BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

___________________________________________

 )

Applications of )

 )

AIR CANADA )

ALASKA AIRLINES, INC. )

FRONTIER AIRLINES, INC. )

JETBLUE AIRWAYS CORPORATION )

SOUTHWEST AIRLINES CO. ) Docket No. OST-2012-0029

SUN COUNTRY AIRLINES )

VIRGIN AMERICA INC. )

 )

For exemptions from 14 C.F.R. Part 93, Subparts ) 

K and S, pursuant to 49 U.S.C. § 41718 )

(BEYOND-PERIMETER SLOT EXEMPTIONS) )

________________________________ ___________ )

CONSOLIDATED ANSWER 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 27, 2012
1

BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

___________________________________________

 )

Applications of )

 )

AIR CANADA )

ALASKA AIRLINES, INC. )

FRONTIER AIRLINES, INC. )

JETBLUE AIRWAYS CORPORATION )

SOUTHWEST AIRLINES CO. ) Docket No. OST-2012-0029

SUN COUNTRY AIRLINES )

VIRGIN AMERICA INC. )

 )

For exemptions from 14 C.F.R. Part 93, Subparts ) 

K and S, pursuant to 49 U.S.C. § 41718 )

(BEYOND-PERIMETER SLOT EXEMPTIONS) )

________________________________ ___________ )

CONSOLIDATED ANSWER OF 

SOUTHWEST AIRLINES CO. 

Pursuant to Order 2012-2-21 establishing this proceeding, Southwest files this 

Consolidated Answer to the Applications filed by the six other participating carriers for 

the eight beyond-perimeter slot exemptions created by the recently enacted FAA 

Modernization and Reform Act of 2012 (“FAA Act”).1 As is detailed below, a review of 

the competing Applications filed in this proceeding makes clear that Southwest’s 

proposal is materially superior to the other proposals. When scored against the seven 

decisional criteria specified in the FAA Act, as well as considered side-by-side for 

substance and public benefits, there is no doubt that Southwest’s proposal is by far the 

strongest and most beneficial to the public in this case. 

 

1 Common names of airlines are used.
2

Overview

Southwest is requesting two of the eight available beyond-perimeter slot

exemptions to provide nonstop service between Ronald Reagan Washington National 

Airport (DCA) and Austin, Texas (AUS) with single-plane service beyond Austin to San 

Diego, California (SAN). In Order 2012-2-21the Department clearly articulated the 

statutory criteria required for a grant of slot exemptions in this case. Southwest’s 

Application explained in detail how Southwest’s DCA-AUS-SAN proposal met all seven 

decisional criteria set forth in that order (Application at pp. 3-6). In fact, a close review 

of all the applications filed in this case demonstrates that Southwest is the only

applicant to fully satisfy all seven carrier selection criteria. Every other applicant does 

not meet one or more of the selection criteria, either by failing to offer significant 

network benefits and/or competition in beyond-perimeter markets, or by failing to 

present credible evidence of public benefits that would result from their proposals. In 

fact, no carrier other than Southwest has offered a fully explained and documented 

estimate of consumer fare savings that would be created by the proposed beyondperimeter service, along with a transparent calculation of the additional passengers that 

would benefit from the new low fares to be offered. 

Table I below summarizes the seven carrier applications in this case as 

measured against the statutory selection criteria: 
3

Table I

Only Southwest Airlines Fully Satisfies

All Selection Criteria in This Case

WN B6 AS VX F9 SY AC

DOT Carrier Selection Criteria AUS AUS SJU PDX SAN SFO COS LAS YVR

A. Domestic network benefits 

beyond the perimeter Y M Y Y M M M N N

B. Increase competition in 

multiple markets Y N Y Y M M Y N N

C. Not reduce travel options 

for small and medium hub 

communities inside the 

perimeter

Y Y Y Y Y Y Y Y Y

D. Not result in meaningful 

delays

Y Y Y Y Y Y Y Y Y

E. Enhance options for 

nonstop travel to/from the 

beyond perimeter airports

Y Y Y Y Y Y Y Y Y

F. Positive impact on overall 

competition

Y M Y Y M M M M N

G. Product public benefits, 

including lower fares, 

higher capacity and variety 

of service options.

