OST-97-2985 / Simmons Airlines / Exemption, High Density Rule, Chicago O'Hare / Reply of Simmons / November 4, 1997
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)
REPLY OF SIMMONS AIRLINES, INC. d/b/a AMERICAN EAGLE
Simmons Airlines, Inc. d/b/a American Eagle hereby replies to the answer submitted by United Air Lines, Inc. on
October 17, 1997 in opposition to Simmons' application under 49 USC 41714 for sufficient Chicago O'Hare exemption slots required to provide service to the following underserved nonhub communities: Charleston, West Virginia; Chattanooga, Tennessee; Duluth, Minnesota; Fayetteville, Arkansas; Montgomery, Alabama; New Haven, Connecticut; Roanoke, Virginia; Shreveport, Louisiana; Springfield/Branson, Missouri; and Wilkes-Barre/ Scranton, Pennsylvania.United, which with its codeshare affiliates holds more slots at O'Hare than any other carrier group, proffers three reasons for opposing Simmons, application. First, United contends that it plans to file its own application at some
- 2 -
unspecified future date, and seeks comparative consideration. Second, United wrongly suggests that United and American are equally situated at O'Hare with respect to slots. Finally, United criticizes American for not maintaining service to certain communities with 97-seat Fokker jet aircraft. Before turning to these arguments, we will first show that Simmons' application is fully consistent with
Order 97-10-16, October 17, 1997, which the Department issued on the same day that United filed its answer. In that order, which granted two O'Hare exemption slots to Reno Air and eight to Trans States Airlines d/b/a United Express, the Department said that:"Consistent with our continuing goal of achieving maximum public benefits through the grant of slot exemptions, we will also clarify other aspects of our decisional guidelines for determining public interest and exceptional circumstances. First, we would favor proposals that are based on jet aircraft that meet Stage 3 noise requirements; second, there should be a reasonable expectation that the proposed service would be operationally and financially viable; third, we will place a premium upon the introduction of (a) new nonstop services where none exist and (b) new competitive services, especially by applicants that have the demonstrated potential to offer low ' -fare competition, where there is single carrier service and the market could support entry or where existing services do not produce meaningful price competition" (p. 4).
Simmons' application fully meets the Department's decisional criteria. First, Simmons has proposed service with regional jet aircraft. Second, Simmons has demonstrated the viability of its proposed service in the supplement to its
-3 -
application submitted on
October 20, 1997. Third, there are presently no roundtrip nonstop flights in any of the O'Hare markets Simmons proposes to serve. Simmons' application has received substantial civic support from elected officials, regional economic organizations, and businesses, and should be granted without delay.Turning to United's objections, the Department should not delay action on Simmons' request merely because United has said it intends to submit a competing application at some unnamed future date.. The Department did not defer acting on the application by Trans States Airlines d/b/a United Express in Order 97-10-16, even though Simmons' application was already pending. There is no justification for holding up Simmons' request merely because United may file its own application. See e.g., Order 97-7-21, July 15, 1997, where the Department rejected a similar request by United for deferral of an application by American, finding that 11(t]he due process requirements of Ashbacker do not demand that we defer a final decision in this case, in order to consider an application that was filed much later" (p. 14). The Department should reach the same result here.
Second, United misleadingly suggests that American and United are virtually even in slot holdings at Chicago O'Hare. United's portrayal not based on reality. In fact,
- 4 -
United and its three codeshare affiliates presently hold a total of 1,024 O'Hare slots, compared to 898 held by American and American Eagle. United holds 760 domestic slots and 17 international slots; Air Wisconsin d/b/a United Express holds 38 domestic slots and 128 commuter slots; Great Lakes Airlines d/b/a United Express holds 73 commuter slots; and Trans States Airlines d/b/a United Express holds eight commuter slots. American holds 582 domestic slots and 35 international slots; AMR Eagle holds 281 commuter slots, which are presently being operated by Simmons Airlines d/b/a American Eagle.
While United states that the carriers that operate as United Express are "independently owned and operated" (p. 4 n. 4), whereas AMR Corporation owns American and the American Eagle commuters, that is a distinction without a difference. United clearly views its codeshare network at O'Hare as an integral part of its own operations. Indeed, United's answer recites that "United is among those actively preparing to implement regional jet service by United Express carriers at O'Hare" (p. 2), rather than that these "independent" carriers are preparing to implement service. United's view of the integrated nature of its commuter network is also shown by the fact that United mistakenly counted 128 commuter slots that are
- 5 -
actually held by Air Wisconsin d/b/a United Express as part of United's holdings (p. 5 n. 6). /1
Moreover, United's answer fails to mention that the United group has already received 56 O'Hare slots under the exemption process since 1994:
o By Order 94-10-47, October 28, 1994, Great Lakes Airlines d/b/a United Express received 24 O'Hare exemption slots to serve EAS points in Indiana and Illinois.
o By Order 94-11-12, November 8, 1994, Great Lakes Airlines d/b/a United Express received four O'Hare exemption slots to serve Oshkosh, Wisconsin.
o By
Order 97-1-7, January 13, 1997, Great Lakes Airlines d/b/a United Express received 20 O'Hare exemption slots to serve Dubuque, Mason City, Huron, Sioux Falls, and Fargo. DOT granted that application under a Congressionally mandated expansion of the EAS subsection o f the statute to include underserved nonhub points, even though Sioux Falls was receiving twice-daily roundtrip jet service by United at the time of the Department's award. Great Lakes d/b/a United Express started Chicago-Sioux Falls service with three daily roundtrips on March 31, 1997, which it expanded to four on June 4, 1997. On June 4, 1997, United canceled its two daily1/ In addition, the motion for leave to file and reply of Trans States Airlines, Inc. submitted in OST-97-2368 on
October 24, 1997 appears to have been prepared by counsel for United.
- 6 -
Chicago-Sioux Falls jet roundtrips; maintained its presence in the market through Great Lakes d/b/a United Express; and began using four O'Hare slots that had been assigned to Sioux Falls for other United services.
The Department should not be misled by United's characterizations. The fact is that United and United Express hold 1,024 O'Hare slots, while American and American Eagle hold 898. And since 1994, United Express has received 56 O'Hare exemption slots under 49 USC 41714, while American Eagle has received none.
Finally, we dispute United's charge that American did not honor its promises to provide jet service to certain communities with Fokker 100 aircraft after the Federal Aviation Administration adopted the commuter slot conversion rule in 1991. In fact, American instituted Fokker jet flights to each of the communities it identified for service in seeking the amended rule, including Fargo, Sioux Falls, Springfield, and Peoria. Unfortunately, service with 97-seat aircraft to these communities did not turn out to be economically viable. In fact, as already noted, United itself canceled jet service to one of these communities (Sioux Falls) earlier this year in favor of turboprop operations by United Express.
- 7 -
Simmons fully expects that service with 50-seat regional jet aircraft -- half the capacity of the Fokker - will be successful at each of the cities it proposes to serve. Simmons' application has received strong civic support. Notwithstanding United's delaying tactics, the Department should grant the necessary O'Hare exemption slots to Simmons on an expeditious basis, so that Simmons may complete its plans to implement regional jet service to these underserved nonhub
communities as proposed in this application.
Respectfully submitted,
CARL B. NELSON, JR.
Associate General Counsel American Airlines, Inc.
On behalf of Simmons Airlines, Inc. d/b/a American Eagle
November 4, 1997