 

                                        UNITED STATES OF AMERICA

                               DEPARTMENT OF TRANSPORTATION

                                        OFFICE OF THE SECRETARY

                                                 WASHINGTON, DC

Issued by the Department of Transportation on December 15, 2005

NOTICE OF ACTION TAKEN

DOCKET OST-2005-22620

________________________________________________________________________
______________________________________________________________

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).

Docket OST-2005-22620:  Application of Delta Air Lines, Inc. (Delta)
filed 9/29/05, and supplemented 10/3/05, and 10/17/05, 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 Boston, Massachusetts, and Cancun, Mexico; Los Angeles,
California, and Puerto Vallarta, Mexico; Los Angeles, California, and
San Jose del Cabo, Mexico; Los Angeles, California, and
Ixtapa/Zihuatanejo, Mexico; and Washington, D.C., and Cancun, Mexico,
and to integrate this authority with Delta’s existing exemption and
certificate authority, consistent with applicable international
agreements.  Delta states that it will provide year-round service in
each of the subject markets.

Applicant rep:  Robert E. Cohn (202) 637-4999   DOT Analyst:  Linda
Lundell (202) 366-2336

DISPOSITION

XX  Granted exemption authority to Delta to serve the Boston-Cancun,
Washington, D.C.-Cancun, and

           	 Los Angeles-Ixtapa/Zihuatanejo markets, including
corresponding route integration authority

            	(subject to conditions and remarks, see below)

XX   Deferred on Delta’s request for exemption authority to serve the
Los Angeles-Puerto Vallarta and Los

            	Angeles-San Jose del Cabo markets, including corresponding
route integration authority (see remarks, below)

XX  Deferred on Delta’s request for certificate authority to serve the
Atlanta-Acapulco, Atlanta-Ixtapa/Zihuatanejo,

            	Boston-Cancun, Washington, D.C.-Cancun, Los Angeles-Puerto
Vallarta, Los Angeles-San Jose del Cabo, 	and Los
Angeles-Ixtapa/Zihuatanejo markets (see remarks, below)

The above action granting exemption authority and route integration to
Delta for Boston-Cancun, Washington, D.C.-Cancun, and Los
Angeles-Ixtapa/Zihuatanejo services was effective when taken: December
15, 2005, through 

December 15, 2007.

The above action deferring on Delta’s request for exemption authority
to serve the Los Angeles-Puerto Vallarta and Los Angeles-San Jose del
Cabo markets, and for corresponding route integration authority, was
effective when taken: December 15, 2005.

The above action deferring on Delta’s certificate requests was
effective when taken: December 15, 2005.

													

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 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.  Consistent with our standard policy, the dormancy
notice period for the new exemption authority granted will begin on
Delta’s proposed start-up dates for the subject services, as follows:
June 1, 2006, for the Boston-Cancun and Washington, D.C.-Cancun markets;
and March 18, 2006, for the Los Angeles-Ixtapa/Zihuatanejo market. 

The route integration authority granted to Delta is subject to the
condition that any service provided under this exemption shall be
consistent with all applicable 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 Delta rights (including fifth-freedom intermediate
and/or beyond rights) to serve markets where U.S. carrier entry is
limited unless Delta 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 such carrier to use the limited-entry route rights that are included
in Delta’s authority by virtue of the route integration authority
granted here, but that are not then being used by Delta, the holding of
such authority by route integration will not be considered as providing
any preference for Delta in a competitive carrier selection proceeding
to determine which carrier(s) should be entitled to use the authority at
issue.

Responsive Pleadings/Remarks:  At the time the captioned application was
filed, the operative U.S.-Mexico aviation agreement provided that the
United States could designate only two U.S. carriers to provide
scheduled combination services in the Boston-Cancun, Los Angeles-Puerto
Vallarta, Los Angeles-San Jose del Cabo, Los Angeles-Ixtapa/Zihuatanejo,
and Washington, D.C.-Cancun markets.  

