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Updated: Tuesday, August 24, 2004 10:30 AM

OST-04-17470 - Frontier Airlines - St. Louis-Cancun

Frontier Airlines, Inc.

OST-04-17470 - Exemption - St. Louis-Cancun

April 1, 2003

Application for an Exemption

Hereby applies for a two-year exemption from 49 U.S.C. 41101 and any other provision of the Department's rules to the extent necessary to engage in scheduled foreign air transportation of persons, property, and mail between St. Louis, Missouri and Cancun, Mexico with services beginning on July 3, 2004.

Frontier is fit, willing, and able to perform the U.S.-Mexico services proposed herein using Airbus A-319-111 aircraft, with an average seat configuration of 132 seats. Frontier reserves the right to serve this route with other aircraft from its fleet.

Frontier has been serving the Mexico market since August 2002. Frontier's existing Denver service to Cancun, Mexico, Mazatlan, Mexico, Puerto Vallarta, Mexico, Ixtapa/Zihuatanejo, Mexico and cabo San Lucas, Mexico has been highly successful. (See Frontier Airlines, Inc. Notice of Action Taken dated august 23, 2002, Docket 2002-13061, 2002-13011, July 23, 2003, Docket 2003-15371 and August 20, 2003 Docket 2003-15840) Frontier's expanded Mexico service has contributed to its system wide growth and its presence in Mexico.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7501, epfaberman@uhlaw.com


OST-04-17470 - St. Louis-Cancun

April 8, 2004

Answer of USA 3000

Brendan Airways, LLC, d/b/a USA 3000 Airlines hereby answers in opposition to the April 1, 2004 application submitted by Frontier Airlines Inc. requesting an exemption to operate scheduled services on a St. Louis, MO-Cancun, Mexico route.

As Frontier states in its application, under the terms of the U.S.-Mexico Bilateral Air Service Agreement the United States is entitled to designate up to two (2) airlines to provide U.S.-Mexico scheduled airline services in any city-pair. USA 3000 understands that, at present only American Airlines is designated and currently operates scheduled services in the St. Louis-Cancun city-pair, leaving one additional designation available for designation.

In view of the fact that Champion, Frontier and USA 3000 all have pending applications for St. Louis-Cancun exemption authority and only one designation is available, USA 3000 submits that these applications are mutually exclusive. Under the principles established by the Supreme Court in Ashbacker Radio Comm v. FCC, the Department is required to conduct a carrier selection proceeding to choose the applicant whose proposal will generate the maximum public benefit.

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel

April 8, 2004

Reply of Frontier Airlines

On April 1, 2004 Frontier Airlines, Inc. applied for authority to provide scheduled service between St. Louis, Missouri and Cancun, Mexico. On April 2, USA 3000 Airlines filed an application to operate service on this route and on March 24 Champion Air filed an application to operate service on this route. If true open skies existed between the U.S. and Mexico, Frontier would not object to the petitions of either Champion or USA 3000 to serve the STL-CUN market. However, given the fact that only one additional carrier can be designated and licensed to provide this service, the choice should be Frontier.

In addition to introducing year-round scheduled service between STL and CUN, Frontier is working with the airport authority and the STL community to establish alternative travel options to various domestic and international locations from STL. Frontier would make far greater use of its STL-CUN route rights than would either USA 3000 or Champion.

As the Department of Transportation stated when it recently allocated (Order 2004-4-1) Ronald Reagan Washington National Airport slots to Frontier. Frontier is a new entrant/limited incumbent with a record as a low-fare competitor that will help discipline the multiple markets that it serves via its Denver hub. If Frontier can add international service to its domestic presence in STL, that same discipline will be brought to all markets in STL. Moreover, by adding an international destination, Frontier’s base in STL will also expand.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7501, epfaberman@uhlaw.com


OST-04-17408 - Champion Air - St. Louis-Cancun
OST-04-17470 - Frontier Airlines - St. Louis-Cancun
OST-04-17479 - USA 3000 Airlines - St. Louis-Cancun

April 16, 2004

Consolidated Answer and Motion of Champion Air for Consolidation

Grand Holdings, Inc. d/b/a Champion Air hereby submits the following answer in support of its application and in opposition to the applications of Frontier Airlines, Inc. and USA 3000 Airlines for authority to operate nonstop service between St. Louis, Missouri and Cancun, Mexico. Champion Air also requests that the Department set down a simplified and expedited carrier selection proceeding consolidating the above-captioned applications and to establish uniform procedural dates for consideration of these applications.

