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OST-97-2870

Spirit Airlines, Inc. [Exemption for Melbourne, Florida to New York (LGA)]

OST-97-2870 | August 29, 1997

Application for Exemption

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Spirit Airlines, Inc. ("Spirit") hereby requests such an exemption so that Spirit may provide two daily non-stop round trip scheduled jet services between Melbourne International Airport ("Melboume") and New York's La Guardia Airport. Spirit intends to introduce this new service on or about November 15, 1997. Accordingly, Spirit requests that the relief requested in this application be granted by October 1, 1997.

Spirit is proposing to offer residents of the Melbourne area nonstop, nonseasonal access to Melbourne's largest O&D market, New York City. Spirit believes that its low costs and low fare structure will enable it to thrive in the Melbourne market, and to fill a pressing air service need. Without this service, Melbourne area residents will have limited options for travel to New York -- they will either have to drive long distances in order to catch a nonstop flight to the New York area (for example, Melbourne is a 3/-hour drive from Miami, and a 75-minute drive from Orlando), or can travel on a one-stop basis over Delta's hub at Atlanta.

Exhibit 1: Spirit Melbourne- La Guardia Service

Notice: Answers must be filed on or before September 15, 1997

Counsel: Galland Karasch, Anita Mosner, 202 342 5200

Frontier Airlines / ValuJet Airlines, Inc. / Air Tran Airways, Inc. / Western Pacific, Inc. / Reno Air, Inc. / Spirit Air Lines, Inc.

OST-97-2230 | OST-97-2442 | OST-97-2557 | OST-95-277 | OST-97-2771 | OST-97-2870 | September 4, 1997

Motion for Leave to File an Answer and Reply of Air Carrier Association of America to the Reply of United Airlines, US Airways, and TWA

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The Air Carrier Association of America ("ACAA") hereby moves for leave to file this Reply' to respond to the various replies filed by United, US Airways, Delta and TWA regarding the Applications of Frontier Airlines, ValuJet Airlines, Inc., Air Tran Airways, Inc., Western Pacific, Inc., and Reno Air ("affordable fare carriers") to gain access to LaGuardia Airport in New York City ("LaGuardia") and O'Hare International Airport ("O'Hare").

Service List | Exhibit 1

Counsel : Edward Faberman, 202 778 4462

Spirit Airlines, Inc. (Exemption, Melbourne-New York LaGuardia)

OST-97-2870 | September 15, 1997

Answer of The Melbourne International Airport Authority

With its proximity to Orlando, Melbourne has always been preceived as a little fish in a big pond. However, services to Orlando are not and never will be a substitute for direct services. With US Airways and Continental's recent decisions to eliminate service from Melbourne to Charlotte and Newark respectively, Melbourne is threatened with a sharp loss in air service, and a corresponding increase in fares. Melbourne, with an air service market of 800,000, now has one carrier, Delta, serving one-market, Atlanta.

By: James Johnson, Director of Aviation

Spirit Airlines, Inc. / AirTran Airways, Inc. / Pan American World Airways, Inc. and Carnival Air Lines, Inc. (Exemption, LaGuardia and JFK Slots)

OST-97-2870 | OST-97-2873 | OST-97-2885

Consolidated Answer of Delta Air Lines

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The flood of new entrant slot exemption requests over the past several months fully validates the concern raised by a number of parties that if the exceptional circumstances criterion are relaxed, the flood gates will be open for any carrier claiming an interest in serving a high-density airport-pair. The resulting exemptions would quickly swallow the rule.

With the prospect of free slots for the asking, it appears that the applicant carriers have largely disregarded the Department's buy-sell rule. Any carrier seeking to add service at one of the high density airports including existing carriers must anticipate and assume the cost of acquiring slots. The Department should not embark on a policy of slot subsidies for new entrants, simply because they are unwilling to pay the cost of acquiring slots.

