OST-00-7176 / Wendell H. Ford Aviation Investment and Reform Act for The 21^st Century / Amendment to Application of Midway Airlines / April 19, 2000

In the matter of

THE WENDELL H. FORD AVIATION INVESTMENT AND REFORM ACT FOR THE 21ST CENTURY / Docket OST-2000-7176

For exemptions from 14 CFR Part 93, under 49 U.S.C. section 41716(b)

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issued a Notice establishing procedures for slot exemptions under the new provisions of the Act and issued Order 2000-4-10 granting slot exemptions at. New York's LaGuardia Airport under the provisions of 49 U.S.C. section 41716(b) of the new Act. By this amendment Midway conforms its Application to the requirements of Order 2000-4-10, including the required certification under 14 CFR 302.4(b).

Under the new provision, Midway requests a total of nine slots, to be phased in over the coming year, to enable it to maintain and modestly expand its scheduled nonstop operations between LaGuardia and Raleigh/Durham, North Carolina, with Stage 3 aircraft. By this amendment, Midway is also supplying the slot times and effective dates it is requesting, as required by Order 2000-4-10.

In its initial application Midway requested two slots on an emergency basis and seven additional slots to be phased in over the coming year. It demonstrated that it qualified for slot exemptions as a new entrant, /1 and that its proposal was in the public interest and met the Department's guidelines for exceptional circumstances. In summary, Midway attested that it will use Stage 3 aircraft and demonstrated that it will provide significant transportation benefits to a large number of

1/ Midway noted that its current schedule of five arrivals and five departures, for a total of ten operations a day, is the highest number of slots it has ever operated during the slot-controlled hours at LaGuardia, and that it therefore met the then-effective criterion for exemption eligibility for new entrants, i. e., holding or operating no more than twelve slots at the airport in question.

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consumers and that its service will be financially and operationally viable. Midway emphasized that without the requested exemptions, the carrier would be forced to reduce or terminate its LaGuardia services and a substantial number of travelers in the LaGuardia-Raleigh/Durham market would suffer the loss of effective competition.

Following Midway's filing of the exemption application, the FAA was able to ease the immediate crisis by making available to Midway two temporary slots through October 28, 2000. That action will enable Midway to maintain its LaGuardia operations for the immediate months. But it will not accommodate the longer term transportation needs of the LaGuardia-Raleigh/Durham market, both because the two temporarily extended slots remain subject to termination by their lessor as of October 29, 2000, and the lease for five of the other slots for Midway's existing operations at LaGuardia will terminate on March 31, 2001 (leaving Midway with only its own three slots as of April 1, 2001), and because it has been virtually impossible to expand operations to meet growing demand through the marketplace acquisition of slots. Accordingly, the basis for Midway's exemption application continues and the need for the requested slots remains critical.

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Effective April 6, 2000, Congress enacted a new Section 41716 of the Act, "Interim slot rules at New York airports." Section 41716(b) provides that the Secretary shall grant slot exemptions to any new entrant or limited incumbent air carrier "if the number of slot exemptions granted under this subsection ... when added to the slots and slot exemptions held by such air carrier with respect to such airport does not exceed 20." Revised section 41714 provides, with respect to all slot exemption applications, including those submitted under section 41716(b), that certain information must be included with the application, and that the application shall be granted within 60 days "if the Secretary determines that the requirements of the section under which the request is made are met." (Section 417140)). Required information includes the names of the airports to be served, the times requested, and such additional information as the Secretary may require.

Midway's current operations at LaGuardia are below the new 20-slot statutory ceiling for eligibility as a limited incumbent air carrier under section 41716(b). To perform its LaGuardia-Raleigh/Durham schedules, Midway now relies on short-term leases of seven daily slots, plus three slots that it holds in its own right. Under Midway's application, the temporary, leased slots would be replaced with permanent slots through the Department's exemption authority. As explained in

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its initial application, Midway was informed by its lessor that two of the leases would be terminated effective June 1, 2000. The five remaining slots are also leased on a short-term basis, at very high cost, and are at risk of elimination or prohibitive cost increases.

In summary, Midway currently holds only three slots at LaGuardia, which it combines with seven temporarily leased slots to perform a total of ten flight operations a day. It therefore qualifies as a limited incumbent air carrier to receive exemptions under section 41716(b). By this amended application, Midway seeks an exemption for nine slots, which will include two new slots, effective June 15, 2000, and seven slots to replace currently leased slots that will expire during the coming year (two effective October 29, 2000, and five on April 1, 2001). Following the Department's approval of these exemptions and the termination of Midway's slot leases, Midway's combined holdings of slots and slot exemptions will total twelve, and it will remain eligible for eight additional, future slot exemptions.

Midway intends t6 Use all twelve of its LaGuardia slots to serve the LaGuardia-Raleigh/Durham market, thus increasing its service from five round trips a day to six.

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The requested slot times are as follows:

* Midway also hopes to work with the FAA and through other standard industry procedures to retime its three permanent slots to more operationally viable times.

Midway is currently deploying a fleet of eight 98-seat Fokker F100s, 19 50-seat Canadair Regional Jets (RJs), and two 128-seat Boeing 737-700s. As Midway stated in its initial application, it will soon be taking delivery of seven newly manufactured RA and 15 newly manufactured Boeing 737s and will phase out its Fokker F100s. All of the aircraft in Midway's fleet meet or exceed Stage 3 requirements.

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operations between LaGuardia and Raleigh/Durham under authority granted to the Department under the new legislation.

Respectfully submitted,

Stephen H. Lachter

LAW OFFICES OF STEPHEN H. LACHTER

Louis H. Dupart

James F. Moriarty

FLEISCHMAN AND WALSH, LLP

COUNSEL FOR MIDWAY AIRLINES CORPORATION

April 19, 2000