Champion Air objects to the applications of Frontier and USA 3000 for exemption authority in the St. Louis-Cancun city-pair market to the extent that these applications preclude Champion Air's applications for authority in this market. If true open skies existed between the U.S. and Mexico, Champion Air would not object to the petitions of either Frontier or USA 3000 to serve the St. Louis-Cancun market. However, given the fact that only one additional carrier can be designated and licensed to provide this service, the choice should be Champion Air. Champion Air understands that American Airlines holds one of the two designations in the St. Louis-Cancun market, leaving one designation available for allocation.

By: Champion Air, Edward Davidson, 952-814-8785, edward.davidson@championair.com


OST-04-17470 - Exemption - St. Louis-Cancun

April 14, 2004

Re: Lambert-St. Louis International Airport Letter in Support

By: Leonard Griggs


OST-04-17470 - Exemption - St. Louis-Cancun

June 14, 2004

Amended Application for an Exemption

On March 24th, Champion Air filed an application to operate scheduled service on this route and on April 2, USA 3000 Airlines filed an application to operate scheduled service on this route. Frontier originally stated that it would initiate service on July 3, 2004.

Since those filings, the Department has not made any decision on the application. As a result, it is no longer possible to initiate STL-CUN operations this summer. In the April 1st filing, Frontier stated that it would operate one roundtrip STL-CUN flight per week (Saturday). As a result of the changes in circumstances since Frontier filed its STL-CUN application, Frontier now proposes to operate STL-CUN three times per week (Tuesday, Friday, and Sunday). Frontier proposes to initiate its three weekly STL-CUN operations on November 7, 2004.

Counsel: Ungaretti Harris, Edward Faberman,202-639-7501, epfaberman@uhlaw.com


June 18, 2004

Answer of USA 3000

As Frontier states in its application, under the terms of the U.S.-Mexico Bilateral Air Service Agreement the United States is entitled to designate up to two (2) airlines to provide U.S.-Mexico scheduled airline services in any city-pair. USA 3000 understands that, at present only American Airlines is designated and currently operates scheduled services in the St. Louis-Cancun city-pair, leaving one additional designation available for designation.

In view of the fact that Champion, Frontier and USA 3000 all have pending applications for St. Louis- Cancun exemption authority and only one designation is available, USA 3000 submits that these applications are mutually exclusive. Under the principles established by the Supreme Court in Ashbacker Radio Corp v. FCC, the Department is required to conduct a carrier selection proceeding to choose the applicant whose proposal will generate the maximum public benefit.

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


June 18, 2004

Re: The St. Louis Convention and Visitors Commission Letter in Support of the St. Louis-Cancun Route

By: Carole Moody


OST-04-17470 - St. Louis-Cancun

June 21, 2004

Re: The Regional Business Council Letter in Support of the St. Louis-Cancun Route

By: Kathleen Osborn


2004 US-Mexico Combination Service Proceeding

Order 04-07-17
OST-2004-18692 - 2004 US-Mexico Combination Service Proceeding
OST-2004-17416 - Allegiant Air - Denver-Cancun
OST-2004-17407 - Champion Air - Denver-Cancun
OST-2004-17299 - United Air Lines - Denver-Cancun
OST-2004-17408 - Champion Air - US-Mexico
OST-2004-17491 - United Air Lines - Denver-Puerto Vallarta
OST-2004-17405 - Champion Air - Detroit-Cancun
OST-2004-17234 - Spirit Airlines - Detroit-Cancun
OST-2004-17351 - USA 3000 - Detroit-Cancun
OST-2004-17470 - Frontier Airlines - St. Louis-Cancun
OST-2004-17479 - USA 3000 - St. Louis-Cancun/Cozumel

Issued and Served July 21, 2004

Instituting Order | Word

By this order we: (1) institute the 2004 U.S.-Mexico Combination Service Proceeding to select one primary and one backup carrier, to provide foreign air transportation of persons, property, and mail over the following transborder routes: Denver-Cancun, Denver-Puerto Vallarta, Detroit-Cancun, and St. Louis-Cancun; (2) consolidate the already-filed captioned applications into this new proceeding; and (3) direct the applicants to file the requested information, as set forth below.

