American Airlines, Inc.

OST-2005-22230 - Exemption - St. Louis-Puerto Vallarta

August 23, 2005

Application for an Exemption

American proposes to operate nonstop service between St. Louis and Puerto Vallarta on Saturdays during the period February 4, 2006 to April 1, 2006, and on a similar seasonal basis in future years. American will use MD8O aircraft (16F/120Y).

Under the U.S.-Mexico Air Transport Agreement, two U.S. carriers may operate scheduled service between St. Louis and Puerto Vallarta. Although two carriers were granted St. Louis-Puerto Vallarta exemption authority last year - USA 3000 (Notice of Action Taken, OST-2004-19673, December 6, 2004) and Champion Air (Notice of Action Taken, OST-2004-17408, June 1, 2004) - Champion Air never started service, and its authority lapsed as dormant on September 1, 2004. Moreover, while USA 3000 operated service in February and March of 2005, USA 3000 has not published any St. Louis-Puerto Vallarta schedules for the coming winter season. In these circumstances, at least one and possibly both opportunities are available.

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

August 31, 2005

Answer of Northwest Airlines, Inc.

Northwest does not oppose American’s application so long as the Department grants Northwest’s application pending in Docket OST-2005-21781 before (or, at least, contemporaneously with its approval of) American’s application. Northwest’s application in Docket OST-2005-21781 and American’s application here are similar in that both seek authority for a certificated air carrier to institute new scheduled service between the United States and Mexico, and designations appear to be available under the U.S.-Mexico bilateral to satisfy both carriers’ requests for new route authority.

It would be fundamentally unfair for the Department to grant American’s application before Northwest’s earlier-filed application. Northwest has been waiting for two months now to secure the Department’s approval for new scheduled services in six U.S.-Mexico markets, not because Northwest’s application involves particularly complex or controversial issues relating to the U.S.-Mexico bilateral relationship but because American has raised red herring arguments against the Department’s granting Northwest’s application. American’s objection to Northwest’s application appears to have been calculated to have a delaying effect, and so far American has gotten its wish at the expense of Northwest and the communities where Northwest is seeking to introduce new services. It is only fair for American to wait too and not to be allowed to leapfrog its competitors in seeking and obtaining new international route authority from the Department.

Counsel: Northwest, Ronald Brower, 202-842-3193, ron.brower@nwa.com

September 1, 2005

Reply to Answer of Northwest Airlines

American Airlines, Inc. replies to the answer filed by Northwest Airlines, Inc. on August 31, 2005 to American's application for St. Louis-Puerto Vallarta authority in the captioned docket.

In its answer, Northwest states that it does not oppose American's application, so long as the Department also grants Northwest's U.S.-Mexico application pending in OST-2005-21781, to which American objected.

In these circumstances, where Northwest and Delta are no longer seeking antitrust immunity on a global basis, American is this day withdrawing its objection to Northwest's U.S.Mexico application in OST-2005-21781.

The Department should promptly grant American's unopposed St. Louis-Puerto Vallarta application in this docket, as well as Northwest's unopposed U.S.-Mexico application in OST-2005-21781.

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

September 1, 2005

Letter of Champion Air - No Plans to Use Scheduled Authority

Grand Holdings, Inc. d/b/a Champion Air hereby notifies the Department that it has no current plans to use the scheduled authority granted by the Notice of Action Taken dated June 1, 2004 (Docket-2004-17408). This notice applies to the following three routes: (1) Dallas/Ft. Worth - Cozumel; (2) Dallas/Ft. Worth - Puerto Vallarta; and (3) St. Louis - Puerto Vallarta.

Counsel: Zuckert Scoutt, Charles Simpson, 202-298-8660

Filed August 23, 2005 | Issued October 4, 2005

Notice of Action Taken | Word

Scheduled foreign air transportation of persons, property, and mail between the terminal point St. Louis, Missouri, and the terminal point Puerto Vallarta, Mexico.  American proposes seasonal service in the market, beginning February 4, 2006.

Brendan Airways, LLC, d/b/a USA 3000 (OST-2004-19673) and Grand Holdings, Inc., d/b/a Champion Air (OST-2004-17408) currently hold the two available designations under the U.S.-Mexico aviation agreement to provide scheduled service on the St. Louis-Puerto Vallarta route.  American asserts, however, that Champion never commenced service in this market and that, as a result, one designation opportunity for the St. Louis-Puerto Vallarta market is available.  By letter, Champion has notified us that it has no plans to use its scheduled authority to serve the St. Louis-Puerto Vallarta market. See letter dated September 1, 2005, to Ms. Dorothy Beard, Chief, Docket Section, U.S. Department of Transportation, from counsel for Champion, filed in this docket.  Under these circumstances, one designation opportunity is now available and we are able to grant American’s application here.

Northwest Airlines, Inc. filed an answer to American’s application, stating that it does not oppose American’s request here so long as Northwest’s application, in Docket OST-2005-21781, is granted before, or at least contemporaneously with, American’s instant application.  American filed a reply to Northwest’s answer stating that it was withdrawing its objection to the Northwest application and that the Department should promptly grant both American’s unopposed St. Louis-Puerto Vallarta application here and Northwest’s application in Docket OST-2005-21781.  We have already granted Northwest’s application.  See Notice of Action Taken dated September 2, 2005 in Docket OST-2005-21781.

By: Paul Gretch

August 8, 2007

Re: Will Not Seek to Renew Authority

American Airlines, Inc. will not seek to renew its exemption authority in the captioned docket to serve between St. Louis and Puerto Vallarta, Mexico.

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