OST-99-6654 / Des Moines International Airport / High Density Rule - Des Moines-LaGuardia and Des Moines-Indianapolis-LaGuardia / December 15, 1999

Application of the

DES MOINES INTERNATIONAL AIRPORT / Docket OST-99-6654

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

(Des Moines-LaGuardia and Des Moines-Indianapolis-LaGuardia)

The Des Moines International Airport ("Des Moines") hereby applies for six slot exemptions from the High Density Rule at New York's LaGuardia Airport to permit Midwest Express Airlines, Inc. ("Midwest Express") to conduct twice daily Des Moines-New York City single plane service via Indianapolis, as well as one daily nonstop roundtrip flight in the Des Moines-LaGuardia market.

In short, with the ceasing of operations by Des Moines-based Access Air in late-November 1999, Des Moines has lost its only single plane, direct access to La Guardia. Among other things, this loss is a tremendous blow to the business community of Des Moines and Iowa. In light of this extraordinary circumstance, Des Moines seeks to fill this critical void as rapidly as possible and is pleased to inform the Department that it has joined with Midwest Express to fill this void. If the Department approves Des Moines' request, the community understands that

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Midwest Express can implement the entire service pattern by June 2000 and potentially start the single plane service via Indianapolis as early as March 2000.

By approving Des Moines' request, the Department will provide a strong boost to both the local and state economy and inject much-needed airline competition. Indeed, the Department would help redress one of the most glaring and well-documented shortcomings of the otherwise beneficial Airline Deregulation Act--the uneven distribution of benefits in certain geographic regions of the county. Just as importantly, Midwest Express currently does not serve Des Moines, although its commuter affiliate Skyway provides turboprop service to Milwaukee. As a result, favorable Department action on Des Moines' petition will bring a new jet air carrier to Des Moines.

Des Moines has long pursued Midwest Express to serve the community in part because of the air carrier's reputation for exceptional passenger service quality at competitive fare levels. By enabling Midwest Express to come to Des Moines and to serve the Des Moines-LaGuardia market, the Department will allow the community to be less dependent upon connecting service via numerous Midwest hub airports for service to East coast destinations.

As indicated above, upon award to Des Moines of the six LaGuardia slot exemptions requested herein, Midwest Express will

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fill a critical void left by the recently terminated Des Moines-LaGuardia service provided by Access Air, which ceased all air carrier operations in late November. Access Air's single plane service to LaGuardia was vital to the air transportation needs of Des Moines and was well supported by the community. Based on the proven record of market demand, Midwest Express has advised Des Moines that its Stage 3 aircraft service to New York will be operationally and financially viable. For these reasons, and for those set forth below, the Des Moines International Airport hereby respectfully requests the DOT grant to it six LaGuardia slot exemptions for use by Midwest Express.

1. Des Moines is the capital of Iowa with a vibrant and growing economy. The Des Moines International Airport is centrally located within the state and is Iowa's largest commercial air service facility. With an Airport service area population approximating 1.1 million and a metropolitan area population of over 700,000 the Central Iowa region needs, and can support, single plane access to the eastern portion of the United States. For a time, Access Air provided that service with one weekday one stop and one weekday two stop flights to LaGuardia. During the brief eleven-month period Access Air served the Des Moines-LaGuardia market, it is estimated that passenger traffic increased by over 28 percent. It is of utmost importance to the Des Moines community and the state that this service be restored to accommodate the increasing demand for direct service to New York.

2. Whatever financial difficulties Access Air may have experienced, no one can question the support of the Des Moines, community and the viability of Access Air's single plane service to New York. This historic level of passenger demand is fully consistent with the fact that New York is now, with the cessation of Access Air's service, Des Moines's second largest 0&D market that does not have single plane or nonstop service. This situation is very similar to the facts facing other High Density Airport city-pair markets in which the DOT granted exemption slots in order to rectify the service imbalance at the slot constrained airport. See Orders 97-10-16, 97-10-17, 98-4-21, and 98-4-22.