Counsel: Delta and Shaw Pittman, Robert Cohn, 202-663-8060

Answer of Trans World Airlines

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Three more undercapitalized new entrant carriers have jumped on the free slot bandwagon. One applicant proposes to operate in a major short haul market that already has almost 100 daily round trips; another proposes service to a secondary airport only one hour's drive from one of the busiest airports in the country; and the third would fly in a market already well served by commuter carrier flights of major airline affiliates. However, none have come close to meeting the public interest requirements of 49 U.S.C. §41714, which governs these proposed exemptions from the slot regulations. They do not make even a passing attempt to comply with the requirements of the statute, and one fails entirely to mention the statutory provisions. TWA hereby answers and respectfully requests that the applications be denied.

Counsel: TWA and Richard Fahy, 202-457-4764, rfahy@ibm.net

Spirit Airlines, Inc. (Exemption, Melbourne-New York LaGuardia)

OST-97-2870 | September 24, 1997

Motion for Leave to File and Consolidated Reply of The Melbourne Intl Airport to the Answers of TWA and Delta

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The plight of Melbourne is the most compelling case of exceptional circumstances to come before the Department under the new entrant exemption. Application of the criteria used by the Department in approving the Reno Air and Air South applications virtually dictates the grant of an exemption to Spirit Airlines for its proposed Melbourne-La Guardia service. It is clear that the new entrant slot exemption statute was enacted to meet urgent air service needs exactly like the one facing Melbourne. As recently as last April the community was served by three carriers and had non-stop service to its primary destination - New York. Today, it has only one carrier and no nonstop service. This represents the truly "exceptional circumstance" for which this statute was intended.

Exhibit A

Counsel: Baker Hostetler, Joanne Young

Reply of Spirit Airlines

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The topic which was not addressed in the answers filed by TWA and Delta is, in Spirit's view, the most significant topic at issue here. Nowhere was it mentioned that, without the service proposed by Spirit, Melbourne will remain a one-airline town. Nowhere was it mentioned that, with the recent exit from the market by US Airways and Continental, passengers have no choice of scheduled carriers at the airport. Certainly, neither carrier mentioned that, with each day Melbourne remains a monopoly market, the risk increases that passengers there will have to endure higher fares.

Counsel: Galland Kharasch, Anita Mosner, 202-342-5200

Spirit Airlines, Inc. (Exemption, High Density Rule, Melbourne-New York LaGuardia)

OST-97-2870

Re: Ex Parte Letters to Civic Organizations in Support

• Randy Ball, Florida House of Representatives
• Mayor John Buckley, City of Melbourne, Patsy Kurth, Florida Senate
• Bill Posey, Florida House of Representatives

Spirit Airlines, Inc. (Exemption, High Density Rule, LaGuardia)

OST-97-2870 | OST-97-2932 | December 18, 1997

Reply of Spirit Airlines to Answer of The Office of the Queens Borough President and Motion for Leave to File

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The arguments raised by the Borough President are either directed to the existence of the slot exemption procedure itself, or, with respect to the application filed by Spirit, largely are a rehash of arguments raised by other parties. The Borough President's overriding general comment in response to Spirit's application is that services proposed for LGA can as easily be offered at Newark. This is simply untrue. Spirit has devoted considerable time and energy to seeking gates at Newark, and has been unable to secure access to gates at any price during the afternoon evening hours, times which are necessary to mount a viable service. Newark is in fact more congested than LGA, and is simply not a workable alternative. The Borough President's assertions about Newark also have been contradicted by the GAO, which has recognized on several occasions the severe access restrictions at Newark.

