			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on December 23, 2004

NOTICE OF ACTION TAKEN -- DOCKET OST-2004-16945

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Application of AMERICAN AIRLINES, INC. (AMERICAN) and its affiliate
AMERICAN EAGLE AIRLINES, INC. (AMERICAN EAGLE) filed 11/23/04 for:

XX  Amended statement of authorization under CFR Part 212 to:

Engage in additional transborder codesharing services with Compania
Mexicana de Aviacion, S.A.  Under the amendment, the Mexicana “MX”
designator code will be displayed on flights operated by American or
American Eagle between Dallas/Ft. Worth, Texas and San Luis Potosi,
Mexico, beginning January 5, 2005.  American requests that the amended
authorization be granted for an indefinite period.

Application of COMPANIA MEXICANA DE AVIACION, S.A. DE C.V. (MEXICANA)
filed 11/23/04 for:

XX  Amended exemption under 49 U.S.C. 40109 to provide the following
service:

Scheduled foreign air transportation of persons, property, and mail
between San Luis Potosi, Mexico, and Dallas/Ft. Worth, Texas.  Mexicana
proposes to operate this service only by a code-share arrangement with
American Airlines and its affiliate American Eagle.  Mexicana intends to
place its “MX” designator code on flights operated by American Eagle
beginning January 5, 2005.  Mexicana requests that this exemption be
granted for at least a one-year period.

Applicant reps: Carl B. Nelson, Jr. (AA) (202) 496-5647 and Charles F.
Donley II (MX) (202) 626-6840  

DOT Analyst: Thuy H. Cooper (202) 366-5423

  							

D I S P O S I T I O N

XX  Granted in part (subject to conditions, see below)

XX  Deferred in part (specifically, the portion of Mexicana’s
application involving Aerocaribe, see footnote 2)

The above action granting statements of authorizations to American and
American Eagle was effective when taken: December 23, 2004 , and will
remain in effect indefinitely, subject to the conditions below.

The above action granting new exemption authority to Mexicana was
effective when taken:  December 23, 2004, through December 23, 2005.

The above action deferring on Aerocaribe was effective when taken:
December 23, 2004.

				

Action taken by:   Paul L. Gretch, Director	

		      Office of International Aviation

XX  The authority granted is consistent with the aviation agreement
between the United States and Mexico.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated: 	 

	XX   Mexicana’s foreign air carrier permit

	XX   Foreign Carrier Exemption Conditions (attached)

Conditions:   The exemption authority granted to Mexicana to serve the
Dallas/Ft. Worth-San Luis Potosi market is limited to operations
conducted on a code-share basis only.

The Statement of Authorization granted to American and American Eagle is
subject to the following conditions:

(a) The statement of authorization will remain in effect only as long as
American or American Eagle and Mexicana  continue to hold the underlying
authority to operate the code-share services at issue, and the
code-share agreement providing for the code-share operations remains in
effect.

(b) American or American Eagle and/or Mexicana  must promptly notify the
Department (Office of International Aviation) if the code-share
agreement is no longer effective or if the carriers decide to cease
operating all or a portion of the approved code-share services. (Such
notice should be filed in Docket OST-2004-16945.)

(c) The code-sharing operations conducted under this authority must
comply with 14 CFR 257 and with any amendment to the Department’s
regulations concerning code-share arrangements that may be adopted. 
Notwithstanding any provisions in the contract between the carriers, our
approval here is expressly conditioned upon the requirements that the
subject foreign air transportation be sold in the name of the carrier
holding out such service in computer reservation systems and elsewhere;
that the carrier selling such transportation (i.e., the carrier shown on
the ticket) accept responsibility for the entirety of the code-share
journey for all obligations established in its contract of carriage with
the passenger; and that the passenger liability of the operating carrier
be unaffected.

(d) The authority granted here is specifically conditioned so that
neither American or American Eagle nor Mexicana shall give any force or
effect to any contractual provisions between themselves that are
contrary to these conditions.  

