OST-99-5130 / Greenville-Spartanburg Airport Commission / High Density Rule - Chicago O'Hare / Answer of United Air Lines / March 8, 1999
Application of
GREENVILLE/SPARTANURG AIRPORT COMMISSION /
Docket OST-99-5130for an exemption from 14 CFR Part 93, Subparts K and S under 49 U.S.C. §41714 to allow nonstop service to Chicago O'Hare International Airport
ANSWER OF UNITED AIR LINES. INC.
United Air Lines, Inc. ("United") hereby answers the above-captioned application of the Greenville/Spartanburg Airport Commission ("GSP"):
1. By its application, GSP requests the award to it of three Chicago O'Hare exemption slot, "in the event that the Department determines to grant exemption slots to a community, rather than to an air carrier..." (GSP Application at 2). United appreciates the efforts of small and medium-sized communities such as GSP to improve their air services, especially to major network hubs such as Chicago O'Hare. Unfortunately, due to the slot limitations at O'Hare Airport, carriers such as United and its independent commuter carriers are not able to provide services to all such communities in response to consumer demands.
United shares the goals of communities in assuring a high level and quality of service for consumers A carrier such as United, with a large network of services (including independent United Express commuter services), is ideally positioned to provide the services to
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consumers at communities such as GSP. A community by itself, however, is not equipped to provide these services which require sustainable access to critical markets and networks. It is only through cooperation between a network carrier and a community that the latter's service needs can be met.
Recent efforts of the Department to extend service to consumers at small and medium size communities are the result of the type of cooperation described above. For example, United and its independent commuters such as Atlantic Coast Airlines ("ACA") have developed service plans with communities similar to GSP, such as Charleston (WV), Wilkes Barre/Scranton (PA), and Springfield (MO) to offer consumers in those communities regional jet network service connections to United's system through its hub at Chicago O'Hare. The Department rewarded these efforts by granting exemption slots to ACA.
Order 98-4-21. More recently, United cooperated with its independent commuters in securing upgrades of Chicago service from propeller to jet equipment for communities such as Sioux Falls, Fargo and Peoria. In some cases this involved the transfer of exemption slots subject to DOT approval (Order 98-10-28) and in others the transfer of commuter slots held by a carrier subject to FAA review. In all cases, United and the independent commuter carriers involved worked closely with the communities and the Federal government to ensure the successful introduction of improved service which will benefit consumers in these communities.The relief GSP proposes, however, is intended to award exemption slots directly to the community in an apparent effort to put the community in control of the carrier selection process. Instead of the type of cooperation which has proved successful in the past, such a
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proposal would inevitably lead to competition and conflict among carriers and communities over who is to operate these services. The disinterested participation of the Federal government, taking into account the interests of consumers and the service offerings of the carriers as well as broader competitive and policy considerations, would be lacking from the type of procedure envisaged by GSP.
In these circumstances, United is constrained to oppose GSP's request for allocation of exemption slots to communities. A different case might be presented if the community were to seek the joint award of slots in conjunction with a carrier eligible to operate them or if the exemptions were allocated to a carrier designated by the Department of Transportation to operate the services for the benefit of a specific community. To award the slots to the community directly for it to dispose of at its own discretion would, however, be both unlawful and unwise.
2. GSP offers no arguments to support such an unprecedented exemption award to a community, rather than a carrier. Instead, GSP repeats the arguments offered by American Eagle Airlines, Inc. ("American") in support of such an award to American for Chicago O'Hare-Greenville/Spartanburg service.
United has answered in opposition to American's application, in
Docket OST-98-4647, for exemption slots to serve the Chicago-Greenville/Spartanburg market. In that regard, United has noted the ineligibility of American or its wholly-owned commuter subsidiary to receive such exemption slots. Moreover, to the extent that additional exemption slots are to be issued at O'Hare, they should be issued to ACA for services between Chicago and the larger
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Savannah/Hilton Head market (
OST-98-3982). United will not repeat those arguments here but adopts by reference its pleadings in Docket OST-98-4647.3. There are additional factors which preclude the Department from issuing slot exemptions to a community such as GSP rather than an air carrier. United has already demonstrated why the Department cannot make slot exemption awards to communities under any of the provisions of 49 U.S.C. §41714. See Answer and Reply of United, dated March 26 and April 13, 1998 in
Docket OST-98-3603 (Application of the Community of Savannah, Georgia/Hilton Head, South Carolina) and Answer of United, dated November 4, 1998, in Docket OST-98-4604 (Application of the Communities of the Virginia Peninsula). For the same reasons set forth in United's pleadings cited above (which are adopted here by reference), the GSP application for exemption slots should also be denied.Indeed, the Department itself has noted the difficulty in even considering such unsupported community applications for exemption slots which are:
not accompanied by a specific operating proposal naming a committed air carrier and its actual schedule, including aircraft type. As a practice, therefore, the Department is not in a position to ascertain whether [such a] request comports with our guidelines (see e.g.,
Order 98-9-24 at 6-7. In that instance, the Department was referring to the application of the Savannah/Hilton Head community. The Department there indicated that it would, instead, be prepared to consider the application of ACA, in Docket OST-98-3982, for exemption authority under §41714(c) to serve the Chicago-Savannah/Hilton market. Id.
