OST-97-2970 / OST-97-2985 / OST-97-2984 / America West / Simmons / American Trans Air / High Density Rules, Chicago O'Hare and New York LaGuardia / Answer of TWA / October 21, 1997

Application of

AMERICA WEST AIRLINES, INC.

for an exemption pursuant to 49 U.S.C. § 41714

Columbus - New York LaGuardia Airport

Phoenix - Chicago O'Hare Airport

Application of

SIMMONS AIRLINES, INC d/b/a AMERICAN EAGLE

under 49 USC 41714 for an exemption from the high density rule governing Chicago O'Hare slots (14 CFR Part 93)

In the matter of the application of

AMERICAN TRANS AIR, INC.

For an exemption from 14 C.F.R. Part 93, Subparts K and S. pursuant to Section 206(c)(1) of the Federal Aviation Administration Authorization Act of 1994

(Chicago Midway-New York LaGuardia; St. Petersburg, FL - New York LaGuardia; Sarasota, FL-New York LaGuardia)

ANSWER OF

TRANS WORLD AIRLINES, INC.

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Introduction

The feeding frenzy of airlines enticed by DOT promises of a liberalized approach to the grant of slot exemptions has now escalated dramatically. Three more carriers, including two majors or their affiliates, have now requested a total of 83 new slots at LaGuardia and O'Hare Airports. American (Simmons) makes no pretense that it is a new entrant and proposes to use valuable slots for commuter equipment. America West and American Trans Air (ATA) propose to add service primarily in large markets that are already well served. In considering these applications, the Department must keep in mind the purpose of slot rules -- to limit runway congestion and avoid the imposition of delay costs on airlines and consumers. Grant of these applications would benefit these carriers but impose real economic costs on other airlines and consumers. TWA hereby answers /1 and requests that the applications be denied. In support of its answer, TWA states as follows:

1/ In response to these pleadings, TWA is filing a consolidated answer, which is late-filed with respect to the America West application in Docket 97-2970. TWA, therefore, moves to file this answer as a late filed answer in that Docket. The subsequent filing of the American (Simmons) and American Trans Air applications mean that the Department must treat all three as competing applications for the same limited resources. Under these circumstances, TWA believes that the Department will benefit from a consolidated answer which discusses all answers in the context of the total slot situation at these airports. No party will be prejudiced by the grant of this motion.

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LaGuardia

Many months ago, when the total of LaGuardia slot requests stood at only 28, TWA showed that they would take up almost half hour of runway time /2. The two applications here bring total slot requests to 58. Since the total hourly slot limit at LaGuardia is only 62, this amounts to almost a full hour of runway congestion. Neither applicant has shown any compelling public interest or unusual circumstances that would justify grant imposition of such substantial delay costs on airlines and passengers at LaGuardia.

LaGuardia - Florida - American Trans Air proposes to use four slots to provide daily round trips in the New York - St. Petersburg and New York - Sarasota, Florida markets. Neither service has enough of a public interest justification to justify use of LaGuardia slots.

The New York - Sarasota market is so small and well served via major hubs that American Trans Air proposes only seasonal service. (ATA proposes to use the slot for an additional Midway flight in the off-season.) American Trans Air admits that Sarasota receives 23 daily departures to LaGuardia from Delta and US Airways (Application, p. 4). In addition, the Sarasota area has nonstop access from Tampa International, which is

2/ TWA Answer to Airtran, June 9, 1997, Docket 97-2557.

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only 54 miles and 62 minutes from the center of Sarasota via interstate highway (Rand McNally Trip Maker).

St. Petersburg is even closer to Tampa. Its airport is directly across Tampa Bay from Tampa International and only 11 miles away by interstate highway. The Tampa airport is only 21 miles and 23 minutes from downtown St. Petersburg. ATA's claim that Tampa - New York is underserved is invalid. Its claim of limited service to LaGuardia is based on off-season schedules and ignores ample service to Kennedy and Newark.

December schedules show 15 daily frequencies to New York.

Airport	Frequencies
LaGuardia	4 (US Airways)
Newark	7 (Continental 6, Kiwi 1)
Kennedy	4 (TWA 2, Delta 2)

Clearly, neither of the Florida cities justify use of scarce LaGuardia slot resources.

