BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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

Application of :

:

SOUTHWEST AIRLINES CO. :

: Docket DOT-OST-2014-0222

for an exemption pursuant to 49 U.S.C. § 40109 :

to 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 :

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

CONSOLIDATED REPLY OF

UNITED AIRLINES, INC. AND SKYWEST AIRLINES, INC. 

Communications with respect to this document should be sent to:

Steve Morrissey

Vice President-Regulatory & Policy

UNITED AIRLINES, INC.

1225 New York Avenue, NW

Suite 1100 – DCAIZ

Washington, DC 20005

(202) 521-4373

steve.morrissey@united.com

Daniel A. Weiss

Managing Director-International

 Affairs and Regulatory

UNITED AIRLINES, INC.

233 South Wacker Drive

10th Floor – HDQIZ

Chicago, IL 60606

(872) 825-6828

dan.weiss@united.com

January 8, 2015

Thomas Newton Bolling

Vice President and Deputy General Counsel

Abby L. Bried

Associate General Counsel-Regulatory, 

 Alliances & International

James Conneely

Counsel-Regulatory

UNITED AIRLINES, INC.

233 South Wacker Drive

11th Floor – HDQLD

Chicago, IL 60606

(872) 825-8068

(872) 825-7415

(872) 825-8311

thomas.bolling@united.com

abby.bried@united.com

james.conneely@united.com

Gerald F. Murphy

Steven J. Seiden

CROWELL & MORING LLP

1001 Pennsylvania Avenue, NW

Washington, DC 20004

(202) 624-2500

gmurphy@crowell.com

sseiden@crowell.com

Counsel for

United Airlines, Inc.

and SkyWest Airlines, Inc.
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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

Application of :

:

SOUTHWEST AIRLINES CO. :

: Docket DOT-OST-2014-0222

for an exemption pursuant to 49 U.S.C. § 40109 :

to 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 :

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

CONSOLIDATED REPLY OF

UNITED AIRLINES, INC. AND SKYWEST AIRLINES, INC.

I. INTRODUCTION.

The Answers of Spirit1and The City of Houston (“Houston”) underscore the fundamental 

premise advanced by United and SkyWest in their Answer to Southwest’s Application – that the 

Department should take all steps necessary to grant Southwest the authority to serve the 

Houston-Mexico City/San Jose del Cabo markets alongside United, SkyWest and Spirit without 

cutting off longstanding consumer service options. While Houston asserts the need for increased 

air services in Houston-Mexico markets, Spirit’s thinly-veiled attempt to eliminate the 

competition United and/or SkyWest (d/b/a United Express) services provide demonstrates why 

all carriers who desire to serve these markets should be permitted to do so without delay. 

Granting extra-bilateral authority to Southwest would allow the Department to accomplish these 

 

1 Common names are used for airlines. 
Consolidated Reply of United and SkyWest

Page 2 of 5

goals and is in the public interest. Indeed, it is the only alternative that will truly benefit all 

carriers, consumers and communities on both sides of the border.

II. SPIRIT’S ANSWER IGNORES LONGSTANDING DEPARTMENT PRECEDENT 

AND PROPOSES A LOSS FOR CONSUMERS

Spirit, like Southwest, conveniently ignores the fact that the Department cannot simply 

reallocate United and/or SkyWest’s U.S.-Mexico designations to Southwest. The designations 

can only be withdrawn following a carrier selection proceeding. See United and SkyWest 

Answer at 2-3 (internal citations omitted). Although neither Southwest nor Spirit claim that 

United or SkyWest has failed to comply with the terms and conditions of its designations, the 

Department’s recent institution of a proceeding to consider whether Delta’s Seattle-Tokyo 

Haneda slot allocation award remains in the public interest is instructive here. See Order 2014-

12-9; see also, e.g., Notice of Action Taken dated Sep. 3 2014 in Dockets DOT-OST-2014-0129 

and DOT-OST-2014-0130 at 2 (a competing proposal for Houston-Mexico City services means 

only that the Department “would be prepared to reconsider whether...award of the [United and 

United Express carrier] authority...continues to be in the public interest”). As discussed below, 

however, instituting such a costly and unnecessary proceeding is a distant second best option 

given the unique circumstances of this case.

Rather than having to demonstrate the consumer benefits its services would provide in a 

carrier selection proceeding, Spirit has supported Southwest in its push to degrade existing 

United and/or United Express services and unduly harm consumers. The Department should 

disregard this cynical move for what it is: two similarly-structured carriers attempting to 

eliminate competitors with a different business model, superior international and domestic 

connecting opportunities, and more flexible service offerings. By contrast, United and SkyWest 
Consolidated Reply of United and SkyWest

Page 3 of 5

have focused on consumers by asking the Department to exercise extra-bilateral authority to 

allow all competitors to serve the markets in question during the short 11-week period between 

when Southwest proposes to commence operations and the new U.S.-Mexico air transport 

agreement goes into effect.2 Why have Southwest and now Spirit asked the Department to 

eliminate competitors rather than find a solution to maximize competition and consumer 

benefits? 