Y M M M M M M M M

TOTAL “YES” COUNT 7 3 6 6 3 3 4 3 3

Scoring Code

Y = Yes

N = No

M= Minimal effect or insufficient data given in Application 

Beyond the above tabulation, the superiority of Southwest’s Application becomes 

clear from the detailed carrier-by-carrier evaluations that are provided below. First, 

however, a few general observations:
4

DCA-AUS is the most over-priced market in this case (Exhibit WN-R-102) and 

is most in need of Southwest’s low-fare service to provide relief to overcharged travelers. 

Southwest’s forecast of traffic stimulation (146,082 annual passengers) 

dwarfs the next largest estimate (JetBlue – San Juan (SJU)) by a factor of 3.5 

to 1 (Exhibit WN-R-103). Alaska, Frontier, Virgin America, Sun Country and 

Air Canada make no estimate of newly generated traffic. In some cases their 

costs and likely fares would not provide a basis for any price stimulation. 

With its new 175-seat B737-800 aircraft Southwest proposes the largest 

aircraft in the case (Exhibit WN-R-104). Some carriers are proposing aircraft 

as small as 120 seats (Air Canada), 119 seats (Virgin America), and even the 

100-seat E190 regional jet (JetBlue). 

DCA-AUS is the second largest un-served market in this case (Exhibit WN-R105). At the opposite end of the spectrum is DCA-Colorado Springs (COS),

which is less than 40% the size of DCA-AUS, and is the smallest O&D market

being proposed.

2

Among the competing markets in this case, DCA-AUS has no current nonstop 

service, and the Dulles service is only two daily round trips. Austin’s current 

service and capacity pales in comparison to other contending markets, 

including several that already have, or shortly will have, DCA nonstop service 

(Exhibits WN-R-106 and WN-R-107). 

 

2 DCA-COS reported 29,435 fared O&D passengers for YE Q3 2011, compared to 76,995 for DCA-AUS 

in the same period.
5

The limited incumbents as a group have 111 DCA slots, or 13.0% of the 

airport total (Exhibit WN-R-108). Southwest has 25 DCA slots, all by virtue of 

its acquisition of AirTran Airways, now Southwest’s wholly-owned subsidiary. 

When examined on a size-adjusted basis, however, Southwest has by far the 

smallest pool of slots of any limited incumbent in this case relative to its 

presence in the domestic market (Exhibit WN-R-109). On this relative scale 

JetBlue and Frontier have more than seven and eight times respectively, the 

slots of Southwest. 

Southwest is only one of only three applicants offering single-plane one-stop 

beyond service (between DCA and SAN in Southwest’s case), which is the 

best and strongest way to increase competition in multiple markets beyond 

the perimeter, and to provide maximum network benefits. 

Detailed carrier-by-carrier evaluations of each proposal are given below and in 

the attached exhibits. A brief summary follows. 

I. JetBlue’s Two-Route Application Is Seriously Flawed

JetBlue’s first choice is for two slot exemptions to serve DCA-SJU. “If and only if” 

the Department grants that request (Application at p. 29), JetBlue wants two more slot

exemptions to provide regional jet (“RJ”) service between DCA and AUS (Exhibit WN-R202). JetBlue’s AUS proposal is far inferior to Southwest’s AUS proposal, and even its 

DCA-SJU proposal is seriously flawed. 

Regarding its conditional DCA-AUS proposal, JetBlue would utilize only 

small 100-seat E-190 RJ aircraft to serve this important market. 