________________________________________________________________________
______

On the basis of data officially noticeable under Rule 24(g) of the
Department's regulations, we found the applicant qualified to provide
the exemption services authorized.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the authority was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975. 
To the extent not granted or deferred, we denied all requests in the
referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

  HYPERLINK "http://dms.dot.gov//reports/reports_aviation.asp" 
http://dms.dot.gov//reports/reports_aviation.asp 

Foreign Carrier Exemption Conditions

In the conduct of the operations authorized, the foreign carrier
applicant(s) shall:

(1)  Not conduct any operations unless it holds a currently effective
authorization from its homeland for such operations, and it has filed a
copy of such authorization with the Department;

(2)  Comply with all applicable requirements of the Federal Aviation
Administration, including, but not limited to, 14 CFR Parts 129, 91, and
36, and with all applicable U.S. Government requirements concerning
security, including, but not limited to, 49 CFR Part 1546 or 1550, as
applicable.  To assure compliance with all applicable U.S. Government
requirements concerning security, the holder shall, before commencing
any new service (including charter flights) from a foreign airport that
would be the holder’s last point of departure for the United States,
contact its International Principal Security Inspector (IPSI) to advise
the IPSI of its plans and to find out whether the Transportation
Security Administration has determined that security is adequate to
allow such airport(s) to be served;

(3)  Comply with the requirements for minimum insurance coverage
contained in 14 CFR Part 205, and, prior to the commencement of any
operations under this authority, file evidence of such coverage, in the
form of a completed OST Form 6411, with the Federal Aviation
Administration’s Program Management Branch (AFS-260), Flight Standards
Service (any changes to, or termination of, insurance also shall be
filed with that office);

(4)  Not operate aircraft under this authority unless it complies with
operational safety requirements at least equivalent to Annex 6 of the
Chicago Convention;

(5)  Conform to the airworthiness and airman competency requirements of
its Government for international air services;

(6)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR Part 203,
concerning waiver of Warsaw Convention liability limits and defenses;

(7)  Agree that operations under this authority constitute a waiver of
sovereign immunity, for the purposes of 28 U.S.C. 1605(a), but only with
respect to those actions or proceedings instituted against it in any
court or other tribunal in the United States that are: (a)  based on its
operations in international air transportation that, according to the
contract of carriage, include a point in the United States as a point of
origin, point of destination, or agreed stopping place, or for which the
contract of carriage was purchased in the United States; or (b)  based
on a claim under any international agreement or treaty cognizable in any
court or other tribunal of the United States.  In this condition, the
term "international air transportation" means "international
transportation" as defined by the Warsaw Convention, except that all
States shall be considered to be High Contracting Parties for the
purpose of this definition;

(8)  Except as specifically authorized by the Department, originate or
terminate all flights to/from the United States in its homeland;

(9)  Comply with the requirements of 14 CFR Part 217, concerning the
reporting of scheduled, nonscheduled, and charter data;

(10) If charter operations are authorized, except as otherwise provided
in the applicable aviation agreement, comply with the Department's rules
governing charters (including 14 CFR Parts 212 and 380); and

(11) Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department, with all applicable orders or regulations of other U.S.
agencies and courts, and with all applicable laws of the United States.

This authority shall not be effective during any period when the holder
is not in compliance with the conditions imposed above.  Moreover, this
authority cannot be sold or otherwise transferred without explicit
Department approval under Title 49 of the U.S. Code.

5/04	

 American and American Eagle already hold the underlying authority to
serve the Dallas/Ft. Worth-San Luis Potosi market (see Department action
dated September 29, 2004, (undocketed), for American and Notice of
Action Taken on September 24, 2004, Docket OST-2004-19024, for American
Eagle).

 Mexicana’s application as filed also requested authority for
Mexicana’s affiliate Aerovias Caribe de C.V. d/b/a Aerocaribe. 
However, Mexicana has since advised us, via email on December 23, 2004,
that Aerocaribe does not currently intend to operate or market seats
between San Luis Potosi and Dallas/Ft. Worth.  Mexicana indicates that
Aerocaribe will advise us when it is ready to engage in San Luis Potosi
- Dallas/Ft. Worth service.  Under these circumstances, we are deferring
the Aerocaribe portion of Mexicana’s application.

 We expect this notification to be received within 10 days of such
non-effectiveness or of such decision.

