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Order 2008-2-14 - 2008 Los Angeles-San Jose del Cabo Proceeding


2008 Los Angeles-San Jose del Cabo Proceeding

Order 2008-2-14
OST-2008-0056 - 2008 Los Angeles-San Jose del Cabo Exemption Proceeding
OST-2008-0023 - United - Exemption - Los Angeles-San Jose del Cabo

Issued and Served February 8, 2008

Instituting Order

By this order we institute a proceeding to select one primary carrier and one backup carrier to provide direct carrier (own-aircraft), scheduled combination air services in the Los Angeles-San Jose del Cabo market.

Under the U.S.-Mexico aviation agreement, three U.S. carriers may be designated to provide foreign scheduled air transportation services of persons, property, and mail between Los Angeles, California, and San Jose del Cabo, Mexico. Currently, American Airlines, Inc., Alaska Airlines, Inc., and Frontier Airlines, Inc. are designated to provide these services. On February 4, 2008, however, Frontier notified the Department that it will cease service on this route after April 13, 2008. Thus, one designation opportunity will become available for U.S. carrier combination service as of April 14, 2008.

We have already received an application from United for the subject route authority (see captioned application, above). Delta Air Lines, Inc., filed an answer opposing the application, stating that both United and Delta seek the available designation. Both Delta and United urge the Department to promptly institute a comparative selection proceeding in this matter.

Our principal objective in awarding the available authority will be to maximize public benefits. In this regard, we will consider which applicant will be most likely to offer and maintain the best service for the traveling and shipping public. We will also consider the effects of each applicant’s service proposals on the overall competitive environment, including the market structure and the level of competition in the U.S.-Mexico market, and on any other market shown to be relevant.

The subject combination authority will become available on April 14, 2008. In light of the requests of both United and Delta to promptly institute this case, and the public benefit of facilitating the timely introduction of replacement service on the route, we accordingly intend to process this case on an expedited procedural schedule. That schedule is as follows:

Petition for reconsideration February 13, 2008
Replies to Petitions for Reconsideration February 15, 2008
Applications/Supplements/Amendments February 19, 2008
Answers February 26, 2008
Replies February 29, 2008

By: Michael Reynolds


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