Southwest’s 175-seat B737-800 service and consumer benefits would 
6

dwarf anything JetBlue could generate. Southwest would offer DCA-AUS 

passengers 75% more annual seats than JetBlue (Exhibit WN-R-203), and 

assuming an 85% load factor for both carriers, Southwest would carry 

45,000 more annual passengers than JetBlue (Exhibit WN-R-204). 

Moreover, the unit cost of JetBlue’s E-190 aircraft is almost five cents per 

mile more, or 88% higher, than Southwest’s 737-800 per-mile unit cost 

(Exhibit WN-R-206). This dramatically lower operating cost will allow 

Southwest to serve the DCA-AUS market profitably at much lower fares 

than JetBlue. 

By several standard metrics Southwest is six to seven times larger than 

JetBlue at Austin (Exhibit WN-R-205). In fact, Southwest has over 

700,000 Rapid Rewards members in Austin and nearby San Antonio. 

Southwest’s much larger presence in the AUS area will unquestionably 

enable it to attract many more passengers on the DCA-AUS route than 

JetBlue, leading to a stronger service with greater consumer savings. 

Southwest’s detailed and transparent forecasts indicate that total 

consumer savings from its proposal will be approximately $23 million per 

year (Exhibit WN-120). JetBlue provides no analysis, no evidence, and no 

corroboration to support its alleged “forecasts,” which it relegates to an unexplained footnote on page 27. JetBlue makes no attempt to evaluate 

consumer savings generated by its proposal. So, its claim of 36,500 farestimulated passengers is unsupported by any empirical evidence or 

analysis and should be rejected. 
7

JetBlue has made no commitment to proposed fares in the markets it 

wishes to serve. It only states, without any explanation or support, that its 

fares will range from $125 to $665 in the DCA-AUS market (Application at 

p. 24). But based on JetBlue’s fares in markets of similar distance, its

average DCA-AUS fare would have to be least $30 or 18% higher than 

Southwest’s (Exhibit WN-R-207). 

Southwest’s fares would be significantly lower than JetBlue’s in the DCAAUS market. As shown in Exhibit WN-121, Southwest’s system average 

fare for the DCA-AUS distance is $169, which would be a 36% discount 

below current DCA-AUS connecting fares.

As for SJU, this is a 50% smaller and leisure-oriented market that already 

has low fares. In fact, DCA-SJU fares on a distance-adjusted basis are 

currently 22% lower than DCA-AUS fares (Exhibit WN-R-208). Although 

JetBlue does not make any effort to calculate fare savings from its 

proposal, any such savings would be minimal in light of the low-fare nature 

of the SJU market to begin with (see Exhibit WN-R-210).

Once again JetBlue has avoided any commitment to DCA-SJU fares in its 

proposal to the Department. It side-stepped this critical decisional issue 

by stating that its “low fares” would range from $127 to $667 (Application 

at p. 21), and that in some unexplained fashion these fares would 

stimulate 41,610 new passengers in the market (Application at p. 29, 

footnote 28). This claim is unsupported by any analysis and has no 

credibility.
8

In sum, JetBlue offers no traffic forecast, no concrete fare proposal, and does not 

even attempt to claim any fare savings for consumers. For these and other reasons, 

JetBlue’s application -- with respect to both SJU and its distant second choice AUS -- is 

far inferior to Southwest’s application. Given that only four new beyond-perimeter 

routes are available in this case, JetBlue certainly does not warrant two routes, and 

even its first choice of DCA-SJU is weak.

II. Alaska Does Not Deserve An Allocation Of Four Slots, and Its DCA-SAN 

Proposal Has Been Mooted By US Airways’ Selection Of San Diego

Alaska Airlines has requested two slot exemptions to serve DCA-PDX service (its 

clearly stated first choice), and two more to serve DCA-SAN as a second choice. To 

ask for 50% of the total slot exemptions available is an extraordinary request for a 

carrier that does not have low costs or low fares. While PDX is a market that would 

benefit from nonstop service to DCA, Alaska’s proposal will likely generate no fare 

savings for PDX-DCA passengers. The same is true for Alaska’s second choice SANDCA proposal, but that proposal is effectively mooted by US Airways’ March 21 

announcement of DCA-SAN as its beyond-perimeter nonstop market selection. 

