BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

ACCESSAIR HOLDINGS, INC. / Docket No. OST-97-3087

for an exemption from Subparts K and S of 14 C.F.R. Part 93

(High Density Rule) at New York LaGuardia Airport as to provide non-stop service between:

Des Moines, Iowa - Quad Cities, Illinois and New York LaGuardia (combination service), and Des Moines, Iowa - Peoria Illinois and New York LaGuardia (combination service)

Application of:

AMERICAN TRANS AIR, INC. / Docket No. OST-97-2984

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 Act of 1994 (Chicago Midway - New York LaGuardia; St. Petersburg, FL - New York LaGuardia; Sarasota, FL - New York LaGuardia)

Application of:

AMERICA WEST AIRLINES, INC. / Docket No. OST-97-2970

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

Columbus - New York LaGuardia Airport Phoenix - Chicago O'Hare Airport

Application of :

COLGAN AIR, INC. / Docket No. OST-97-3086

for an exemption pursuant to 49 U.S.C. § 41714 New York LaGuardia Airport

Joint Application of :

PAN AMERICAN WORLD AIRWAYS, INC. and CARNIVAL AIR LINES, INC.

Docket No. OST-97-2885

for an exemption from Subparts K & S of 14 C.F.R. Part 93

(slot restrictions at New York JFK International Airport)

Application of

SPIRIT AIRLINES, INC. / Docket No. OST-97-2870

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

Melbourne, Florida - New York (LaGuardia Airport)

Application of

SPIRIT AIRLINES, INC. / Docket No. OST-97-2932

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

Myrtle Beach, South Carolina - New York (LaGuardia )

Airport)

MOTION OF THE OFFICE OF THE

QUEENS BOROUGH PRESIDENT, CITY

OF NEW YORK TO FILE A LATE ANSWER

Communications with respect this document should be addressed to:

David Nocenti

Counsel

Michael Rogovin

Deputy Counsel

Queens Borough President's Office

120-55 Queens Boulevard

Kew Gardens, New York 11424

(718) 286-2880

December 3, 1997

MOTION OF THE OFFICE OF THE

QUEENS BOROUGH PRESIDENT, CITY

OF NEW YORK TO FILE A LATE ANSWER

The President of the Borough of Queens, City of New York ("Borough President"), hereby moves for leave to file a Consolidated Answer to the Applications submitted by AccessAir Holdings ("AccessAir"), America West Airlines ("America West"), American Trans Air ("ATA"), Colgan Air ("Colgan"), Pan American World Airways/Carnival Airlines ("Pan Am/Carnival") and Spirit Airlines ("Spirit") for exemptions pursuant to 49 U.S.C. § 41714 and 14 C.F.R. Part 93 from the High Density Rule limitations on operations at LaGuardia Airport and Kennedy Airport in New York City.

Even though the Borough President was elected to represent the local residents who will be most adversely affected by any additional increases in the number of flights at LaGuardia and Kennedy Airports, and even though the Borough President was actively involved in the recent requests of three airlines (Frontier Airlines, ValuJet Airlines and AirTran Airways) for exemptions from the High Density Rule at LaGuardia Airport, neither AccessAir, America West Airlines, American Trans Air, Pan Am/Carnival nor Spirit served the Borough President with copies of their exemption applications.⁽¹⁾ Moreover, none of these airlines took any steps to advise this office of their requests, except for Colgan Air, which was the only airline that sent a copy of its request to the Borough President. As a result, there were significant delays before this office learned of the existence of these requests and was able to obtain copies of the applications and other relevant documents, thereby greatly reducing the time available to prepare responses to these requests.

Moreover, just five weeks ago the United States Department of Transportation ("Department" or "USDOT") issued two orders which pronounced new standards for the review of applications seeking exemptions from the High Density Rule.⁽²⁾ This office has moved expeditiously to review those orders as soon as they were received, and also to evaluate the exemption requests submitted both before and after the issuance of those orders. Upon the completion of that review, this office has moved quickly to prepare and file this response to all of the exemption requests that are known to be outstanding as of this date.

Finally, the Borough President is the only individual who can adequately represent the interests of Queens County, which is the home of both LaGuardia Airport and John F. Kennedy International Airport. In Frontier, the Department granted permission for an additional twenty-one flights to be added at LaGuardia Airport, and the seven exemption applications which are currently pending, if granted, would add another fifty-four flights at the two airports in this borough. The almost two million residents of Queens County are already greatly overburdened with noise, traffic and pollution from LaGuardia and Kennedy airports, and any review of the "public interest" must include a full and complete evaluation of the significant adverse impact that would result from additional flights at those airports.

The Borough President is elected by and represents the entire county, and works closely with the local community and the aviation industry to balance the economic and transportation benefits of that industry with the negative impacts on residents. The unique perspective of this office makes the Borough President's views on this matter critical to the decision making process. The Department has granted previous motions by this office on substantially the same grounds to intervene in other applications, and has recognized the unique role and expertise of the Borough President with regard to these matters.

Accordingly, it is respectfully requested that the Department accept the late filing of this Consolidated Answer to applications of AccessAir, America West, ATA, Colgan Air, Pan Am/ Carnival and Spirit Airlines, and that the issues raised in this Answer be considered by the Department in deciding whether to grant those applications.

Respectfully submitted,

CLAIRE SHULMAN

President

Borough of Queens

By:

David M. Nocenti

Counsel to the Borough President

120-55 Queens Boulevard

Kew Gardens, New York 11424

(718) 286-2888

December 3, 1997

CONSOLIDATED ANSWER OF THE OFFICE OF THE

QUEENS BOROUGH PRESIDENT, CITY OF NEW YORK

I. INTRODUCTION

LaGuardia Airport and Kennedy Airport in New York City have been tremendously overburdened by air traffic congestion for decades. The overutilization of these airports imposes a significant cost on air travelers through delays and cancellations, and also imposes excessive burdens on local residents who suffer from continuous aircraft noise, vehicle traffic, and air pollution.

For many years, there were absolutely no legal or regulatory limits on the number of flights that could be added at these two airports, and eventually the problems caused by the congestion of the aviation system reached a crisis. In its 1995 Report to Congress, the United States Department of Transportation ("USDOT" or "Department") described the problem as follows:

"By 1968, airports and airway systems were near saturation. Among the most congested airports were O'Hare, Washington National, Newark, Kennedy and LaGuardia. For example, reports of extreme delays for aircraft en route to New York were common. On some days, air travel between New York and Washington could take up to four hours. Likewise, both San Francisco and Miami airports reported extensive backups as aircraft waited for clearance to take off for New York. Other flights would never even make it to New York; they were canceled before getting off the ground."⁽³⁾

The FAA finally took action against this problem on November 27, 1968, when it adopted the "High Density Rule".⁽⁴⁾ That rule limited the number of instrument flight rule (IFR) flights which could occur at the "high density" airports during particular hours, and provided tremendous relief to both air travelers and local residents from the problems that had been caused by congestion at those airports. Although the High Density Rule has been amended somewhat over the past 30 years, it still provides the only protection that airline passengers and residents have against a return to the problems that plagued the air traffic system in the 1960s.

AccessAir Holdings ("AccessAir"), America West Airlines ("America West"), American Trans Air ("ATA"), Colgan Air ("Colgan"), Pan American World Airways/Carnival Airlines ("Pan Am/Carnival") and Spirit Airlines ("Spirit") have submitted seven separate applications for exemptions from the High Density Rule, in an effort to provide up to 54 additional flights to and from LaGuardia and Kennedy Airports in New York City. These flights would be in addition to the 21 flights recently added at LaGuardia Airport pursuant to the USDOT orders issued just last month.⁽⁵⁾

For the reasons set forth below, these applications clearly fail to meet the statutory requirements for exemptions established by Congress, and also fail to meet the revised standards enunciated by the Department in the Frontier and Simmons decisions. Accordingly, all seven applications must be denied in their entirety.

