	                   UNITED STATES OF AMERICA

            DEPARTMENT OF TRANSPORTATION

                    OFFICE OF THE SECRETARY

                             WASHINGTON, DC

	

								           

	

		  						

Docket OST-2005-20459

      

								Docket OST-2005-20630	

NOTICE ON PROCEDURES AND 

CONSOLIDATION OF EXEMPTION APPLICATIONS 

Under the U.S.-Mexico aviation agreement, the United States may
designate up to two U.S. carriers to provide direct-carrier (own
aircraft) combination services in a given U.S.-Mexico city-pair market. 
Brendan Airways, LLC, d/b/a USA 3000 Airlines (USA 3000) and United Air
Lines, Inc. (United) each has filed an application for an exemption to
serve the Chicago-San Jose del Cabo city-pair market.  Currently,
American Airlines, Inc., holds underlying authority and is designated to
serve the route, leaving only one designation opportunity available in
this market.    

A number of responsive pleadings have been filed to the applications.   
The record effectively stands ready for decision and, in the
circumstances presented, including the fact that these valuable
bilateral rights are now unused, we intend to proceed directly to a
final order on this matter.  However, we believe that the applicants
should be accorded one further opportunity to add information to the
record to ensure its completeness before our final decision.  

In awarding the available authority, our principal objective will be to
maximize public benefits that will result from award of the authority in
this case.  In this regard, we will consider which applicant will most
likely offer and maintain service that best meets the needs of the
traveling and shipping public.  We will also consider the effects of the
applicants’ service proposals on the overall competitive environment,
including effects on the market structure and the level of competition
in the Chicago-San Jose del Cabo market, the U.S.-Mexico market, and on
any other markets shown to be relevant.  In addition, we will consider
other factors historically used for carrier selection, where they are
relevant.

We intend to issue Chicago-San Jose del Cabo exemption authority for a
two-year period, subject to a 90-day startup condition, and subject also
to certain dormancy notice requirements routinely imposed on U.S.-Mexico
air transportation services.  Except where service in the market is
seasonal/intermittent in nature, the dormancy conditions will apply as
specified above.  In light of the U.S.-Mexico dormancy conditions, and
consistent with our standard policy, we will only grant Chicago-San Jose
del Cabo route authority to an applicant presenting firm service plans.

As indicated above, we intend to resolve issues on the basis of the
pleadings filed, and to award the immediately-available Chicago-San Jose
del Cabo authority by proceeding directly to final order.  As the
applications filed are already ripe, and all interested parties have had
an opportunity to file competing requests, we will not provide for
additional applications here.

Therefore, acting under authority assigned in 14 CFR 385.3, we will give
USA 3000 and United an opportunity to file any other pertinent
information to support their Chicago-San Jose del Cabo applications. 
The additional information should be filed no later than 

five (5) business days from the date of service of this Notice, and
should be served on all parties in the captioned docket. 

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

By:

					PAUL L. GRETCH

Director, Office of International Aviation

(SEAL)

Dated:  May 3, 2005

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 

 USA 3000 proposes to serve the Chicago-San Jose del Cabo market on a
year-round basis with one-weekly flight, beginning May 6, 2005, and
United proposes year-round service with two-weekly flights from May 7,
2005,  to October 31, 2005, and with four-weekly flights from November
1, 2005,  to 

April 30, 2006.

 On March 9, 2005, United filed an answer to USA 3000’s application,
along with a motion to consolidate the applications for contemporaneous
consideration.  We will grant the motion.  On April 6, 2005, the City of
Chicago filed a reply in support of United’s application in Docket
OST-2005-20630.  It accompanied the reply with a motion for leave to
file an otherwise unauthorized document.  We will grant the motion.

 Both carriers have requested that the Department institute a carrier
selection proceeding.  United has urged the Department to streamline the
carrier selection process as was done in a recent carrier selection case
involving service in the Milwaukee-Cancun market (see Notice on
Procedures dated January 7, 2005, in Dockets OST-2004-19806 and
OST-2004-19887).     

Application of

    United Air Lines, Inc.			

for an exemption pursuant to 49 U.S.C. Section 40109 

(Chicago-San Jose del Cabo)

Application of

  Brendan Airways, LLC d/b/a USA 3000 Airlines

  

for an exemption pursuant to 49 U.S.C. Section 40109 

(Chicago-San Jose del Cabo)

2005 Chicago-San Jose del Cabo Exemption Proceeding

Docket OST-2005-21156