With respect to Delta’s Los Angeles-Puerto Vallarta and Los
Angeles-San Jose del Cabo requests, two U.S. carriers were already
authorized and designated to serve each of these city-pair markets at
the time of filing.  Thus, no designation opportunities were available
for those markets at that time.  United Air Lines, Inc. (United), filed
a competing application for the Los Angeles-Puerto Vallarta authority in
Docket OST-2005-22767.  Both the present Delta application (for Los
Angeles-Puerto Vallarta authority) and United’s application in Docket
OST-2005-22767 (for Los Angeles-Puerto Vallarta authority) remain
pending.  Competing applications for the Los Angeles-San Jose del Cabo
authority have been filed by Frontier Airlines, Inc. (Frontier),
ExpressJet Airlines, Inc. (ExpressJet), America West Airlines, Inc.
(America West), and United (see Dockets OST-2005-22590, OST-2005-22766,
OST-2005-22769 and OST-2005-22767, respectively).  All of the Los
Angeles-San Jose del Cabo applications remain pending, including
Delta’s present application for Los Angeles-San Jose del Cabo
authority.

 

With respect to Delta’s Boston-Cancun and Los
Angeles-Ixtapa/Zihuatanejo requests, two U.S. carriers were already
authorized and designated to serve these city-pair markets at the time
of filing.  Thus, no designation opportunities were available for those
markets at that time.  No other carrier has filed for Boston-Cancun or
Los Angeles-Ixtapa/Zihuatanejo exemption authority, and no party has
opposed that portion of Delta’s application here.  

With respect to Delta’s Washington, D.C.-Cancun request, two U.S.
carriers were already authorized and designated to serve this city-pair
market at the time of filing.  Thus, no designation opportunities were
available for services on the route at that time.  Delta’s application
for Washington, D.C.-Cancun authority competed with the pending
applications of USA 3000 for authority to serve Cancun from Washington,
D.C. (see Docket OST-2002-13527) and of US Airways for authority to
serve Cancun from Baltimore (see Docket OST-2002-13855).  

On September 21, 2005, the United States and Mexico reached an ad
referendum agreement on certain amendments to the U.S.-Mexico aviation
agreement, providing for the expansion of services between the two
countries for both combination and all-cargo air transportation
services, including combination services in the Los Angeles-Puerto
Vallarta, Los Angeles-San Jose del Cabo, Boston-Cancun, Los
Angeles-Ixtapa/Zihuatanejo, and Washington, D.C.-Cancun markets.  We are
now in a position to award authority pursuant to these amendments.  

 

One route opportunity is now available for the Los Angeles-Puerto
Vallarta and Los Angeles-San Jose del Cabo markets.  However, because
both Delta (in the present docket), and United (in Docket
OST-2005-22620) have filed applications for this authority, we will
consider those competing requests subsequently.

One route opportunity is now available for Boston-Cancun and Los
Angeles-Ixtapa/Zihuatanejo services.  Because Delta, in the instant
application, is the only applicant requesting authority to serve the
Boston-Cancun and Los Angeles-Ixtapa/Zihuatanejo markets, we will now
grant Delta’s exemption request to serve those markets.  

Pursuant to the amendments to the agreement, Washington, D.C., and
Baltimore, Maryland, are now regarded as separate points for designation
purposes.  Up to three U.S. carriers may now be designated to serve the
Washington, D.C.-Cancun market, and up to three U.S. carriers may now be
designated to serve the Baltimore-Cancun market.  In light of these
amendments, two route opportunities are now available for Washington,
D.C.-Cancun services.  With regard to the Washington, D.C.-Cancun
market, US Airways no longer wishes to prosecute its Washington,
D.C.-Cancun request in Docket OST-2002-13855, thus leaving two
applicants (Delta in the instant application and USA 3000 in docket
OST-2002-13527) as the only applicants requesting authority to serve
that market.  Under these circumstances, we will now grant Delta’s
exemption request to serve the Washington, D.C.-Cancun market.  