II. Review of the Two-Part Statutory

Test For Granting Slot Exemptions

In the Federal Aviation Administration Authorization Act of 1994, the United States Congress set forth very narrow circumstances under which USDOT is permitted to grant exemptions from the High Density Rule for new entrant carriers.⁽⁶⁾ First, any airline seeking to add slots at LaGuardia or Kennedy Airports must show that additional flights at these already overcrowded airports would be "in the public interest". Second, the airline also must show that there are "exceptional" circumstances warranting the granting of the application.

An analysis of the "public interest" test requires a balancing of several factors. For example, the Department must consider whether the proposed service offers a substantial benefit to the public, either through the institution of new nonstop service where none exists, or through low-fare competition to carriers already providing service to that market. In addition, however, the Department also must consider whether the new service will have negative public impacts, including an adverse impact on air safety, increased flight delays, additional aircraft noise, increased highway congestion and adverse health impacts from air pollution. Once it has been determined that the public benefits outweigh the detrimental impacts of the proposed service, then the Department must conduct a separate analysis to determine whether there are "exceptional" circumstances warranting an exemption from the High Density Rule.

Prior to October 1997, the Department properly required all applicants to meet both portions of the statutory test, and in its prior decisions the Department specifically recognized that there is a strict statutory limit on its authority to grant exemptions. For example, in its 1995 Spirit Airlines decision, the Department explained its scope of review as follows:

"We have interpreted the intent of Congress narrowly because of the exceptional circumstances criterion. If Congress had intended that a less restrictive allocation process be established, it would have mandated that the grant of exemptions be based only on a public interest finding. In fact, 49 U.S.C. § 41714 states requirements that apply to slot exemptions for essential air service, for foreign air transportation, and for new entrant airlines. Congress mandated the exceptional circumstances criterion only for the provisions applicable to the new entrant airlines. Clearly, Congress intended that a higher standard be met before granting exemption authority to new entrants."⁽⁷⁾

As a result, based upon the clear direction of Congress, each of the airlines currently seeking slot exemptions must be required to meet both the "public interest" and "exceptional circumstances" parts of the statutory test.

III. USDOT's New Standard for Review

In the Frontier and Simmons decisions, the Department acknowledged that it had always correctly applied the statutory standard for granting exemptions "narrowly". In addition, the Department correctly noted that this limited review was necessary in order to "preserve the overall integrity of the High Density Rule".⁽⁸⁾

Nevertheless, the Department then proceeded to abandon this statutory standard and enunciate a new scope of review. Specifically, the Department announced that it will now define "exceptional circumstances" more broadly, by recognizing the need for "low-fare competitive service" in a market.⁽⁹⁾ The potential for "low-fare competitive service", however, was exactly the kind of showing that airlines previously had to make to meet the "public interest" test. Indeed, in justifying the expanded reading of the "exceptional circumstances" test, the Department stated that "low-fare carriers provide substantial public benefits by making low fares available to many more travelers".⁽¹⁰⁾ As a result, it appears that the Department has incorporated the "public interest" analysis into the "exceptional circumstances" test, thus essentially merging the two separate statutory requirements into one.

The Department attempted to "clarify" its new decisional guidelines by stating that it would consider the following three factors in evaluating the "public interest" and "exceptional circumstances" tests:

The Department will "favor" proposals from airlines that will use Stage 3 aircraft;

The Department will require a "reasonable expectation" that the proposed service is operationally and financially viable; and

The Department will "place a premium" on the introduction of: (a) new nonstop service; and (b) new service by airlines that "have the demonstrated potential to offer low-fare competition", where there is "single carrier service and the market can support entry", or where existing services do not produce "meaningful price competition".⁽¹¹⁾

This first factor has limited relevance, of course, because federal law requires that all air carriers use Stage 3 (or equivalent) engines on all their flights starting on January 1, 2000, and thus this factor will automatically disappear in 25 months. The second factor also will have limited substantive impact, because if an exemption is provided to the High Density Rule to allow service that is not operationally or financially viable, that service will simply go out of existence on its own, thereby restoring the status quo. This leaves just the third factor, which appears to be a restatement of the types of benefits that should be weighed against potential adverse consequences when determining whether a slot exemption is in the "public interest".

The Department explains that it "reexamined" its reading of the statutory test "in the light of growing interest expressed by congressional, community, and airline parties, particularly with regard to the need for a competitive spur in certain markets."⁽¹²⁾ While it may be true that some members of Congress have expressed a desire that additional slots be granted at some high density airports, the members of Congress representing the area around LaGuardia and Kennedy Airports have clearly stated that they do not want any change in the High Density Rule. Indeed, every member of the House of Representatives from Queens County had joined in a letter to President Clinton in September 1997, just one month prior to the Frontier decision, expressing their strong opposition to the pending requests to increase the number of flights at LaGuardia Airport.⁽¹³⁾

Similarly, the Queens "community", which would bear virtually all of the adverse consequences from any new flights, also strongly opposes the granting of any additional slots at LaGuardia or Kennedy Airports. Moreover, while some "airline parties" have sought to expand the High Density Rule, the opposition papers filed in the Frontier and Simmons cases make clear that other "airline parties" clearly opposed these efforts. Thus, there certainly was no popular mandate warranting a "reexamination" of the statutory standard for review.

Finally, and most importantly, the Department's interpretation of the statutory "public interest" and "exceptional circumstances" standards should be based only upon the language of the statute and the legislative history behind its enactment. The Department's new "interpretation" of the statute effectively eliminates the "exceptional circumstances" test by looking at the same factors that are already included in the "public interest" test. A federal agency should not change its interpretation of an enabling statute based upon the perceived "concerns" of some members of Congress or anyone else, however, and must implement the intent of Congress at the time of the enactment of the statute.

IV. Evaluation of Pending

Slot Exemption Requests

Even though the Department has erred in revising its methodology for evaluating whether applicants have met the statutory test for exemptions from the High Density Rule, the Queens Borough President's Office has evaluated all of the pending slot exemption requests pursuant to the new standard established by the Department in the Frontier and Simmons orders. This review shows that the applicants have all failed to make the showing required for the granting of additional slots. Not only is it clear that imposing additional flights at LaGuardia or Kennedy Airports is not in the public interest, but the airlines have completely failed to demonstrate the existence of exceptional circumstances warranting exemptions from the High Density Rule, even under the new, relaxed standards established by the Department. As a result, there is no need to also evaluate the requests pursuant to the two-part test established by Congress, because they will necessarily also fail to meet the stricter requirements set forth in the statute.

A. Any Increase in the Number of Flights

At LaGuardia or Kennedy Airports

Would Be Contrary to the Public Interest

Any airline seeking an exemption from the High Density Rule must demonstrate that the new proposed service would be in the "public interest", and the current applicants have failed to meet this burden for four reasons. First, the proposed increase in flights would significantly increase delays at LaGuardia and Kennedy Airports, which is in direct contravention of the purpose of the High Density Rule. Second, the airlines have failed to show that they cannot purchase or lease slots on the open market. Third, adding more flights over Queens County will jeopardize public safety. Finally, the additional flights will impose undue noise, traffic and pollution impacts on the already overburdened residents of Queens County.

