BEFORE THE U.S. DEPARTMENT OF TRAN S PORTATION

WASHINGTON D

. C

.

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

- 201 2

- For an exemption pursuant to 49 U.S.C § 40109 ) t o engage in foreign scheduled air transportation ) of persons, property and mail between Austin

, ) Texas and Cancun

, Mexico and between Denver, ) Colorado and Cancun , 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

January 18 , 2 01 2

NOTICE : ANY PERSON MAY FILE AN ANSWER TO THIS APPLICATION IN THIS DOCKET AND SERVED ON THE PERSONS LISTED ABOVE
, ON OR BEFORE F EBRUARY 2, 201 2

. 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

- 2012

- For an exemption pursuant to 49 U.S.C § 40109 ) to engage in foreign scheduled air transportation ) of persons, property and mail between Austin

, ) Texas and Cancun, Mexico and between Denver, ) Colorado and Cancun, 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 two U.S.

– Mexico routes: Austin

, Texas

( AUS ) and Cancun, Mexico (CUN ) and Denver, Colorado (D EN ) and Cancun, Mexico.

Assuming receipt of all necessary approvals, AirTran proposes to commence

operations between AUS and CUN on or about May 25, 2012

, and between D EN and

CUN on or about April 16 , 2012

. AirTran requests that the exemption authority

specified in the application be gra nted as soon as possible for a period of at least two

years.

In support of this application, AirTran 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 a re 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 pre sident and other managing officers are citizens 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 AUS and CUN on or

about May 25, 2012

. AirTran will prov ide this service using Boeing 737

- 700 aircraft

configured for 137 seats and plans to offer service four times a week to daily, d e pending

on demand and other market conditions.

4. AirTran proposes to commence year round service between DEN and CUN

beginning on or about April 16 , 2012

. AirTran will provide this service using Boeing

737

- 700 aircraft configured for 137 seats

. AirTran plans to offer daily service during the

peak season ( December through June ) and service several times a week during the off

peak period , depending on demand and market conditions

.3

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

application. AirTran holds 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 already holds exemption authority from the Department in

several U.S.

– CUN markets, providing scheduled service from Baltimore, Atlanta, and

Milwaukee, as well as in a number of ot her 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), and OST

- 2009

- 0200 (U.S.

– Aruba)

. In addition, the

Department recently granted AirTran exemption authority to provide service between

SAT

- CUN, SAT

- MEX, SNA

- MEX, and SNA

- SJD, with flights starting in early summer

2012 1

. See Docket OS T

- 2011

- 0205

. Pursuant to Rule 24 of the Department’s Rules of

Practice, AirTran asks the Department to take official notice of al l 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 uth orizes 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, t hree U.S. carrier designations

are authorized on U.S.

– CUN routes . Ann ex I(B)(5).

7. U.S. carrier d esignations are available on each of the routes for which AirTran is

seeking authority in this application. Currently, Continental (OST

- 2010

- 0255) and Sun

Country (OST

- 2010

- 0030) hold AUS

- CUN authority. By letter dated December 21,

1 Service between SAT

- CUN and SAT

- MEX begins May 24 , 2012 and between SNA

- MEX and SNA

- SJD on June 3, 2012

.4

2011, Delta Air Lines informed the Department that it had ceased operations on the

AUS

- CUN route and that it had no objection to the withdrawal of its exemption authority,

leaving one designation available

. See Docket OST

- 2010

- 0196. In the DEN

- CUN

mar ket, United Air L ines (OST

- 2004

- 17299 ) and Frontier Airlines (OST

- 2002

- 13061 )

each hold authority to operate scheduled combination nonstop service, leaving one

designation available

.

8. AirTran already provides scheduled service to Mexico with nonstop fligh ts 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

ne twork . Southwest /AirTran is the largest carrier at AUS and the second largest at

DEN

. 2 Accordingly, the Southwest /AirTran network would offer passengers on these

new international flights numerous domestic connecting opportunities

, many of them to

small or medium sized cities without current nonstop service to Mexico. In sum,

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 pu blic 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.

2 Based on domestic enplanements for the 12 month period ending September 2011

.5

10. AirTran will accept and comply with the terms and conditions that the Department

routinely i mposes on exemption authority for scheduled foreign air transportation.

WHEREFORE, AirTran requests that the Department act expeditiously in

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

foreign air transportation o f persons, property and mail on the two U.S.

– Mexico routes

listed above

. Respectfully submitted,

______________________ Robert W. Kneisley

January 18 , 20126 CERTIFICATE OF SERVI CE

I hereby certify that on Janua ry 18 , 2012 , 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) robert.cohn@hoganlovells.com (Frontier Airl ines) patrick.rizzi@hoganlovells.com (Frontier Airlines jhill@dowlohnes.com (JetBlue Airways) dkirstein@yklaw.com (Spirit Airlines) jyoung@yklaw.com (Spirit Airlines) John.Fredericksen@suncountry.com (Sun Country Airlines) dan.weiss@united.com (United Air Lines) howard_kass@usairways.com (US Airways) pmurphy@lopmurphy.com (USA3000) barbara.russell@virgin america.com (Virgin America)

susan.kurland@dot.gov paul.gretch@dot.gov brian.hedberg@dot.gov brett.kruger@dot.gov todd.homan@dot.gov esta.rosenberg@dot.gov john.allen@faa.gov

ur skr@dos.gov

Jim Smith Director of Aviation Austin

- Bergstrom International Airport jimsmith@ci.austin.tx.us

Kim Day Manager of Aviation Denver International Airport kim.day@diadenver.net

info@airlineinfo.com

__________________________ Leslie C. Abbott