United Air Lines, Inc.

OST-2005-20630 - Exemption - Chicago-San Jose del Cabo

March 9, 2005

Application for an Exemption

United seeks an exemption authorizing it to provide scheduled foreign air transportation of persons, property and mail between Chicago, Illinois and San Jose del Cabo, Mexico. United plans initially to operate services on a year round basis from O'Hare International Airport starting on or about May 7, 2005, on the following schedule: twice weekly service from May 7, 2005, through October 31, 2005, and four times weekly from November 1, 2005, through April 30, 2006. From its Chicago hub, United serves 137 nonstop destinations, offering connection opportunities to points throughout its system.

By: Wilmer Cutler, Jonathan Moss, 202-663-6960, jonathan.moss@wilmerhale.com

OST-2005-20459 - Chicago/Detroit-San Jose del Cabo
OST-2005-20630 - Exemption - Chicago-San Jose del Cabo

March 9, 2005

Answer and Motion for Consolidation of United Air Lines

United objects to the application of USA 3000 for an exemption in the Chicago-San Jose del Cabo city-pair to the extent that it precludes United's application. United is clearly a better choice than USA 3000 for this service. United will serve not only the local Chicago-San Jose del Cabo market but also passengers in numerous cities on United's network served over its principal hub at Chicago O'Hare. United will also offer codeshare and other interline connections to additional markets.

The Department should establish uniform procedural dates for the proceeding into which these applications are consolidated. On whatever date the Department selects, the present applicants and any additional applicants would be required to submit their year‑round service proposals (schedules, equipment, startup dates, traffic projections) for Chicago‑San Jose del Cabo services. A common date for applications and amendments is necessary as a matter of due process to put all applicants on the same procedural schedule so that no applicant has the advantage of knowing what another's final proposal may be. The establishment of a uniform date for applications and amendments is consistent with the Department's practice in carrier selection cases even where, as here, some applications have already been filed.

By: Wilmer Cutler, Jonathan Moss, 202-663-6960, jonathan.moss@wilmerhale.com

March 24, 2005

Answer of USA 3000 Airlines

In view of the fact that USA 3000 and now United have applications pending for Chicago‑San Jose del Cabo exemption authority and only one exemption is available, USA 3000 submits that these applications are mutually exclusive. Under the principles established by the Supreme Court in Ashbacker Radio Corp. v. Q 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

April 4, 2005

Reply of United Air Lines

As United noted in its application, there is only one remaining designation available under the U.S.-Mexico bilateral agreement for a U.S. carrier to serve the Chicago-San Jose del Cabo city pair. USA 3000 has also applied for that designation, proposing weekly service." United filed an answer opposing USA 3000's application in Docket OST-05-20459 to the extent it precluded the grant of United's application, and requested that the Department institute a carrier selection case, consolidate the applications of USA 3000 and United, and establish uniform procedural dates for consideration of these applications. USA 3000 subsequently filed its answer opposing United's application and similarly requesting that the Department conduct a carrier selection proceeding.

While United's proposed service would initially be operated with mainline aircraft, it would later be operated using its "Ted" product. United has developed its new "Ted" product to compete in leisure markets such as Mexican resort areas. This involves the use of specially-configured Airbus A320 aircraft. Public reception of the "Ted" product has been very positive. In markets where "Ted" services were first introduced early last year, United's market share increased significantly.

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

April 6, 2005

Motion of City of Chicago for Leave to File a Reply in Support of Application of United Air Lines

Only one U.S. carrier currently provides scheduled service between O'Hare and San Jose del Cabo. American Airlines offers daily service. See Order 2000-5-31 (reissuing American Airlines' Certificate for Route 560). As United noted in its application, there is only one remaining designation available under the U.S.-Mexico bilateral agreement for a U.S. carrier to serve the Chicago-San Jose del Cabo city pair. Both United and Brendan Airways, LLC, dlb/a USA 3000 Airlines, have applied for that remaining designation. See Docket OST-05-20459. According to their pleadings, United has proposed initially to operate two to four frequencies per week from O'Hare, and USA 3000 has proposed to operate one frequency per week. Both carriers would use A320 equipment and propose to start services in May that would operate year round.

Chicago believes that United's proposed service would provide greater public benefits than the service proposed by USA 3000. United is the world's second largest carrier and has its principal hub at O'Hare; USA 3000 is primarily a charter carrier with no connecting service at O'Hare. United is proposing substantially more frequencies and capacity than USA 3000.

Counsel: Chicago, Eduardo Cotillas, 312-744-6478, ecotillas@cityofchicago.org

OST-2005-21156
OST-2005-20459 - USA 3000 Airlines
OST-2005-20630 - United Air Lines

Issued and Served May 3, 2005

Notice on Procedures and Consolidation of Exemption Applications

We intend to issue Chicago‑San Jose del Cabo exemption authority for a two‑year period, subject to a 90‑day startup condition, and subject also to certain dormancy notice requirements routinely imposed on U. S.‑Mexico air transportation services. Except where service in the market is seasonal/intermittent in nature, the dormancy conditions will apply as specified above. In light of the U.S.‑Mexico dormancy conditions, and consistent with our standard policy, we will only grant Chicago‑San Jose del Cabo route authority to an applicant presenting firm service plans.

We intend to resolve issues on the basis of the pleadings filed, and to award the immediately-available Chicago-San Jose del Cabo authority by proceeding directly to final order. As the applications filed are already ripe, and all interested parties have had an opportunity to file competing requests, we will not provide for additional applications here.

We will give USA 3000 and United an opportunity to file any other pertinent information to support their Chicago-San Jose del Cabo applications. The additional information should be filed no later than five (5) business days from the date of service of this Notice, and should be served on all parties in the captioned docket.

By: Paul Gretch

OST-2005-21156 - 2005 Chicago-San Jose del Cabo Exemption Proceeding
OST-2005-20630 - Exemption - Chicago-San Jose del Cabo

May 24, 2007

Application of United for Renewal of Exemption Authority

United hereby applies for renewal of an exemption from 49 U.S.C. §41101 authorizing it to provide scheduled combination service in foreign air transportation of persons, property, and mail between Chicago, Illinois and San Jose del Cabo, Mexico. United’s exemption authority is currently effective through July 28, 2007, and this renewal application is being timely filed in compliance with the Department’s rules.

United intends to continue its year-round service between Chicago and San Jose del Cabo. The Department has found United fit to provide foreign scheduled combination air transportation. See, Route 838, Order 2007-4-19, and Route 747, Order 2004-5-23.

Counsel: United, Julie Oettinger, 202-296-2370, julie.oettinger@united.com