1. Adding More Flights Will Increase Delays and

Congestion at LaGuardia and Kennedy Airports

As noted above, the High Density Rule was initially instituted as a result of a "crisis" created by congestion at LaGuardia, Kennedy and other over-utilized airports throughout the country. The existing limits on the number of flights at the "high density airports" have helped to address the issue, but congestion is still a significant problem, and every slot exemption that is granted exacerbates that problem and brings us one step closer to the crisis situation that existed in the past.

When reviewing prior slot exemption requests, USDOT has solicited the input of the FAA's Office of Air Traffic System Management (ATM), which is responsible for ensuring that the air traffic system is operated in a safe and efficient manner. As recently as 1995, ATM made abundantly clear that there should be no increase in the number of flights at LaGuardia Airport because it would undoubtedly increase the delays and congestion that exist at that airport. In its decision denying the 1995 request of Spirit Airlines to fly between Detroit and New York City, the Department summarized ATM's findings as follows:

"Through internal review of Spirit's application, ATM made it clear that it does not support additional operations at LaGuardia for four main reasons. First, LaGuardia currently operates at capacity under virtually all operating conditions due to the limitations of intersecting runway operations. Second, ground congestion is currently a problem at LaGuardia due to limited taxiways and staging and holding areas, with virtually no potential for airport expansion. Third, airspace in the New York area is very congested and complex with several major air carrier and general aviation airports in close proximity. Finally, delay levels at LaGuardia and in the New York area are consistently among the highest in the country and have a significant effect on the air traffic system, especially at other airports along the east coast. Increased operations at LaGuardia would increase ground delays for flights at the origin airports waiting to depart for LaGuardia. Based on its expertise and knowledge of air traffic conditions at New York's LaGuardia Airport and the larger New York air traffic region, ATM concluded that granting of the exemptions for ten additional operations at LaGuardia would significantly increase the current level of delay and congestion at LaGuardia as well as in the surrounding airspace.⁽¹⁴⁾

All of these problems continue to exist at LaGuardia Airport. Indeed, the only change that has occurred since ATM's analysis in 1995 is that the Department has granted Frontier Airlines, ValuJet Airlines and AirTran Airways the right to initiate 21 additional flights at LaGuardia Airport, even though ATM found that even 10 additional flights would "significantly increase the current level of delay and congestion".

The Department is now faced with seven new applications to add up to 54 more flights at LaGuardia and Kennedy Airports. While each individual airline might claim that their own request would result in only a small percentage increase in the number of flights at the airports, each application must be reviewed based upon the already overcrowded nature of the airspace, as well as the impending increase in flights. The Borough President specifically noted the importance of considering the cumulative impact of additional flights in its opposition to the 1995 application by Spirit Airlines, and USDOT's comments on that point are particularly instructive:

"We find [the Borough President's] arguments regarding increased congestion at LaGuardia persuasive. We cannot accept the characterization of the increase in air traffic as modest based solely on the calculation of Spirit's aircraft operations as a percent of total aircraft operations during the slot period without any consideration being given to the timing of the operations. Moreover, even if we were to agree with Spirit's presumption that Congress intended to accept modest delays as necessary, we cannot agree that the proposed [ten additional] operations are within an acceptable range."⁽¹⁵⁾

Since ATM found in 1995 that even 10 additional flights in the New York airspace would be too many, and since 21 flights have now been added, it is clear that the existing applications must be denied in order to prevent a overwhelming increase in aviation delays and congestion.

2. The Applicants Have Failed to Demonstrate

That Slots are Unavailable on the Open Market

As both the Department and the FAA know, dozens of slots at LaGuardia and Kennedy Airports are purchased, leased or transferred among airlines and financial institutions every year. As a result, any discount airline that wants to offer service to LaGuardia or Kennedy Airports should be required to purchase or lease a slot on the open market, or provide concrete evidence that it is not possible to do so. The current applicants, however, have failed to demonstrate that they have adequately pursued this option.

Colgan Air, for example, is requesting slot exemptions to provide service to Hyannis, Nantucket and Charlottesville, even though it already leases slots to provide that exact service, and thus there is absolutely no basis for granting that request. Similarly, Pan Am/Carnival state merely that they "have not identified a realistic market opportunity to obtain the JFK slots needed" for their proposed service, without stating whether they have actually made an offer to purchase or lease slots from any other carrier.⁽¹⁶⁾ AccessAir admits that "slots at LaGuardia may be obtained through purchase or lease", and that they have "retained a consultant in order to help access whether purchase or lease would be feasible", but they have still filed an application for free slots, stating that they will "purchase or lease slots only as absolutely necessary."⁽¹⁷⁾

These statements are wholly insufficient to warrant the granting of exemptions to the High Density Rule, and the Queens Borough President respectfully suggests that the Department should set forth specific standards that must be met by any airline seeking to obtain additional slots at a high density airport. Specifically, each such airline must provide evidence of their efforts to purchase or lease existing slots, including: (1) copies of all written communications to other airlines setting forth the terms of any offers to purchase or lease slots; (2) copies of any responses to those requests, including responses setting forth terms different from those offered; and (3) an analysis of the financial impact on ticket prices if applicant amortized the cost of any purchase or lease offers over a ten-year period.

The Borough President agrees with the Department's statement in Frontier that the buy-sell rule is not the "exclusive means" for airlines to obtain slots, and that Congress specifically authorized the Department to approve slot exemption requests when a proper showing has been made.⁽¹⁸⁾ Nevertheless, the Department must sets forth specific standards for such a showing, or else new entrant carriers will succeed in capturing free slots even when they could have economically purchased or leased those same slots on the open market.

For example, without requiring airlines to demonstrate the efforts that have been made to purchase or lease slots, an applicant could simply offer to pay an unreasonably low amount for a slot, and then assert that its attempt was "unsuccessful". In the alternative, an applicant could simply state that it has not "identified" slots that are available when needed, and could obtain free slots without even trying to enter the open market. The High Density Rule is designed to prevent increases in the number of flights at the New York airports, and the vague statements from the current applicants do not provide a sufficient basis upon which the requests for exemptions could be granted.

4. Adding More Flights Over Queens

County Will Jeopardize Public Safety

When Frontier, ValuJet and AirTran filed their exemption applications earlier this year, the Borough President raised significant concerns about the safety impact of permitting additional flights at LaGuardia Airport. First, as ATM had noted in 1995, the "airspace in the New York area is very congested and complex with several major air carrier and general aviation airports in close proximity." Second, there has been a significant increase in the number of "close call" incidents in which separation requirements had been violated. This increase is due, in part, to the large number of flights at the New York City Airports, and in an April 22, 1997 memorandum, the air traffic manager for the FAA's New York Center stated that the number of incidents had "reached levels of grave concern".⁽¹⁹⁾

Finally, there has been a chronic shortage in the number of air traffic controllers in the New York City area, and Senator Alfonse D'Amato asserted that these shortages were "inviting disaster".⁽²⁰⁾ Indeed, 97% of the air traffic controllers in the New York area stated in a recent survey that the existing staffing shortages "strongly hindered" safety, and that "the amount of work they handled daily increased the risk of a mishap."⁽²¹⁾ As a result, Borough President Shulman asserted that no additional flights should be authorized in the New York area until the problem of "close call" incidents had been addressed and the number of controllers had been increased to the authorized staffing levels.

