			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on February 25, 2005

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).

Joint Application of AMERICAN AIRLINES, INC. (AMERICAN) (and its
affiliates AMERICAN EAGLE AIRLINES, INC. and EXECUTIVE AIRLINES, INC.
d/b/a AMERICAN EAGLE) and COMPANIA MEXICANA DE AVIACION, S.A. DE C.V.
(MEXICANA) filed 1/26/05 for:

XX  Exemption for American under 49 U.S.C. 40109 to provide the
following service:

Scheduled foreign air transportation of persons, property, and mail
between 1) Las Vegas, Nevada, and San Jose del Cabo, Mexico; 2)
Sacramento, California, and San Jose del Cabo, Mexico; and 3)
Sacramento, California, and Morelia, Mexico, and to integrate this
authority with its existing certificate and exemption authority. 
American intends to operate this service pursuant to a code-share
arrangement with Mexicana, whereby the “AA” designator code will be
placed on flights operated by Mexicana in these markets.  The applicants
request that the exemption authority be granted for a period
co-extensive with the exemptions granted previously in the instant
docket (through April 29, 2006).

XX  Amended statement of authorization for Mexicana under CFR Part 212
to:

Permit American’s “AA” designator code to be placed on the flights
of Mexicana on the above-mentioned routes.

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 (subject to conditions, see below)

The above action granting new exemption authority to American was
effective when taken:  February 25, 2005, through April 29, 2006.

The above action granting an amended statement of authorization to
Mexicana was effective when taken: February 25, 2005, and will remain in
effect indefinitely, subject to the conditions below.

				

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   American’s certificates of public convenience and necessity

	XX   Standard exemption conditions (attached)

Conditions:   The U.S.-Mexico exemption authority granted is subject to
the dormancy notice requirements set forth in condition 7 of Appendix A
of Order 88-10-2.  

The route integration authority granted to American is subject to the
condition that any service provided under this authority shall be
consistent with the applicable bilateral aviation agreements between the
United States and the foreign countries involved.  Furthermore, (a)
nothing in the award of the route integration authority granted should
be construed as conferring upon American rights (including code-share,
fifth-freedom intermediate and/or beyond rights) to serve markets where
U.S. carrier entry is limited unless American notifies the Department of
its intent to serve such a market and unless and until the Department
has completed any necessary carrier selection procedures to determine
which carrier(s) should be authorized to exercise such rights; and (b)
should there be a request by any carrier to use the limited-entry route
rights that are included in American’s authority by virtue of the
route integration authority granted here, but that are not then being
used by American, the holding of such authority will not be considered
as providing any preference for American in a competitive carrier
selection proceeding to determine which carrier(s) should be entitled to
use the authority at issue.

The Statement of Authorization granted to Mexicana is subject to the
following conditions:

(a) The statement of authorization will remain in effect only as long as
American (and its affiliates) 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 (and its affiliates) 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 (and its affiliates) 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, 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 

APPENDIX 

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier
applicant(s) shall:

(1)  Hold at all times effective operating authority from the government
of each country served;

(2)  Comply with applicable requirements concerning oversales contained
in 14 CFR 250 (for scheduled operations, if authorized);

(3)  Comply with the requirements for reporting data contained in 14 CFR
241;

(4)  Comply with requirements for minimum insurance coverage, and for
certifying that coverage to the Department, contained in 14 CFR 205;

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

(6)  Comply with all applicable requirements of the Federal Aviation
Administration and with all applicable U.S. Government requirements
concerning security, including, but not limited to, 49 CFR Part 1544. 
To assure compliance with all applicable U.S. Government requirements
concerning security, the holder shall, before commencing any new service
(including charter flights) to or from a foreign airport, 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; and

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

The authority granted shall be effective only during the period when the
holder is in compliance with the conditions imposed above.

										  05/2004

 Mexicana already holds the underlying authority to serve each of these
routes. (See Notice of Action Taken dated December 22, 2004, in Docket
OST-2004-19820)

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

