth in this Notice under the 

Department’s regulations, 14 CFR §385.30, may file their petitions within seven (7) days after the date of 

issuance of this Notice. This action was effective when taken, and the filing of a petition for review will 

not alter such effectiveness.

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

http://www.regulations.gov

 2 United and SkyWest take no position on the remainder of Southwest’s application. 3 We will address the designation requests for the Houston-Cancun and Houston-Puerto Vallarta markets through 

normal diplomatic channels.
ATTACHMENT

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier applicant(s) shall:

(1) Hold at all times effective operating authority from the government of each country served;

(2) Comply with applicable requirements concerning oversales contained in 14 CFR 250 (for 

scheduled operations, if authorized);

(3) Comply with the requirements for reporting data contained in 14 CFR 241;

(4) Comply with requirements for minimum insurance coverage, and for certifying that coverage to 

the Department, contained in 14 CFR 205;

(5) Except as specifically exempted or otherwise provided for in a Department Order, comply with 

the requirements of 14 CFR 203, concerning waiver of Warsaw Convention liability limits and 

defenses;

(6) Comply with all applicable requirements of the Federal Aviation Administration, the 

Transportation Security Administration, and with all applicable U.S. Government requirements 

concerning security, including, but not limited to, 49 CFR Part 1544. To assure compliance with all 

applicable U.S. Government requirements concerning security, the holder shall, before commencing 

any new service (including charter flights) to or from a foreign airport, contact its Principal Security 

Inspector (PSI) to advise the PSI of its plans and to find out whether the Transportation Security 

Administration has determined that security is adequate to allow such airport(s) to be served;

(7) Comply with such other reasonable terms, conditions, and limitations required by the public 

interest as may be prescribed by the Department of Transportation, with all applicable orders and 

regulations of other U.S. agencies and courts, and with all applicable laws of the United States.

The authority granted shall be effective only during the period when the holder is in compliance 

with the conditions imposed above.

 

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