BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

_____________________________________

)

Application of )

)

SOUTHWEST AIRLINES CO. )

)

For “inside perimeter” slot exemptions ) Docket DOT-OST-2000-7182

under 49 U.S.C. § 41718(b) )

)

Service between Oklahoma City (OKC) )

and Ronald Reagan Washington National )

Airport (DCA) )

_____________________________________ )

RESPONSE OF 

SOUTHWEST AIRLINES CO. 

Communication with respect to this 

 document should be addressed to:

Ron Ricks Robert W. Kneisley

 Executive Vice President -- Associate General Counsel

 Chief Legal and Regulatory Officer Leslie C. Abbott

Madeleine Johnson Senior Attorney

 Vice President General Counsel SOUTHWEST AIRLINES CO.

SOUTHWEST AIRLINES CO. 1901 L Street, NW

2702 Love Field Drive Suite 640

Dallas, TX 75235-1611 Washington, DC 20036

 bob.kneisley@wnco.com

 (202) 263-6284

March 20, 2012
1

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

_____________________________________

)

Application of )

)

SOUTHWEST AIRLINES CO. )

)

For “inside perimeter” slot exemptions ) Docket DOT-OST-2000-7182

under 49 U.S.C. § 41718(b) )

)

Service between Oklahoma City (OKC) )

and Ronald Reagan Washington National )

Airport (DCA) )

_____________________________________ )

RESPONSE OF 

SOUTHWEST AIRLINES CO. 

Pursuant to the Department’s February 17, 2012 Notice establishing this 

proceeding, Southwest hereby files this Response to the Applications filed by Frontier 

and US Airways on March 5, 2012 for two inside-perimeter slot exemptions previously 

held by Delta Air Lines.

1

Summary

A review of the three competing Applications filed in this proceeding makes clear 

beyond question that Southwest’s proposal is materially superior to the proposals of 

both Frontier and US Airways. When scored against the Department’s carrier selection 

criteria as well as considered side-by-side for substance and public benefits there is no 

 

1 Common names of airlines are used herein.
2

doubt whatsoever that Southwest’s proposal is by far the strongest and most beneficial 

to the public for the purposes of this case. 

To begin with, only Southwest’s proposal satisfies the maximum number of 

AIR-21 carrier selection criteria: (1) Southwest is a limited incumbent at DCA; (2) it 

proposes nonstop service to OKC, a community without existing nonstop service to 

DCA; (3) OKC is a small community, as it is classified as a small hub by the FAA; and 

(4) Southwest’s proposal will produce by far the greatest level of competitive benefits, 

including low fares, among the three competing applicants. In fact, neither US Airways 

nor Frontier even attempted to quantify the alleged public benefits from their proposals, 

nor disclosed to the Department what their fare levels would be.

Satisfied By:

AIR-21 Criteria Southwest US 

Airways

Frontier

1. Is the applicant a new entrant or limited incumbent? YES NO YES

2. Does the applicant propose nonstop service to a 

community without existing nonstop service to 

DCA?

 YES YES NO

3. Does the applicant propose nonstop DCA service 

to a small community?

 YES YES YES

4. Does the applicant propose competitive nonstop 

service on a monopoly nonstop route to DCA?

 NO2 NO YES

5. Will the applicant’s proposed service produce the 

maximum competitive benefits, including low fares?

 YES NO NO

US Airways, by far the largest DCA carrier, is obviously not a new entrant or 

limited incumbent. It proposes a continuation of small aircraft RJ service to JAN with 

high fares similar to Delta’s failed service. If US Airways believes that it is important to 

 

2 This factor is mutually exclusive with factor 2 above.
3

serve DCA-JAN it can easily transfer two of the 460 DCA slots it currently holds. The 

record makes clear that JAN was a weak performing market for Delta, and the results 

would not be materially different for US Airways. 

Frontier proposes service to SDF, a market that is already well-served from DCA 

today by US Airways’ three daily nonstops. Moreover, the current DCA-SDF service is 

provided not by US Airways itself but by Frontier’s sister companies on US Airways’ 

behalf. US Airways is in fact Republic Airways Holdings largest customer. Under the 

circumstances it is highly suspect that Frontier would price its fares aggressively against 

US Airways given that they would control the nonstop DCA-SDF market together. 

Given this apparent conflict, it is perhaps not surprising that Frontier has offered no fare 

proposal in this case. Therefore, any claimed consumer benefits or fare savings in this 

market would likely be minimal at best. 

By contrast, Southwest has provided detailed economic analysis and forecasts to 

the Department and the parties in order to produce a realistic estimate of the expected 

public benefits of its proposed DCA-OKC-DAL service. These analyses demonstrate 

that Southwest’s proposal will generate over $8 million in annual consumer savings 

while stimulating the markets by an additional 55,000 annual passengers.3 With its 137-

seat B737-700 aircraft, Southwest forecasts that it will carry over 72,000 passengers in 

the first normalized year, of which over 43,000 will be local DCA-OKC O&D 

passengers.4 Neither US Airways nor Frontier provided analysis or forecasts of any 

operating statistics relevant to the DOT’s evaluation. There are no market analyses, no 

forecasts of traffic or market share, no fare proposals, no estimates of traffic stimulation 

 

3

See Exhibits WN-117 and WN-121. 