In its decision in Frontier, the Department responded to these issues by stating that the existing traffic management system "limits demand to operationally safe levels", and that the FAA had assured the Department that "safety will not be compromised."⁽²²⁾ The Borough President certainly recognizes that the FAA can and will apply its air traffic "programs and procedures for ensuring safety regardless of any changes to the HDR or any slot exemptions that the Department might grant."⁽²³⁾ Indeed, the FAA undoubtedly would state that they would not allow safety to be compromised, no matter how many flights theoretically are granted "slots" at the airport.

That does not mean, however, that the Department should ignore its obligation to consider aviation safety as part of its "public interest" analysis, simply because it knows that the FAA air traffic controllers will cancel, redirect or turn back flights when the airspace has reached its safety limits. To the contrary, the Department must consider the potential implications on the air traffic control system before granting additional flights, and any airline proposing to add flights must make a sufficient showing that the increased flights are consistent with public safety.⁽²⁴⁾

5. The Two Million Residents of Queens

Are Already Overburdened with Aircraft

Noise, Vehicular Traffic and Pollution

Finally, none of the applicants have even attempted to address the significant adverse noise, traffic and pollution impacts that will occur if even more flights are added at LaGuardia and Kennedy Airports. Nevertheless, as part of its "public interest" analysis, the Department must consider the tremendous adverse impacts that additional flights will have on the residents of this borough.

As this office has noted in our responses to prior applications, while many airports throughout the country are located in outlying areas, both LaGuardia and Kennedy Airports are located within New York City. As a result, many of the two million residents of this borough are already greatly overburdened by aircraft noise. Both the Environmental Protection Agency (EPA) and the National Resources Defense Council (NRDC) have concluded that 55 DNL is the noise level necessary to properly protect the pubic health and welfare. The FAA, in contrast, continues to use 65 DNL (which is twice as loud as 55 DNL) as its standard for measuring unreasonable noise levels.

Even using the FAA's higher threshhold, however, the High Density Rule Study still found that 183,814 residents are exposed to noise levels of 65 DNL or greater at LaGuardia Airport, and another 49,526 individuals are subjected to these high levels near Kennedy Airport.⁽²⁵⁾ As a result, Queens County already has more individuals who are adversely impacted by noise than any other area in the United States, and it is particularly inappropriate to impose additional aircraft noise on these individuals.

Although it is true that the number of individuals within the 65 DNL noise contour will decrease as Stage 2 aircraft are phased out, it must be remembered that Congress passed the law requiring the elimination of Stage 2 aircraft specifically to address the adverse consequences that aircraft noise was having on local residents. Any attempt to increase the number of flights over the noise-impacted areas clearly undercuts the intent of Congress in this area.⁽²⁶⁾

Moreover, in addition to increases in aircraft noise, the granting of exemptions to the High Density Rule will also lead to increases in vehicular traffic, highway congestion and air pollution. Indeed, in its recent study of the environmental impacts of airports, the NRDC found that airports are major emitters of volatile organic compounds (VOCs) and nitrogen oxides (NO_x), and that airports are not effectively regulated like other air pollution sources, even though the "number of commercial flights, which burn the most fuel and cause the most pollution per operation . . . grows higher and higher each year."⁽²⁷⁾

It is incumbent upon USDOT to consider all of these potential impacts -- delays, noise, traffic and pollution -- before adding any additional flights at LaGuardia or Kennedy Airports. The Department conducted part of this analysis in its High Density Rule Study, and concluded that no changes should be made to the High Density Rule. Specifically, the Department concluded that the benefits of relaxing or eliminating the rule were greatly outweighed by the costs associated with additional delays and increased noise.

With respect to LaGuardia Airport, the High Density Rule Study found that the number of airport slots already exceeded airfield capacity, that this "shortage of airfield capacity hinders the airport's ability to accommodate additional traffic without increases in delay", that lifting the High Density Rule would have a negative monetary impact, and that the number of individuals impacted by aircraft noise would increase.⁽²⁸⁾ With respect to Kennedy Airport, the report found that lifting the High Density Rule would present "no obvious, immediate opportunities to serve JFK from new or additional markets", that there would be increased operational delays, that there would be a net negative monetary impact, and that there would be an increase in the number of local residents adversely impacted by noise at the airport.⁽²⁹⁾

For these reasons, the Department should similarly find that the current requests for exemptions to the High Density Rule are not in the "public interest" and should be denied.

B. The Individual Applicants Have Failed

To Demonstrate the Existence of

Exceptional Circumstances Warranting

The Granting of Slot Exemptions

In addition to demonstrating that additional flights are in the public interest, the current applicants must also show that their particular circumstances are so exceptional that exemptions must be granted from the High Density Rule to allow additional flights to the New York airports. As will be shown below, however, none of the new entrant carriers has overcome this burden.

First, several of the airlines have failed to even make a prima facie showing that there is a need for the new service. Second, those airlines proposing to provide flights to underserved areas could do so from Newark Airport, which is not subject to the High Density Rule. Third, the airlines have failed to meet the standards for "exceptional circumstances" set forth in the Frontier and Simmons orders, and a fortiori they also cannot meet that requirement as set forth in statute

1. AccessAir Holdings

AccessAir seeks six slots at LaGuardia Airport in order to provide two daily nonstop flights to Moline/Quad Cities, Illinois and one daily nonstop flight to Peoria, Illinois. AccessAir states that each flight will also provide one-stop service to Des Moines, Iowa. This application should be rejected for several reasons.

First, AccessAir has completely failed to demonstrate that it cannot obtain the necessary slots on the open market. Indeed, AccessAir admits that "slots at LaGuardia may be obtained through purchase or lease", and that it has "retained a consultant in order to help it assess whether purchase or lease would be feasible." Nevertheless, AccessAir has proceeded first with an application seeking an allocation of free slots from the Department, stating that it "will purchase or lease slots only as absolutely necessary."⁽³⁰⁾ By seeking free slots before attempting to purchase or lease slots, however, AccessAir is circumventing the intent of Congress, which was to allow the free market sale and leasing of slots as the primary method of acquisition by new entrant carriers. Contrary to AccessAir's view of the process, a demonstration that slots are not available is a prerequisite to an award of an exemption, and AccessAir has clearly failed to make this required showing.

Second, AccessAir's application is indistinguishable from the rejected portion of the application of AirTran Airways. In that application, AirTran had sought permission to initiate service to Moline/Quad Cities, Bloomington/Normal, Toledo, Akron and Knoxville. Although the Department granted AirTran four slots to serve Knoxville, it found that none of the remaining markets were not large enough to warrant slot exemptions. With respect to Moline/Quad Cities, the Department noted that origin/destination data for 1996 showed only 15,230 passenger per year. As a result, the Department stated:

"We acknowledge that these markets currently have no direct access to any of the New York City airports, and that the introduction of such service would be beneficial. However, as we noted above, traffic in the subject markets is relatively small, and we do not find that the service benefits therein would constitute an efficient use of slot exemptions to the extent necessary to warrant our approval."⁽³¹⁾

AccessAir's application must be rejected on the same grounds. The Department has already found that Moline/Quad Cities does not have a sufficient market to warrant the granting of a slot exemption, and AccessAir's own projections indicate that the market for Peoria is no larger than the market for Moline/Quad Cities.⁽³²⁾ Indeed, AccessAir's estimates for Peoria include Bloomington/Normal, which AirTran had also intended to serve. Finally, AccessAir's attempt to include passenger estimates for Des Moines is unavailing, because five airlines already offer connecting service between LaGuardia and Des Moines, and any alleged competitive benefits from the proposed service are speculative at best.

