Posted: September 3, 2004 – 12:20pm

	                   UNITED STATES OF AMERICA

            DEPARTMENT OF TRANSPORTATION

                    OFFICE OF THE SECRETARY

                             WASHINGTON, DC

                                                                        
    Served:  September 3, 2004

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2004 U.S.-Mexico Combination Service Proceeding

DOCKET OST-2004-18692

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NOTICE 

By this Notice we dismiss the application of Champion Air in this
Proceeding and deny the request of Spirit to change the procedural
schedule in the Proceeding.

By Order 2004-7-17, July 21, 2004, we instituted the 2004 U.S.-Mexico
Combination Service Proceeding, Docket OST-2004-18692, to select one
primary and one backup carrier, to provide foreign air transportation of
persons, property, and mail over the following transborder routes:
Denver-Cancun, Denver-Puerto Vallarta, Detroit-Cancun, and St.
Louis-Cancun.  We also consolidated the already-filed applications into
this proceeding.  In addition, Order 2004-7-17 established a procedural
timetable for this case.  

On August 20, 2004, separate motions were filed by Frontier, Spirit
Airlines, Inc. (Spirit), and Brendan Airways, LLC d/b/a USA 3000 (USA
3000) in the 2004 U.S.-Mexico Combination Service Proceeding.  Spirit
urges the Department to dismiss the application of Grand Holdings, Inc.,
d/b/a Champion Air (Champion Air) for Detroit-Cancun authority, and
Frontier and USA 3000 urge the Department to dismiss Champion Air’s
application for St. Louis-Cancun authority due to the carrier’s
failure to submit direct exhibits or to otherwise respond to the
Department’s Order 2004-7-17 in this Proceeding.  Spirit also states
that, because the carrier selection issues will now be fairly simple
with fewer applicants, Spirit “would not be adverse to an acceleration
of the briefing deadline (or even an elimination of the briefing
requirement)” for the Detroit-Cancun portion of the Proceeding (where
Spirit and USA 3000 are actively competing for the authority).  

USA 3000 filed an answer to Spirit’s motion, stating that it “would
be hard to conceive of any shorter briefing schedule” and that USA
3000 would be opposed to elimination of briefs in this Proceeding. 
United filed a consolidated answer to the motions filed by Frontier and
Spirit, and replied to the answers filed by Frontier and USA 3000,
stating that it does not oppose the requests of Frontier, Spirit, and
USA 3000 so long as those requests do not delay the Department’s
action on United’s motion for immediate action to grant United
Denver-Cancun and Denver-Puerto Vallarta exemption authority.  No other
responses to the motions were filed.  Specifically, Champion Air did not
respond to the motions to dismiss its applications.

Upon consideration of the pleadings filed here, we have decided to grant
the motions of Frontier, Spirit, and USA 3000 to the extent that the
carriers request dismissal of Champion Air’s applications in this
Proceeding.  Champion Air has not prosecuted its application as directed
by our Order. Nor did it respond to the motions requesting its
dismissal.  In these circumstances, the public interest warrants
dismissal of Champion Air’s application in this case.

Further, we will terminate the 2004 U.S.-Mexico Combination Service
Proceeding to the extent that this Proceeding would involve carrier
selection awards for the Denver-Cancun and Denver-Puerto Vallarta
markets.  We will not alter the briefing requirement.  We continue to
believe that briefs will prove useful to our consideration of the
record.  Briefs are currently due September 8, and we believe that the
existing schedule remains reasonable.

Therefore, acting under authority assigned in 14 CFR 385.13(p), we (1)
dismiss the applications of Champion Air for Detroit-Cancun and St.
Louis-Cancun exemption authority in the 2004 U.S.-Mexico Combination
Service Proceeding; and (2) terminate the 2004 U.S.-Mexico Combination
Service Proceeding to the extent that this Proceeding would involve
consideration of the Denver-Cancun and Denver-Puerto Vallarta markets. 
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 September
3, 2004, and the filing of a petition for review will not alter such
effectiveness.

We will serve this notice by electronic mail on all parties to this
proceeding, and hereby authorize service of documents by facsimile and
by electronic mail.

By:

					PAUL L. GRETCH

Director, Office of International Aviation

(SEAL)

Dated:  September 3, 2004

An electronic version of this notice 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 

   Spirit Motion, at 2.

   USA 3000 answer to motion, at 2.

 By Notice of Action Taken dated August 25, 2004, in Docket
OST-2004-18692, the Department granted exemption authority to United to
serve the Denver-Cancun and Denver-Puerto Vallarta markets.