Petitions for Reconsideration:

July 28, 2004

Answers to Petitions:

August 2, 2004

Direct Exhibits:

August 16, 2004

Rebuttal Exhibits:

August 30, 2004

Briefs:

September 7, 2004

By: Karan Bhatia


OST-04-18692 - 2004 US-Mexico Combination Service Proceeding
OST-04-17299 - United Air Lines - Denver-Cancun
OST-04-17470 - Frontier Airlines - St. Louis-Cancun

July 26, 2004

Answer of Frontier Airlines

Hereby submits comments in response to the motion of United Airlines, Inc. for "Pendente Lite Grant of An Exemption" to allow it to operate scheduled service, between Denver, Colorado and Cancun, Mexico.

Under the U.S./Mexico bilateral air services agreement, only two U.S. carriers may be designated in each city pair. In the DEN‑CUN city pair, only one additional designation remains. At a time that the Department has initiated a proceeding to select a second carrier for the DEN‑CUN route, United has asked that the Department take the time to give it immediate authority to initiate DEN‑CUN service. United is not the only carrier that is attempting to initiate new Mexico service this year. On April 1, 2004, Frontier Airlines asked the Department to allow it to operate scheduled service between STL‑CUN. The Department has not awarded Frontier the CUN authority it requested. Unfortunately, since one carrier already serves that market and other carriers applied for the second destination, Frontier has been forced to modify its plans and schedules for the STL‑CUN market because award of the route has been delayed.

Frontier is prepared to wait until this proceeding is completed before it asks the Department to give it that authority. If the Department is going to proceed with separate Pendente Lite deliberations, it needs to allow Frontier to operate in STL‑CUN this fall.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7501


OST-04-18692 - 2004 US-Mexico Combination Service Proceeding
OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel

August 20, 2004

Motion of Frontier for Immediate Action

By Order 04-7-17 the Department instituted this proceeding, in part, to select a carrier to operate scheduled service between St. Louis and Cancun. Frontier, Champion, and USA 3000 submitted applications for the St. Louis-Cancun authority. The Order established a procedural schedule for the filing of direct exhibits setting forth detailed information regarding each applicant's service proposals, and required the filing of certain additional documents. The Department also made clear that the provision of the information was mandatory, and stated "we expect all applicants to set out their firm proposals at the Direct Exhibit stage." (p. 6, footnote 8) As Champion failed to present any information or exhibits in the Denver-Cancun and Denver-Puerto Vallarta docket, it has also not submitted any of the information that the Department ordered to be submitted in the St. Louis-Cancun proceeding.

On August 16, 2004, Frontier and USA 3000 filed the STL-CUN information required to be submitted under the Order. However, Champion has not filed any of the additional information set forth in the Order.

Champion cannot be allowed to participate in this proceeding unless it provides all the requested information. If Champion had a valid basis for not submitting the information requested, it should have filed a motion.

Since Champion has elected not to participate in this proceeding, its application for St. Louis-Cancun should be dismissed. Of course, Champion can continue to operate charter flights in this market.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com


OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel
OST-04-17234 - Spirit - Detroit-Cancun
OST-04-17351 - USA 3000's Application
OST-04-17405 - Champion's Application
OST-04-17299 - United Air Lines - Denver-Cancun
OST-04-17407 - Champion Air - Denver-Cancun
OST-04-17416 - Allegiant Air - Denver-Cancun
OST-04-17491 - United Air Lines - Denver-Puerto Vallarta

August 20, 2004

Answer of USA 3000 to Motions of United and Spirit and Motion of USA 3000

In addition to supporting the dismissal of Champion's applications in the Denver-Cancun, Denver‑Puerto Vallarta, and Detroit‑Cancun portions of this proceeding sought by United and Spirit in their motions, USA 3000 would also urge that Champion's other application in the St. Louis‑Cancun portion of this proceeding be similarly dismissed for the same fundamental reasons advanced by United and Spirit, and to the extent necessary, USA 3000 so moves. Neither USA 3000 nor the other competing applicant for St. LouisCancun transborder city‑pair should be put to the trouble and expense of trying to rebut direct exhibits which do not exist.

