Does anybody know if US still holds PSA's dormant route authority to Cabo? If so I am surprised that they have not attempted to reactivate it or move it to another city on both ends of the border.
If I recall correctly, the Mexican government said the deal was with PSA, not US Air and would'nt allow US Air into the market. I don't believe Mexico had anything against US Air, but were protecting their own national carriers at the time.
If anyone has better information, please correct me.
The US-Mexican bilateral aviation treaty allows any two airlines from each country to fly any route. If US wants to fly to Cabo, they probably can - from a variety of cities. All they have to do it apply for the authority, if they don't already hold it.