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OST-99-5130

Greenville-Spartanburg Airport Commission

OST-99-5130	February 19, 1999	Application for Chicago O'Hare Exemption Slots	High Density Rule - Chicago O'Hare
		Service List

In the event that the Department determines to grant O'Hare exemption slots to a community, rather than to an air carrier, Greenville-Spartanburg wishes to be considered for such an award. We hereby seek to secure three Chicago O'Hare exemption slots, which will be held in the name of the community for the benefit of the public, and used for nonstop regional jet service between Greenville/Spartanburg and Chicago O'Hare.  In brief, Chicago is the third largest O&D market for Greenville/Spartanburg, and securing nonstop jet service to O'Hare is absolutely critical to the economy of upstate South Carolina. Currently, companies in the greater Greenville/Spartanburg area that do business in Chicago and the upper Midwest must either send their employees backtracking to Charlotte, or make them endure ever-increasing connecting delays at Atlanta. And for the "privilege'' of using such inconvenient connecting service, our passengers pay some of the highest fares in the country.

By:  GSP Airport Commission, J Garrett Jackson, 864-877-7426

Greenville/Spartanburg Airport Commission

OST-99-5130

March 8, 1999

Answer of United Air Lines HTML

High Density Rule - Chicago O'Hare

The relief GSP proposes, however, is intended to award exemption slots directly to the community in an apparent effort to put the community in control of the carrier selection process. Instead of the type of cooperation which has proved successful in the past, such a proposal would inevitably lead to competition and conflict among carriers and communities over who is to operate these services. The disinterested participation of the Federal government, taking into account the interests of consumers and the service offerings of the carriers as well as broader competitive and policy considerations, would be lacking from the type of procedure envisaged by GSP. In these circumstances, United is constrained to oppose GSP's request for allocation of exemption slots to communities. A different case might be presented if the community were to seek the joint award of slots in conjunction with a carrier eligible to operate them or if the exemptions were allocated to a carrier designated by the Department of Transportation to operate the services for the benefit of a specific community. To award the slots to the community directly for it to dispose of at its own discretion would, however, be both unlawful and unwise.

Counsel:  United and Kirkland Ellis, Jeffrey Manley, 202-879-5161, jeffrey_manley@kirkland.com

The Communities of VA Peninsula, Savannah, GA/Hilton Head, SC, Greenville/Spartanburg, SC and Aspen Mountain Airways

By this order the Department is establishing an experimental allocation of Chicago O'Hare Airport slot exemptions to be deployed by selected communities for the purpose of assisting those communities in acquiring nonstop air service to O'Hare. Specifically, we are reserving a total of three O'Hare slot exemptions each for the communities of Greenville/Spartanburg, South Carolina, and Savannah, Georgia/Hilton Head, South Carolina, for the provision of such service. The service must be provided with Stage 3 jet aircraft, and is limited to a 179-day period. We find that this at lion is in the public interest.

By:  Charles Hunnicutt

Greenville/Spartanburg Airport Commission

The Greenville-Spartanburg Airport Commission respectfully requests renewal of the three Chicago O'Hare exemptions slots that the Department awarded to the community of Greenville/Spartanburg by Order 99-3-12, March 16, 1999. As the Department stated in Order 99-3-12, the award was on an experimental basis, and limited to a period of 179 days from April 4, 1999. Accordingly, absent grant of this renewal application, the exemption would lapse on or about October 1, 1999.

By:  GSP Airport Commission, J. Garrett Jackson, 864.877.7426

Greenville/Spartanburg Airport Commission

Legal and policy considerations strongly counsel in favor of denying GSP's application. First, DOT has no authority under law to grant permanent slot exemptions to a community. None of the provisions of 49 U.S. C. §41714 that authorize slot exemptions applies to GSP's application. Further, as United has already noted, granting slot exemptions to GSP would violate the federal preemption provisions of 49 U.S.C. §41713(b). Second, allowing communities to allocate exemption slots to carriers will remove the is interested participation and expertise of the Department, which is in a unique position to evaluate broader national competitive and policy considerations in conjunction with the interests of the community. If communities are given permanent slot exemptions, there is a real danger that they will base carrier selection decisions on factors, such as local politics, rather than on the national interest and the air service benefits to the local community. The superior and tested alternative to promote service in communities where the marketplace itself cannot make that determination is for the Department's to decide which carrier is in the best position to do so. Finally, it is unlikely that a community would be willing to relinquish a permanent slot exemption even if it is not being used cost-effectively. This could lead to a wasteful and inefficient use of a highly scarce and valuable resource -- a slot at O'Hare International Airport if air traffic demand dropped significantly in the community holding the slot exemption. Carriers are in a much better position to decide how to use their slot exemptions in the most efficient, productive manner possible. Where efficient services are not possible, carriers can be expected to raise the matter with the Department in an effort to redeploy the exemptions where they will produce greater benefits.

Counsel:  United and Kirkland Ellis, Jeffrey Manley, 202-879-5161, jeffrey_manley@kirkland.com

Community of Savannah, Georgia/Hilton Head, South Carolina and Greenville/Spartanburg Airport Commission

We have decided to extend the provisions of Order 99-3-12 until further notice. As we noted in authorizing this experiment, we want to maintain program flexibility regarding slot issues while Congress is addressing relevant legislative proposals. At this time, legislative proposals remain pending and it would therefore be premature to take permanent action on the experiment. Moreover, initial indications are that traffic response at both Savannah/Hilton Head and Greenville/Spartanburg has been very good. Thus, clearly it would not be in the public interest to terminate the authorization of the slot exemptions. We disagree with United's arguments concerning our legal authority to award slot exemptions to communities, as we explained in detail in Order 99-3-12. As we noted there, only 49 U.S.C. §41714(a), which does not apply to this case, limits the award of slot exemptions to air carriers.

We are not in a position to grant Savannah/Hilton Head's request for additional exemptions. We are continuing to adhere to the previously established limit of 60 slot exemptions at O'Hare based on an environmental assessment issued with Order 97-10-16. There are no available exemptions remaining against that limit. Moreover, in view of the strong and valid interest of numerous communities to gain access to O'Hare, our policy has been to encourage air carrier recipients of slot exemptions, especially those with ties to American Airlines or United Air Lines, to augment their slot exemptions through the market place or by operating outside the controlled hours.

FUTURE CHANGES

As the FAA slot regulation makes clear "slot(s) do not represent a property right but represent an operating privilege subject to absolute FAA control (and) slots may be withdrawn at any time to fulfill the Department's operating needs..." 14 CFR 93.223(a). This order should not be construed as conferring any ability to sell, trade, transfer, or convey the operating authorities granted by the subject exemptions.

By:  Bradley Mims

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