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OST-00-7656

United Air Lines, Inc.

United seeks an exemption authorizing it to provide scheduled foreign air transportation of persons, property and mail between Los Angeles, on the one hand, and San Jose del Cabo and Puerto Vallarta, Mexico, on the other, on a thrice weekly basis (Sat./Sun./Wed.), commencing December 16, 2000. United plans to operate the above services on a seasonal basis through April 29, 2001. United then expects to resume the service on or about December 1, 2001, but will notify the Department if it does not anticipate resuming service within 90 days after December 1, 2001, consistent with the Department's dormancy policy with respect to U.S.-Mexico seasonal authority.

United also seeks a statement of authorization pursuant to Part 212 of the Department's regulations to place the "MX*" designator code of its code-share partner, Mexicana, on United's flights between Los Angeles on the one hand, and Puerto Vallarta and San Jose del Cabo, on the other. The Department previously has granted United exemption authority and statements of authorization to conduct code-share services in conjunction with Mexicana.

The U.S.-Mexico bilateral agreement permits the designation of two U.S. carriers to serve the Los Angeles-Puerto Vallarta and Los Angeles-San Jose del Cabo city-pair markets. At present, Alaska Airlines is the only U.S. carrier providing service in these two city-pair markets; thus, a designation is available to accommodate United's proposed services.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202-663-6670, jmanley@wilmer.com

United Air Lines, Inc.

American Airlines, Inc. hereby answers in opposition to the application submitted by United Air Lines, Inc. on July 14, 2000 to the extent that United is seeking authorization to operate its own service between Los Angeles and San Jose del Cabo.  At present, Alaska Airlines is the only U.S. carrier so designated. Accordingly, one additional designation is available.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

United Air Lines, Inc. and American Airlines, Inc.

On July 14, 2000 United submitted an application seeking, inter alia, exemption authority to operate scheduled services between Los Angeles, CA and San Jose del Cabo, Mexico ("Los Cabos"). On July 31, 2000, American filed a competing application for exemption authority in the same city-pair market. Under the U.S./Mexico bilateral air services agreement, only two U.S. carriers may be designated in this city pair, and one of those designations has already been made. In these circumstances, the applications of United and American are mutually exclusive and should be consolidated into a single carrier selection case for contemporaneous consideration.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com 

United Air Lines, Inc.

Scheduled foreign air transportation of persons, property, and mail between (1) the terminal Point Los Angeles, California, and the terminal point San Jose del Cabo, Mexico; and (2) the terminal point Los Angeles, California, and the terminal point Puerto Vallarta, Mexico.' United proposes to operate services in both markets on a seasonal basis.   Display the designator code of United's code-share partner, Compania Mexicana de Aviacion, S.A. de C.V. (Mexicana), on the services described above.

On July 31, 2000, American Airlines, Inc., filed an answer opposing United's application to the extent it seeks authorization to operate its own service in the Los Angeles-San Jose del Cabo market (American also filed a competing application for the authority in Docket OST-2000-7714). We have deferred action on that portion of United's application, and will address the issue of that authority separately. We will also handle separately the request of United for a statement of authorization.

By:  Paul Gretch

United Air Lines and American Airlines

On August 2, 2000, United Air Lines, hic., filed a motion for consolidation and immediate action in the above captioned proceedings. Specifically, United has requested that the Department set down an expedited carrier selection case, consolidating the captioned applications of United and American and establishing uniform, expedited procedural dates for consideration of the applications. In its motion, United requested that, among other things, the date for additional applications and/or amendments be set for August 8, 2000. Under the Department's regulations (14 CFR 302.11), answers to this motion would normally be due August 11, 2000. United asked that we rule on the motion without awaiting answers. After careful consideration of the circumstances presented, we have decided to permit answers, but to shorten the answer period on United's motion to Monday, August 7, 2000.

Therefore, acting under authority assigned to the Director, Office of International Aviation, 14 CFR 385.3, we modify the procedural schedule for responsive pleadings to United's motion, and require that answers to the motion be filed no later than Monday, August 7, 2000, and that replies to answers be filed no later than Tuesday, August 8, 2000.

By:  Paul Gretch

Delta Air Lines, Inc. hereby Answers the Motion of United Air Lines, Inc., in the captioned proceedings. Delta has no objection to the procedural schedule proposed by United, which would facilitate an expedited and uniform process for considering proposals for the remaining Los Angeles- San Jose del Cabo service opportunity. Delta intends to submit its own competing application for Los Angeles-San Jose del Cabo authority, and will do so by August 8, 2000.

