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OST-00-7180

Establishment of Slot Exemptions Proceedings 

By:  Bradley Mims

The Wendall H. Ford Aviation Investment and Reform Act for the 21st Century (Slot Exemptions)

Notice from April 14th

By:  Bradley Mims

Legend Airlines, Inc.

It is unfortunate that a carrier that once championed the rights of new entry and competition now raises objections to a new entrant carrier's application to obtain slots at high density airports, but, sadly, that is what America West Airlines, Inc. has done by filing an Answer opposing new entrant Legend Airlines, Inc.'s application for slots at Chicago O'Hare and LaGuardia. In the not so distant past, America West was an advocate of new entry and promoted public interest factors set forth by the Airline Deregulation Act.

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7500

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

• National meets the statutory criteria as a new entrant/limited incumbent air carrier because it does not hold, and never has held, any slots or slot exemptions at O'Hare.
• National requests five slot exemptions at O'Hare so that it may provide perform three daily nonstop roundtrips between O'Hare and Las Vegas' McCarran International Airport.
• National intends to operate its proposed O'Hare-Las Vegas service using only the Stage 3-compliant aircraft in National's all-Boeing 757 fleet.

Counsel:  National Airlines, Kevin Tourek, 702.944.2842

National Airlines, Inc.

National Airlines' attempt to characterize America West as an incumbent in the ORD-LAS market is misleading. In fact, as National Airlines is aware, America West is a post-deregulation carrier that did not, unlike United Air Lines and American Airlines, receive grandfathered ORD slots. Indeed America West has been forced to drop one of its two daily Las Vegas flights because it could not operate that flight at a competitive time. America West does not have sufficient service in the market to significantly affect prices to consumers. National Airlines and America West are both "new entrant and limited Incumbent air carriers" at ORD for purposes of Air 2 1. See 49 U.S.C § 41714(h)(5); 49 U.S.C § 4171 7(c). Therefore the few slots available at this time should go to carriers that can maximize the public benefit.

National Airlines has not Justified its need for ORD slots given its point-to-point, leisure service operating model and its ability to operate flights between LAS and Chicago using Midway Airport rather than ORD. As a carrier that does not currently serve O'Hare it could implement the proposed service through Midway. On July 1, 2001 with the elimination of slots before 2:45 p.m. and after 8:14 p.m. National could operate some flights and seek exception slots that will then be available in the evening for additional service.

Counsel:  Baker & Hostetler, Joanne W. Young, 202.861.1532

Sun Country Airlines, Inc.

Enable operation of three daily round-trip flights between Chicago O'Hare ("ORD") and Minneapolis/St. Paul, Minnesota ("MSP"). Sun Country seeks six exemption slots at ORD to operate its proposed nonstop point-to-point services using 170-seat Boeing 727-200 aircraft.

Counsel:  Morgan Lewis, Dennis Barnes, 202.467.7060, Barn7060@mlb.com

Legend Airlines, Inc.; Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Due to American's domination of the Dallas/Fort Worth Metroplex, consumers have had a lack of alternatives and viable competition. As concentration has grown. fares from DFW have increased. Small businesses, which are the economic growth engine of the local and national economies, are the most severely impacted of all as they lack the purchasing volume to negotiate discounted fares with major carriers. Legend will provide much needed fare and service level competition, particularly for those business travelers, by offering business class service at coach fares

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7500

Legend Airlines, Inc.; Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Due to American's domination of the Dallas/Fort Worth Metroplex, consumers have had a lack of alternatives and viable competition. As concentration has grown. fares from DFW have increased. Small businesses, which are the economic growth engine of the local and national economies, are the most severely impacted of all as they lack the purchasing volume to negotiate discounted fares with major carriers. Legend will provide much needed fare and service level competition, particularly for those business travelers, by offering business class service at coach fares

Counsel:  Ungaretti Harris, Edward Faberman, 202.639.7500

Spirit Airlines, Inc.; Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Spirit seeks these exemptions so that it may offer new daily, low-fare, nonstop roundtrip scheduled jet service between O’Hare and Myrtle Beach, South Carolina and five Florida markets, namely, Ft. Lauderdale, Ft. Myers, Orlando, Tampa, and West Palm Beach. Spirit intends to introduce service in the above markets on or about September 22, 2000 or such earlier or later date as the Department may prescribe. These markets will be served in accordance with the schedule set forth in Table No. 1 of this Application. All services will be operated with Stage 3 MD-80-series aircraft. The proposed services are clearly in the public interest and will provide significant benefits to the U.S. economy and will offer substantial consumer benefits as the first low-fare, new entrant service between O’Hare and Florida/Myrtle Beach, SC. The certifications required by Order 2000-4-15 are attached as Appendix A to this Application.

Counsel:  Spirit Airlines, Mark Kahan, 954.477.7965

America West Airlines, Inc.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Legend Airlines, Inc.; Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Sun Country Airlines, Inc.