Also under the amended agreement, one additional route opportunity is
now available for Los Angeles-Puerto Vallarta and one for Los
Angeles-San Jose del Cabo services.  However, the requests to serve
these markets exceed the number of designations available under the
amended agreement.  Thus, we will handle these requests in the context
of a comparative selection proceeding to be instituted soon. 
Accordingly, we defer on Delta’s request for authority to serve the
Los Angeles-Puerto Vallarta and Los Angeles-San Jose del Cabo markets.

We will handle, subsequently, the request of Delta for certificate
authority for the Atlanta-Acapulco, Atlanta-Ixtapa/Zihuatanejo,
Boston-Cancun, Washington, D.C.-Cancun, Los Angeles-Puerto Vallarta, Los
Angeles-San Jose del Cabo, and Los Angeles-Ixtapa/Zihuatanejo markets.

________________________________________________________________________
___________________________

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 

			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

   On October 3, 2005, Delta supplemented its application to add an
additional route to its request for authority.  On October 17, 2005,
Delta further supplemented its application to confirm, among other
things, its proposed start-up dates in the subject markets.  By letter
dated November 22, 2005, Delta modified certain of its earlier-proposed
start-up dates for its Cancun services, as a result of the damage 
caused by Hurricane Wilma to Cancun. 

   By Notice of Action Taken dated December 9, 2005, we granted
Delta’s requests, in the instant application, for exemption authority
and route integration to serve the Atlanta-Acapulco and
Atlanta-Ixtapa/Zihuatanejo markets.  We deferred on Delta’s request
for exemption authority to serve the Boston-Cancun, Los Angeles-Puerto
Vallarta, Los Angeles-San Jose del Cabo, Los Angeles-Ixtapa/Zihuatanejo,
and Washington, D.C.-Cancun markets.  We also deferred on Delta’s
request for certificate authority to serve the Atlanta-Acapulco,
Atlanta-Ixtapa/Zihuatanejo, Boston-Cancun, Washington, D.C.-Cancun, Los
Angeles-Puerto Vallarta, Los Angeles-San Jose del Cabo, and Los
Angeles-Ixtapa/Zihuatanejo markets.  This Notice of Action Taken
addresses the still-pending portion of the applicant’s request.

   Delta requests that its exemption authority for these markets be
awarded under the Department’s streamlined licensing procedures.  To
the extent that Delta is seeking certificate authority for these
markets, we will handle that request subsequently.

   Alaska Airlines, Inc. (Alaska), and Mesa Airlines, Inc. (Mesa), are
authorized and designated to serve the Los Angeles-Puerto Vallarta
market.  American Airlines, Inc. (American), and Alaska are authorized
and designated to serve the Los Angeles-San Jose del Cabo market.  

   American and US Airways, Inc. (US Airways) are authorized and
designated to serve the Boston-Cancun market.  Alaska and United are
authorized and designated to serve the Los Angeles-Ixtapa/Zihuatanejo
market.

   At the time Delta’s application was filed, the then-operative
aviation agreement provided that, for designation purposes, only two
U.S. carriers could be designated to provide combination services on the
Washington, D.C./Baltimore-Cancun route.  (Washington/Baltimore was
considered one U.S. point).  United was authorized and designated to
serve Cancun from Washington, D.C., and Brendan Airways LLC, d/b/a USA
3000 (USA 3000) was authorized and designated to serve Cancun from
Baltimore.  

   In its original application in Docket OST-2004-13855, US Airways had
also requested authority to serve Cancun from Washington, D.C.  On
October 27, 2005, US Airways filed a supplement to its application in
Docket OST-2004-13855, stating that it wishes to prosecute its
application for authority to serve Cancun from Baltimore only.  

   The United States and Mexico signed the agreement in Mexico City on
December 12, 2005.

    We are granting concurrently US Airways’ application, in Docket
OST-2004-13855, for Baltimore-Cancun authority, and USA 3000’s
application, in Docket OST-2004-13527, for Washington, D.C.-Cancun
authority.

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