Horizon Air Industries, Inc.

OST-2007-28179 - Exemption and Statement of Authorization - US-Mexico Codesharing

May 8, 2007

Application for Exemption and Statement of Authorization

Horizon Air Industries, Inc. hereby requests (i) a statement of authorization and (ii) an exemption from 49 U.S.C. 41101 and, to the extent necessary, from the Department's regulations, to permit Horizon to engage in the scheduled foreign air transportation of persons, property and mail between Los Angeles, CA and Loreto, Mexico, on a year-round basis under a codeshare agreement with Alaska Airlines, Inc. Under its agreement with Alaska, Horizon will operate Los Angeles-Loreto flights and will display Alaska's two-letter designator code on these flights. Horizon requests that its exemption be granted for at least a two-year period and that its statement of authorization be granted for an indefinite period. Horizon intends to begin service between Los Angeles and Loreto on October 28, 2007, and requests prompt approval of this application so that marketing and sale can begin without delay.

Horizon will operate between Los Angeles and Loreto utilizing either Bombardier CRJ-700 aircraft seating seventy passengers or Bombardier DHC-8-402 aircraft seating seventy-six passengers. Service will be offered on a year-round basis and will commence on October 28, 2007. Current plans call for daily service between Los Angeles and Loreto. Horizon will display on these flights Alaska's two-letter "AS*" designator code.

Counsel: Horizon, Arthur Thomas, 206-241-6757, art.thomas@horizonair.com

May 10, 2007

Answer of Delta Air Lines

Hereby answers the Application of Horizon Air Industries, Inc., for the sole purpose of correcting Horizon's apparent misunderstanding of Delta's March 6, 2007 Letter and to ensure that the record is accurate with respect to Delta's service in the Los Angeles-Loreto market.

Contrary to Horizon's interpretation. Delta did not relinquish its designation for the Los Angeles - Loreto route. As explained in Delta's March 6, 2007 Letter, Atlantic Southeast Airlines will relinquish its Los Angeles-Loreto designation when that Delta Connection service is transitioned from ASA to ExpressJet, which is currently scheduled to occur next month. ExpressJet has already been designated for that route through diplomatic channels. Delta does not operate its own aircraft in that market and serves that route pursuant to a codeshare authorization.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999/5659, recohn@hhlaw.com

Filed May 8, 2007 | Issued June 22, 2007

Notice of Action Taken

Scheduled foreign air transportation of persons, property, and mail between Los Angeles, California, and Loreto, Mexico. Horizon states that it will use this authority pursuant to a codeshare arrangement with Alaska Airlines, Inc., whereby Horizon will place Alaska's "AS*" code on Horizon's flights in the market.

We will dismiss, as moot, Horizon's request for a statement of authorization to provide these code-share services. Such authority is not required when a code-share arrangement is between two U.S. carriers.

By: Paul Gretch