4

See Exhibit WN-117.
4

(if any) and no consumer benefit estimates. The large public benefits and consumer 

savings explained and documented in Southwest’s proposal stand in stark contrast to 

the lack of any meaningful benefits projected by Frontier and US Airways (Exhibit WNR-100). 

I. US Airways Does Not Need or Deserve Slot Exemptions 

To Serve a Market That Failed to Support Delta’s Nonstop Service 

US Airways operates 460 slots at DCA, 54% of the airport total. This is more 

than four times the number of slots held by the number two carrier, Delta (Exhibit WNR-101). For decades US Airways has been a major holder of DCA slots which it has 

used to build a connecting hub with Washington’s scarce aviation resource. It tightened 

its dominant control over access to DCA with the 84 slots it obtained in the recent slot 

swap transaction with Delta. 

By comparison, Southwest has only 25 slots (all operated by its wholly-owned 

subsidiary AirTran Airways), or 2.9% of the airport total. All low-cost carriers combined 

hold just 87 slots, or 10.2% of the DCA total (Exhibit WN-R-101). It is easy to see how 

fractured the competition is at DCA, and how difficult it will be for any new entrant or 

limited incumbent to mount an effective competitive response to US Airways, restrain 

DCA fares, and produce meaningful consumer benefits. This proceeding offers the 

DOT its first opportunity since the US Airways/Delta slot swap to begin to re-balance the 

competitive landscape at DCA. 

The Southwest/AirTran service at DCA reaches just four markets with 83 weekly 

departures, compared to US Airways’ 1,414 weekly departures to 67 destinations 

(Exhibit WN-R-102). If US Airways really wants to replace Delta in the DCA-JAN RJ 

market it can easily do so by using two slots in its enormous existing slot portfolio. The 
5

two slots in question represent less than one-half of 1% of US Airways’ current DCA 

holdings (Exhibit WN-R-103). US Airways could easily move two slots from any of its 

high frequency RJ markets, like PHL, RDU or BDL for example, or from any other of its 

67 DCA markets (Exhibit WN-R-104). 

Further, scarce slot exemptions should not be squandered on a proposal that is 

likely to produce the same results that drove Delta to terminate its DCA-JAN service. 

The JAN-DCA market did not respond well to Delta’s nonstop RJ service which began 

in 2005. Normally a first nonstop service increases total market demand, but in the 

case of DCA-JAN it actually declined by 26%, even though total seat departures in the 

market increased over that period (Exhibit WN-R-105). Since Delta’s first year of 

operating the route, total DCA-JAN O&D traffic declined by 35%, and this was true for 

both the volume of passengers taking Delta’s nonstop flights and for the traffic using 

connecting services (Exhibit WN-R-106). As a consequence, Delta’s load factor 

declined from 68% in CY 2005 to 46% for the year ended Q3, 2011, or by 22 

percentage points (Exhibit WN-R-107A). In its Application US Airways attempts to 

excuse Delta’s departure by speculating that Delta needed to move assets to its 

expanded LGA operation. In reality, Delta abandoned the market because it failed to 

support nonstop service to DCA, and there is no indication that anything would be 

materially different under a similar service to JAN by US Airways with small aircraft and 

high fares.

One of the main reasons for this failure is that Delta’s DCA-JAN fares were 87% 

higher than the fares the year before Delta’s nonstop service began, as its nonstop fare 

averaged $262 for YE Q3, 2011 (Exhibit WN-R-107). While US Airways’ Application 
6

makes no mention of the fares it would charge in the market, Campbell-Hill has 

conservatively estimated its average fare using the carrier’s actual fare data from all of 

its other domestic monopoly routes. On this basis the estimated US Airways average 

fare for the DCA-JAN market would be $232. Southwest’s average fare for a market of 

the same distance would be approximately $150, or 35% less (Exhibit WN-R-108). It is 

obvious why US Airways makes no mention of its planned fares, nor does it attempt to 

claim any consumer benefits. 

Given the history of the DCA-JAN market under Delta’s small aircraft and high 

fares, it is not surprising to find that nonstop service is not well patronized. For the 

latest 12 month period 57% of all O&D passengers between JAN and DCA took 

connecting flights (Exhibit WN-R-109), even though the load factors on the nonstop 

averaged only 46% during the same period (Exhibit WN-R-107A). 

Oklahoma City, on the other hand, has no nonstop service to or from DCA. 

