OST-00-6970 / Midway Airlines / High Density Rule - New York LaGuardia / Answer of America West / March 22, 2000
Application of
MIDWAY AIRLINES CORPORATION /
Docket No. OST-00-6970For an exemption from Subparts K and S of 14 CFR 93 (Raleigh/Durham - LaGuardia Service)
MOTION FOR LEAVE TO FILE AND
ANSWER OF AMERICA WEST AIRLINES INC.
America West Airlines, Inc. ("America West") respectfully requests leave to file the following answer in response to the exemption application filed February 22, 2000 by Midway Airlines Corporation ("Midway"), for slot exemptions for service to Raleigh-Durham, the answer of the Office of the Queens Borough President and the Reply of Midway. America West seeks to file this answer in light of the imminent enactment of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ("Air 21"). This legislation substantially revises 49 U.S.C § 41714 and creates a new § 41716, which provides interim slot rules for New York's LaGuardia Airport (LGA) pending the abolition of slots at LGA on January 1, 2007. Granting this request will allow America West to comment on Midway's application in light of Air 21 in the interest of ensuring the completeness of the Department's record in its consideration of Midway's
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application, and acceptance of the following answer will not prejudice any party to this proceeding. America West agrees with Midway that the objections raised by the Office of the Queens Borough President are without merit and America West has no objection to approval of Midway's request so long as America West's previously filed request for slot exemptions to continue its LGA service to Columbus, Ohio is also granted. Air 21 makes significant substantive changes to the statutory provisions governing the allocation of exemption slots at LGA that will enable the Department to approve the applications of both America West and Midway. First, Air 21 redefines the terms new entrant and limited incumbent by increasing the slot limits for such carriers from 12 to 20. Second, Air 21 deletes the requirement that new entrants or limited incumbents must show an "exceptional circumstance" to qualify for slots. Thus, under the legislation, expected to be signed by the President within the next week, all the Department must find to grant an exemption slot is that the proposed service is in the public interest. See Air 21 at § 23 1 (a)(4)(B).
More significant with respect to the pending applications of America West and Midway is the interim exemption rule for new entrants and limited incumbents at LGA and John F. Kennedy International Airport, which states:
[T]he Secretary shall grant, by order, exemptions ...to any new entrant air carrier or limited incumbent air carrier to provide air transportation to or from LaGuardia Airport or John F. Kennedy International Airport if the number of slot exemptions granted under this subsection to such air carrier with respect to such airport when added to the slots and slot exemptions held by such air carrier with respect to such airport does not exceed 20.
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Air 21 at § 23 1 (c) (emphasis added). The use of the compulsory language "shall grant" requires the Department to grant these slot exemptions to eligible carriers. The Conference Managers' report on Air 21 states "DOT is also directed to grant exemptions to new entrants and limited incumbents for service to New York." Id. at 40 (emphasis added). Thus, allocation of exemption slots to new entrants at LGA and JFK has been made mandatory. See, Association of Civilian Technicians v. FLRA, 22 F.3d 1150, 1153 (D.C. Cir. 1994) (noting that statutory language including, "[t]he word "shall" generally indicates a command that admits of no discretion on the part of the person instructed to carry out the directive.") Accordingly, Air 21 requires allocation of exemption slots to all new entrants at LGA, including both America West and Midway.
Both America West and Midway requested exemption authority because their ability to continue the only competitive service in significant markets from LGA is in jeopardy. Specifically, America West requested permission to slide two slots held by Mesa Airlines for America West Express flights to more useable times and to be awarded four exemption slots to enable it to continue its four daily roundtrip flights between LGA and Columbus with connections to points in the West.
America West is sympathetic to Midway's plight as America West also has been unable to secure LGA slots at reasonable times from other carriers on commercially reasonable terms. Contrary to the assertion of the Queens Borough President, Midway's inability to acquire LGA slots confirms America West's experience that there is no marketplace access to slots at LGA at any price. Indeed this problem has been recognized by Congress in Air 21 by directing the Department to make slots available to
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limited incumbents outside the buy/sell rule. As noted by Senator John McCain, Chairman of the Senate Commerce, Science and Transportation Committee, in his remarks supporting certain provisions in Air 21, numerous respected studies have shown that "slots and perimeter rules are anticompetitive, unfair, unneeded, and harmful to consumers." 145 Cong. Rec. S 12,096 (daily ed. Oct. 6, 1999) (referring to reports by the General Accounting Office, the National Research Council, and others.). Congress' decision to effectively abolish the slot rule at the New York airports for service by regional jets to non-hub and small hub airports also demonstrates that the grant of slots to America West as well as Midway (both currently using regional jet equipment) will not have any significant impact on noise or other environmental issues. As noted in America West's reply in support of its exemption request for LGA and JFK, Air 21 moots the objections raised by the Office of the Queens Borough President.
America West's existing service between LGA and Columbus, combined with the beyond service it provides to Western points not only provides the only competition in this market but also extends the competitive benefits of the service to numerous passengers in those beyond Columbus markets. In its 1998 order awarding America West five exemption slots at Chicago's O'Hare International Airport the Department recognized that providing exemption slots at LGA to America West for additional service to Columbus would benefit many consumers.
Order 98-4-22, April 21, 1998, at 13. However, the continuation of the benefits of the existing service is imperiled by lack of reasonable access to LaGuardia. America West has consistently advocated that the
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Department further the deregulation process by granting exemptions from the high density airport rules to stimulate competition and enhance consumer welfare.
For the above stated reasons America West respectfully submits that the Department grant the slot requests of both America West and Midway. America West has no objection to Midway's application for LGA exemption slots provided America West's earlier-filed application is not prejudiced, and if Midway's application is approved America West's application is also approved.
Respectfully submitted,
Joanne W. Young
David M. Kirstein
BAKER & HOSTETLER LLP
Washington Square, Suite 1100
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5304
(202) 861-1532
Counsel for America West Airlines
March 22, 2000