US authorities have granted Southwest Airlines authority to operate two Mexico routes from Houston, in a move that appears to also appease United Airlines which will keep its existing rights on the routes.
The US Department of Transportation's decision comes after it was assured by its Mexican counterparts that they will likely allow Southwest to operate on the routes on an extrabilateral basis.
Southwest and United had fought over the route authorities to operate from the Houston market to both Mexico City and Los Cabos. The existing US-Mexico bilateral air transport agreement restricts the number of carriers that can serve on each city pair, until a new liberalised agreement takes effect in 2016.
Southwest plans to begin service to the two Mexican destinations from Houston Hobby in October 2015, as part of its growth to Latin America from the airport. But the US-Mexico bilateral agreement limits the number of US carriers to three on Houston-Los Cabos and two on Houston-Mexico City. Southwest had called for the DOT to rescind one of two authorities held by United and its partners on each route - a request that prompted an outcry from United.
The DOT says it was advised by Mexican civil aviation authorities that they would "favourably consider" Southwest's request on an extrabilateral basis.
"We find that the public interest warrants our approval of Southwest's application, and that we can proceed to such approval without needing to withdraw or otherwise place in issue the designations or authorities of any of the currently authorised US carriers in these city-pair markets," says the DOT.
United operates to both Mexico City and Los Cabos from Houston Intercontinental. It is the only airline serving Los Cabos nonstop from Intercontinental although Spirit Airlines plans to begin service on the route in May. United competes against Aeromexico on the route from Intercontinental to Mexico City.
Southwest's international growth out of Houston Hobby is made possible by its investment in a new international facility at the airport, scheduled to open in the fall of this year. The facility had been opposed by United. The mainline carrier made good on threats to slash capacity at Intercontinental after the Hobby facility was approved by the city of Houston.
Source: Cirium Dashboard