Finally, AccessAir fails to demonstrate why it cannot provide its intended service to Newark Airport, which is not subject to the High Density Rule. Contrary to AccessAir's allegations, the Department has never made a finding that LaGuardia, Kennedy and Newark Airports serve different markets within the New York metropolitan area. Instead, the Department merely quoted assertions by Frontier and ValuJet that travelers from Manhattan find LaGuardia more convenient than Newark.

In fact, travelers from Manhattan choose flights from both LaGuardia and Newark Airports on the basis of price and availability, since both airports are equally convenient. Both airports are about 30 minutes from midtown Manhattan by taxicab or bus, and recent efforts by the Port Authority, which operates both airports, will make it easier to get to Newark from Manhattan by rail. Even though Kennedy Airport is farther from Manhattan than either LaGuardia or Newark, it serves the same general market and competes with both Newark and LaGuardia for domestic traffic, and with Newark for international traffic. Indeed, even AccessAir acknowledges that New York is a single market, because its passenger traffic projections include origin/destination data from Kennedy, LaGuardia, Newark, Stewart, Islip and White Plains airports.⁽³³⁾ AccessAir cannot be allowed to justify its service on the grounds that it will draw passengers from all of these airports, but at the same time deny that the airports are part of a single market.

2. American Trans Air

American Trans Air ("ATA") requests 10 slots at LaGuardia Airport to provide three daily nonstop flights to Chicago Midway Airport, one daily nonstop flight to St. Petersburg, and one daily seasonal nonstop to Sarasota, Florida. In the off-season, the Sarasota flight will be replaced by a fourth flight to Chicago.

In order to succeed in its application, ATA must first face the overwhelming hurdle that there are almost 200 nonstop flights between New York and Chicago every day, and thus there is no basis upon which Chicago could be considered an "underserved" market.⁽³⁴⁾ ATA attempts to circumvent this hurdle by simply ignoring those flights, asserting that they are irrelevant because they primarily serve O'Hare Airport rather than Midway Airport. ATA thus concludes that Midway is a separate, "underserved" market.

Unfortunately, ATA immediately undercuts its own argument by asserting that it will draw a "considerable volume" of passengers from O'Hare Airport. ATA cannot argue, on the one hand, that Midway Airport constitutes a separate and distinct market from O'Hare Airport, and at the same time that it will draw customers from O'Hare Airport to Midway Airport. Like AccessAir, ATA fails to recognize that the terms "airport" and "market" are not interchangeable, and the Department's evaluation of slot exemption applications must focus on separate "markets", not "airports".⁽³⁵⁾

In addition, there already is existing scheduled service between Midway Airport and Newark Airport, and therefore Chicago passengers who find Midway Airport more convenient can use this service to travel to New York City. ATA is free to expand the flight options between these two airports, neither of which is subject to the High Density Rule. Moreover, ATA already provides service between Midway and Kennedy Airport.⁽³⁶⁾

ATA's request for slot exemptions to serve St. Petersburg and Sarasota is insufficient for similar reasons. First, St. Petersburg is already well served by service to Tampa International Airport, which has at least a dozen daily non-stop flights offered by at least five different airlines to all three New York City airports. ATA nevertheless asserts that slot exemptions should be granted to allow service to St. Petersburg, even though the airports are just 11 miles apart and clearly serve the same market.

ATA apparently recognizes that the market for nonstop service to Sarasota is small, because it plans to offer only seasonal service. In addition, ATA also admits that "four different carriers provide a total of 23 flights from Sarasota to LaGuardia and a total of 20 flights from LaGuardia to Sarasota."⁽³⁷⁾ In addition, there are numerous connecting flights from Newark and Kennedy, and Continental Airlines offers non-stop service between Sarasota and Newark. Moreover, as TWA notes in its response to ATA's application, Sarasota is only 54 miles from Tampa International Airport, which provides numerous other flight options.

Like AccessAir, ATA also fails to provide any evidence that it made a good faith effort to slots on the open market. ATA does not indicate which carriers, if any, it contacted in seeking to purchase slots, what terms were offered, and what impact the purchase would have on its ticket prices if the cost of the slot were amortized over a period of years. Finally, like the other carriers, ATA fails to explain why it cannot offer service to Newark Airport rather than LaGuardia Airport.

3. America West Airlines

America West is requesting eight slot exemptions at LaGuardia Airport so that it can initiate four daily round-trip flights to Columbus, Ohio.

America West's application is remarkable, because it is clear that America West's main objection is not to the High Density Rule at all. Instead, America West complains that the Port Authority's 1500-mile "perimeter rule" at LaGuardia Airport prohibits non-stop service between LaGuardia and America West's main hub in Phoenix. Rather than request that the Port Authority eliminate the perimeter rule, however, America West instead argues that it should be granted an exemption from the High Density Rule in order to increase service to Columbus, where passengers would be able to make connections to Phoenix and other destinations served by America West.⁽³⁸⁾

Unlike the other slot exemption applicants, America West makes no claim that Columbus is an unserved or underserved market. Indeed, America West cannot make such a claim. Columbus is already served by numerous nonstop flights by Continental Airlines, US Airways, and American Airlines to LaGuardia, Newark and Kennedy Airports, as well as America West's existing service to LaGuardia and Newark. In addition, America West states that it "plans to expand existing service to Newark",⁽³⁹⁾ and America West fails to explain why it cannot provide the proposed service at Newark Airport rather than LaGuardia Airport.

Remarkably, America West also does not claim that additional service to Columbus would lower prices or have any other discernible benefit to residents of the Columbus area. This is because America West is not seeking to assist Columbus passengers, and instead is requesting free slots in order to provide additional one-stop service between New York and other cities. As America West admits in its own application, however, there is no lack of existing one-stop service from New York to anywhere in the country:

"[America West] is able to offer only two flights per day from LaGuardia to Columbus, its Midwestern hub which acts as a connecting point for passengers traveling from the Western U.S. to Northeast destinations such as New York and Washington. Because of the poor times of its LaGuardia slots only one round-trip connects to Phoenix. In comparison, other major higher fare airlines offer 67 connecting opportunities daily between LaGuardia and Phoenix. Between LaGuardia and Las Vegas America West is only able to offer two connections, while other major airlines offer 57."⁽⁴⁰⁾

In Frontier and Simmons, the Department stated that it would "favor" applications which would introduce "new nonstop services where none exist", or "new competitive services" where there "is single carrier service and the market could support entry or where existing services do not produce meaningful price competition." America West's pending application meets none of these requirements, because there are already existing nonstop flights between Columbus and New York by several different carriers resulting in active price competition.

Apparently recognizing the inadequacy of its application, America West seeks to redefine, once again, the "exceptional circumstances" test. Specifically, the application states: "The effect of America West's lack of slots at high-density airports on the operation of the carrier's national route network constitutes an exceptional circumstance."⁽⁴¹⁾ Under this theory, however, every airline which does not currently hold or operate slots at LaGuardia Airport would be automatically entitled to an award of free slots, because they would all be able to argue that service to LaGuardia would improve access to their "national route network".

4. Colgan Air

Colgan Air requests 16 commuter slots at LaGuardia Airport which would be used to serve Hyannis, Nantucket, and Charlottesville. The application does not indicate how the service would be divided among those three cities. Colgan Air's request is meritless for several reasons.

