			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on January 31, 2005

NOTICE OF ACTION TAKEN -- DOCKET OST-2004-19966

________________________________________________________________________
________________________________________

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 BRENDAN AIRWAYS, LLC d/b/a USA 3000 AIRLINES (USA 3000)
filed 12/22/04 for: 

		

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

Scheduled foreign air transportation of persons, property, and mail
between (1) the terminal point Chicago, Illinois, and the terminal point
Zihuatanejo, Mexico, (2) the terminal point Detroit, Michigan, and the
terminal point Cozumel, Mexico, and (3) the terminal point Detroit,
Michigan, and the terminal point Puerto Vallarta, Mexico.   USA 3000
intends to begin service on these routes on or about January 27, 2005.  
USA 3000 proposes to serve the Chicago-Zihuatanejo/Ixtapa and
Detroit-Cozumel markets on a seasonal basis.    

Applicant rep:   Pierre Murphy (202) 776-3980     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)

XX  Granted sua sponte

The above action was effective when taken: January 31, 2005, through
January 31, 2007.

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  Holder’s certificate of public convenience and necessity

		XX  Standard Exemption Conditions (attached)

------------------------------------------------------------------------
-----------------------------------------------------------

Responsive Pleadings:  On January 6, 2005, United Air Lines, Inc.
(United) filed an answer in partial objection to USA 3000’s
application.  United states that it has no objection to USA 3000’s
application for Detroit-Puerto Vallarta and Detroit-Cozumel authority. 
United states, however, that it does object to USA 3000’s application
to the extent that it is requesting two-year exemption authority to
serve the Chicago-Zihuatanejo market.  In this regard, United maintains
that it has recently begun service to Zihuatanejo from Los Angeles and
Denver and that, after the end of the winter 2004-2005 season, it will
have completed its analysis of that service, along with an assessment of
the feasibility of introducing additional service to Zihuatanejo from
Chicago.  United states that, under these circumstances, the Department
should grant to USA 3000 a temporary exemption to permit USA 3000 to
operate the Chicago-Zihuatanejo service during the Winter 2005 season,
and invite applications for longer-term authority after the winter
season has concluded.  

On January 12, 2005, USA 3000 filed a reply to United’s answer.  USA
3000 argues that United’s proposal to award to USA 3000 temporary
authority for a few months and then institute a carrier-selection
proceeding if United ultimately decides it might want to serve the
Chicago-Zihuatanejo market is without precedent and would be patently
unfair and commercially unworkable.  USA 3000 maintains that, unlike
United, USA 3000 clearly has made the decision to operate
Chicago-Zihuatanejo service, and no other U.S. carrier has filed an
application for such service.  USA 3000 states that, in these
circumstances, USA 3000’s application should be promptly granted
without regard to United’s “contingent future plans,” and that
United’s answer should be dismissed.

On January 14, 2005, United filed a response to USA 3000’s reply. 
United states that, on January 6, 2005, USA 3000 announced its
introduction of three-weekly charter flights in the Chicago-Zihuatanejo
market, beginning January 17, 2005.  United argues that this is the same
service pattern which USA 3000 proposes in the captioned application. 
United states that, given USA 3000’s willingness and ability to
introduce Chicago-Zihuatenejo seasonal charter service without the
exemption authority it has requested here, USA 3000 “can hardly claim
that the grant of the limited relief sought by United would prevent it
from proceeding with its plans for the Winter 2005 season.”  United
further argues that, while an immediate grant of long-term authority to
USA 3000 might serve USA 3000’s interest, by precluding United as a
potential competitor, it would also deprive the public of the
opportunity to secure superior service benefits for the subject market. 


Decision:  We have decided to grant the uncontested requests of USA 3000
for two-year exemption authority to serve the Detroit-Puerto Vallarta
and Detroit-Cozumel markets.  We have also decided to grant the request
of USA 3000 for two-year exemption authority to serve the
Chicago-Zihuatanejo market.  

Under the U.S.-Mexico aviation agreement, only two U.S. carriers may be
designated to serve a given city-pair market.    Currently, ATA
Airlines, Inc. (ATA) holds authority and is designated to provide
direct-carrier service on the Chicago-Zihuatanejo route.  Thus, there is
only one designation opportunity available for Chicago-Zihuatanejo
service.

Only one U.S. carrier, USA 3000, has filed an application for
Chicago-Zihuatanejo services with firm plans to initiate service in the
near future.  Neither United nor any other carrier has filed a competing
request for this authority.  The Chicago-Zihuatanejo route rights
involved here constitute a valuable resource obtained in exchange for
granting Mexico route opportunities for its airlines to serve the United
States, and the public interest calls for use of these rights.  In light
of the fact that USA 3000 has presented an application to use these
valuable limited-route rights, along with a firm service proposal, and
no other U.S. carrier has filed a competing request, we find that grant
of the application for the full term requested (which is in fact the
standard duration of the exemption awards we issue to U.S. carriers for
service to Mexico) is in the public interest.  United has not provided
any evidence to persuade us to take a different approach here. 

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. 
________________________________________________________________________
_______________

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicant qualified to provide
the 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 application 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: http://dms.dot.gov//reports/reports_aviation.asp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

   Although the applicant did not specifically request authority for
Zihuatnejo to include Ixtapa, we have consistently granted
Ixtapa/Zihuatanejo as a joint point in our U.S.-Mexico authorizations. 
Thus, we will grant, sua sponte, the Ixtapa authority here as well.

   United further states that, by that time, the results of the current
U.S.-Mexico aviation negotiations will be known and it may be possible
for both USA 3000 and United to offer Chicago-Zihuatanejo services.

   USA 3000 accompanied its reply with a motion for leave to file an
otherwise unauthorized document.  We grant that motion. 

   United accompanied its response with a motion for leave to file an
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