Home | Search | Help
OST by Number | OST by Order | OST by Carrier | OST by Subject | OST by Day
OIA by Carrier/Subject | OIA by Day | FAA by Number | FAA by Subject | FAA by Day
Carrier Financials | Charter Office | Answer/Reply Calendar

OST-2000-8361

http://www.aa.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

Los Angeles- San Jose del Cabo Exemption Proceeding

If United wished to compete as an operating carrier to San Jose del Cabo from gateway hubs that would give it access to the broader U.S. market, United would focus not on Los Angeles, but on Chicago and Denver. United operates far larger hubs at both Chicago and Denver than it does at Los Angeles, and both of those cities are available under the U.S.--Mexico Air Transport Agreement for additional U.S. carrier service. Moreover, if United wished to compete as an operating carrier from a western gateway, it could do so from its hub at San Francisco, which is also available for U.S. carrier ser-vice. United cannot credibly assert that it is shut out of operating its own service to San Jose del Cabo simply because the Department has selected American as a new entrant at Los Angeles.

United, by contrast, presently operates its own service to only a single point in Mexico, Mexico City, and does not serve any Mexican resort cities. Under the U.S.-Mexico Air Transport Agreement, a large number of U.S.-Mexico routes are completely open to United's entry, including the opportunity to serve San Jose del Cabo itself from United's hubs at Chicago, Denver, and San Francisco, as noted above. United's failure to develop its own pattern of service to points in Mexico, and particularly to resort destinations such as San Jose del Cabo and Puerto Vallarta, should weigh heavily against United's selection in this proceeding. In any event, it would establish a terrible precedent for the Department to accede to threats by an applicant that it will not start service in one market, where entry is freely available, unless it wins the award in another market that is at issue in a carrier-selection proceeding.

We also take strong exception to United's contention that American indicated no interest in Los Angeles-San Jose del Cabo service until United filed its application, and then responded "for no other purpose than to exclude United" from the market. To the contrary, American's interest in the route long predates United's application. As we stated in our answer in OST-00-7714 and OST-00-76S6 on August 23, 2000, pp. 10-11, American has greatly expanded its presence in West Coast markets over the past two years. Having focused first on key domestic routes, American is now broadening its expansion to international destinations. only the limitations on American's ability to grow its West Coast presence even more quickly has kept American from entering the Los Angeles-San Jose market before now. But in any event, determining which applicant began considering the route first is irrelevant.

Counsel:  American, Carl Nelson, 202.496.5647, carl.nelson@aa.com

Los Angeles-San Jose del Cabo Exemption Proceeding

By this order we make final our tentative decision in Order 2000-11-23 to select American Airlines, Inc. (American), to provide foreign scheduled air transportation services between Los Angeles, California, and San Jose del Cabo, Mexico, with its own aircraft, pursuant to exemption authority.

By:  Susan McDermott

American Airlines, Inc.

Hereby applies for renewal of its exemption, initially granted in this docket in the Los Angeles-San Jose del Cabo Exemption Proceeding, Order 2001-1-11, January 18, 2001, authorizing foreign air. transportation of persons, pro­perty, and mail between Los Angeles, California and San Jose del Cabo, Mexico.

American currently operates nonstop service between Los Angeles and San Jose del Cabo, using 130-seat MD80 aircraft (15F/115Y). Illustrative data was submitted in OST-2000-7714 on July 31, 2000, which we incorporate herein by reference.

Counsel: American, Carl Nelson, 202 496-5647

American Airlines, Inc.

By: Paul Gretch

OST-00-8361 - Los Angeles-San Jose del Cabo Exemption Proceeding

September 27, 2004

Application of American Airlines for Renewal of Exemption Authority

American Airlines, Inc., under 49 USC 40109 and 14 CFR Part 377, hereby applies for renewal of its exemption, initially granted in this docket in the Los Angeles-San Jose del Cabo Exemption Proceeding Order 2001-1-11, January 18, 2001, and renewed by Notice of Action Taken, December 4, 2002, authorizing scheduled foreign air transportation of persons, property, and mail between Los Angeles, California and San Jose del Cabo, Mexico.

In filing this application, American invokes the automatic extension provisions of the Administrative Procedure Act, 5 USC 558(c), as implemented by 14 CFR Part 377. The authority would expire on December 4, 2004 absent this renewal application, which is timely under 14 CFR 377.10(c) since it is filed more than 60 days in advance of the expiration date. American's service constitutes an "activity of a continuing nature" under 14 CFR Part 377.

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

OST-00-8361 - Los Angeles-San Jose del Cabo

Filed September 27, 2004 | Issued October 22, 2004

Notice of Action Taken

Scheduled foreign air transportation of persons, property, and mail between the terminal point Los Angeles, California, and the terminal point San Jose del Cabo, Mexico.

By: Paul Gretch

OST-2000-8361 - Los Angeles-San Jose del Cabo Exemption Proceeding

August 15, 2006

Application of American Airlines for Renewal of Exemption Authority

American Airlines, Inc. hereby applies for renewal of its exemption, initially granted in this docket in the Los Angeles-San Jose del Cabo Exemption Proceeding, Order 2001-1-11, January 18, 2001, and most recently renewed by Notice of Action Taken, October 22, 2004, authorizing scheduled foreign air transportation of persons, property, and mail between Los Angeles, California and San Jose del Cabo, Mexico.

American currently operates nonstop service between Los Angeles and San Jose del Cabo, using 130-seat MD80 aircraft (15F/115Y). Illustrative data was submitted in OST-2000-7714 on July 31, 2000, which we incorporate herein by reference.

In response to the Department's notice of August 23, 2005 on streamlining regulatory procedures (OST-2005-22228), American has requested corresponding certificate authority for its U.S.-Kenya exemption authority. See application for amended certificate of public convenience and necessity, August 26, 2005 (OST-2000-8516). We urge expedited approval of that application to avoid the need for successive renewals in exemption dockets.

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

OST-2000-8361 - Los Angeles-San Jose del Cabo Exemption Proceeding

Filed August 15, 2006 | Issued October 16, 2006

Notice of Action Taken

Renewal of scheduled foreign air transportation of persons, property and mail between Los Angeles, California and San Jose del Cabo, Mexico.

By: Paul Gretch

Home | Search | Help
OST by Number | OST by Order | OST by Carrier | OST by Subject | OST by Day
OIA by Carrier/Subject | OIA by Day | FAA by Number | FAA by Subject | FAA by Day
Carrier Financials | Charter Office | Answer/Reply Calendar