Southwest has served OKC for 32 years, and is proposing to serve DCA-OKC with 

mainline B737-700 aircraft having 137 seats. Today Southwest serves nine nonstop 

markets from OKC providing 146 weekly departures (Exhibit WN-R-104). Even though 

both Jackson and Oklahoma City are served by “small hub” airports, Oklahoma City is 

more than twice the size of Jackson as measured by total O&D passengers (Exhibit 

WN-R-110). The superiority of Southwest’s proposal over US Airways’ is also illustrated 

by the fact that Southwest would charge sharply lower fares. The estimated average 

fare that US Airways would charge in DCA-JAN produces a yield of 27.0 cents per 

RPM. Southwest’s yield for its DCA-OKC proposal will average 14.1 cents per RPM, or 

48% less (Exhibit WN-R-111). 
7

II. US Airways Wastes An Enormous Amount Of Scarce Capacity at DCA, 

and Awarding Slot Exemptions for JAN Service Would Create Additional 

Waste 

As by far the dominant carrier at DCA, US Airways has been able to utilize the 

airport’s scarce capacity to erect barriers to entry and monopolize markets. Its obvious 

strategy has been to provide high fare service in smaller monopoly markets (like 

Jackson), or higher frequency service with small planes in large markets to gain a 

service advantage over competitors with relatively few slots. This inefficient use of 

limited airport assets clearly is designed to protect US Airways’ high fare structure and 

seal off competitive challenges, especially a formidable low-cost carrier like Southwest. 

The unfortunate consequences of this strategy to the public are high fares and limited 

capacity for air service at DCA, one of the nation’s most important airports. 

An examination of US Airways’ schedules demonstrates the inefficiency of its 

DCA operations. Exhibit WN-R-112 shows the current US Airways route map for DCA. 

Of the 67 routes operated, only four are 100% with mainline aircraft. Two of these 

routes are long-haul exemption markets (PHX and LAS), one is a long-haul over water 

market (BDA), and the other is DCA-TPA. The remaining 63 DCA markets are served 

by commuter/RJ aircraft (Exhibit WN-R-112). 

The consequence of this waste and inefficient use of DCA’s scarce operating 

capacity is profound, and the trend has worsened as US Airways’ control over DCA 

access has increased. In CY 2000, 38% of US Airways’ DCA operations were with 

commuter/RJ aircraft. Today that share is 73%, and it increased by four percentage 

points just in the past year as a result of the US/DL slot swap transaction. US Airways’ 

average aircraft size declined from 91 seats per departure in 2005 to only 78 seats in 

2012 (Exhibit WN-R-113). Moreover, its average aircraft size at DCA dropped 5% just 
8

in the last year due to US Airway’s decision to use RJ’s for all of the 84 slots it obtained 

last year from Delta, averaging just 53 seats (Exhibit WN-R-114). 

US Airways’ increasing use of smaller aircraft has prevented DCA from being 

able to maximize public use and benefits by accommodating the greatest number of air 

travelers who want to use Washington’s close-in and highly preferred airport. An award 

of precious slot exemptions to US Airways in this proceeding would only worsen this 

unfortunate situation. The Department should take this rare opportunity to award the 

slot exemptions in a manner that will inject new competition and efficiency at DCA, 

rather than to increase US Airways’ already dominant share of service. This important 

goal will only be accomplished by awarding the slot exemptions to Southwest for its 

proposed DCA-OKC service. 

III. Frontier’s Proposal Would Do Little To Strengthen Competition

Or Inject Consumer Benefits in the DCA Market

Frontier proposes a fourth nonstop to Louisville, while Southwest proposes the 

first and only nonstop to Oklahoma City with continuing one-stop service to Dallas’ 

close-in Love Field. Giving effect to both proposals, the DCA-OKC market would still be 

greatly under-served relative to DCA-SDF. In fact, the population per DCA departure 

would be nearly three times greater in the OKC market than the SDF market, signifying 

the high degree of relative service inadequacy for DCA-OKC (Exhibit WN-R-201). 

Louisville is very well served today, but even with three daily US Airways round trips 

(operated by Republic Holdings companies), DCA is only the 12th largest SDF market 

for O&D passengers (Exhibit WN-R-202).5

 

5

Frontier claims that the “Washington Metro Region” is SDF’s largest destination, but it does this only by 

combining IAD, DCA and BWI traffic (See Frontier Exhibit 3). The DOT recently concluded from its own 

empirical analyses that DCA, IAD and BWI are not the same economic market. As the DOT concluded,
9

Frontier’s Exhibit 2 attempts to show that much smaller routes than SDF have 

obtained DCA slot exemptions in the past. However, none of the three routes cited by 

Frontier had other nonstop services prior to the exemption awards (Exhibit WN-R-203), 

nor did the daily traffic exceed 18 passengers per day. SDF, by contrast, already has 

three daily nonstop round trips and generates 84 passengers per day per day to and 

from DCA. With this local traffic level, SDF does not need deserve fourth nonstop, 

especially when compared to OKC which has no nonstop DCA service.

The DCA-OKC market is much more similar to Frontier’s three cited market 

examples than is DCA-SDF. The Oklahoma City route has no nonstop service today 

and its local O&D traffic – without the benefit of nonstop service - is 46 passengers per 

day each way (Exhibit WN-R-203). Moreover, Southwest’s one daily nonstop flight in 

DCA-OKC will generate 109 passengers per day each way, 30% more than DCA-SDF 

with three nonstops (Exhibits WN-R-204 and 205). This illustrates dramatically that 

Southwest’s proposal will benefit more passengers, and generate more consumer 

benefits, than Frontier’s.