Counsel:  Morgan Lewis, Dennis Barnes, 202.467.7060, Barn7060@mlb.com 

Wendell Ford Aviation Investment and Reform Act for the 21st Century

The Department should disregard the arguments that America West made in its Response. As discussed above, under a proper interpretation of AIR-21, America West is not eligible to receive new O'Hare slot exemption's because it does not qualify as a limited incumbent air carrier at that airport. Further, National's new nonstop O'Hare-Las Vegas service will provide tremendous new pricing and service options for passengers and will greatl1N enhance competition in a market dominated by two major air carriers

Counsel:  Hogan Hartson, George Carneal, 202.637.6546, gucarneal@hhlaw.com 

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

America West confirms that it plans to operate the three slots requested f or Las Vegas using only Stage-3 Jet aircraft, specifically A-320 aircraft arid the Columbus service will be operated by Mesa using only stage 3, 50-seat Canadair Regional Jets. The proposed schedules are set forth in Exhibit I to America West's April 5, 2000 application.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Mesa requests that it be allocated eight exemption slots at O'Hare so that Mesa may provide four daily, non-stop round-trip flights between O'Hare and Columbus, Ohio at the specific times set forth in Exhibit I to America West's April 5 application for these slots. Mesa proposes to operate these services as America West Express flights pursuant to a code-sharing arrangement with America West.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century;  Spirit Airlines, Inc.

Counsel:  Horry County, Robert Kemp, 843.448.1580

Slots at O'Hare have been concentrated in the hands of a few majors, thereby, effectively making O'Hare off-limits to new entrant, low-fare carriers. The Fort Myers-O'Hare market is no exception. It has endured high fares and high market concentration by major carriers for many years. Indeed, United Air Lines and American Airlines together possess a 79.21% market share of the RSW-ORD traffic. Spirit's proposed service would add price competition, reduce fares, provide passengers with additional service options, and stimulate traffic in the RSW-ORD market.

Counsel:  Lee County, Robbert Ball, 941.78.4383

As its Application demonstrates, as a new entrant, Spirit has a successful track record of introducing new scheduled service in other domestic city-pair markets and competing with established, incumbent air carriers. In these markets, Spirit has lowered fares and stimulated new passenger service. In the Detroit-Orlando market in particular, Spirit's entry showed that fares can be lowered and new service offered without a loss in market share by an incumbent air carrier because the new entrant service resulted in increased traffic growth overall and for the incumbent and new entrant air carrier. Spirit's ability to stimulate traffic in the Orlando-O'Hare market is furthered demonstrated by the fact that it had the highest system-wide load factor (75. 1 %) for the first quarter of 2000 and is the 13th largest U.S. air carrier ranked by revenue passenger miles.

Counsel:  Preston Gates, Jonathan Blank, 202.662.8450

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century; Spirit Airlines, Inc.

Spirit is the only applicant in this proceeding proposing to establish ORD as a new operating focal point, offering Chicago-area travelers low-fare access to a variety of attractive leisure destinations. Spirit's service will have a large employment impact at ORD, and will stimulate additional tourism to communities that are highly dependent upon tourism revenues. Another factor to consider are the recent programs introduced by American and United to remove seats from their aircraft, creating more room for "premium economy" or full fare passengers. This measure will diminish the ability of United and American to accommodate demand at O'Hare for inexpensive seats for traffic destined to the leisure markets Spirit proposes to serve, making the need for Spirit's low-fare service at O'Hare even more compelling.

Counsel:  GKMG Consulting, Steven Quan, 703.312.1446

Slots at O'Hare have been concentrated in the hands of a few majors, thereby, effectively making O'Hare off-limits to new entrant, low-fare carriers. The FLL-ORD market is no exception. It has endured high fares and high market concentration by major carriers for many years. Indeed, United Air Lines and American Airlines together possess an 81.25% market share of the FLL-ORD traffic, which explains why fares between Chicago O'Hare-FLL are 32% higher than fares between Chicago Midway-FILL. Spirit's proposed service would add price competition, reduce fares, provide passengers with additional service options, and stimulate traffic in the FLL-ORD market.

Counsel:  Broward County Aviation, William Sherry, 954.359.1032

The Wendall H. Ford Aviation Investment and Reform Act for the 21st Century (Slot Exemptions)

America West currently provides service from Columbus to Chicago Midway, but that service is of limited use in disciplining fares in the Columbus-O'Hare market because, as the DOT has previously recognized, O'Hare and Midway serve different market segments. Granting the requested exemptions would permit America West to compete head-to-head against United and American Eagle in the O'Hare market, with resulting fare and capacity benefits to travelers from Columbus and other markets America West serves through its Columbus hub. Currently, United and American Eagle have a duopoly in the Columbus-O'Hare market, with the two carriers controlling 97 percent of passengers. As set out in America West's Application, at p. 9, America West's fares from Columbus to Northeast points are consistently lower than its competitors' fares in such markets; granting the requested exemptions will permit it to offer those low-fare flights in direct competition with United and American Eagle's current flights.