First and foremost, Colgan Air already leases slots to provide service to all three cities. In the Frontier and Simmons decisions, the Department made clear that it intends to utilize its exemption authority to encourage "low-fare" flights where there is a "need for competitive service in a market."⁽⁴²⁾ Neither Congress nor USDOT has ever indicated, however, that the statutory slot exemption power should be used to permit the continuation of existing service, which is exactly what Colgan is requesting in this case. Indeed, Colgan readily admits in its application that it "has no reason to believe that it will lose its leased slots within a short period of time."⁽⁴³⁾

Second, Colgan has not made a sufficient showing that it is unable to obtain permanent slots through the buy-sell market. Without providing any evidentiary support, Colgan simply states that it has been "unable" to obtain permanent slots "at prices that would allow Colgan to serve current markets." The only basis for this claim is Colgan's assertion that other "large carriers" have stated "in other slot petition requests" they cannot obtain air carrier slots", and Colgan therefore concludes that it "would have no opportunity to obtain any", clearly ignoring the significant market differences between air carrier slots and commuter slots.⁽⁴⁴⁾

Third, Colgan could easily offer service to Hyannis, Nantucket and Charlottesville from Newark Airport, which is not subject to the High Density Rule. Colgan asserts that it "cannot serve an alternative airport" due to the "nature of its service", but it fails to submit any evidence to support that assertion, other than stating that service to Newark Airport "would not work." Colgan also asserts that the General Accounting Office (GAO) has found that "each airport in the New York area has its own separate market", which is blatantly inaccurate. Indeed, just two years ago the Department rejected a slot exemption request from Spirit Airlines because Spirit had "offered no analysis to demonstrate that Detroit-LaGuardia is a separate, unique market", and Colgan's application should be rejected on these same grounds.⁽⁴⁵⁾

Fourth, Colgan makes no effort at all to demonstrate any "exceptional circumstances" warranting an exemption from the High Density Rule. In fact, the only reference to "exceptional circumstances" is a single sentence which states: "Department approval of Colgan's application is particularly warranted given the exceptional circumstances of Colgan's disadvantage as to the major carriers." Colgan completely fails to explain what this "disadvantage" is, especially since it already provides more flights between New York City and Hyannis, Nantucket and Charlottesville than any other airline. In addition, under Colgan's new interpretation of the "exceptional circumstances" test, every airline that is not a "major carrier" would automatically be entitled to an unlimited number of slot exemptions.

Finally, Colgan fails to demonstrate the existence of two of the three factors set forth in the new test announced in Frontier and Simmons. Specifically, the Department stated that it would "favor proposals that are based on jet aircraft that meet Stage 3 noise requirements", because that would allow for the deployment of these "scarce resources in a manner that makes them available to the highest number of users." Colgan has not indicated that it will use Stage 3 jet aircraft, an in any event the extraordinarily small number of passengers to be carried makes clear that this would not be a proper use of these "scarce resources". In addition, the Department stated that it would "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 a single carrier service and the market could support entry, or where existing services do not produce meaningful price competition."⁽⁴⁶⁾ As note above, however, Colgan already provides the exact service for which the free slots are being requested, and thus it clearly fails to meet this portion of the test.

For all of these reasons, the request of Colgan Air for an award of 16 commuter slots at LaGuardia Airport should be denied in its entirety.

5. Pan American World Airways/Carnival Airlines

Pan American World Airways and Carnival Airlines ("Pan Am/Carnival") have filed a joint application seeking an award of six slots to provide three daily non-stop flights between Kennedy Airport and Boston, Massachusetts.

As noted above, the Department has repeatedly stated that the number of available slot exemptions is extremely limited, and as a result those exemptions will be utilized only to enhance low-fare flights in markets where competition is lacking. It is patently obvious that the New York/Boston market is one of the most competitive in the country, and therefore the Pan Am/Carnival application must be denied.

According to the most recent Airport Flight Guide produced by the Port Authority of New York and New Jersey, there are already about 200 non-stop flights every day between New York City and Boston, including hourly shuttle operations by Delta and US Airways, as well as frequent competing flights offered by Continental Airlines, United Air Lines, TWA and American Airlines. There is absolutely no reason to believe that adding another six flights per day during slot-restricted hours will have any impact whatsoever on that market.

Apparently recognizing the overwhelming amount of service between New York City and Boston, the application submitted by Pan Am/Carnival attempts to dismiss all of the Delta, US Airways and Continental flights to LaGuardia and Newark Airports as mere "shuttle" services, and then proclaims the Boston/Kennedy market as "underserved".⁽⁴⁷⁾ The Airport Flight Guide, however, shows that there are over 70 daily non-stop flights between Kennedy Airport and Boston, and the attempt by Pan Am/Carnival to further distinguish the jet flights from the non-jet flights is simply unavailing.

Moreover, Pan Am/Carnival completely fails to demonstrate that the Boston/Kennedy constitutes a separate market from Boston/LaGuardia or Boston/Newark. Indeed, Pan Am/ Carnival asserts that there is a "fare premium" for the USAir Shuttle and Delta Shuttle at LaGuardia Airport, but they are trying to address that "fare premium" by bringing "low-fare" service to Kennedy Airport.⁽⁴⁸⁾

Most importantly, by arguing that their new service "will provided needed competition to shuttle services at LaGuardia and Newark"⁽⁴⁹⁾ Pan Am/Carnival is clearly admitting that LaGuardia, Newark and Kennedy Airports all serve a single market -- the New York City market. This admission starkly exposes the fallacy of the arguments made by the Pan Am/ Carnival and the other airlines that each New York City airport constitutes a different market.

The real reason for Pan Am/Carnival's baseless argument that the Boston/Kennedy is a separate, underserved market is made clear on page 5 of the application, where Pan Am/ Carnival reveals that they are really seeking to link the proposed Boston/Kennedy flights "with new JFK service to existing stations in Ft. Myers, Ft. Lauderdale and Santo Domingo, Dominican Republic."⁽⁵⁰⁾ Thus, it is clear that Pan Am/Carnival is not at all interested in serving the already oversaturated market between Boston and New York City, but instead is simply seeking feeder routes for its existing service to Florida and other locations.⁽⁵¹⁾ Boston residents already have many options for non-stop flights to Florida, however, and there is absolutely no reason to grant an exemption from the High Density Rule to allow a carrier to provide one-stop flights to these locations.

Finally, it is clear that Pan Am/Carnival has not made a sufficient showing that it could not purchase or lease slots on the open market. The applicants admit that they have leased slots at Kennedy Airport in the past, and that there are "continuing discussions" with carriers on this issue. Without knowing the terms that were offered and what impact, if any, it would have on the ability of Pan Am/Carnival to operate competitive service, there clearly is an insufficient basis for the Department to award free slots in this case.

6. Spirit Airlines

Spirit Airlines has filed two different exemption applications. In its first application (Docket Number OST-97-2870), Spirit seeks four slots at LaGuardia Airport in order to provide service to Melbourne, Florida. In its second application (Docket Number OST-97-2932), Spirit request four more slots at LaGuardia Airport for its proposed service to Myrtle Beach, South Carolina. For the reasons set forth below, both of these requests lack merit and should be denied.

a. Melbourne, Florida

First, Spirit's proposed service to Melbourne clearly fails to meet the Department's clear requirement that "there should be a reasonable expectation that the proposed service would be operationally and financially viable."⁽⁵²⁾ Indeed, Spirit starts its application by admitting that Continental Airlines had offered seasonal service between Newark and Melbourne last year, but that service has now been suspended. Moreover, Spirit also admits that US Airways has suspended its three daily Charlotte-Melbourne flights. As TWA cogently points out in its answer, the Melbourne market has decreased substantially during the past several years, in part due to the many low-fare options available to the nearby Orlando International Airport.⁽⁵³⁾ With other airlines realizing that the Melbourne market is insufficient to support separate non-stop service and therefore dropping service to Melbourne, there is no basis for awarding free slots at LaGuardia Airport so that Spirit can also try and fail to sustain such service.