In fact, Frontier’s Application makes no attempt to forecast the traffic it would 

carry, the amount of traffic stimulation (if any), or any consumer benefits to be derived 

from its proposal. While Frontier repeatedly claims that it will offer “low fares,” it does 

not tell the Department or the parties in this contested proceeding what those fares will 

 

“for a large portion of passengers, especially time-sensitive passengers . . . [the] Washington area 

airports are not effective substitutes for each other.” See DOT/FAA Notice dated May 4, 2010, in Docket 

FAA-2010-0109.

 
10

be. Thus, Frontier has completely failed to demonstrate how its proposal could 

“produce the maximum competitive benefits including low fares.”6 

IV. The Deep Interlocking Relationships Between Republic Holdings and US 

Airways Will Likely Discourage Vigorous Competition By Frontier in the 

DCA-SDF Market

Frontier and US Airways are not exactly independent competitors. Republic

Airways Holdings commuter carriers fly major contract services for US Airways and, to a 

smaller degree, for Frontier. In fact, there are two DCA routes where the only nonstop 

competitors are Frontier and US Airways, and Republic subsidiaries operate all services 

for both carriers in both markets (Exhibit WN-R-204). Under Frontier’s proposal, SDF 

would be a third DCA market where both nonstop carriers are member of the Republic 

Holdings family. 7 Moreover, Republic commuters at DCA operate more flights for 

Frontier than Frontier operates for itself (Exhibit WN-R-211). 

When US Airways was in serious financial difficulty in 2006 it sold 113 commuter 

slots at DCA to Republic, and granted Republic contracts to operate those slots for US 

Airways.8 As shown in Exhibit WN-R-209 there are significant interlocking affiliations 

between the Republic Airways companies and US Airways. Republic Holdings gains 

financially from US Airways’ three current DCA-SDF round trips,

9

and it would gain 

again if the Department were to award the slot exemptions at issue to Frontier. 

 

6 Notice of the Department in this proceeding served February 17, 2012 at p. 2. 

7 Republic Holdings subsidiaries include Frontier Airlines, Republic Airlines, Chautauqua Airlines, Shuttle 

America and Lynx Aviation. See http://www.rjet.com/whoweare.html.

8

According to the Aviation Daily, March 9, 2012 at p. 4, US Airways has repurchased some of those slots 

from Republic.

9 Chautauqua operates two DCA-SDF nonstop round trips for US Airways and Republic Airlines operates 

the third (Exhibit WN-R-207). 
11

The interrelationships between Republic Holdings and US Airways are deep and 

important to this case. Republic Holdings commuter companies have contracts with 

four major carriers, but US Airways is by far the largest, accounting for 43% of all 

Republic contract daily departures – 392 out of 904 (Exhibit WN-R-210). This is more 

than all of Frontier’s daily departures system-wide, including those operated by Republic 

commuter carriers (Exhibit WN-R-211). US Airways is therefore by far Republic

Holdings’ largest and most important customer. Republic’s operation for US Airways is 

twice the size of its next largest customer (Exhibit WN-R-210). Given the extreme 

importance of US Airways’ business to Republic Holdings, it is doubtful that Frontier will 

risk aggressive pricing in the DCA-SDF market at the expense of its largest customer. 

One final point regarding Frontier: In every contested DOT route proceeding, 

Frontier touts its “Stretch” and “Select” seating. What it never discloses is that these 

seats cost more than its regular coach seats. ”Stretch” seats cost a minimum of $15 

extra and in some cases the additional charge is much more. Similarly, “Select” seating 

is also no bargain. The add-on begins with seats having as little as 31 inch seat-pitch 

(Exhibit WN-R-212). The revenue that Frontier collects from these fees is not included 

in the DOT’s O&D Survey, and thus Frontier’s actual yields and fares in DOT reports 

are understated accordingly. 

CONCLUSION

For the reasons given above and in our prior pleadings, we urge the Department 

to grant the two slot exemptions at issue in this proceeding to Southwest Airlines to 

enable it to initiate first-ever nonstop service from OKC to DCA, with single plane 

service beyond OKC to Dallas Love Field. Grant of Southwest’s Application will not only 
12

fulfill the maximum number of AIR-21 decisional criteria, it will have by far the greatest 

impact on competition for the benefit of the public and DCA. US Airways can easily 

serve JAN without slot exemptions by shifting a single slot pair from its huge cache of 

460 DCA slots. SDF is already well-served from DCA with three daily nonstop flights,

and does not merit a fourth nonstop especially considering that OKC has none. The 

record makes clear that far and away the best use of the scarce exemptions available in 

this proceeding is to award them to Southwest for its DCA-OKC-DAL proposal. 

