OST-99-6654 / OST-99-6692 / Des Moines International Airport and Midwest Express / High Density Rule - New York LaGuardia / December 21, 1999

Application of

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

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

Joint Application of

THE DES MOINES INTERNATIONAL AIRPORT and MIDWEST EXPRESS AIRLINES, INC. / Docket OST-99-6692

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

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

MIDWEST EXPRESS AIRLINES, INC.

On December 13, 1999, the Des Moines International Airport ("Des Moines") filed an application with the Department of Transportation seeking six LaGuardia exemption slots to permit Midwest :Express Airlines, Inc. ("Midwest Express") to conduct twice daily Des Moines-New York single plane service via Indianapolis, as well as one daily nonstop roundtrip flight in the Des Moines-LaGuardia market. Des Moines Application, Docket OST-99-6654.

In its application, Des Moines made note that it was being filed in the name of the Des Moines International Airport because of its understanding that Midwest Express is not a new entrant or limited incumbent carrier at LaGuardia and, therefore, is not eligible for an award of slots pursuant to 49 U.S.C. section 41417(c) of the federal transportation statute. While it is correct to note, as did Des Moines, that Midwest Express operates 12 slots at LaGuardia, Midwest Express is nonetheless a limited incumbent carrier within the meaning of section 93.213 (a) (5) of the Federal Aviation Regulations (FAR's). Therefore, Midwest Express, jointly with Des Moines, is filing this Joint Supplemental Application to permit the Department to award the requested exemption slots to Midwest Express.

By definition, a limited incumbent carrier means "an air carrier or commuter operator that holds or operates fewer than 12 air carrier or commuter slots, in any combination, at a particular airport, not including international slots, or slots between the hours of 2200 and 0659 at Washington National Airport and LaGuardia Airport." Emphasis supplied. Two of the twelve slots operated by Midwest Express at LaGuardia are operated during the hours of 2200 and 0659. Specifically, Midwest Express has a scheduled LaGuardia departure at 0645 and an arrival at LaGuardia at 2200. Hence, Midwest Express is the holder of only 10 slots at LaGuardia during the hours specified in section 93.213 (a) (5) of the FAR' s . Midwest Express is, therefore, a limited incumbent carrier and is eligible to receive slot exemption authority pursuant to section 41714 (c) of the statute.

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Accordingly, and with the concurrence and support of Des Moines, Midwest Express by this Joint Supplemental Application request; that the award of six LaGuardia slots be made to Midwest Express under section 41714(c). Under this section of the transportation code, the Secretary is authorized to grant exemptions from the FAA's High Density Airport Rule (Subparts K and S of Part 93 of the FAR' s) to new entrant and limited incumbent carriers upon a showing of exceptional circumstances. Such circumstances are carefully described in the Des Moines application, and Midwest Express will not repeat those arguments in this supplemental filing. It is sufficient to note that the community of Des Moines recently, lost its direct, single plane access to New York when Access Air ceased all operations last month. This has created a service void that Midwest Express is prepared to fill upon the grant of this application. Assuming timely consideration of this application, Midwest Express may be able to commence twice daily single plane service to New York via Indianapolis as early as March, 2000. Nonstop Des Moines-New York service would commence as early as June, 2000. The service would be provided with Midwest Express's Stage 3 aircraft, with its renowned two-plus-two seating configuration, superior meal service and competitive low fares. Midwest Express has earned the reputation as the best domestic air carrier for five years running and it is honored that Des Moines has joined with it to ensure that the growing Des Moines-New York

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market is not downgraded to a connecting market. /* Des Moines has a compelling need for nonstop and single plane service to East Coast destinations, and particularly major East Coast centers of commerce, and the flights being offered by Midwest Express will be the only such service to be provided to the community. Service between Des Moines and other East Coast destinations is limited to connecting flights over other major hub airports.

Midwest Express has forecast that its Des Moines -LaGuardia service will be profitable. Perforce the service will be operationally and financially viable. The characteristics of the Des Moines-New York market are similar to the many nonstop markets served by Midwest Express in which it is the only carrier offering nonstop or single plane service. Such markets include Omaha-New York, Omaha-Washington, D.C., Milwaukee-San Antonio, and Milwaukee-San Antonio. Indeed, a full 60 percent of Midwest Express flights are conducted in nonstop markets in which no other carrier provides nonstop service. The willingness of Midwest Express to offer direct service to communities, such as Des Moines--markets in which major carriers only offer less effective connecting service--is to be encouraged by the Department. Specifically, this application presents precisely the factual circumstances found by the DOT in prior decisions to be exceptional in the establishment of its slot

*/ According to Des Moines, during the short eleven months Access Air offered two-stop and one-stop service to LaGuardia, the market grew a substantial 28 percent. At this rate of growth the market will double in size in less than four years.

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Not only will the grant of the requested exemption slots to Midwest Express provide the Des Moines community needed service to New York, Midwest Express will also provide nonstop flight competition to USAirways service in the Indianapolis-LaGuardia market. The DOT has previously held that extraordinary circumstances can be found when exemption slot authority is used not only to provide new nonstop service but as well to enhance service in existing nonstop markets. See Orders 97-10-16 and 97-10-17 in which the Department expanded its definition of exceptional circumstances by specifically recognizing in the need for competitive services in a market. This will be the case in the Indianapolis market where Midwest Express will enter into direct competition with USAirways for the nonstop Indianapolis-LaGuardia passenger.

There is no question but that the FAA's High Density Airport Rule significantly limits both air carrier and community options in providing and attracting needed air service. In the case of Des Moines, with a catchment area of 1.1 million people, service to New York's LaGuardia Airport need not be a casualty of the High Density Airport Rule. Certainly, not when the community recently enjoyed the service but the carrier providing it had to cease operations, despite the community's strong support for its services. The DOT has done its best over the last few years in granting slot exemption authority to rationalize air carrier

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service patterns and thereby overcome the limitations of airport slot controls. The joint Midwest Express and Des Moines application presents yet another opportunity to the Department to insure a continuation of needed Des Moines -LaGuardia service which cannot be provided without relief from the FAA regulation.

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For all of the reasons set forth above, Midwest Express hereby requests an exemption from the provisions of Subparts K and S of Part 93 and for the DOT to issue to it six LaGuardia slots to facilitate the Des Moines service described above.

Respectfully submitted,

DES MOINES INTERNATIONAL AIRPORT

SILVERBERG, GOLDMAN & BIKOFF

Attorneys for MIDWEST EXPRESS AIRLINES, INC.