LaGuardia - Chicago - American Trans Air also proposes to use LaGuardia slots for service to Chicago's Midway Airport. It claims that the Midway-LaGuardia market is separate and distinct from O'Hare-LaGuardia because its proximity to downtown makes it a convenient airport for Chicago and surrounding area residents, including those in northern Indiana (Application, page 3). There is no basis for any claim that Midway is a

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separate market from O'Hare. O'Hare is equally convenient for most of the same Chicago and surrounding area residents, and indeed, provides superior access to downtown because of its Rapid Transit Line. If Midway were a separate market, ATA would not be comparing Midway and O'Hare fares and arguing that its "service will serve as a competitive spur increasing the size of the overall market" (Application, p. 3). Nor, of course, is LaGuardia a separate market from that served by the other New York airports. The New York-Chicago market presently receives a total of 90 daily frequencies in each direction, including six from JFK and Newark to Midway. ATA has provided no basis for treating LaGuardia-Midway as a separate market.

American Trans Air also relies on Midway Airlines' service in 1990 as "another compelling indication that ATA's service would convenience a considerable number of passengers". However, Midway operated 8 daily round trip frequencies, enough to establish a presence in the market. Nevertheless, its load factor was only 51% (Schedule T-100). It is unlikely that ATA's limited frequency will achieve the same traffic volumes as Midway Airlines. However, the issue is not whether ATA would attract some limited amount of traffic. Rather, it is whether the scarce resource of a new LaGuardia slot should be allocated to a market that already receives 90 daily frequencies.

LaGuardia - Columbus - America West proposes that eight slots be used for LaGuardia - Columbus, Ohio service. It is already using four slots for two daily round trips, but proposes to replace slots it now leases with slots it would be given by the

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government. Nevertheless, it is proposing a net increase of eight slots because the returned slots will be used or re-leased by the other airline.

America West makes no claim that any unusual circumstances affect the New York-Columbus market, which would justify creation of new slots. Indeed, U.S. Air and America West provide six daily round trips and had a load factor of only of 54% in the year ended July 31, 1997 (Schedule T-100). Rather, it claims that additional frequencies to Columbus are necessary so that it can provide connecting service to its Phoenix and Las Vegas hubs, and double connections to West Coast points. However, American West ignores its own nonstop service from New York to both Phoenix and Las Vegas, which provides superior online service to the West Coast. America West currently operates the following nonstop frequencies:

	Phoenix	Las Vegas
Kennedy	3	2
Newark	3	2

Thus, American West already operates l O daily round trips from New York to its major West Coast connecting hubs. American West has failed to show any unusual

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circumstances affecting either its New York-Columbus service or its New York-West Coast connecting service that would justify creation of new slots at LaGuardia /3.

O'Hare

Two Major airlines, American and America West, have used the opportunity to attempt to claim additional O'Hare slots. It is unclear what statutory basis American (Simmons) has for its extraordinary request for 60 O'Hare slots to serve 10 different city pairs. American and Simmons are clearly neither new entrants nor limited incumbents under section 41714 and none of the cities for which it requests slots are Essential Air Service points.

As for America West, surely it must be against public policy for a carrier to lease valuable O'Hare slots to other airlines and then make claims for new slots under Sect. 41714. America West admits that it has leased three O'Hare slots to American in exchange for two slots at LaGuardia and one at National (ftnte. 6). America West has made an economic decision that its Chicago slots will be most valuable if traded for slots at other airports. This is the same type of economic judgments that every other major

3/ American West's claim that it will provide a $51.8 million benefit for consumers through lower fares (Application, page l0) is invalid. The exhibit on which it is based shows alleged traffic stimulation from additional frequencies, not from fare reductions. Such stimulation is unlikely in view of the existing service in these markets. The alleged stimulation is then multiplied by a figure from a 1991 study that represents economic impact of new service in the local community. This is not fare-related.

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airline has to face. It should not be rewarded for this decision with additional O'Hare slots.

Moreover, America West does not need O'Hare slots to provide low fare service from Chicago to its hubs. It already operates a daily Midway-Las Vegas nonstop round trip, and could add Midway-Phoenix service. Carriers already providing low fare service to Phoenix and Las Vegas from Midway include Southwest, American Trans Air, and Kiwi. They have demonstrated that Chicago consumers seeking low fare alternatives can utilize Midway. Under these circumstances, there are no unusual circumstance that would justify creating new slots for American West to provide low fare service.

Wherefore, TWA respectfully requests that the applications of American, America West, and American Trans Air for new slots at LaGuardia and O'Hare be denied.

Respectfully submitted,

Richard J. Fahy, Jr.

Attorney for Trans World Airlines, Inc.

October 21, 1997