Second, if Spirit believes that it can provide better or more efficient non-stop service than Continental Airlines, Spirit can simply initiate that service between Melbourne and Newark Airport, which is not subject to the High Density Rule. As TWA noted, Newark Airport has consistently generated more traffic to Melbourne than LaGuardia Airport,⁽⁵⁴⁾ and thus Spirit's claim that "LaGuardia is the preferred New York area airport"⁽⁵⁵⁾ is simply untrue. Spirit asserts that Continental was unable to "tap into the business market at Newark",⁽⁵⁶⁾ but Spirit fails to provide any evidentiary proof that there is a substantial "business market" between New York City and Melbourne, which Spirit itself admits is "best known for its beaches and major tourist attractions." Finally, like all of the other carriers, Spirit has failed to demonstrate that it could not obtain slots through the buy-sell market.

b. Myrtle Beach, South Carolina

Like the proposed service to Melbourne, Spirit fails to demonstrate that its proposed service to Myrtle Beach would be operationally or financially viable. Just two years ago, the Department granted six slots at Kennedy Airport to Air South for its flights to South Carolina and Georgia, including service to Myrtle Beach.⁽⁵⁷⁾ As Spirit correctly notes, however, Air South was not able to sustain profitable operations and has now filed for bankruptcy protection, ceasing all operations.

Spirit claims that the Department's decision in Air South supports its request for an exemption, claiming that the Department had concluded that there was sufficient traffic to support non-stop service and that the markets were underserved. However, Spirit ignores the fact that the Department's findings were based upon Air South's entire application, which was not limited to Myrtle Beach, but also sought to provide service to Savannah, Georgia and to Columbia, Charleston, Hilton Head and Greenville/Spartanburg, South Carolina. In addition, the Department noted in the Air South decision that the daily origin/destination markets to Columbia and Charleston were 58% and 177% greater, respectively, than the Myrtle Beach market.⁽⁵⁸⁾

Indeed, the Department's own decision clearly indicates the importance of this diverse service, stating as follows:

"Air South's proposed service with six takeoff/landing slots would provide service benefits to five points, Charleston, Columbia, Myrtle Beach, Greenville/Spartanburg, and Savannah. Thus, no single point will bear the burden of supplying traffic to make the full pattern of service viable; rather the five points will be mutually supportive."⁽⁵⁹⁾

Spirit Airlines, in contrast, seeks to provide service only to Myrtle Beach and not the larger Charleston or Columbia markets, and thus its application contains the very flaw that the Department so scrupulously avoided in its Air South decision.

Spirit's application also fails to explain why it cannot provide the proposed service either to Newark Airport or to Kennedy Airport outside of the slot-controlled hours, rather than to LaGuardia Airport. Spirit recognizes that "Myrtle Beach generally is identified as a leisure market", but still claims that "it needs slots at LaGuardia in order to mount a viable service."⁽⁶⁰⁾ However, Spirit's claim that the Myrtle Beach market "could easily sustain nonstop service" to New York City is belied this admission that it could not provide "viable" service to Newark or Kennedy Airports. In addition, Spirit admits in a footnote that it has already commenced service between Myrtle Beach and Kennedy Airport. Spirit also asserts that "LaGuardia is overwhelmingly the airport of choice for Myrtle Beach travelers",⁽⁶¹⁾ but cites fare information rather than passenger traffic data in support of that claim.

Spirit then attempts to pull up its Myrtle Beach request up by the bootstraps of its Melbourne request, claiming that "it is essential that Spirit, a very small carrier, operates all of its services from a single New York-area airport". While there may be cost advantages to operating from a single airport, Spirit still has not provided any reasonable justification as to why Newark should not be that airport. The only defense Spirit raises is that "access to Newark is as constrained (if not more constrained) than access to LGA," and that its attempts to obtain gates at Newark have been unsuccessful.⁽⁶²⁾ While this argument might form the basis for a review of gate access issues at Newark Airport, it hardly warrants the granting of additional slots at LaGuardia.

In sum, with other airlines abandoning the Melbourne market, in part due to the convenient service offered at nearby Orlando Airport, it is clear that Spirit's proposed service between Melbourne and New York City would not be "operationally [or] financially viable". Similarly, since Spirt itself believes that the Myrtle Beach market is insufficient to support viable nonstop service to New York through Kennedy or Newark Airports, there clearly is an insufficient basis upon which the Department could determine that such service would be viable if offered to LaGuardia Airport. Finally, even if these markets could support the service that is being proposed, then they should be offered to Newark Airport, which is not slot controlled, rather than providing exemptions to the High Density Rule at LaGuardia Airport.

V. The Department Should Utilize Its

Power to Reallocate Existing Slots

For the reasons set forth above, none of the six airline applicants has met the criteria for an award of slot exemptions from the High Density Rule at LaGuardia or Kennedy Airports, either under the statutory standard or pursuant to the revised scope of review announced by the Department in October. This does not mean, however, that the Department is powerless to assist these airlines in their efforts to provide additional service to the New York City area.

Specifically, the Department of Transportation has the power to reallocate existing slots from their current holders to other airlines. If the Department believes that the flights being proposed would provide greater benefits than existing service at the airports, it can use this power to transfer slots and allow those flights to occur. By using this reallocation power, the Department can achieve the public benefits that it believes would result from increased low-fare competition, without causing the increased flight delays that ATM has determined would occur, and without increasing the already overwhelmingly adverse noise, traffic and pollution impacts on local residents.

CONCLUSION

In sum:

1. The United States Congress has determined that exemptions to the High Density Rule should be granted only if additional flights are in the public interest and if exceptional circumstances exist;

2. Neither the Congress nor local communities nor the airlines have agreed that there should be any changes in that statutory standard;

3. Any evaluation of the "public interest" must include an examination of the adverse consequences of additional flights, including decreased safety and increased delays, noise, traffic and pollution;

4. The examination of these adverse consequences must consider the cumulative impacts from both existing flights and the new flights being proposed;

5. The FAA's Office of Air Traffic System Management (ATM) has determined that the granting of exemptions for 10 additional operations at LaGuardia Airport would significantly increase the current level of delay and congestion at that airport and in the surrounding airspace;

6. The Department just granted exemptions for 21 additional operations at LaGuardia Airport, which is more than twice the amount that ATM determined would lead to significant increases in delays;

7. The six airline applicants are now seeking to add 54 more flights to the already overcroweded LaGuardia and Kennedy Airports, which is five times the number that ATM objected to in 1995;

8. The applicants have failed to demonstrate that they cannot obtain these slots on the open market;

9. In order to obtain additional slots, an airline should be required to set forth the amounts offered for the purchase or lease of slots, the amounts at which other airlines stated that the slots could be made available, and the financial impact on ticket prices amortized over a ten-year period;

10. Permitting additional flights at LaGuardia and Kennedy Airports will jeopardize public safety;

11. Permitting additional flights at LaGuardia and Kennedy Airports will increase the number of individuals subjected to unacceptable levels of aircraft noise, will add congestion to the already overcrowded highways in Queens County, and will result in increased the exposure of local residents to VOCs, NO_x and other forms of air pollution;

12. All of the service being proposed by the applicant airlines could just as easily be offered from Newark Airport, which is not subject to the High Density Rule;

13. AccessAir Holdings has filed an application which is indistinguishable from the AirTran Airways request that the Department rejected in October, finding that the proposed markets to be served were too small to warrant a slot exemptions;

14. American Trans Air seeks free slots to serve the oversaturated Chicago/New York market, and also to provide service to locations already well served by Tampa International Airport and by other airlines;

15. America West's application should be rejected because the Columbus market already has existing non-stop service, and the airline readily admits that it really is trying to increase one-stop service to Phoenix and other cities;

16. Colgan Air's application is meritless because it is already providing the proposed service by leasing slots, and slot exemptions should not be granted to allow an airline to avoid these leasing costs;

17. Pan Am/Carnival have filed a similarly meritlesss application, because there are already an overwhelming number of non-stop flights between Boston and New York, and the airlines are simply seeking to increase one-stop passengers on their existing flights to Florida and the Caribbean;

18. Spirit Airlines proposes service which will be neither financially or operationally viable because the proposed markets are very small and have a past history of unprofitable operations; and

19. The Department has the power to offer low-fare competitive service without increasing the number of flights by reallocating existing slots among airlines, thereby preserving public safety and avoiding any increase in flight delays, aircraft noise, vehicular traffic or air pollution.

