Parent Southwest Airlines announced Thursday that the U.S. Department of Transportation had awarded a Chicago-Cancun, Mexico, route to AirTran Airways.

AirTran and Frontier in January had sought the route, with AirTran planning to fly from Midway Airport and Frontier proposing to fly from O’Hare International Airport.

With U.S. approval, AirTran just needs Mexican government approval to proceed with the service, scheduled to begin June 3 subject to that okay.

“We are excited to offer all AirTran Airways Customers this new opportunity to travel to Mexico,” said Bob Jordan, Southwest executive vice president and chief commercial officer and AirTran Airways president.

“The additional international service to Cancun is a great example of how customers are already realizing the benefits of Southwest’s acquisition of AirTran,” Jordan said.

The DOT had issued a preliminary order in March giving AirTran the route, and made that decision final Thursday. Frontier was given backup authority.

The route became available under the U.S.-Mexico bilateral after U.S. carrier USA 3000 Airlines told DOT that it would end its U.S.-Mexico services on Jan. 30.

Here’s the DOT justification from its March 16 show-cause order:

“We tentatively determine that AirTran’s service proposal would provide greater public benefits in terms of scheduled capacity and enhanced competition in the Chicago-Cancun market, and that a selection of AirTran would result in certain market structure benefits that would not be available with a selection of Frontier.

“Specifically, we tentatively find that, while Frontier’s proposal relies on larger aircraft than that proposed by AirTran, AirTran’s proposal would inject more capacity into the market for scheduled service given that much of Frontier’s capacity will be used to fulfill its contract with Apple Vacations to provide the charter services previously performed by USA 3000 on the route. The record demonstrates that only a portion of Frontier’s capacity would be available for sale as scheduled service and Frontier has not demonstrated otherwise.

“We have considered Frontier’s argument that it should not be “penalized” for its Chicago-Cancun charter service; however, we do not agree that we can or should overlook the fact that, in essence, only a portion of Frontier’s service proposal would require the scheduled authority at issue here. The Agreement does not limit the number of U.S. carriers that may provide charters in the U.S.-Mexico market; only three carriers, however, may provide scheduled service in the Chicago-Cancun market. Therefore, we tentatively find that the interests of the traveling public would be diminished if we were to forgo the opportunity to put a carrier into the market whose capacity would be devoted entirely to offering scheduled service, especially when it would be in addition to the charter service that Frontier has already begun and can continue to provide. We have also considered the potential benefits that might be derived from Frontier’s proposed interline connections which would be sold as scheduled service if Frontier were selected, but we tentatively find that any potential traffic would represent a very small portion of Frontier’s overall capacity and would not outweigh the benefits of AirTran’s larger scheduled service capacity.

“We tentatively conclude that selection of AirTran’s proposal would also provide important Chicago-Cancun service and market structure benefits that would not be available if we were to choose Frontier. AirTran would restore nonstop Chicago-Cancun service from Midway and a structurally advantageous Chicago-Cancun alternative that the public previously enjoyed. As a result of our last carrier selection proceeding involving the Chicago-Cancun market, the public enjoyed the service and market structure benefits of having two legacy carriers competing at O’Hare, with a lower cost carrier serving from Midway. We tentatively conclude that restoring those benefits through our selection of AirTran would provide the greatest service and travel options for the public and, therefore, best maximize the public benefits in this highly restrictive and sought-after market.

“Finally, while AirTran places much emphasis on the benefits that might be anticipated from its merger with Southwest, our tentative decision is based on AirTran’s service proposal as it will be implemented in the near-term and not on any alleged future benefits that may be derived through integration with Southwest’s operations. Even without the benefit of Southwest’s network, we tentatively find that the proposed capacity, service, and market-structure benefits of AirTran’s proposal outweigh the Frontier proposal.”

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