Respectfully submitted,

__________________________

Robert W. Kneisely 

March 20, 2012
CERTIFICATE OF SERVICE

I hereby certify that on March 20, 2012, a copy of the foregoing was served via email on the following persons:

robert.cohn@hoganlovells.com (Frontier Airlines)

patrick.rizzi@hoganlovells.com (Frontier Airlines)

howard_kass@usairways.com (US Airways)

benjamin.slocum@usairways.com (US Airways)

tmerrick@swapa.org (SWAPA)

susan.kurland@dot.gov

todd.homan@dot.gov

brian.ctr.meehan@faa.gov

Mark Kranenburg 

Director of Airports 

Will Rogers World Airport 

mark.kranenburg@okc.gov

John E. Potter

President and Chief Executive Officer 

Metropolitan Washington Airports Authority

john.potter@mwaa.com

info@airlineinfo.com

__________________________

Leslie C. Abbott
$8.2

$0.0 $0.0

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

Southwest Frontier US Airways

Forecast Annual 

Consumer Savings 

Benefits

(Millions)

Docket OST-2000-7182

Exhibit WN-R-100

Source: Applications of Southwest, Frontier and US Airways.

Southwest’s DCA-OKC-DAL Service Will Generate

$8.2 Million in Annual Consumer Savings While the 

Proposals of Frontier and US Airways Show None

Neither US Nor F9 Have Provided Any Analysis of 

Consumer Benefits in Their Proposals
US Airways Operates 54% of All DCA Slots Today

Source: FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.

460

109

97

76

18

6

34 25 20

6 2

0

50

100

150

200

250

300

350

400

450

500

US DL AA UA AC AS B6 WN F9 NK SY

Legacy/Foreign Flag Carriers Low Cost Carriers

DCA Slots

Total DCA Slots = 853

Percent of 

Airport Total 53.9% 12.8% 11.4% 8.9% 2.1% 0.7% 4.0% 2.9% 2.3% 0.7% 0.2%

54%

Docket OST-2000-7182

Exhibit WN-R-101
Mainline/Large Aircraft 

RJ/Commuter Aircraft 

With 25 Slots Southwest Serves Only 

Four Destinations, While US Airways

Serves 67 Destinations with its 460 Slots

Docket OST-2000-7182

Exhibit WN-R-102

Source: OAG Schedules for the week of June 11th through the 17th, 2012.

Weekly Departures

Ave. Seats per Departure

Current DCA Slots

83

120

25

MKE

DCA

ATL

MCO

RSW

Southwest/AirTran’s DCA Network US Airways’ DCA Network

Weekly Departures

Ave. Seats per Departure

Current DCA Slots

1,414

78

460

YHZ

DCA
US Airways Can Easily Fund Its DCA-JAN 

Flight from Its Current Cache of 460 Slots

1/Assuming US operates the E-170.

Source: FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.

Docket OST-2000-7182

Exhibit WN-R-103

Slots

June 2012 DCA Departures

June 2012 Seat-Departures1

Current

460

202

15,789

Proposed

DCA-JAN

Service

2

1

69

Proposed DCA-JAN

Service as % of Total

US Slots/Operations

0.4%

0.5%

0.4%
US Airways Could Serve DCA-JAN Today Without Slot Exemptions 

By Using Slots From Any of its High-Frequency RJ Markets

CLT

PHL

RDU

BDL

CMH

IND

PIT

PVD

Market

Daily US

Departures

Source: OAG Schedules June 11, 2012.

10

8

7

6

6

6

5

5

US Average

Aircraft Size

112

65

50

80

60

70

60

78

Docket OST-2000-7182

Exhibit WN-R-104

US Airways RJ Markets With 5 or More Daily Departures from DCA
32,898

24,302

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

CY 2004 YE 3Q 2011

Annual O&D 

Passengers

Docket OST-2000-7182

Exhibit WN-R-105

Note; Fared passengers only. 

Source: US DOT O&D Survey, via Diio,LLC.

-26%

The Jackson Market Did Not Support Nonstop Service:

Annual DCA-JAN O&D Passengers Fell 26% 

Since Nonstop Service Began

Note: DCA-JAN Passengers Dropped 26% Despite a 22% 

Increase in Seat-Departures Since Delta Began Nonstop Service

Full Year Before Nonstop Current
0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

4Q051Q062Q063Q064Q061Q072Q073Q074Q071Q082Q083Q084Q081Q092Q093Q094Q091Q102Q103Q104Q101Q112Q113Q11

Annual DCA-JAN O&D Passengers Are 35% Lower Now 

Than in Delta’s First Year of Nonstop Service

Annual O&D 

Passengers

Docket OST-2000-7182

Exhibit WN-R-106

All O&D Passengers

Nonstop O&D Passengers

Note: Fared passengers only. 

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
$140

$262

$0

$50

$100

$150

$200

$250

$300

CY 2004 YE Q3 2011

Average DCAJAN Fare

Docket OST-2000-7182

Exhibit WN-R-107

+87%

Delta Increased Fares 87% Since Starting DCA-JAN Service 

Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees.

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

Market Fare Before

Delta Nonstop

Current DL Fare Paid 

By Local Passengers
67.7%

46.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

CY 2005 YE 3Q 2011

Load Factor

Docket OST-2000-7182

Exhibit WN-R-107A

Source: US DOT, T-100 data, via Diio,LLC.