Alaska’s DCA-SAN request would simply double-track the US Airways operation without 

meaningful price competition. 

Southwest, in contrast, will offer substantial price competition to US Airways with 

its proposed single plane SAN-AUS-DCA service. The US fare between DCA and SAN 

will average approximately $395 assuming it tracks US Airways’ pricing in its DCA-PHX 

market. Southwest’s one-stop fare between SAN and DCA will average $196, or 50% 

less (Exhibits WN-122 and WN-R-308 through -311). There is therefore no question 
9

that Southwest will carry its conservative forecast of 10,000 DCA-SAN annual 

passengers (Exhibit WN-202). 

Alaska’s application suffers from a number of additional flaws:

Alaska is not a low-fare carrier compared to Southwest. In the domestic 

system its fares are typically 20% to 25% higher than Southwest’s for the 

same distance (Exhibit WN-R-301). 

Southwest’s service proposal is superior to Alaska’s with respect to both 

capacity and fares. With 18 more seats per departure, Southwest would 

provide 13,140 more seats per year (Exhibit WN-R-304), and would carry 

nearly 11,000 more annual passengers than Alaska would under either of

its proposals (Exhibit WN-R-305). 

Southwest’s AUS-DCA service will do much more to impact current DCA 

fares than Alaska’s proposal. As shown in Exhibit WN-R-306, current 

DCA-AUS yields are significantly higher than both DCA-PDX and DCASAN on a distance-adjusted basis. 

Except for temporary introductory fares, 3 Alaska does not make any 

commitment to proposed fares for either PDX or SAN. Using Alaska’s 

current DCA-SEA and DCA-LAX fares as a benchmark, however, Alaska’s 

proposal is unlikely to deliver any fare savings to consumers since its 

average fares in both PDX and SAN would likely be higher than the 

prevailing DCA one-stop fares (Exhibits WN-R-307 and R-308). In fact, 

 

3

Alaska’s Application at p. 2 refers to initial fares as low as $149 for DCA-PDX and $159 for DCA-SAN. 

But these are introductory fares that Alaska commits to only for one year and only so long as fuel costs 

do not rise. Such temporary fares have little relevance. The real question is what will Alaska’s average 

fares be in the longer term (i.e., in the first normalized year of operations), a question which Alaska’s 

application does not answer. 
10

Alaska’s likely fare in the DCA-SAN market would be 37% higher ($73 

one-way) than Southwest’s single-plane one-stop fare (Exhibit WN-R308). Alaska’s claims of consumer savings are thus a myth, contrary to 

the experience of Alaska’s existing beyond-perimeter services.

As with JetBlue, Alaska certainly does not deserve an award of two routes in this 

proceeding, 50% of the beyond-perimeter slot pool available. Its second choice 

proposal for SAN is especially weak, both by its own terms and in light of US Airways’ 

announcement of nonstop SAN-DCA service. Even Alaska’s first choice proposal of 

PDX-DCA is inferior to Southwest’s AUS-DCA proposal, given that Alaska would 

operate smaller aircraft at higher fares and will deliver minimal or no fare savings to 

consumers. 

III. Virgin America’s Request for Four slots in One Market is Unjustified

Virgin America’s request for four slot exemptions, or 50% of the total available for 

seven applicants, is not justified on the face of Virgin’s application. This is particularly 

true given that United has selected its San Francisco (SFO) hub for nonstop service to 

DCA in the Incumbent Carrier proceeding. The Washington DC area enjoys another 15 

round-trips per day between IAD and SFO.

Among the serious flaws in Virgin America’s proposal are the following: 

As noted above, WAS-SFO is abundantly well-served already, and United 

will now provide nonstop service between its SFO hub and DCA.

