After several informal governmental consultations this year, the U.S. and Mexico agreed to hold formal negotiations to liberalize their air services agreement Dec. 8-9 in Washington, The DAILY has learned.

The U.S. and Mexico currently have a restricted aviation bilateral, updated most recently in 1999, that limits passenger service in transborder city-pair markets. Only two combination carriers from each country may directly serve each city-pair and four carriers from each country may provide code-share services between the city-pairs. Cargo designations are capped at five carriers per country, with one carrier from each side allowed to serve a city-pair.

While Continental provides the most service to Mexico, other U.S. carriers, such as America West, Frontier and Spirit, recently ran into tough competition from one another in their efforts to expand southward to serve popular leisure destinations, such as Cancun and Puerto Vallarta.

A U.S. Transportation Dept. spokesman confirmed that the dates for the aviation talks were finalized yesterday in Mexico City, where Transportation Secretary Norman Mineta is co-chairing the annual U.S.-Mexico Bi-National Commission's transportation working group meeting.