OST-00-7134 / Legend Airlines / High Density Rule - O'Hare and LaGuardia / Answer of American Airlines / April 24, 2000

Application of

for an exemption from Subparts K and S of 14 CFR Part 93 pursuant to 49 USC 41716, 41717 (LaGuardia and O'Hare)

AMERICAN AIRLINES, INC.

American Airlines, Inc. hereby moves for leave to file the following answer to the captioned application submitted on March 27, 2000 by Legend Airlines, Inc. American's answer should be accepted in the interest of a complete record for the Department's consideration.

In submitting this answer, American takes no position on whether Legend should be granted the slots it is seeking. Unfortunately, however, Legend's application contains misrepresentations about American. Fearing that it might not succeed in the marketplace, Legend has begun laying the ground work for a campaign of misinformation, apparently in the hope that the Department might later take some action to prevent American from competing against Legend.

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Legend next asserts, without any supporting evidence, that American is introducing Love Field service without decreasing its service levels at Dallas/Ft. Worth International Airport. Legend neglects the facts. on January 31, 2000, months before Legend commenced operations, American was operating 18 daily roundtrips between Dallas/Ft. Worth and Los Angeles, with an average capacity of 139 seats per flight. As of May 1, 2000, American's frequency between Dallas/Ft. Worth and Los Angeles will be 16 roundtrips, or 556 fewer seats per day. At the same time, American plans to introduce four daily roundtrips between Love Field and Los Angeles, using Fokker 100 aircraft reconfigured to carry 56 passengers per flight, or 448 passengers per day, a net decrease of 108 daily seats.

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The total number of seats operated by American between the Dallas/Ft. Worth Metroplex and Los Angeles will decrease even further when American's "More Room in Coach" initiative is completed, as described below.

Legend's complaints about American's Love Field to Chicago service are equally unfounded. Legend had not even announced Love Field to Chicago service, and thus was not a competitor on this route, when American announced its service. Further, American's frequencies constantly fluctuate in response to competition and market conditions. In fact, due in part to American's "More Room in Coach" initiative, the combined number of seats that American will offer from Love Field and DFW to Chicago in summer 2000 is substantially fewer than American offered from DFW to Chicago at the same time in 1999.

For example, in mid-June 1999, American offered 54,084 weekly seats in the DFW-Chicago market. When American completes its "More Room in Coach" process this summer, its combined DFW-Chicago and Love Field-Chicago weekly seats will be 48,269. The net result is that by the end of the summer, if not before, American will be operating some 5,800 fewer weekly seats between the Dallas/Ft. Worth Metroplex and Chicago than it did in 1999, even after adding new service from Love Field.

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American's position is quite simple, and fully consistent with Order 98-12-27 on Love Field. That order created opportunities for new Love Field service, and American intends to compete in offering such new service. American's decisions at Love Field are driven by customer demand, competitive conditions, and the marketplace, and not by Legend's business plans. Indeed, in announcing Love Field service, American matched Legend on only one of three routes, and American announced service to Chicago before Legend even asked the Department for slots.

Whether Legend is entitled to slots is a matter on which American takes no position. The Department should not, however, grant slots to Legend based upon the misrepresentations it has made against American.

Respectfully submitted,

R. BRUCE WARK

Senior Attorney

American Airlines, Inc.

April 24, 2000