OST-00-7082 / OST-00-7131 / Continental Express / Delta Connection Carriers / LaGuardia Regional Jet Service / April 10, 2000

Application of

for an exemption from Subparts K and S of 14 C.F.R. Part 93 pursuant to 49 U.S.C. S 41716 (LaGuardia-21 Cities)

Applications of

For Exemptions from Subparts K and S of 14 C.F.R. Part 93 Pursuant to 49 U.S.C. S 41716

(LaGuardia Regional Jet Services)

The St. Joseph County Airport Authority /1 ("South Bend") submits this motion /2 and answer to the applications of Continental Express, Inc. ("Continental Express") and Delta Connection Carriers Comair, Inc., Atlantic Southeast Airlines, Inc., and Atlantic Coast Jet, Inc. ("Delta Connection Carriers")

1/ St. Joseph County Airport Authority, Indiana is the owner and operator of South Bend Regional Airport, a small hub.

2/ South Bend moves for leave to file an otherwise unauthorized document (answer to Continental Express) to answer both applications at the same time and to bring to the Department's attention in both proceedings the views of an

(Continued...

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for LaGuardia slot exemptions involving regional jet services under the "Wendell H. Ford Aviation Investment and Reform Act for the 21st century" (the "Air 21 Act").

South Bend, despite a long history of no nonstop service and inconvenient connecting service, is a significant generator of New York traffic. /3 It clearly deserves inclusion in the list of cities benefitting from the new opening up of LaGuardia to small hub and non-hub cities envisioned by the Air 21 Act.

The Continental Express LaGuardia-21 city application has many public-interest arguments, such as at page 1, "starved for competitive"; page 3, "meet a broader range of New Yorkers' travel needs"; page 4, 11612 new connecting opportunities" and "enhancing service to smaller, underserved cities meets 'the vital public interest objective of enabling qualified air carriers to fill voids in underserved [and now page 5] markets' (see Order 99-3-12) because the new services expand 'the access of underserved . . . cities to more responsive air transportation, (see Order 98-4-21 at 15-18)".

The Delta Connection Carriers LaGuardia-27 city application also contains public-interest arguments, such as at page 5,

important U.S. city long involved in the struggle to gain LaGuardia access.

3/ The South Bend-New York market also produces quite adequate yields on the traffic it generates.

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"expand access by smaller cities to the national air transportation network and thereby enhance competition in the industry" and footnote 2 on that same page.

Thus, though the Department may be required to grant the two applications under the Air 21 Act alone, the applicants themselves have introduced public-interest arguments, and it is clear that South Bend has a right to respond to such arguments and demonstrate its own public interest qualifications.

Attachment A hereto shows all small hub and non-hub markets that were listed in the Official Airline Guide at TO NEW YORK in any of four months (6/96, 6/98, 12/98, and 6/99, a spread that avoids overreliance on any one month, and indicates South Bend's repeated interest in the New York market). The hub status of each station in 1997 (the year used by the Air 21 Act, apparently) is given in column 2. As expected, the small hubs dominate the top of the list (which is in passenger sequence). Distance (given in column 3) becomes important in that nearer stations are more likely than farther stations to receive nonstop service (or better service) for any given number of passengers.

The Attachment A passengers (given in columns 4 through 11) are domestic true O&D distributed by the best service they received in the four OAG months studied. True O&D is used because it represents the travel of people who really must get

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to the New York area itself for business or personal reasons (not just make to make an airline connection there). Connecting passengers can often be served well by other airports. True O&D passengers cannot. (The need to eliminate the international traffic arises from the fact that domestic portions of international journeys are included in Airline Traffic Survey table 8.)

Attachment A shows that almost all stations with more New York true O&D passengers than South Bend had single-plane service (the only complete exception is Aspen, CO, a seasonal station whose airport would not permit jet service from New York). Asheville is almost an exception, it had some single-plane service only in 6/96 of the four months studied (see Attachment B). More than twenty small and non-hubs with less New York traffic than South Bend had nonstop service. More than thirty such stations had one-stop service. So, South Bend is clearly near the top of the list of small and non-hubs that are "starved" (to use the Continental Express word) for nonstop New York service.

The poorer service a market has, of course, the greater percentage stimulation will be expected from any given level of better service. Thus we would expect New York-South Bend traffic to increase substantially with nonstop service. A 25% increase would be a modest estimate.

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The applications of Continental Express and Delta Connection Carriers concentrate on the largest markets already served. Thus, of the 21 small and non-hub markets in the Continental Express application, 19 already have (or have had) multiple nonstop New York service (in sequence by traffic on attachment A): Buffalo, Rochester, Greensboro, Norfolk, Richmond, Syracuse, Charleston, SC, Greenville, Savannah, Manchester, Myrtle Beach, Portland, Columbia, SC, Birmingham, Albany, NY, Burlington, Dayton, Nantucket, and Martha's Vineyard. The other two are Grand Rapids, which has had multiple one-stop service, and Knoxville, which has had one onestop service (in the last three of the four periods studied, see Attachment B).

Further, of the 25 small and non-hub markets (that is, excluding Hartford and Providence, two medium hubs apparently included in error) in the Delta Connection Carriers application, 20 have (or have had) multiple nonstops (column 4): Buffalo, Rochester, Greensboro, Norfolk, Richmond, Syracuse, Charleston, SC, Greenville, Savannah, Manchester, Portland, Columbia, SC, Birmingham, Albany, NY, Burlington, Dayton, Bangor, Nantucket, Martha's Vineyard, and Hyannis[port). Two more (Grand Rapids and Des Moines) have (or have had) multiple one-stops. Only Knoxville (one one-stop), Lexington (one one-stop), and Greenbrier (connecting plus non-qualifying one-stop) could

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really be said to have been given little chance to show what they could produce with good New York service.

The only high-traffic multiple nonstop markets on the list that neither Continental Express nor the Delta Connection Carriers applied for are Sarasota (1,042 miles) and St. Thomas (Charlotte Amalie, VI, 1,635 miles).' Both carriers already serve New York-Sarasota with larger equipment than permitted in the Air 21 Act and Continental serves New York-St. Thomas with such equipment.

Thus it is obvious that these two applications attempt to use slot exemptions to obtain new service for the largest markets that have already received good service. Markets historically lacking good service are excluded, even where, as in the case of South Bend, they already have high New York traffic and are at good distances (New York-South Bend is 645 miles, Asheville is 592, and Wilmington, NC, is only 496).

For the foregoing reasons, the Department should carefully consider the nature of the service proposed by Continental Express and the Delta Connection Carriers herein and encourage these carriers and others to use the expanded LaGuardia slot authority provided by the Air 21 Act to meet the needs of small

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and non-hub communities such as South Bend that are truly starved for nonstop New York service.

Respectfully submitted,

Richard P. Taylor

STEPTOE & JOHNSON

1330 Connecticut Avenue, N.W.

Washington, D.C. 20035

(202) 429-6459

Counsel for South Bend