Virgin America offers the smallest mainline aircraft in the case (119 seats). 

Southwest’s 175-seat B737-800 will provide 47%, or 41,000 more seats 
11

per year and carry 34,000 more annual passengers than Virgin America 

(Exhibits WN-R-402 and R-403). 

The current DCA-SFO fare is actually 12% below the DCA-AUS fare in 

absolute terms even though the SFO route is nearly twice the distance of 

the AUS route (Exhibits WN-R-405 and R-406). Thus there is little 

opportunity for fare savings on the SFO route, and certainly minimal 

compared to the AUS route.

Despite its claims about disciplining pricing in the DCA-SFO market, Virgin 

America has had little to no effect on United’s fares in both the IAD-SFO 

and IAD-LAX markets (Exhibits WN-R-407 and R-408). There is no 

reason to expect a materially different result in the DCA market.

Virgin America’s IAD-SFO fare is actually $10 more than the current 

average fare in the connecting DCA-SFO market (Exhibit WN-R-409). 

The Department should therefore expect no price stimulation under 

Virgin’s proposal. 

Virgin America provided no traffic forecast, no fare proposal, and no estimates of 

traffic stimulation or consumer fare savings. In addition, United has already selected 

SFO for daily nonstop service to DCA. Virgin’s proposal to provide two SFO-DCA daily 

round-trips on top of United’s nonstop is not justified.

IV. Frontier Has Given No Public Interest or Evidentiary Basis

to Justify an Award of Slots for the Small DCA-COS Market

Frontier’s application to serve DCA-COS is especially weak and undeserving of 

an award of the limited slot exemptions available. In fact, Frontier has a serious 

dilemma defending its application. DCA-COS by itself is by far the smallest market in 
12

this case, too small to support Frontier’s proposed 168-seat aircraft, and too small to 

justify an award of slot exemptions. Nor can Frontier rely on traffic from BWI or IAD to 

support its DCA-COS proposal.4 On the other hand, if COS is viewed as part of the 

Denver market, Frontier’s application is also deficient since Frontier already provides 

three daily nonstops, and United provides one, in the DCA-DEN market (the most DCA 

nonstops of any beyond-perimeter destination). In total, DEN has 16 daily nonstop 

round trips to DCA and IAD combined (Exhibit WN-R-501). 

There are many additional reasons to reject Frontier’s application in favor of 

Southwest’s:

The DCA-AUS market is 162% larger than DCA-COS (Exhibit WN-R-503). 

In fact, COS is only the 14th largest beyond-perimeter market without 

nonstop service to DCA (Exhibit WN-R-506). 

In Exhibit F9-6 Frontier alleges that the “Washington Metro Region” is the 

largest O&D market for COS, at 126 PDEW. However, when the 

irrelevant BWI and IAD traffic is stripped away, the DCA-COS market is 

left with only 40 PDEW and it ranks 10th (not first) in market size for COS 

(Exhibit WN-R-507). 

Southwest serves 20 destinations from AUS; Frontier serves only 5 

markets from COS (Exhibit WN-R-503a). 

 

4

See, e.g., DOT/FAA Notice Granting Petition With Conditions (DL/US slot swap), where the Department 

explains at length why the three Washington area airports “are not interchangeable” and “are not 

economic substitutes.” 75 Fed. Reg. 26322, 26332-26333 (May 11, 2010).
13

Like Southwest, Frontier proposes one-stop service to San Diego; 

however, unlike Southwest, Frontier has almost no presence in San Diego 

and will have difficulty generating local traffic against US Airways’ nonstop 

and Southwest’s single-plane one-stop to DCA. Southwest is the largest 

carrier at SAN, accounting for 41% of all SAN point of sale passenger, 

while Frontier carries only 2% of SAN passengers (Exhibit WN-R-509). 