-21.6 pts

DCA-JAN Load Factors Fell More Than 21 Percentage 

Points Since Delta’s First Year of Nonstop Service

First Year With Nonstop Service Current
$253

$232

$150

$262

$0

$50

$100

$150

$200

$250

$300

Current DCA-JAN Current DL 

DCA-JAN Local

DCA-JAN at US Monopoly

Market Yield Curve

Southwest Average Fare for

DCA-JAN Distance

Average DCAJAN Fare

Docket OST-2000-7182

Exhibit WN-R-108

In the Likely Event that US Airways 

Sets Prices Similar to Its Other Monopoly Markets

DCA-JAN Fares Will Remain Extremely High

1/ From US DOT, O&D Survey, YE Q3 2011, via Diio, LLC. plus in estimated checked baggage and rebooking/change fees calculated from Form 41 data for YE Q3 2011.

2/ Uses equation from Appendix 1 of this filing plus $13.97 in estimated checked baggage and rebooking/change fees.

3/ Uses equation from Appendix 2 of this filing plus $0.38 in estimated checked baggage and rebooking/change fees.

1

1 2 3

-35.3%

(All Carriers)
More JAN Passengers Take Connecting Flights 

to/from DCA Than Take the Nonstop

Docket OST-2000-7182

Exhibit WN-R-109

Nonstop

Connecting 43%

57%

Note: Fared passengers only. 

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
1,327,453

540,140

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Oklahoma City Jackson

Oklahoma City is More Than Twice The Size of Jackson

A. Population

+146%

Note: Both OKC and JAN are classified as “small hubs” by the FAA. 

Source: 2010 US Census.

Population

Docket OST-2000-7182

Exhibit WN-R-110

Page 1 of 2
3,289,990

1,195,231

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Oklahoma City Jackson

Oklahoma City is More Than Twice The Size of Jackson

B. O&D Passengers

+175%

Note: Both OKC and JAN are classified as “small hubs” by the FAA. 

Source: US DOT O&D Survey, YE Q3 2011.

Total O&D

Passengers

Docket OST-2000-7182

Exhibit WN-R-110

Page 2 of 2
31.1¢

14.1¢

27.0¢

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

DCA-JAN Yield Estimated US DCA-JAN Yield Southwest Proposed DCA-OKC Yield

DCA-JAN’s Average Yield Is More Than Twice 

Southwest’s Proposed DCA-OKC Yield

Yield (Cents)

Docket OST-2000-7182

Exhibit WN-R-111

1/ Estimated from US yield curve in monopoly markets (Appendix 1) plus $13.97 per passenger in estimated checked baggage and rebooking/change fees.

2/ WN Yield Curve from Appendix 2 plus $0.38 per passenger in estimated checked baggage and rebooking/change fees.

Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees.

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

1 2
US Airways Serves Only 4 Nonstop DCA Markets 

Exclusively with Mainline Aircraft

Docket OST-2000-7182

Exhibit WN-R-112

1/ In 11 markets US Airways operates mainline aircraft as well as commuter/RJ equipment.

Source: OAG Schedules for the week of June 11th through the 17th, 2012.

BTV

ILM

MHT

CLT

AVL

SYR

BGR YHZ

PW M

BOS

BDL HPN

OAJ

RDU GSO ORF

BUF ROC

PIT

CAK

CMH DAY

IND

DTW

OMA

DSM

PBI

NAS

MCO

VPSTLH

CHA

CHS

HHH

SAV

PHL ISP

DCA

ALB

BDA

BHM

BNA

CAE

CRW

CVG

DFW

FAY

FLL

HSV GSP

JAN

JAX

LAS

LGA

LIT

MCI

MEM

MSY

MYR PHX

PNS

PVD

RSW

SDF

SRQ

TPA

TYS

YOW

US Mainline Routes

US Regional Routes 

Weekly Departures

Average Seats per Dep.

No. of Markets Served1

Commuter/RJ

1,036

60

63

Total

1,414

78

67

Mainline

378

129

4
US Airways Squanders Enormous DCA Operating Capacity

US June

Seats per Departure

91 88 88 86 84 84 82 78

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010 2011 2012 Source: OAG Schedules for mid-June weeks, 2000-2012

US’ Average DCA Aircraft Size Has Dropped 14% 

Since 2005 and 5% in the Last Year

US 

RJ or Commuter

Percent

Of Departures 

33% 38% 40% 61% 64% 66% 69% 73%

Docket OST-2000-7182

Exhibit WN-R-113

Southwest B737-700 Capacity
All 13 DCA Routes US Airways Added from its Delta Slot Swap 

Are Served With RJ’s Averaging 53 Seats per Departure

Birmingham (BHM)

Fayetteville (FAY)

Islip (ISP)

Little Rock (LIT)

Jacksonville (OAJ)

Pensacola (PNS)

Tallahassee (TLH)

Ft. Walton Beach (VPS)

Memphis (MEM)

Omaha (OMA)

Ottawa (YOW)

Bangor (BGR)

Savannah (SAV)

Hartford (BDL)

