Reagan Washington National Airport Slots

Order 2006-3-6
OST-2005-23106 - Petition of Air Carrier Association of America to Withdraw and Reallocate America West and US Airways Slots

Issued March 7, 2006 | Served March 10, 2006

Order Denying Petition to Withdraw and Reallocate America West's DCA Slots

On November 21, 2005, the ACAA filed a petition asking the Department to revoke and reallocate the eight beyond-perimeter exemption slots at DCA that had been awarded to America West Airlines. ACAA contends that America West is no longer a limited incumbent as a result of its merger with US Airways, and that the merger has in fact made it the largest slot holding carrier at DCA. Thus, ACAA argues that America West is not qualified to retain the eight DCA beyond-perimeter slot exemptions under AIR-21 or Vision 100 statutory criteria, which require the Secretary to find that award of exemptions would provide domestic network benefits beyond the perimeter and increase competition by new entrants or in multiple markets. ACAA states that America West’s own arguments in applying earlier for the exemptions, which for example stress the anti-competitive effects of awarding them to incumbent carriers, demonstrate why America West is not entitled to hold them now.

We have decided to deny the ACAA request to withdraw eight beyond-perimeter slot exemptions from America West.

As a factual matter, the Department did nut use the new entrant/limited criterion in awarding America West the original six slot exemptions. In our decision awarding a total of 12 beyond-perimeter slot exemptions, six of which were to America West, we stated, “ [Although because of its [America West’s] code-share relationships with Continental it would not be a new entrant at DCA, allowing America West to serve DCA from those hubs [Phoenix and Las Vegas] will provide the carrier the opportunity to become an effective new competitor between DCA and all beyond perimeter cities it serves via Phoenix and Las Vegas.”’ Moreover, we have awarded slot exemptions to other carriers that were not new entrants or limited incumbents, such as Delta Air Lines (Order 2002-11-20) and United Airlines (Order 2004-4-1).

ACAA is of course correct that the post-merger US Airways/America West has significantly more operations at DCA than the pre-merger America West, and that the post-merger carrier could not now qualify there as a new entrant or limited incumbent. The issue, however, is whether the applicable Federal statutes at 49 U.S.C. 41714 and 41718 mandate that we use these facts retroactively to strip America West of the exemptions it had been lawfully awarded earlier. We do not read such a requirement in the statutes.

By: Michael Reynolds