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OST-99-5583

Charleston County Aviation Authority and Atlantic Coast Airlines, Inc.

In addition to the immediate Charleston metro area, ACA's air service to O'Hare will provide positive benefits for a large radius extending northward to Myrtle Beach. Myrtle Beach is currently ranked the second most popular vacation destination in the United States, and the third largest Chicago market without nonstop service. It is reasonable to expect that the presence of nonstop Chicago service would convince "Grand Strand" travelers to fly in and out of Charleston. This would be especially true for those destined for the southern-end of the Grand Stand for communities such as Pawley's Island and the Debordeaux Colony.

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

Mobile Airport Authority and Atlantic Coast Airlines, Charleston County Aviation Authority and Atlantic Coast Airlines and Community of Savannah/Hilton Head

As we pointed out in our application in OST-99-5587, American's network at Chicago (American Airlines and American Eagle) is at a significant slot disadvantage compared to United's network at Chicago (United Air Lines and its United Express affiliates, including Air Wisconsin, Great Lakes Airlines, Atlantic Coast, and Trans States Airlines). United's network has access to a total of 1,052 O'Hare slots, while American's network has access to 916, resulting in a United network advantage of 136 daily slots, or 68 daily roundtrip services. In the interest of fostering two-carrier hub competition at O'Hare, the Department should not grant any additional exemption slots to use by United-affiliated carriers at O'Hare until American and American Eagle have achieved slot parity

Counsel:  American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

Charleston County Aviation Authority and Atlantic Coast Airlines and Mobile Airport Authority and Atlantic Coast Airlines

It is compelling that Eagle virtually ignores these considerations in its answer to the joint applications. In these applications, the parties noted the fact that the Charleston and Mobile markets lacked nonstop O'Hare service and that these markets were logical candidates for the grant of slot exemptions based on their respective size and market potential. */ In addition, ACA presented a traffic forecast and profit and loss statement. Eagle made no attempt to rebut these facts and arguments. Its only response was to incorrectly focus on hub carrier competition at O'Hare. Perhaps Eagle is distracted by this competition issue and for this reason it failed to successfully market its O'Hare Shreveport and O'Hare-Montgomery service for which slots were awarded to it by exemption. Whatever the reason for Eagle's termination of Shreveport and Montgomery service, it is no answer to the ACA/Charleston/Mobile applications to ask that they be denied on grounds that are irrelevant to the DOT's consideration of the joint requests.

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

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

Atlantic Coast Airlines, Inc.

Not only will ACA service permit Charleston to enjoy more regional jet connecting service to these new nonstop and single plane destinations, Charleston will have the benefit of ACA's experience in linking communities like Charleston to O'Hare. For a year ACA has been building a second base of operations at O'Hare and as of October, 1999 will be providing O'Hare service to eight small non-hub, small hub and medium hub airports consisting of 42 daily operations. ACA currently serves the Charleston-Washington Dulles market with four times daily turboprop J-41 service. In conjunction with ACA's Charleston-O'Hare service and in consideration of aircraft routing patterns, ACA plans to upgrade the Charleston-Washington Dulles market with three times daily regional jet service. The Charleston community will twice benefit by an award of exemption slots to ACA.

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

American Eagle Airlines, Inc. / Charleston County Aviation Authority/Atlantic Coast Airlines

We have already determined in Order 99-7-17 that we would reallocate the three remaining slot exemptions at O'Hare to a carrier to serve Charleston, SC. In summary, we did so on the basis that Charleston is the largest O'Hare market without nonstop service and that the Charleston-O'Hare market is clearly large enough to support nonstop jet service. We affirm those findings here. Thus the only decision at issue in this order is the designation of the air carrier applicant for the reallocation of those exemptions.

ACA's proposal, the only one now pending for Charleston-O'Hare operations, meets our guidelines for exceptional circumstances. It would introduce new nonstop service in a market where none now exists; it would use Stage 3 jet aircraft; and it reasonably appears to be financially and operationally viable. ACA has also assured us that it will use self-help means of supplementing the requested exemptions in order to provide a full service pattern of at least two round trips a day in the market. Such commitments are a critical consideration under our slot exemption policy goal of striving for the maximum public benefit through the use of our slot exemption powers. We will therefore amend Order 99-7-17 to reallocate an additional three slot exemptions to ACA to be used to provide at least two round trips a day between O'Hare and Charleston, SC. ACA may use these exemptions only for the provision of nonstop regional jet service in that city-pair market.

By:  Bradley Mims

Atlantic Coast Airlines, Inc.

In accordance with Ordering Paragraph No. 3 of Order 99-9-16, the undersigned on behalf of Atlantic Coast Airlines hereby submits the Atlantic Coast Airlines /Charleston, S.C.-Chicago O'Hare flight schedule, effective November 19, 1999. The O'Hare flight times have been coordinated with, and agreed to by, the Airspace and Traffic Law Branch of the FAA.

Counsel:  Silverberg Goldman, Robert Silverberg, 202.944.3300

Charleston County Aviation Authority and Atlantic Coast Airlines, Inc.

By:  Krista Trombley

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