III. HOUSTON DEMONSTRATES THE NEED FOR A CREATIVE SOLUTION TO 

MAXIMIZE COMPETITION IN HOUSTON-MEXICO MARKETS 

As the nation’s premiere gateway to Mexico and one of its fastest growing business and 

population centers, Houston stands only to gain from increased air carrier competition in 

Houston-Mexico markets. “[Houston’s] remarkable economic strength provides ongoing new 

opportunities for carriers, passengers and shippers, and ever-growing potential for additional air 

services to meet the community’s increasing needs. These needs are especially vital – and 

growing – where Mexico is concerned.” Houston Answer at 3. But disrupting existing United 

and/or United Express services for even two and one-half months – as Southwest and Spirit 

propose – would affect tens of thousands of passengers. For example, in the 12 month-period 

ended November 30, 2014, nearly half of United’s Houston-Mexico City passengers flew on 

United in one direction and its United Express partner in the other direction, a figure that 

increases to nearly two-thirds of passengers in the Houston-San Jose del Cabo market. This is 

ample evidence that consumers depend on these flexible service offerings and that they should 

 

2 United and SkyWest have raised significant concerns regarding Southwest’s 

ability to commence its proposed Houston-Mexico City/San Jose del Cabo services on October 

15, 2015 that must be addressed before the Department can even consider eliminating existing 

consumer services options in these markets. See United and SkyWest Answer at 7-9. 
Consolidated Reply of United and SkyWest

Page 4 of 5

not be interrupted for even a period of 11 weeks, particularly since the Department has the tools 

available to help the tens of thousands of consumers that would be affected. Preserving these 

flexible itinerary and fare class options, along with unparalleled network connecting 

opportunities at United’s Houston hub, is precisely why “Houston hopes that the Department will 

explore all opportunities available to approve and secure additional rights from Mexico so that 

all carriers wishing to serve [the Houston-Mexico City/San Jose del Cabo] markets are able to 

obtain the authority they need on a timely basis.” Id. at 5

Granting extra-bilateral authority to allow Southwest to operate alongside United, 

SkyWest and Spirit provides such a solution. As detailed in United’s and SkyWest’s Answer, 

the Department has relied on extra-bilateral authority more than a dozen times in recent years –

and largely to the benefit of Mexican carriers. See United and SkyWest Answer at 5-6. There is 

no reason the Department should not do so once again, given these unique circumstances, to the 

benefit of all U.S. carriers wishing to serve these significant Houston-Mexico markets. 

Moreover, in the words of the Chairman of the Subcommittee on Trade of the House Ways and 

Means Committee, “[i]t is not in the best interest of Houston or the traveling public to withdraw 

long held rights granted...to United or its United Express partners, and which benefit U.S. 

consumers who use IAH as an airport to access Mexico, for a period of only 2.5 months.” Letter 

from Congressman Kevin Brady (TX-8) to Anthony Foxx, Sec’y, U.S. Dept. of Transp. (Dec. 29, 

2014) (Exhibit A to the United and SkyWest Answer).
Consolidated Reply of United and SkyWest

Page 5 of 5

IV. CONCLUSION

For the foregoing reasons, United urges the Department to grant Southwest extra-bilateral 

authority for Southwest to commence its proposed Houston-Mexico City/San Jose del Cabo 

operations and preserve existing United mainline and SkyWest (d/b/a United Express) regional 

jet services to the benefit of United’s customers, coworkers and communities. Doing so is the 

only alternative that would enhance competition on these important U.S.-Mexico routes, further 

the intent of the new U.S.-Mexico air transport agreement, and serve the public interest.

Respectfully submitted,

CROWELL & MORING LLP

____________________________

Gerald F. Murphy

Steven J. Seiden

gmurphy@crowell.com

sseiden@crowell.com

Counsel for

United Airlines, Inc. 

and SkyWest Airlines, Inc.

January 8, 2015
CERTIFICATE OF SERVICE

I certify that I have this date served the foregoing document on the following persons in 

accordance with the Department’s Rules of Practice.

robert.wirick@aa.com

howard.kass@aa.com

nssparks@fedex.com

gbleopard@fedex.com

kevin.montgomery@polaraircargo.com

rpommer@atlasair.com

rsilverberg@sgbdc.com

jjohnson@sgbdc.com

msinick@ssd.com

stephen.lachter@cozen.com

robert.land@jetblue.com

jhill@cooley.com

perkmann@cooley.com

dkirstein@yklaw.com

jyoung@yklaw.com

bob.kneisley@wnco.com

leslie.abbott@wnco.com

pjackson@swapa.org

matwood@cozen.com

anita.mosner@hklaw.com

jennifer.nowak@hklaw.com

sascha.vanderbellen@delta.com

chris.walker@delta.com

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

thomas.ting@suncountry.com

john.varley@virginamerica.com

rbtrinder@zsrlaw.com

paul.gretch@dot.gov

brett.kruger@dot.gov

susan.kurland@dot.gov

brian.hedberg@dot.gov

reese.davidson@dot.gov

todd.homan@dot.gov

peter.irvine@dot.gov

cristinasa@state.gov

info@airlineinfo.com

__________________________________

Steven J. Seiden

January 8, 2015