Counsel:  Spiegel McDiarmid, John Corbett, 202-879-4000

Counsel:  GKMG Consulting, Steven Quan, 703.312.1446

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Order 2000-5-20 grants exemption from 14 C.F.R. Part 93, Subpart K and S,, to America West Airlines, Inc. (three slot exemption to serve Las Vegas, Nevada), Legend Airlines, Inc. (four slot exemptions, to serve Dallas (Love Field), Texas); Mesa Airlines, Inc.(six slot exemptions, to serve (Columbus, Ohio); National Airlines, Inc. (five slot exemptions, to serve Las Vegas, Nevada); Spirit Airlines, Inc. (six slot exemptions to serve any of the airports in Florida and South Carolina that it proposed, to do allocated based on Spirits assessment of market conditions and system needs) and Sun Country Airlines, Inc. (six slot exemptions, to serve Minneapolis,-St. Paul, Minnesota) to enable these applicants to conduct the operations described in this order at Chicago O'Hare International Airport during the slot -controlled hours of 6:45 a.m. to 9:15 p.m., at times to be determined in consultation between the applicant airlines and the Federal Aviation Administration. the actual times for arriving and departing flights as authorized by that order and to establish the starting date for starting date for implementing the schedules.

By:  Bradley Mims

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century 

By:  Winthrop Stimson, Kenneth Quinn, 20036202-775-9824, leem@winstim.com 

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

America West confirms that it plans to operate the three slots requested for Las VC-as using only Stage-3 Jet aircraft, specifically A-320 aircraft and the Columbus service will be operated by Mesa using only stage 3, 50-seat Canadair Regional Jets. The proposed schedules are set forth in Exhibit I to America West's April 5, 2000 application. America West plans to commence service with the requested slots within 45 days of their allocation.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Mesa requests that it be allocated eight exemption slots at O'Hare so that Mesa may provide four daily, non-stop round-trip flights between O'Hare and Columbus.

Counsel:  Baker Hostetler, Joanne Young, 202.861.1532 

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Counsel:  Morgan Lewis, Dennis Barnes, 202.467.7060, Barn7060@mlb.com

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

By:  Francisco Sanchez

Wendell H. Ford Aviation Investment and Reform Act for the 21st Century

Counsel:  GKMG Consulting, Anita Mosner, 703.312.1446

Since we must now reallocate the two exemptions that Sun Country has returned, and since no other carrier has expressed an interest in them, we will grant Spirit's request for the two unused slot exemptions consistent with its proposed service outlined in Docket 2000-7180 and with the conditions in Order 2000-5-20.  

By:  Francisco Sanchez

America West Airlines, Inc. and Mesa Airlines, Inc./Legend Airlines, Inc./National Airlines, Inc./Sun Country Airlines, Inc. and Spirit Airways, Inc.

We have decided to grant Spirit's request for four O'Hare slot exemptions for nonstop Myrtle Beach service by reassigning the four O'Hare slot exemptions awarded to Legend by Order 2000-5-20. This action will not preclude Legend from reapplying for these four slot exemptions plus additional slot exemptions that the carrier might require. As we noted in Order 2000-5-20, qualified applicants such as Legend may apply for O'Hare slot exemptions under the provisions of 49 U.S.C. § 41714(i).

Moreover, we note that under the terms of 49 U. S.C § 41717(a), effective July 1, 200 1, the period of slot controlled operations at O'Hare will narrow from the current 6:45 a.m.-9:15 p.m. period to a much more limited 2:45 p.m.-8:14 p.m. period and under the provisions of 49 U.S.C § 41715(a)(1), effective July 1, 2002, the High Density Rule (Subparts K and S of Part 93 of Title 14 Code of Federal Regulations pursuant to 49 U.S. C. § 41714 (c)) will no longer be in effect for O'Hare operations. These statutory provisions will make additional O'Hare access available to Legend.

As noted in Order 2000-5-20, Spirit certified in accordance with 14 C. F. R. 302.4(b), that it met the statutory criteria as a new entrant or I imited incumbent; i.e., that it and any affiliates pursuant to § 41717(k) hold or operate (or held or operated since December 16, 1985) fewer than 20 slots and slot exemptions at Chicago's O'Hare airport. In the instant application Spirit reaffirms that it operates only eight slot exemptions and that it will operate Stage 3 compliant aircraft. Nonetheless, to be consistent, we will require that Spirit certify that its proposed operations comply with the requirements outlined in Order 2000-4-15.

We find that grant of Spirit's request would improve competition in the Myrtle Beach- O'Hare market by providing new, lower-fare offerings and by operating additional service in a market with a strong, leisure-fare component. In addition, given the loss of Vanguard's service in the Midway-Myrtle Beach market, we agree that Spirit's proposal would significantly address a potential service shortfall in the overall Chicago-Myrtle Beach market.

By:  Francisco Sanchez

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