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4. There is no basis under the applicable statutes for DOT to make such an award to a community. Not only is an exemption award to a community beyond the Department's jurisdiction under §41714, such an award would also violate the Federal pre-emption provisions of §41 713(b). Under that statute,
"a State, political subdivision of a State, or political authority of at least two States may not enact or enforce a law, regulation, or other provision having the force or effect of law related to a price, route or service of an air carrier that may provide air transportation…"
49 U.S.C. §41'713(b). Because a community (i.e., a political subdivision of a State) would be preempted from authorizing service by an air carrier under any slot exemption that might be awarded to such a community, any attempt by the Department to award exemption slots to a community, such as GSP proposes, would be a legal nullity. There are sound reasons for such pre-emption. A community choosing a carrier to exercise such services would have a parochial view of its own service needs, rather than those of the nation or the air traffic system as a whole. The Department is charged by statute in making decisions with respect to matters such as slot exemptions under §41714 to consider factors such as the following:
(6) placing maximum reliance on competitive market forces and on actual and potential competition
(A) to provide the needed air transportation system; ...
(7) developing and maintaining a sound regulatory system that is responsive to the needs of the public and in which decisions are reached promptly to make it easier to adapt the air transportation system to the present and future needs of
(A) the commerce of the United States;
(B) the United States Postal Service; and
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(C) the national defense;
(10) avoiding unreasonable industry concentration, excessive market domination, monopoly powers, and other conditions that would tend to allow at least one air carrier or foreign air carrier unreasonably to increase prices, reduce services, or exclude competition in air transportation.
49 U.S.C. §401 01(a). These are not the types of considerations that a local government or airport authority can reasonably be expected to bring to bear on an issue such as carrier selection for a particular route service.
The Department cannot, consistent with its obligations under §§40101, 41713 and 41714, allow individual communities such as GSP to decide what carriers will operate services between that community and Chicago O'Hare or any other point. Indeed, in this very instance, the wisdom of the drafters of Federal pre-emption is amply demonstrated. The exemption at issue relates to service between Greenville/Spartanburg and Chicago. Why should GSP, but not Chicago or the numerous cities served via carrier hubs at Chicago, have the sole discretion over what carrier operates that route? Similarly, a single community should not be in a position to determine unilaterally to change carriers on a route in response to local economic or political pressure. To avoid allowing such decisions to be made on parochial grounds by favored communities, (Congress has reserved such decisions to the Federal government by pre-empting local governments from doing so.
The problems that can be created by local governments seeking to exercise such Federal powers are amply illustrated by the present dispute over services at Dallas/Love Field. In the Love Field Service Interpretation Proceeding, Order 98-12-37, the Department correctly
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noted that local governments were pre-empted from deciding which carriers would be allowed to serve certain routes at certain airports under their control. Except for decisions falling within a narrowly defined set of proprietary interests, airport owners are pre-empted from making decisions involving airline routes. Id. at 24-42. No such proprietary interest would even arguably apply in the case of decisions as to what carrier would operate routes to small and medium sized communities pursuant to slot exemptions.
In the case of slot exemptions, if the Department were to attempt to delegate to local governments its powers over allocation of these valuable resources, there would be no consideration given to making such awards in a manner designed to maximize the overall public interest. Such decisions could be subject to influence pedaling on a large scale by unscrupulous carriers seeking to take advantage of the discretion afforded to local governments not subject to stringent Federal conflict of interest standards. By pre-empting local governments from such decision-making, Congress has protected the general public from decisions aimed at benefitting only a favored few.
5. In conclusion, in order to ensure a carrier's maximum ability to serve a community's needs and those of its consumers, the Department must dismiss the instant application of (ASP. While communities and consumers have a legitimate role in promoting services to their local airports, the Federal government, and not local governments, that has the ultimate responsibility for determining how transportation resources are allocated when the supply of such resources is insufficient to meet the demands for them by communities and carriers. It would be a serious mistake and contrary to its legal obligations for the Department to abdicate its
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statutory responsibilities in the manner suggested by GSP. To the extent that carriers eligible for slot exemptions such as ACA have corresponding applications on file, the relief sought by such communities can be made available expeditiously, but it must be accomplished by the Federal government by awards to eligible carriers, not to ineligible communities.
Respectfully submitted,
JEFFREY A. MANLEY
KIRKLAND & ELLIS
655 Fifteenth Street, NW
Washington, DC 20005
(202) 879-5161
Counsel for UNITED AIR LINES, INC.