Counsel: Spirit and Galland Kharasch, Anita Mosner, 202-342-5200

Spirit Airlines, Inc. (Exemption, High Density Rule, New York LaGuardia)

OST-97-2870 | December 23, 1997

Motion for Leave to File and Reply of Melbourne International Airport to Queens Borough

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Spirit filed its application for four slots to serve Melbourne on August 29, 1997. The evidence supplied by Spirit and Melbourne in earlier pleadings demonstrated that the proposed service met the public interest and exceptional circumstances test under the Department's earlier criteria set forth in Applications of Reno Air, Inc., Order 94-9-30. Having meet the Reno Air criteria, there is no doubt that Spirit's proposed Melbourne service satisfies the criteria announced in Frontier, by restoring nonstop service to Melbourne's most important destination and bringing needed competitive low-fare service into the market. Until the Department redistributes some of the free slots given to the incumbents, the new entrant exception provision is the only avenue currently available to enable Spirit to serve the LaGuardia - Melbourne market. Under the slot exemption legislation and the Airline Deregulation Act, the Department has a public interest obligation to award new entrant slots. The Borough President has failed to show that her concerns outweigh the important public benefits to be derived by restoring service to Melbourne.

Counsel: Baker Hostetler, Joanne Young

Applications of ACCESSAIR HOLDINGS, INC. / AMERICAN TRANS AIR, INC. / AMERICA WEST AIRLINES, INC. / COLGAN AIR, INC. / SPIRIT AIRLINES, INC. / PAN AMERICAN WORLD AIRWAYS, INC. and CARNIVAL AIRLINES, INC. / THE PEOPLE AND BUSINESSES OF BLOOMINGTON-NORMAL, IL; MOLINE-QUAD CITIES, IL; TOLEDO, OH; AND AKRON/CANTON, OH

ORDER GRANTING AND DENYING APPLICATIONS FOR SLOT EXEMPTIONS AT NEW YORK'S LAGUARDIA AND JOHN F. KENNEDY INTERNATIONAL AIRPORTS

After considering applications for exemptions from 14 CFR Part 93, Subparts K and S, for slots at New York's LaGuardia and John F. Kennedy (JFK) Airports, the Department has decided to grant five slot exemptions to American Trans Air, Inc. (ATA) for nonstop service in the Chicago (Midway)-LaGuardia market; and four slot exemptions to Spirit Airlines, Inc. (Spirit) for nonstop service in the Melbourne, Florida-LaGuardia market. We find that granting these exemptions is in the public interest and meets the statutory "exceptional circumstances" test. Grant of these exemptions is conditioned on their being used solely for nonstop service in the city-pair markets designated in the carriers' applications. The Department has also decided to deny the remainder of ATA’s and Spirit's applications as well as the applications of AccessAir Holdings, Inc., America West Airlines, Inc., Colgan Air, Inc., and the joint application of Pan American World Airways, Inc. and Carnival Air Lines, Inc. Further, we deny the petition for reconsideration of AirTran Airways' application filed by the People and Businesses of Bloomington-Normal, IL; Moline-Quad Cities, IL; Toledo, OH; and Akron-Canton, OH. In reaching our decision on all of these requests we were committed, among other guidelines, to avoiding significant congestion and environmental problems. Primarily for these reasons, we are granting only a limited number of exemptions.

By: Charles Hunnicutt

Spirit Airlines, Inc.

Counsel:  GKMG Consulting, Anita Moser, 202.342.5201

Spirit Airlines, Inc.

Spirit's planned services would advance the public's interest and comport with the Department's criteria for granting an exemption in all respects. Spirit is a new entrant, low-fare airline that is poised to bring the benefits of competition -- and low fares -- to a market that is presently non-competitive. If granted the requested exemption from the slot rule at LaGuardia Airport, Spirit proposes to offer low-fare, nonstop schedule service using MD-80 jet aircraft that meets Stage 3 noise requirements. In Order 97-10-17, the Department expanded its definition of exceptional circumstances to recognize the need for competitive service in a market -- especially for low fare competitive service. The Department clarified that exceptional circumstances exist "where consumers would be able to obtain significantly lower fares in noncompetitive or under served markets."

Counsel:  Broward County Aviation Diector, William Sherry

New York continues to rank as the number one market for the region in terms of visitation and passenger traffic. However, the fluctuations in the number of passengers from year to year are a direct reflection of a lack of stable and affordable air service. Our air trade area can support - and desperately needs - more frequent and affordable New York service to meet the growing market demand. It is the only way we will be able to realize the economic benefits of Southwest Florida's popularity in the New York market. We have already experienced the benefits related to Spirit's entry into the market. Detroit has consistently ranked as one of the top visitor markets to Southwest Florida. Its full potential was constrained due to a lack of frequent and affordable air service.