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com


OST-04-18692 - 2004 US-Mexico Combination Service Proceeding
OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel

August 20, 2004

Answer of Frontier Airlines to Motions of United and Spirit

Frontier Airlines, Inc. files this answer in response to certain issues raised in the August 18 Motion of United Airlines, Inc. and the August 20 Motion of Spirit Airlines, Inc. seeking dismissal of the Denver-Cancun, Denver-Puerto Vallarta, and Detroit-Cancun exemption applications of Grand Air Holdings, Inc., d/b/a Champion Air, due to Champion's failure to prosecute its pending applications or to comply with any of the terms or requirements of the Instituting Order in the 2004 U.S.-Mexico Combination Service Proceeding (see: Order 2004-7-17 herein).

This filing supplements Frontier's earlier filing of today asking the Department of Transportation to dismiss to dismiss Champion's application for St. Louis-Cancun service since Champion has not filed documents in the STL-CUN proceeding. As to other issues raised by United and Spirit, Frontier does not support changing the briefing schedule set forth in Order 2004-7-17 nor does Frontier support elimination of the briefing requirement.

Wherefore, Frontier again urges the Department to dismiss Champion's STL-CUN application. Moreover, Frontier opposes any proposal to accelerate or eliminate the briefing requirements.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com


OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel

August 23, 2004

Reply of Frontier Airlines

United's basis for requesting that the Department dismiss Champion's Denver-Cancun and Denver-Puerto Vallarta applications is identical to the motion submitted for Frontier to dismiss Champion's St. Louis-Cancun application and Spirit Airlines' motion to dismiss Champion's Detroit-Cancun application.

Since Champion has elected not to participate in any of those proceedings, its applications for Cancun authority, including for the St. Louis‑Cancun authority, should be handled simultaneously, and dismissed at the same time. This is particularly so since the various Champion Cancun applications involve the same legal and factual issues.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com


OST-04-17299 - United Air Lines - Denver-Cancun
OST-04-17407 - Champion Air - Denver-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17416 - Allegiant Air - Denver-Cancun
OST-04-17491 - United Air Lines - Denver-Puerto Vallarta

August 23, 2004

Consolidated Answer and Reply of United Air Lines

United respectfully requests that the Department issue an order immediately granting United's exemption applications for Denver‑Cancun and Denver Puerto Vallarta service as requested in United's Motion for Immediate Action dated August 18, 2004. United objects to any delay in such action while the Department reviews the unrelated motions of Spirit, USA 3000 and Frontier. United also requests that the Department grant it such other and further relief as is deemed consistent with this consolidated answer and reply and the public interest.

Counsel: Wilmer Cutler, Jeffrey Manley, 202-663-6670, jeffrey.manley@wilmerhale.com


OST-04-18692 - 2004 US-Mexico Combination Service Proceeding
OST-04-17470 - Frontier - St. Louis-Cancun
OST-04-17408 - Champion Air - US-Mexico
OST-04-17479 - USA 3000 - St. Louis-Cancun/Cozumel

August 23, 2004

Reply of Frontier Airlines

United's basis for requesting that the Department dismiss Champion's Denver-Cancun and Denver-Puerto Vallarta applications is identical to the motion submitted for Frontier to dismiss Champion's St. Louis-Cancun application and Spirit Airlines' motion to dismiss Champion's Detroit-Cancun application.

Since Champion has elected not to participate in any of those proceedings, its applications for Cancun authority, including for the St. Louis‑Cancun authority, should be handled simultaneously, and dismissed at the same time. This is particularly so since the various Champion Cancun applications involve the same legal and factual issues.

Counsel: Ungaretti & Harris, Edward Faberman, 202-639-7502, epfaberman@uhlaw.com

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