Frontier’s alleged connecting markets at COS do not actually connect to 

Frontier’s proposed DCA flight, so it will gain no traffic support from any of 

them (Exhibit WN-R-510). Only Denver connects at all, but just in the 

eastbound direction (Exhibit WN-R-510).

Frontier claims its proposal will generate over $12 million in “total annual 

savings” (Exhibit F9-4), but provides no evidence or analysis to support 

these alleged savings. Frontier does not even disclose its expected fares 

in the markets it proposes to serve. Further, Its claimed traffic and 

savings are not even broken out by market, so it is impossible to discern 

what if any benefits would accrue to DCA-COS passengers. (Exhibit WNR-511). 

On a size-adjusted basis Frontier has 8 times as many DCA slots as 

Southwest (Exhibit WN-R-502). 

In sum, DCA-COS is too small, DCA-DEN is too well served, and Frontier has 

not proven any public benefits to support its request. Frontier also has failed to offer a 

credible consumer savings estimate, or even to disclose its proposed fares to the 
14

Department. Frontier has not met a reasonable burden of proof for an allocation of slot 

exemptions in this case. Its application is far inferior to Southwest’s.

V. Sun Country’s Application Lacks Any Economic Support

and Will Produce Little Consumer Benefit

Sun Country has provided no evidentiary support for its request to double-track 

US Airways’ nonstop in the DCA-Las Vegas (LAS) market (Exhibit WN-R-601), and the 

nature of this market makes it unlikely that Sun Country would generate any significant 

consumer benefits in any event. DCA-LAS is already a low-fare market, and Sun 

Country has made no showing that its service would produce meaningful competitive 

benefits (Exhibit WN-R-602). In addition:

Sun Country has not provided any forecast of traffic or consumer benefits 

in this proceeding. Sun Country does not disclose the fares it would 

charge DCA-LAS passengers, nor does it offer any analysis of traffic or

prospective fare savings. 

Sun Country bets the credibility of its DCA-LAS application on its 

“success” in developing the DCA-Lansing (LAN) market with AIR-21 slot

exemptions. Yet Sun Country has under-performed in that market and 

missed its traffic forecast by 31% (Exhibit WN-R-606).

Moreover, Sun Country’s DCA-LAN service has only marginally affected 

Delta’s pricing (Exhibit WN-R-606).

Southwest would make superior use of DCA slots by providing 36% more 

seats than Sun Country (Exhibit WN-R-603). 

While Sun Country provided no estimate of fare savings, Southwest has 

estimated that it will generate more than $23 million annually in consumer 
15

savings from its DCA-AUS-SAN proposal, based on detailed and 

transparent economic analysis for the Department and all parties to see. 

In sum, Sun Country has failed to support its application with reasonable 

evidentiary analysis. Sun Country’s chosen market of LAS is already a low-fare market 

from both DCA and IAD, and any consumer savings from Sun Country service will be 

minimal. Its application is inferior to Southwest’s under all relevant decisional criteria. 

VI. Air Canada’s Vancouver Proposal Does Not Merit 

An Award of Scarce Slot Exemptions

Air Canada’s application for DCA-Vancouver (YVR) does not deserve an award 

of scarce beyond-perimeter slot exemptions for several reasons. On five separate

occasions between 2000 and 2008 Air Canada and United attempted nonstop IAD-YVR 

service with A319 aircraft. As Star Alliance partners it appeared to be an ideal market –

Air Canada’s hub at Vancouver connected to United’s hub at Washington Dulles. But 

all five efforts (three by Air Canada and two by United) failed miserably -- Air Canada’s 

load factor averaged only 52% to 62% during its attempts (Exhibit WN-R-701A). A 

significant reason for these repeated failures is that Air Canada and United charged 

very high fares (Exhibit WN-R-700).

5

 Simply moving this transcontinental flight 28 miles 

from IAD to DCA will not change the outcome. With all the “on-line” connecting markets 

at both ends of the unsuccessful IAD-YVR route it is difficult to imagine how a route 

from Vancouver to DCA could succeed (Exhibit WN-R-702). 

