OST-00-5838 / Sun Country Airlines / High Density Rule - New York JFK / Response of Sun Country / March 3, 2000

Application of

under 49 U.S.C. § 41714 for an exemption from the high density rule governing JFK International slots (14 C.F.R. Part 93) (Minneapolis/St. Paul, Minnesota

Sun Country Airlines, Inc. hereby submits its Answer to the Motion/Pleading of JetBlue Airways Corporation ("JetBlue") filed February 23, 2000. /1

JetBlue stated that "the application of Sun Country for two new entrant exemption slots at JFK is neither supported nor opposed by JetBlue ... ." Motion/Pleading at 2. "Reservations" were expressed "based upon both the operational availability of exemptions and compliance with all environmental laws." Id.

1/ Pursuant to Rule 4(f) [new Rule 6(c)] of the Department's Rules of Practice, Sun Country hereby requests leave to file this Response. Only a few new entrant exemption slot applications involving JFK have been considered by the Department. Sun Country seeks leave to file this response in order to provide a realistic perspective regarding the processing of its pending request for JFK exemption slots.

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The effect of these "reservations" would be to thwart Sun Country's application by imposing upon the pending request for two slots the same procedural and analytical requirements used to determine JetBlue's application for 75 slots at JFK. The cases presented by Sun Country and JetBlue are clearly distinguishable. JetBlue has not demonstrated any credible grounds for its contentions. The Department should not be coaxed into delaying action upon Sun Country's application by accepting the false parallel asserted by JetBlue.

1. Operational Availability of Exemptions at JFK.

Jet Blue was awarded 75 slot exemptions for use at JFK to be phased in over a three-year period. Order 99-9-11. The carrier now argues that no subsequent exemption slots at JFK can be granted "without first requiring that the appropriate operational ... analysis be performed, including the assumption that JetBlue's operations will utilize all 75 slots ... ." Motion/Pleading at 2. Performance of such analyses would be an impossible task. /2

Even if JetBlue's contention is reduced to merely subtracting 75 exemption slots from the number of such slots at JFK that might be capable of being used in the next three years, it creates a test that cannot be met because there is no known limit. The Department did not determine, neither in Order 99-9-11 nor elsewhere, the finite number of exemption slots that might be suitable for JFK as of late 1999 or at any time thereafter. /3

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That number, whatever it might be, is likely to be large enough to accommodate not only JetBlue, but Sun Country and other new entrant carriers as well. JFK is clearly an under-utilized airport, as the Department's Environmental Assessment found. /4 Environmental Assessment ("EA"), at XII. JFK was determined to have the capacity to accommodate additional domestic service. Id. Specifically, it was noted that "JFK hourly activity levels are well below those of LGA in spite of the greater capacity of JFK's four-runway complex." Id. at XII-XIII.

Current under-utilization of JFK and the mounting likelihood that legislative or administrative action will modify or eliminate the High Density Rule /5 combine to undermine the basis for JetBlue's fear that it may be precluded from using all of its hard won slots during the next three years. Moreover, because JetBlue cannot guarantee that it will be able to make full use of its slots when planned two or three years from now, the Department should not hesitate to grant the very modest request of Sun Country for immediate use of two exemption slots. There is no justifiable excuse for depriving the Minneapolis/St. Paul-JFK market of its only low-fare nonstop service in mid-2000 to preserve the uncertain ability of JetBlue to use all its slots in 2001 and 2002.

Neither is there any excuse for making any slot granted to Sun Country subject to surrender upon demand by JetBlue. The business opportunity represented by such a conditional slot would be insufficient to warrant the effort to promote and build a market that

5/ EA, at 1-5.

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could summarily be destroyed by another carrier. It cannot be in the public interest to deny or blight the present and certain increase of low-fare service in the Minneapolis/St. Paul JFK market in order to keep open the possibility of future and uncertain inauguration of service in a market yet unknown.

2. Compliance With All Environmental Laws at JFK.

JetBlue asserts that the Department should not grant Sun Country's application "by solely relying on the environmental work performed by JetBlue, especially in such a noise and emissions sensitive region" as the area adjacent to JFK. Motion/Pleading at 3. JetBlue evidently intends that any applicant for exemption slots at JFK should be required to undergo an environmental scrutiny no less rigorous than it experienced in Docket OST-99-5085. That argument is untenable because it falsely equates the unprecedented character of JetBlue's situation with the entirely different situation presented by Sun Country's application.

JetBlue sought 75 exemption slots as part of a plan to utilize JFK as the operational hub of its ambitious route system. The carrier planned to operate in its first year about 90 flights per day at JFK, of which 25 were to occur during slot-controlled hours. JetBlue Application in Docket OST- 99-5085 at 7. By the end of the carrier's third year, the foreseeable level of operation would involve nearly 300 flights per day at JFK, 75 of which would occur during slot-controlled hours. The environmental aspects of such a large daily operation obviously would not be limited to the five-hour span of the High Density Rule. Thus, it is not surprising that a massive and detailed Envirom-nental Assessment was the result.

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The circumstances attending Sun Country's application present a stark contrast. Sun Country seeks only two exemption slots; its total service at JFK, assuming the slots are granted, would be only two takeoffs and two landings per day. If that level of service is deemed sufficient to require a detailed Environmental Assessment, no small carrier could possibly attain the exemption slots that were authorized for new entrants, few of which command financial resources comparable to JetBlue's.

The necessity of "compliance with all environmental laws" urged by JetBlue is not supported by Order 99-9-11 or any of the prior cases involving exemption slots. Apart from the requirement to use stage 3 aircraft, now mandated for all commercial flights at all airports, the Department has not treated environmental issues of flight delays, noise, vehicular traffic congestion and pollution as being of decisional importance. Order 99-9-11 at 12. In any event, the EA preformed in Docket OST-99-5085 produced a Finding of No Significant Impact arising from JetBlue's plans to operate hundreds of daily flights at JFK. The Department justifiably should conclude, on the same data and analysis, that Sun Country's total operation of four flights per day at the same airport would be even less detrimental to the environment.

3. Conclusion.

The Department should promptly grant the application of Sun Country for two new entrant exemption slots at JFK. Award of those two slots should not be subject to surrender

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upon demand by JetBlue. No Environmental Assessment is necessary in connection with the de minimis amount of the service that would operate with the requested slots.

Respectfully submitted,

DENNIS N. BARNES

Morgan, Lewis & Bockius LLP

1800 M Street, N.W.

Washington, D.C. 20036

(202) 467-7060

Attorney for Sun Country Airlines, Inc.

Dated: March 3, 2000