By:  Lee County, Robert Ball

The New York-Orlando market has enough capacity to sustain Spirit's proposed service. Two of the three New York City area airports (Newark and LGA) are the top two domestic O&D markets for Orlando, according to second quarter 1999 data. The third (JFK) was in the top 20. As such, these three airports -- both individually and collectively -- represent a very significant passenger and shipper market for Orlando.

Counsel:  Preston Gates, Jonathan Blank, 202.662.8450

Spirit Airlines, Inc. hereby files the attached letter in support of its Application from Palm Beach International Airport. Spirit Airlines is seeking the award of fourteen exemption slots so that it may provide new nonstop jet service between New York's LaGuardia Airport, on the one hand, and Detroit, MI, Ft. Lauderdale, FL, Ft. Myers, FL, Orlando, FL, Tampa, FL, and West Palm Beach, FL, on the other hand. As demonstrated by the attached letter in support (Exhibit No. 1), there is great need and desire for reliable, convenient, low-fare nonstop jet service to and from LaGuardia.

Counsel:  GKMG, Anita Mosner, 202-342-5201

Spirit Airlines, Inc.

The President of the Borough of Queens is the highest level county-wide executive in Queens County in New York City. If Spirit Airlines' application for 14 slot exemptions at LaGuardia Airport is granted, it would have a significant adverse impact on the residents of Queens County, which is the home of both LaGuardia and John F. Kennedy International Airport and has a population of approximately two million individuals. Because the Borough President is elected by and represents the entire county, and works closely with the aviation industry to balance the economic and transportation benefits of that industry with its negative impacts on residents, the Borough President's Office is in the best position to represent Queens County's interest in this proceeding.

Counsel:  Queens Borough President, Hugh Weinberg

Spirit Airlines, Inc.

If there is any room left for discussion of the benefits to be offered by Spirit’s proposed services, the Department need only look at the use Spirit has made of its LGA-Melbourne and LGA-Myrtle Beach exemption authority. Since Spirit introduced service at Melbourne, average fares in the market have declined 63%, and O&D traffic has increased 964%. At Myrtle Beach, Spirit’s service has brought a 67% fare reduction, and a greater than 500% traffic increase. See Application of Spirit, at 5. The Borough of Queens’ claim that there is a "lack of public benefits that would accrue from any new service" (Answer, at 10) should be put to rest.

Counsel:  GKMG Consulting Services, Anita Mosner, 202.342.5201

Spirit Airlines, Inc.

Counsel:  Office of the Queens Borough President, Hugh B. Weinburg

Spirit Airlines, Inc.

The Office of the President of the Borough of Queens in New York City hereby requests permission to file this unauthorized document in order to supplement its original answer to Spirit Airlines' application for slot exemptions at LaGuardia Airport. We seek to file this document in light of recent factual developments which, we believe, should be considered in connection with Spirit's application. 
While Spirit is factually accurate in its observation that it is within its legal rights to fly the MD-80 aircraft in the routes for which it is seeking exemptions, we believe that it is within the discretion of the decision-makers at the United States Department of Transportation (DOT) to take notice of the particular aircraft model which those seeking exemptions seek to use.  In this case, given the recent problems experienced by Alaska Airlines with its MD-80 aircraft and the federal government's recent decision to inspect all MD-80 and similar aircraft, we respectfully request that the DOT give added weight to Spirit's proposed use of the MD-80 aircraft. The Borough President's Office is of course concerned about the safety of air travel for all those traveling, as well as for all those living near and around airports and under flight paths. For all the reasons stated in the Borough President's December 8, 1999 response and in all subsequent submissions to the DOT, it is respectfully submitted that Spirit's application be denied in its entirety.

Counsel: Queens Borough President, Hugh Weinberg

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