3. Both Vice President A1 Gore and Secretary of Transportation Rodney Slater have recognized that Des Moines has not enjoyed the competition expanding benefits of the Airline Deregulation Act to the same degree as have other areas of the county. Indeed, Secretary Slater characterized Des Moines' air service market as a "pocket of pain" because airline deregulation has left it with fewer service options and higher fares. Des Moines Register, October 10, 1998. In a June, 1999 meeting with Des Moines business and civic leaders in Washington, D.C. Secretary Slater said, "This administration is going to be standing with you in this fight and this is a fight we are going to win." Des Moines Register, June 11, 1999.

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Vice President Gore has also directly acknowledged the poor situation facing Des Moines and previously pledged support for increasing access by underserved communities to the slot controlled airports. "There's no reason why Des Moines and the other cities that are being hit hard by this should have to endure this pain." Des Moines Register, October 21, 1998. In a visit to Des Moines in November 1999, the Vice President commented, "In this day and time, economic competitiveness for a region depends in part on having good air access and yet consolidation of the airline industry has meant they've gone to this hub-and-spoke system where a few cities have the hub and they have the luxury of direct flights everywhere. If you are not a hub, you are a feeder route and that means you are often at the mercy of a single airline . . . .I am committed to help on this issue. I've got a record on this." Des Moines Register, November 12, 1999.

This application is intended to address this situation by allowing Des Moines to continue to receive vital direct air. service to New York and thereby provide an attractive service alternative to the existing connecting service over so-called fortress hub airports. Favorable consideration of this application will permit the Administration to act on its prior expressions of support for the plight of Des Moines and its citizens. Such action would be fully consistent with prior DOT precedent.

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4. The Airport is making this application for numerous reasons. Of particular note is that Midwest Express, under current law, is not eligible at LaGuardia to receive slot exemption authority under section 41714 of the federal transportation statute. Even though Midwest Express is a small airline (accounting for only 0.3 percent of the national market), the carrier operates 12 slots at LaGuardia (obtained solely by means of self-help) and therefore is not a new entrant or limited incumbent carrier within the meaning of the terms as defined in section 93.213 of the Federal Aviation Regulations. However, as the DOT is aware, the eligibility of a carrier to be assigned to use exemption slots is not an impediment to positive action on the request of the community. By Orders 99-3-12 and 99-9-18 the DOT granted and renewed slot exemption authority to the communities of Savannah/Hilton Head and Greenville/Spartanburg. The communities, in turn, joined with two air carriers (Atlantic Coast Airlines d/b/a United Express and American Eagle)to provide nonstop jet service to O'Hare. Therefore, there is no legal bar under section 41714 if the DOT awards six slots to the community to, in turn, assign the slots to any category of air carrier to provide the needed service. While the DOT has recognized that this authority is to be used sparingly, Des Moines' lack of service to New York presents the precise situation, as noted by both Vice President Gore and Secretary Slater, that compels the exercise of the DOT's section 41714 authority in the context of this community slot request.

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5. The Airport further understands that the Department must find its request is supported by exceptional circumstances before it can be favorably considered. Factors the Department has delineated it must find include whether service will be provided with Stage 3 jet aircraft, whether there is a reasonable expectation that the service will be operationally and financially viable and, finally, whether the service to be provided will authorize new nonstop or competitive service where none exits. This application is consistent with the DOT precedents awarding slots to both air carriers and communities under section 41714 of the federal transportation statute. See Orders 99-3-12, 97-10-16, 97-10-17, 98-4-21 and 98-4-22.

Midwest Express is the operator of an all Stage 3 fleet of DC-9 and MD-80 series aircraft and will provide all Des MoinesLaGuardia service with these quiet aircraft. Second, the community understands from Midwest Express that the service the carrier will provide will be operationally and financially viable. Des Moines shares the confidence that Midwest Express has in the proposed service. Access Air only began to fully develop and stimulate the market. With the proven Midwest Express tradition of award winning service, there is no question that the community of Des Moines and the citizens of Iowa will support its flights and that exceptional circumstances support this civic request.

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For all of the reasons set forth above, the Des Moines International Airport requests the DOT issue to it, pursuant to the DOT's authority under section 41714, six LaGuardia slot exemption which it will assign to Midwest Express to permit the service described herein.

Respectfully submitted,

DES MOINES INTERNATIONAL AIRPORT

John R. Fitzgibbon

Chair, Des Moines International Airport Board

Dated: December 13, 1999

ATTEST:

Vicki N. Dickinson

Airport Board Clerk

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