For these reasons, the pending applications of AccessAir Holding, America West Airlines, American Trans Air, Colgan Air, Pan American World Airways/Carnival Air Lines, and Spirit Airlines for exemptions from the High Density Rule should be denied.

Respectfully submitted,

CLAIRE SHULMAN

President

Borough of Queens

By: David M. Nocenti

Counsel to the Borough President

120-55 Queens Boulevard

Kew Gardens, New York 11424

(718) 286-2880

December 3, 1997

EXHIBIT A

1. The Borough President recognizes that the rules of the United States Department of Transportation do not require airlines to serve copies of their exemption requests upon local governments, but the applicants certainly should have provided us with copies of their requests, especially in view of this office's past involvement in these types of cases. Moreover, the Borough President hereby respectfully requests that the Department amend its rules to require service on the highest elected officials in both the city and the county in which the affected airport is located, in order to ensure that local residents are able to make their views known to the Department before any decisions are made which will increase the noise, traffic and pollution in their neighborhoods.

2. Applications of Simmons Airlines, Inc. d/b/a American Eagle, Trans States Airlines and Reno Air, Order 97-10-16 (hereinafter referred to as "Simmons"); Applications of Frontier Airlines, ValuJet Airlines, and AirTran Airways, Order 97-10-17 (hereinafter referred to as "Frontier").

3. Report to Congress: A Study of the High Density Rule, United States Department of Transportation, May 1995, page 22 (footnotes omitted) (hereinafter referred to as "High Density Rule Study").

4. 14 C.F.R. Part 93, Subpart K.

5. Applications of Simmons Airlines, Inc. d/b/a American Eagle, Trans States Airlines and Reno Air, Order 97-10-16 (hereinafter referred to as "Simmons"); Applications of Frontier Airlines, ValuJet Airlines, and AirTran Airways, Order 97-10-17 (hereinafter referred to as "Frontier").

6. 49 U.S.C. § 41714(c).

7. Application of Spirit Airlines, Order 95-8-38, page 5 (emphasis added) (hereinafter referred to as "Spirit").

8. Frontier, page 3.

9. Id.

10. Id. (emphasis added).

11. Id., page 4.

12. Id., page 3 (emphasis added).

13. A copy of that letter is annexed as Exhibit A.

14. Spirit, page 9 (emphasis added).

15. Id.

16. Application of Pan American World Airways, Inc. and Carnival Air Lines, Inc., Docket Number OST-97-2885, page 2.

17. Application of AccessAir Holdings, Inc., Docket Number OST-97-3087, pages 2-3.

18. Frontier, pages 11-12.

19. Newsday, May 1, 1997, page A7.

20. New York Times, May 2, 1997.

21. New York Times, May 2, 1997.

22. Frontier, page 14.

23. Id.

24. Indeed, 49 U.S.C. § 40101 specifically requires that "before authorizing new air transportation services", the Department must "evaluat[e] the safety implications of those services."

25. High Density Rule Study, page 90.

26. Moreover, the DNL standard measures average noise over a time span, not individual noise incidents. An increase in the number of flights increases the number of noise incidents, and thus even if the average noise decreases slightly due to quieter engines, each incident has an impact on the homeowners, tenants, employees and children living under the flight path.

27. Flying Off Course -- Environmental Impacts of America's Airports, National Resources Defense Council, page 37.

28. High Density Rule Study, pages 11-12.

29. Id., page 11.

30. Application of AccessAir Holdings. Inc., Docket Number OST-97-3087, pages 2-3.

31. Frontier, pages 15-16.

32. Application of AccessAir Holdings. Inc., Docket Number OST-97-3087, Exhibits 2 and 3.

33. Id., Exhibit 3.

34. Airport Flight Guide, Port Authority of New York and New Jersey.

35. The response of United Air Lines to the application of America West Airlines ably demonstrates that O'Hare Airport and Midway Airport are part of the same Chicago "market", even if there are differences in fares. See Motion for Leave to File and Reply of United Air Lines, Inc., Docket Number OST-97-2970, pages 9-15.

36. If ATA's theory of airline passenger traffic is to be accepted, there are actually six separate and distinct markets -- O'Hare/LaGuardia, O'Hare/Kennedy, O'Hare/Newark, Midway/ LaGuardia, Midway/Kennedy and Midway/Newark. Needless to say, ATA provides no statistical information to support this theory.

37. Application of American Trans Air, Inc., Docket Number OST-97-2934, page 4.

38. America West explicitly confirms that it is not seeking to assist Columbus travelers in its most recent reply papers, which state that "the main thrust of the application was to enable America West to serve its principal hub of Phoenix from LaGuardia via its hub at Columbus." Motion for Leave to File and Reply of America West Airlines, Inc., Docket Number OST-97-2970, page 2, footnote 1.

39. Application of America West Airlines, Inc., Docket Number OST-97-2970, page 8.

40. Id., page 14.

41. Id., page 15.

42. Frontier, page 3; Simmons, page 3.

43. Application of Colgan Air, Inc., Docket Number OST-97-3086, page 2.

44. Id.

45. Spirit, page 6.

46. Frontier, page 4; Simmons, page 4.

47. Application of Pan Am/Carnival, Docket Number OST-97-2885, pages 3-4.

48. Pan Am/Carnival attempts to bolster its claim by noting that during the year ending March 31,1997, average origin/destination fares were $137 for Boston/Newark and $103 for Boston/LaGuardia. Id., page 4 and Exhibit 3. As TWA ably points out in its response, however, Pan Am/Carnival has conveniently failed to disclose that the Boston/Kennedy fares during the same period were only $93. Answer of Trans World Airlines, Docket Number OST-97-2885, page 10.

49. Application of Pan Am/Carnival, page 8.

50. Id., page 5.

51. Indeed, Pan Am/Carnival admits that Kennedy Airport will not be the final destination for 46% of its passengers.

52. Frontier, page 4; Simmons, page 4.

53. Answer of Trans World Airlines, Docket Number OST-97-2870, pages 5-6.

54. Id., page 6.

55. Application of Spirit Airlines, Docket Number OST-97-2870, page 4.

56. Id. page 5.

57. Application of Air South Airlines, Inc., Order 96-5-33 (hereinafter referred to as "Air South").

58. Id., page 3.

59. Id., page 5.

60. Application of Spirit Airlines, Docket Number OST-97-2932, page 6.

61. Id.

62. Id., page 7; Reply of Spirit Airlines, Docket Number OST-97-2870, page 4.