OST-97-2873 / AirTran / September 2, 1997

APPLICATION OF:

For an exemption from Subparts K and S of 14 CFR PART 93 (Slot Restrictions at Washington (DC) National Airport) as to provide non-stop service between Knoxville, TN & Washington (DC) National;

AirTran Airways, a New Entrant Air Carrier within the meaning of 49 USC 41714, does not hold any Washington National airport (DCA) slots and has not sold or given up any such slots after December 16, 1985. The company desires to provide its non-stop, affordable air fare service between Knoxville, Tennessee (TYS) and DCA but is blocked by the major carrier's control of slots previously given to them by DOT at DCA. Accordingly, AirTran respectfully submits this application seeking an exemption in the public interest from the high density airport slot limitations at DCA; or Requests the Secretary to withdraw slots from incumbents pursuant to 14 CFR 93.223 and re-allocate them to affordable fare carriers so as to allow AirTran to provide two daily round-trips between Washington National Airport and Knoxville, TN.

AirTran believes it is clearly in the public interest for the Secretary to use his existing authority, as did DOT Secretary Goldschmidt in 1980 on behalf of New Entrant New York Air, and take action to open competition at Washington National Airport.

Unrestricted fares by the regional carrier currently flying the TYS-DCA route exceeds 62 cents per mile. This is particularly shocking when comparing the 18 cents per mile fare currently offered between Nashville and Baltimore. The residents of eastern

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Tennessee are held hostage to overpriced, inferior service because of the artificial slot constraints at Washington National. Fares currently exceed 62 cents per mile due to market concentration and lack of convenient jet service in the market.

AirTran's business focus is based on a commitment to customer service, reliability and affordable air fare. AirTran sets its fares at a substantial discount to stimulate demand, particularly by those who might otherwise have not traveled at all.

AirTran Airways began scheduled service on October 5, 1994 from Orlando to several medium sized communities that previously lacked affordable, nonstop jet service to Orlando. In many cases the traffic in markets served by AirTran has tripled as a result of introducing this new, convenient and affordable nonstop and direct jet service.

Operations are currently conducted with a fleet of Boeing 737-200 aircraft. Additional Boeing 737-200 aircraft will be placed in service in 1997.

AirTran proposes to expand this unique brand of affordable service between DCA and TYS by offering convenient nonstop jet service twice a day. Currently this market lacks any nonstop jet-service to Washington National or any other airport into the Washington, DC metropolitan area. AirTran will remedy this situation by offering daily, well timed flights at affordable fare levels. AirTran has researched the availability of slots and associated costs. Based on available information, the cost of slots and time availability would make the proposed service unprofitable. Therefore, AirTran submits this application for exemption to the High Density Rule.

Not only will AirTran provide service to this community on a much-needed nonstop basis to Washington National, but it will do so at affordable fares free of cumbersome restrictions traditionally offered by the major carriers. The combination of enhanced service from these markets and the competition such service will stimulate is clearly in the public

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interest.

AirTran, because of its existing operations in Knoxville, is ready to begin its service immediately.

Granting this request for an exemption will not only improve consumer access to the transportation system, but will provide an economic benefit to a community which is lacking convenient air service to the one of the country's largest metropolitan areas.

As a condition to the granting of this application, AirTran would agree and acknowledge that the slots do not confer on AirTran any permanent right to serve Washington National for the purpose of selling, trading, transferring or conveying the slots for anything of value. AirTran won I however respectfully request the right to slide any slots it obtains through an exemption into another time period by agreement with another slot holder to make a reciprocal slide such that the total number of operations in any relevant time period is not increased.

Knoxville is one of AirTran's original cities. Since nonstop affordable jet service was offered to Orlando, the market has seen a growth of over 139% since service commenced in 1994.

The Knoxville SMSA has a population base of 631,000, however AirTran's experience is that the airport's catchment area extends up to 100 miles away, serving eastern Tennessee and western South Carolina. Population base for the catchment area is estimated at nearly 2,000,000. Eastem Tennessee continues to see an economic boom with low unemployment and solid household income growth.

Despite the lack of nonstop jet service, Washington, DC was the largest generator of O&D traffic for Knoxville with over 216 daily passengers' pay an average of $155. Currently

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passengers must transit hubs at ATL, CLT, or CVG to reach any airport in the Washington, DC metropolitan area with jet service.

AirTran proposes to offer two daily nonstop trips between Knoxville and Washington National. Service would be offered with 126-seat Boeing 737-200 aircraft. Unrestricted fares offered will be up to 50% below those currently available in the market.

By granting AirTran an exemption to serve the Knoxville market from Washington National the DOT will be providing a public service to the consumers in eastern Tennessee that now must be subjected to high fares, inconvenient service through major carrier's hubs, or a trip of nearly two hours in a small propeller driven aircraft.

By granting the exemption sought by AirTran Airways in the Knoxville-Washington National market, the DOT will be acting in the "public interest" as this will:

1. Ensure the availability of affordable jet service in a separate and distinct market where such prices and jet service are currently unavailable.

2. Lessen unreasonable industry concentration at hubs, and eliminate traffic erosion in medium sized markets not currently enjoying affordable nonstop jet service to the Washington, DC area.

3. Encourage the market entry of a new carrier and strengthen a small carrier to ensure a more effective and competitive airline industry.

4. The proposed service would benefit over Two Million consumers who currently fail to enjoy convenient nonstop affordable jet service to Washington National from Knoxville.

5. Vehicular highway traffic would be reduced and consumers would return to their local

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airports rather than driving up to two hours to obtain affordable jet service.

6. Facilitate the DOT's strong commitment to enhancing the role of new entrants.

Therefore, AirTran Airways respectfully requests the Secretary of the DOT to grant an exemption in the public interest or reallocate slots at DCA such that the Secretary's action provide AirTran Airways with sufficient and appropriate Washington National slots necessary for the carrier to operate the pattern of service proposed.

Respectfully submitted this 2nd day of September, 1997.

Lawrence L. Brinker, Esq.

General Counsel and Secretary for AirTran Airways, Inc.