OST-00-7284 / OST-00-7180 / Sun Country / High Density Rule - Chicago O'Hare / April 24, 2000

Application of

under 49 U.S.C. § 41717(c) for an exemption from 14 C.F.R. Part 93 (Minneapolis/St. Paul Chicago O'Hare)

APPLICATION OF SUN COUNTRY AIRLINES, INC.

Sun Country Airlines, Inc., pursuant to 49 U.S.C. § 41717(c) and Order 2000-4-15, hereby applies for exemption from the high density rule, 14 C.F.R. Part 93, Subparts K and S, to enable operation of three daily round-trip flights between Chicago O'Hare ("ORD") and Minneapolis/St. Paul, Minnesota ("MSP"). Sun Country seeks six exemption slots at ORD to operate its proposed nonstop point-to-point services using 170-seat Boeing 727-200 aircraft or other appropriate aircraft from its fleet.

The new services are planned to begin September 3, 2000. See the service proposal identified as Exhibit A attached hereto.

Sun Country qualifies as a "new entrant air carrier" for purposes of 49 U.S.C. § 41717(c) because it does not hold or operate, nor has it ever held or operated, any slots at ORD. See, 49 U.S.C. § 41714(h). Sun Country therefore is eligible to receive the requested slot exemptions at ORD. 49 U.S.C. § 417 17(c)(1). The cited interim rule governing

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issuance of slot exemptions to eligible air carriers at ORD is mandatory ("…the Secretary ... shall grant ..." (emphasis supplied) and gives no discretion to the Department to deny or delay award of the requested exemption. 49 U.S.C. § 41717(c)(1).

Sun Country will offer walk-up and advance purchase fares at levels significantly lower than the fares of the three incumbent major air carriers that now control not less than 98 percent of nonstop MSP-ORD traffic.

[1] As of April 10, 2000

[2] Projected

Sun Country will introduce the First low fare competition in the MSP-OR-D market. The advent of Sun Country's low fare nonstop service between MSP and ORD will stimulate traffic growth in the market, improve service between that important city pair and allow, the operation of one-stop connecting service to ORD from numerous other points served by Sun Country through its MSP hub. Even the presence of three major incumbent carriers in the MSP-ORD market has not produced any substantial price competition despite a large daily

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traffic flow. The $109 average one-way fare to be offered by Sun Country is $101 below the cheapest incumbent's lowest average one-way fare ($210), which itself is only $11 and $23 lower than the average one-way fares of the two other incumbent carriers. The MSP-ORD market is a demonstration of oligopoly at work; it will require the presence of Sun Country as a new entrant to ensure the availability of competitively-priced nonstop air service In that captive market.

Sun Country has proven that it provides reliable low fare air services that benefit the traveling public. Sun Country will provide the first low fare nonstop service between MSP and ORD. Travelers originating in, destined to, or served through MSP will benefit fi7om the proximity of ORD to the central business areas of Chicago. Sun Country's new service will provide a low-cost alternative for passengers who prefer to use ORD. Travelers coming from, or bound to, beyond points will benefit from the greater accessibility to connecting services at ORD, a leading multi-carrier hub.

It is well-recognized that lower fares stimulate traffic growth in specific markets. This stimulus is particularly vigorous when applied in formerly monopolistic or oligopolistic markets, as is the present case. The low fare competitive service proposed by Sun Country would unleash substantial traffic growth between MSP and ORD. See Exhibit B hereto. Such service will benefit individual consumers, as well as businesses and communities adjacent to the two metropolitan areas that will experience an increase in tourism and other economic activity.

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Sun Country forecasts an operating profit of almost S I million for the first 12 months of operation at ORD with the requested six exemption slots. See Exhibit C attached hereto. The traffic and revenue generated by the proposed service will be positive contributions to Sun Country's annual operating and financial results.

AIR 21 has begun to liberate the air transportation system from the stifling effects of the High Density Rule. Sun Country is eligible to obtain new entrant slot exemptions at ORD lately provided by Congress. It has demonstrated that its proposed service meets the public interest test for such slot exemptions and promotes domestic air transportation in the process. Sun Country's instant exemption application should be granted without delay.

WHEREFORE, Sun Country asks the Department to grant six exemption slots at ORD to enable the operation of three daily round-trip flights between ORD and MSP. Sun Country also asks such other and additional relief as the public interest may require.

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: April 24, 2000