By:  Paul Gretch

American Airlines, Inc. and United Air Lines, Inc.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

United Air Lines and American Airlines

Pursuant to the Department's August 4, 2000 Notice in the captioned proceedings, Delta Air Lines, Inc. hereby submits this Reply concerning the Motion of United Air Lines, Inc. to establish an expedited uniform procedural schedule. As Delta indicated in its preliminary Answer on August 4, 2000, Delta has no objection in principle to an expedited uniform schedule, and Delta was willing to accept the dates proposed by United. ' However, on August 7, 2000, American filed an answer, proposing a slightly different set of procedural dates. Delta would also have no objection to the schedule proposed by American. In light of the conflict between the two proposed schedules, Delta will submit its application for Los Angeles-San Jose del Cabo authority, and comply with whatever answer and reply dates the Department deems appropriate, in the Scheduling Order or Notice establishing the procedural dates for this case.

Counsel:  Shaw Pittman, Alexander Cohn, 202.663.8060

American supports United's request for uniform procedural dates and proposes slightly different dates from United's. The American procedural dates are generally acceptable to United. However, because the Department must publish a notice to all interested parties, it may, upon further reflection, be a bit ambitious to expect a procedural schedule beginning with an applications or amendment date of August 8 or August 10, 2000, as United and American, respectively, have proposed.  United, generally concurs with the intervals between the procedural dates proposed by American (which are approximately the same as those in United's proposal). United, therefore, urges the Department in its procedural order to provide two days between the date of that order and the date for applications or amendments, nine days from that date for answers, and seven days from the answer date for replies.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202-663-6670, jmanley@wilmer.com 

United Air Lines, Inc.

On August 4, 2000, the Department shortened the answer period applicable to United's motion. That answer period closed only yesterday, and the Department as of this date has not acted on United's request. In these circumstances, it would be premature for United to file a reply in this proceeding. United, therefore, defers such a filing until a future date to be established by the Department pursuant to its notice in this proceeding dated August 4, 2000 issued in response to United's Motion dated August 2, 2000.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com 

United Air Lines and American Airlines

By this notice, we request that the three U.S. carriers that have expressed an interest in providing combination services in the Los Angeles-San Jose del Cabo market file applications or amendments to existing applications with the Department no later than Monday, August 14, 2000. Answers to the applications or amendments will be due August 23, 2000, and replies will be due no later than September 1, 2000. 

By:  Paul Gretch

United Air Lines, Inc. and American Airlines, Inc.

Delta Will Not be Filing an Application

Under its amended proposal, American will begin nonstop service on November 1, 2000, using MD82 aircraft (14F, 115Y) from its existing fleet. American will provide nonstop service seven days a week on a year-round basis. In addition, American will operate an eighth weekly flight on Saturdays on a seasonal basis from approximately December 15 to April 30 each year. Illustrative schedules and annual operating statistics for American's amended service proposal are attached.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com 

United seeks an exemption authorizing it to provide scheduled foreign air transportation of persons, property and mail between Los Angeles and San Jose del Cabo, Mexico, commencing December 16, 2000. United plans to operate this service on a daily, year-round, nonstop basis using 138-seat Airbus A320 aircraft with the following seating configuration: 12 First Class, 36 Economy Plus, and 90 Economy seats.  By the same application, United also requested a statement of authorization pursuant to Part 212 of the Department's regulations to place Mexicana's "MX*" designator code on its proposed Los Angeles-Puerto Vallarta/San Jose del Cabo services.

Counsel:  United and Wilmer Cutler, Jeffrey Manley, 202-663-6670, jmanley@wilmer.com

United Air Lines, Inc. and American Airlines, Inc.

Counsel:  American, Carl Nelson, 202-496-5647, carl.nelson@aa.com 

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com 

United Air Lines, Inc.

By:  Paul Gretch

American Airlines, Inc. and United Air Lines, Inc.

Counsel:  American, Carl Nelson, 202.496.5647, carl_nelson@aa.com

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com 

American Airlines, Inc. and United Air Lines, Inc. and Los Angles- San Jose del Cabo Exemption Proceeding

By:  Susan McDermott

American Airlines, Inc. and United Air Lines, Inc. and Los Angles- San Jose del Cabo Exemption Proceeding

The Department's decision in Order 2000-11-23 tentatively to select American over United to operate nonstop service between Los Angeles and San Jose del Cabo relies on a flawed analytical framework to reach an erroneous result that, if finalized, will not maximize public benefits. United put forward the superior service proposal, featuring more capacity and more connecting services, including connections to communities that currently lack any online service to San Jose del Cabo and to which American can offer no comparable service. In defense of its tentative selection of American, the Department argues that American is a "new entrant," simply because American has elected not to offer any code-share service between Los Angeles and San Jose del Cabo despite the existence of two American code-share partners that serve this route. Far from being a new entrant, American is the largest U.S. carrier to Mexico and currently serves San Jose del Cabo from both its Chicago and DFW hubs. Before authorizing American to serve San Jose del Cabo from a third city, which is not even an American hub, the Department should revisit its flawed analytical framework, and instead, for the reasons set forth above, authorize United to introduce nonstop service to San Jose del Cabo, and thereby also enabling United to serve Puerto Vallarta, from its Los Angeles hub.

Counsel:  Wilmer Cutler, Jeffery Manley, 202.663.6670, jmanley@wilmer.com

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