Destination Start Date

Source: OAG Schedules for the week of June 11th through 17th, 2012

March 2012

March 2012

March 2012 

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

March 2012

Aircraft

CRJ

CRJ

CRJ

E70

CRJ

CRJ

CRJ

CRJ

CRJ

E70

CRJ

CRJ

CRJ

E70

Frequency

3

1

2

2

1

2

1

1

3

1

3

2

1

1

Total Seats

150

50

100

138

50

100

50

50

150

69

150

100

50

69

Aircraft Size

50

50

50

69

50

50

50

50

50

69

50

50

50

69

Average Aircraft Size on New Routes: 53.2 seats

Docket OST-2000-7182

Exhibit WN-R-114
1,327,453

358,448

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Oklahoma City With Southwest Proposal Louisville With Frontier Proposal

Oklahoma City Is Significantly Underserved Compared to Louisville, 

and Will Still Be Underserved Even With Southwest’s Proposal

+270%

Source: U.S. 2010 Census; OAG Schedules for June 11, 2012 and proposals of Southwest and Frontier.

Population per 

Daily

DCA Departure

Docket OST-2000-7182

Exhibit WN-R-201

2010 Population: 1,327,457 1,433,792

Daily Departures 

including WN and

F9 Proposals: 1 4
Despite Already Having Three Daily Nonstops, 

DCA is Only the 12th Largest O&D Market to/from SDF

Note: PDEW means passengers per day each way.

Source: U.S. DOT, T-100 Data and O&D Passenger Survey Data, via Diio, LLC.

BWI

MCO

LAS

MDW

TPA

LGA

DEN

ORD

DFW

PHL

PHX

DCA

ATL

LAX

EWR

Fared O&D

Passengers

SDF

Market

125,563

111,275

102,740

101,334

95,732

94,138

86,032

85,005

78,730

64,660

63,473

61,635

61,577

60,681

48,326

PDEW

172

152

141

139

131

129

118

116

108

89

87

84

84

83

66

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Docket OST-2000-7182

Exhibit WN-R-202
OKC Is Very Similar to Markets With Recent 

Slot Exemption Awards Referenced by Frontier; SDF Is Not

Note: Markets included in this exhibit are from Frontier’s Application, Exhibit 2.

Source: US DOT, T-100 Data and O&D Passenger Survey Data, via Diio, LLC.

Docket OST-2000-7182

Exhibit WN-R-203

MYR

CAK

LAN

OKC

SDF

Fewer than One 

Daily Roundtrip

Before Proposal

DCA

Market

YES

YES

YES

YES

NO, 3 Daily

Seats per Day

Each Way Before

Proposal

9

0

0

0

161

Fared O&D

Passengers Per

Day Each Way 

Before Proposal

18

3

16

46

84

Period

YE Q3 2004

YE Q4 2008

YE Q1 2011

YE Q3 2011

YE Q3 2011
Southwest’s One Daily Nonstop in DCA-OKC Will Generate 

109 Passengers Per Day Each Way, 

30% More than DCA-SDF’s Three Daily Nonstops

Docket OST-2000-7182

Exhibit WN-R-204

Source/Basis

1 Base DCA-OKC Passengers 33,664 YE Q3 2011 from O&D Survey via Diio, LLC.

2 Fare Stimulation from Southwest Proposal 85.1% From Fare Stimulation Model. See WN-202.

3 Service Stimulation from Southwest Proposal 28.2% From Campbell-Hill Aviation Group QSI Model. See WN-202.

4 Total DCA-OKC Stimulation 137.3% (1+Line 2) x (1+Line 3) -1.

5 DCA-OKC Passengers After Stimulation 79,884 Line 1 x Line 4.

6 Passengers Per Day Each Way 109 Line 5 / (365 Days in a year x 2 Directions)

After Southwest Proposal

Source: Exhibit WN-202

Note: PDEW means passengers per day each way..

SDF’s Three Nonstops Generate Only 84 PDEW, compared to 109 for OKC
84

109

46

0

20

40

60

80

100

120

Current DCA-SDF Current DCA-OKC DCA-OKC After Southwest's Proposal

Fared Passengers 

per Day

Each Way

Docket OST-2000-7182

Exhibit WN-R-205

Southwest’s Proposal for DCA-OKC Will Generate

More Local Passengers than DCA-SDF Despite the Fact that

DCA-SDF Currently Has Three Daily Nonstops

1/ See Exhibit WN-R-204.

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC; Exhibit WN-202.

Current Nonstop 

Service 3 Daily by US Airways None 1 Daily B737-700

1
In Two DCA Routes A Republic Airways Holdings Carrier

Operates Service for Both Frontier and US Airways

– Under Frontier’s Proposal SDF Would Be a Third 

Frontier

US Airways

Marketing Carrier

Operating

Carrier

* Subsidiary of Republic Airways Holdings, Inc.

Source: OAG Schedules for the June 11, 2012

Republic*

Republic*

Aircraft

E70/E75

E70

Frequency

2

1

Total Seats

149

69

Aircraft Size

69/80

69

Docket OST-2000-7182

Exhibit WN-R-206

Omaha

Frontier

US Airways

Republic*

Republic*

E90

E90

2

2

198

198

99

99

Kansas City
Republic Airways Holdings’ Subsidiaries

Operate the 3-Daily Roundtrip Flights

Between DCA and SDF for US Airways

US Airways

US Airways

Marketing Carrier

Operating

Carrier

* Subsidiary of Republic Airways Holdings, Inc.

