OST-97-3237 / United and Mexicana / US-Mexico / December 12, 1997

NOTICES: Answers to this joint application should be filed by December 29, 1997, and served upon the joint applicants and all persons on the Service List.

Joint Application of

for an exemption under 49 U.S.C. §40109 and a Statement of Authorization under 14 CFR §212

(U.S.-Mexico Code Sharing)

United Air Lines, Inc. ("United") and Compania Mexicana de Aviacion, S.A. de C.V. ("Mexicana") hereby apply for the following authority to allow them to expand their U.S.-Mexico code-share services: (1) exemption authority under 49 U.S.C. §40109 for United to hold out service in the following nonstop U.S.-Mexico transborder city pairs: Chicago-Morelia, Chicago-Leon, Chicago-Durango, and San Francisco-Morelia; (2) exemption authority under 49 U.S.C. §40109 for United to hold out service between the points in Mexico and the points in the U.S. listed in Attachment 1 via United's Mexican gateways; (3) a Statement of Authorization under 14 CFR Part 212 to display United's two-letter designator code on Mexicana's nonstop transborder flights

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in the following nonstop transborder city pairs: Chicago-Morelia, Chicago-Leon, Chicago-Durango, and San Francisco-Morelia; (4) a Statement of Authorization under 14 CFR Part 212 for Mexicana to display United's two-letter designator code on services operated by Mexicana to the points in Mexico listed in Attachment 2 via United's Mexican gateways; (5) exemption authority under 49 U.S.C. §40109 for Mexicana to hold out services between the points in the U.S. and the points in Mexico listed in Attachment 3 via Mexicana's U.S. gateways; and (6) a Statement of Authorization for United to display Mexicana's two-letter designator code on services operated by United to the points in the U.S. listed in Attachment 4 via Mexicana's U.S. gateways. In support of their joint request, United and Mexicana submit the following:

2. United and Mexicana now wish to extend their codeshare services to four additional U.S.-Mexico nonstop transborder city pairs and to all points in the U.S. and Mexico

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that are served by either United or Mexicana via their respective transborder gateways as part of their domestic networks. This will allow each carrier to code share over the other's domestic system to the extent designations are available under the U.S./Mexico bilateral air services agreement to do so.

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support all services being proposed. United and Mexicana are requesting that they be authorized to offer code-share services only to the extent that designations are available to do so under the current U.S./Mexico bilateral air services agreement.

United has already been authorized by DOT and designated by the U.S. government to offer services with Mexicana in several city pairs. These are listed in Attachment 5. To the extent that these existing city pairs would be duplicated by the systemwide authority requested herein, United is seeking such expanded authority only to the extent that has not already been granted. /1

5. Mexicana does not yet have operating authority from its government and has not yet been designated to offer codeshare services in certain markets for which it seeks U.S. authority herein. Mexicana is in the process of requesting the

1/ United also holds U.S. carrier designations under the U.S.-Mexico bilateral to operate transborder services in certain city pairs to support its code-share services on Transportes Aeromar. Those services are operated in commuter-sized equipment. United's current code-share service in these city pairs is operated pursuant to the blanket exemption for services in commuter-sized equipment. 14 CFR §206.5. In addition, United code shares on the services of Aeromexico between Mexico City and Miami.

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necessary authority and designations from its government. By joining in this blanket application, Mexicana is seeking authority from the U.S. to operate code shares between all U.S. and Mexican points where Mexicana and United operate services. This will avoid the need to submit ad hoc applications each time a new code-share market is added.

Mexicana has already been designated and authorized to offer code-share services in conjunction with United in certain U.S.-Mexico city pairs. These are listed in Attachment 5. To the extent that these existing city pairs would be duplicated by the systemwide authority requested herein, Mexicana is seeking such expanded authority only to the extent that it has not already been granted.

6. Approval of the proposed services is warranted on the basis of reciprocity between the governments of the U.S. and Mexico with respect to code-share services. Order 97-7-31 at 67. The same findings of reciprocity that supported previous approvals of U.S.-Mexico code-share services apply with equal weight here.

7. United and Mexicana request approval of the additional exemption authority herein to be coextensive with that for which

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their initial code-share exemption authority was issued -- i.e., through June 24, 1999. The statements of authorization should e issued for a period to be coextensive with the statements of

authorization initially issued to them, which are scheduled to expire on December 20, 1997, and should be extended beyond that date for the same period as that applied to the existing statements. By making these new authorizations for the same periods as those applying to existing authorizations, the burden of seeking renewals should be minimized. United and Mexicana propose to start expanding their code-share services on a systemwide basis on January 15, 1998, to the extent that designations are available under the U.S./Mexico bilateral agreement to do so. The joint: applicants, therefore, request expeditious approval of this joint application. /2

8. The services to be provided under the authority requested herein are governed by the terms of their agreement which has previously been submitted to the Department. The

2/ United and Mexicana request a waiver of the requirements of 14 CFR §207.10 (d) and 212.5(d)(2) in order to start these code-share services on less than 45-days'notice. A waiver is in the public interest to permit the benefits of these code-share services to be available as soon as the carriers are able to implement them.

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code-share services proposed by United hereunder will not affect its commitment of equipment to the CRAF.

WHEREFORE, on the basis of the foregoing, United Air Lines, Inc., and Compania Mexicana de Aviacion, S.A. de C.V., jointly request the grant of the authority described herein as well as such other and different authority found by the Department to be consistent with this application and the public interest.

Respectfully submitted,

ROBERT D. PAPKIN

SQUIRE SANDERS & DEMPSEY, L.L.P.

COMPANIA MEXICANA DE AVIACION

JOEL STEPHEN BURTON

GINSBURG, FELDMAN and BRESS,

UNITED AIR LINES, INC.

DATED: December 12, 1997