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OST-99-5521

National Airlines, Inc.

National proposes to provide three daily round-trip, nonstop flights in the O'Hare-Las Vegas market. National recognizes that the Federal Aviation Administration currently does not have O'Hare slots to distribute. Despite diligent efforts. National has been unable to purchase or lease O'Hare slots. Accordingly, National requests that the Department grant it five slot exemptions from the Few s high density rule, conditional on their being used solely to provide nonstop service between O'Hare and Las Vegas.

Counsel Natioanl and Hogan Hartson, George Carneal, 202-637-6546

National Airlines, Inc.

America West has consistently advocated that the Department of Transportation complete the deregulation process and has specifically supported abolition of the High Density rule at O'Hare and the elimination of the perimeter rules at Reagan National and LaGuardia to stimulate competition and enhance consumer welfare. Accordingly, America West joins with National Airlines in urging elimination of the 60-slot exemption limitation at O'Hare which requires no Congressional action. If the Department decides to lift the current exemption ceiling, it should ensure that America West, which has already made a commitment to provide low-fare competitive service at O'Hare, has the opportunity to obtain the slots it has previously requested. Until the slot limitation is lifted such that America West can add needed service in the O'Hare - Las Vegas market, America West is compelled to oppose National Airlines' exemption application. National Airlines' proposed point-to-point air transportation of tourists to resorts in Las Vegas can be adequately operated out of Chicago's Midway Airport, provides fewer benefits to the traveling public than America West's proposed service and does -not meet the public interest and exceptional circumstances criteria established by the Department.

Counsel:  America West and Baker Hostetler, Joanne Young

In the parlance of Las Vegas, the National application is a long shot. It is simply impossible to make a case that exceptional circumstances exist to support the award of slots in a market served by no less than six air carriers that will offer in May, 1999, nonstop and one stop flights with a total of over 48,000 weekly seats. Moreover, in terms of nonstop seats, the O'Hare-Las Vegas market will experience almost 20'6 growth compared to May of 1998. This capacity growth hardly suggests there is a compelling need for the exercise of the Secretary's exemption authority since the incumbent carriers are responding vigorously to growth in the market.

Counsel:  Bagileo Silverberg, Robert Silverberg, 202-944-3300

Traffic growth at McCarran has undoubtedly been held in check due to load factors averaging over 75% for all domestic services. Among the top 15 onboard traffic markets during 1998, six had load factors that exceeded 80%. With total market load factors so high, there is no question that passengers seeking to fly in and out of Las Vegas are consistently being turned away, and cannot get the service they seek. McCarran is known as a low-yield destination, and consequently established carriers are not adding capacity to meet the needs of the traveling public. New entrants are clearly necessary to broaden the service options available at Las Vegas.

By:  Las Vegas and Global Aviation Assoc., Jon Ash, 202-457-0212

Despite the abundant nonstop and single-plane services offered daily between Chicago and Las Vegas by three network carriers and two low-fare specialists, National, nonetheless, contends that the market is underserved. The sole basis for this claim is the fact that the existing nonstop flights between O'Hare and Las Vegas operate at relatively high average load factors, and that some of the flights are scheduled at off-peak hours

Counsel:  United and Kirkland Ellis, Bruce Rabinovitz, 202-879-5116, bruce_rabinovitz@kirkland.com

National Airlines, Inc.

Importantly, National's entrance into the O'Hare-Las Vegas market also will clearly aid in lowering the average ticket prices for passengers. National's proposed fares for its O'Hare-Las Vegas service are set forth in Exhibit NA-4, and will be significantly lower across the board than the fares currently being charged by the incumbent carriers in the O'Hare-Las Vegas market. For example, National's unrestricted, round trip first class fare will be 60.7% lower than the fare being charged by all three incumbents. National's unrestricted, round trip coach/tourist class fare will be 52.8% to 60.3% lower than the incumbents' fares. National's 14-day advance purchase, round. trip fare will be 28.0% lower than the fare being charged by all three incumbents.

Counsel:  Hogan Hartson, George Carneal, 202-637-6546

National Airlines, Inc. - Slots - Chicago O'Hare Airport-Las Vegas

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

American Eagle Airlines, Inc.
Mobile Airport Authority-Atlantic Coast Airlines
Huntsville-Madison County Airport Authority
Greater Baton Rouge Airport District
Charleston County Aviation Authority-Atlantic Coast Airlines
National Airlines, Inc.

By this order the Department is amending its actions in Orders 98-4-21 and 98-9-24 by reallocating eight of the Chicago O'Hare Airport slot exemptions that were authorized to American Eagle in those orders. Specifically, slot exemptions that were previously designated for American Eagle to provide nonstop regional jet service to Montgomery, AL, and Shreveport, LA, are withdrawn and are redesignated for implementation of nonstop regional jet service between O'Hare and Baton Rouge, LA (two slot exemptions for American Eagle), Huntsville, AL (three slot exemptions for American Eagle) and Mobile, AL (three slot exemptions for Atlantic Coast Airlines). The reallocation of these slot exemptions is conditioned on their being used solely for implementation of service in the designated markets.

By:  Brad Mims

National Airlines, Inc.

Counsel National and Hogan Hartson, Ronald Brower, 202-637-6546/5762, rpbrower@hhlaw.com 

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

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

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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