Source: OAG Schedules for the June 11, 2012

Chautauqua*

Republic*

Aircraft

ERJ

E70

Frequency

2

1

3

Total Seats

100

69

169

Aircraft Size

50

69

Total

Docket OST-2000-7182

Exhibit WN-R-207
MKE GRR

MSN

DCA

DEN

MCI

OMA

More Than 50% of Frontier’s Service at DCA is 

Operated by its Sister Company Republic Airlines

Docket OST-2000-7182

Exhibit WN-R-208

Source: OAG Schedules for the week of June 11th through the 17th, 2012.

F9 Mainline Routes

F9 Regional Routes

Operated by Republic

Airlines 

Weekly Departures

Weekly Seats

Average Seats per Dep.

No. of Markets Served

Commuter/RJ

33

3,267

99

3

Total

60

7,497

125

6

Mainline

27

4,230

157

3
Republic – Frontier – US Airways: It’s All in the Family

1/ In 2006 US Airways sold 113 commuter slots to Republic, and Republic licensed the slots back to US Airways in return for a contract to operate them for US Airways. 

According to the Aviation Daily, March 9, 2012 at page 4, US Airways re-purchased a number of these slots from Republic in a December 2011 transaction.

Docket OST-2000-7182

Exhibit WN-R-209

Frontier Republic

Airlines Lynx Aviation

#1 Customer: US AIRWAYS

Chautauqua Shuttle

America

REPUBLIC AIRWAYS HOLDINGS, INC.

Two

Major Slot

Transactions1/

100%

Ownership
US Airways Is Republic Airways Holdings’ 

Largest Business Partner

Note: Republic Airways Holdings’ subsidiaries are Republic, Chautauqua, Shuttle America, Frontier, and Lynx. 

Source: OAG Schedules for the week of June 11th through the 17th, 2012.

Docket OST-2000-7182

Exhibit WN-R-210

392

204 194

114

0

50

100

150

200

250

300

350

400

450

U S D L U A A A

June 2012 Daily Departures

By Republic Airways

Holdings’ Carriers

Share of Republic

Contract Flying 43% 23% 21% 13% 

43%

Republic Customer
115

240

0

50

100

150

200

250

300

350

400

450

Republic Departures on Behalf of US F9 Departures

Republic Airways Holdings’ Subsidiaries Operate More 

Flights for US Airways Than the Total Flights Operated by Frontier

+10%

Daily Departures

Docket OST-2000-7182

Exhibit WN-R-211

1/ Operated by a Republic Airways Holdings carrier.

Note: Republic Airways Holdings’ subsidiaries are Republic, Chautauqua, Shuttle America, Frontier, and Lynx. 

Source: OAG Schedules for the week of June 11th through the 17th, 2012.

F9 

Regional1

F9 Mainline

392

355
Frontier Charges Extra Fees For Its Stretch and Select Seats

Source: www.frontierairlines.com/flight-info/seating-options.

• Charges vary by what class of ticket the customer purchases (Classic Plus, Classic, or 

Economy)

• For Economy passengers, STRETCH Seating fees start at $15 per segment

• Frontier charges additional fees for 31” seat pitch SELECT Seating. Southwest’s 32” to 33” 

seat pitch is free.

• STRETCH Seating must be booked in packages online that includes bag and other fees, or via 

the check-in kiosk at the airport.

• Frontier’s fees are not included in U.S. DOT, Origin-Destination Passenger Survey data and 

thus do not appear in the fares / yields shown in that data.

Docket OST-2000-7182

Exhibit WN-R-212

Product

Frontier STRETCH

Frontier SELECT

Southwest

Pitch

36”

31”

32”-33”

Price

From $15

From $5

Free
y = 3176.3x-0.7154

R

2

 = 0.8424

0.0¢

10.0¢

20.0¢

30.0¢

40.0¢

50.0¢

60.0¢

70.0¢

80.0¢

90.0¢

100.0¢

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600

US Airways’ Yield Curve in its Monopoly Markets

Nonstop Miles

YE Q3 2011 Nonstop 

Market Yield

Note: Fared passengers only. Excludes all taxes, government charges and checked baggage and rebooking/change fees.

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

Docket OST-2000-7182

Appendix 1
y = 2290.2x-0.722

R

2

 = 0.9174

0.0¢

10.0¢

20.0¢

30.0¢

40.0¢

50.0¢

60.0¢

70.0¢

80.0¢

90.0¢

100.0¢

0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600

Southwest's System Yield Curve

Nonstop Miles

YE Q3 2011 Nonstop 

Market Yield

Note: Fared passengers only. Excludes all taxes, government charges and checked baggage and rebooking/change fees.

Note: Fare curve includes markets with nonstop service and over 600 one-way departures for YE Q3 2011.

Source: US DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

Docket OST-2000-7182

Appendix 2