OST-97-2943 / Aeromexico / Exemption, Guadalajara-Phoenix / September 26, 1997

NOTICE: Any person may support or oppose this application by filing an answer and serving a copy of the answer on counsel for Aerovias- de Mexico, S.A. de C.V., and upon persons served with this application no later than October 14, 1997

Application of

for an Exemption from 49 U.S.C. 41302

(Guadalajara-Phoenix)

Pursuant to 49 U.S.C. 40109(c), Aerovias de Mexico, S.A. de C.V. ("Aeromexico"), respectfully requests an exemption from the provisions of 49 U.S.C 41302 to the extent necessary to permit it to engage in scheduled foreign air transportation of persons, property and mail between Guadalajara, Mexico, and Phoenix, Arizona. Aeromexico anticipates instituting the service on or about November 1, 1997. Since certain preparatory actions must be taken to promote and publicize the service, Aeromexico is requesting that the Department act expeditiously on this application. The exemption is requested for one year. In support of this application, Aeromexico states as follows:

1. Aeromexico is a flag carrier of the United Mexican States and currently holds a foreign air carrier permit which authorizes service between Mexico and numerous U.S. points. Order 91-5-25. Pursuant to its permit and various

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exemption authorities, Aeromexico provides extensive service between Mexico and the United States.

2. By this exemption request, Aeromexico seeks authority to engage in scheduled foreign air transportation of persons, property and mail between Guadalajara, Mexico, and Phoenix, Arizona. The service initially will consist of two weekly DC-9S/MD-88 round trips to be operated on weekends. Northbound flights will be operated on Fridays and Saturdays with return flights on Saturdays and Sundays. There currently is no single-plane service in the market although Aeromexico does offer on-line connecting service. Consequently, Aeromexico proposed service will provide significant benefits for U.S.-Mexico passengers, and is procompetitive.

3. Annex 1 to the 1960 Air Transport Agreement, as amended, between the United Mexican States and the United States, provides that a carrier designated by the Government of Mexico is entitled to operate "[f]rom a point or points in Mexico to a point or points in the United States." By Note dated April 11, 1997, Aeromexico was designated for the route in question. Aeromexico holds authority from the DGAC to serve the route.

4. Under 49 U.S.C. 40109(c), the Department may grant an exemption if it finds that such is consistent with the public interest. It is clear that the designation of a

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carrier by its homeland government is the most significant factor in determining whether grant of an application is in the public interest. For example, in Linea Aerea Nacional de Chile. Foreign Permit, 26 C.A.B. 604 (1958), the Civil Aeronautics Board stated as follows:

See also Application of Aerovias Venezolanas S.A., Order 86-8-88 at 3 (provision for authority in a bilateral is prima facie evidence that grant thereof is in the public interest); Aerolineas Peruanas Foreign Permit, 31 C.A.B. 181 (1960). The same findings are warranted here, where Aeromexico has been designated for the route in question.

Moreover, the benefits which the new service will generate for business travelers and tourists alike further demonstrate that the exemption is consistent with the public interest. The proposed service will improve the available air service and facilitate travel in the Mexico-U.S. market to the benefit of the public.

5. Given the fact that Aeromexico will be designated for the authority requested herein and the fact that the exemption will only be effective for one year, the request is limited in~scope and should be noncontroversial.

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Application

WHEREFORE, Aerovias de Mexico, S.A. de C.V. respectfully requests that the Department grant the exemption sought herein.

DATED: September 26, 1997

Respectfully submitted,

William C. Evans

VERNER, LIIPFERT, BERNHARD, McPHERSON AND HAND, CHARTERED

Suite 700

901 - 15th Street, N.W.,

Washington, D.C. 20005

(202) 371-6030

Counsel for Aerovias de Mexico, S.A. de C.V.