Air Canada’s application suffers from several additional flaws: 

Air Canada has provided no traffic analysis, no proposed fares, and no 

estimates of consumer benefits in support of its proposal. 

 

5 Campbell-Hill’s analysis of historical fare data showed that the Air Canada and United fares were well 

over 50% higher than Southwest fares for the same nonstop distance. 
16

Air Canada would operate a small 120-seat airplane with schedule times 

keyed to its transpacific bank at YVR, and not for the convenience of local 

DCA-YVR travelers.

Air Canada’s high fares would stimulate no new traffic. Traditionally Air 

Canada’s unit costs in transborder operations have at least equaled the 

costs of U.S. legacy carriers, and have been well above Southwest’s 

costs. 

It is clear from Air Canada’s Application that it views this case as an 

opportunity to tap into fifth freedom traffic between Washington and Asia. 

In fact, Air Canada’s proposed schedule is not timed for the convenience 

of the local Washington-Vancouver markets but instead is “timed to 

ensure that Washington, DC area travelers will be able to access Air 

Canada’s wide array of services to Asia and the Pacific that it operates 

from Vancouver” (Application at p. 7). 

The specific on-line YVR connecting markets cited by Air Canada are 

Hong Kong, Seoul, Shanghai, Beijing, Sydney and Tokyo. But, as shown 

in Exhibit WN-R-703, United’s hub at SFO already serves all of these 

Asian markets, and in May United will begin DCA-SFO nonstop service. 

An award to Air Canada in this proceeding would give United, its closely 

aligned Star Alliance partner, access to another transpacific gateway 

(YVR), and effectively bestow on United – a Large Incumbent carrier - two

DCA beyond-perimeter routes, contrary to the expressed purpose of this 

proceeding. United and Air Canada would naturally code share on the 
17

DCA-YVR segment for both transborder traffic as well as Washington-Asia 

passengers.

As a foreign flag carrier, Air Canada has been treated well at DCA. It has 

18 slots in its own name, and it enjoys much more access to the DCA 

market through United’s 76 slots (Exhibit WN-R-108). 

For all the reasons stated above, Air Canada’s application for slot exemptions to 

serve DCA-Vancouver should be denied.

CONCLUSION

For the reasons given above and in its Application, Southwest’s proposal for 

DCA-AUS-SAN service is superior to the competing applications in this proceeding with

respect to its overall public benefits, as well as satisfying the seven carrier selection 

criteria specified in the Department’s Instituting Order. Accordingly, Southwest urges 

the Department to grant it two beyond-perimeter DCA slot exemptions to provide 

nonstop service between DCA and AUS, with single-plane beyond service to SAN. 

Respectfully submitted,

__________________________

Robert W. Kneisely 

March 27, 2012
CERTIFICATE OF SERVICE

I hereby certify that on March 27, 2012, a copy of the foregoing was served via 

e-mail on the following persons:

anita.mosner@hklaw.com (Air Canada)

megan.lawrence@alaskaair.com (Alaska Airlines)

Marshall.Sinick@squiresanders.com (Alaska Airlines)

Edward.Saucer@squiresanders.com (Alaska Airlines

robert.cohn@hoganlovells.com (Frontier Airlines)

patrick.rizzi@hoganlovells.com (Frontier Airlines

robert.land@jetblue.com (JetBlue Airways)

jhill@dowlohnes.com (JetBlue Airways)

perkmann@dowlohnes.com (JetBlue Airways)

John.Fredericksen@suncountry.com (Sun Country Airlines)

barbara.russell@virginamerica.com (Virgin America)

john.varley@virginamerica.com (Virgin America) 

jegillick@zsrlaw.com (Virgin America)

susan.kurland@dot.gov

todd.homan@dot.gov

brian.ctr.meehan@faa.gov

Jim Smith

Director of Aviation

Austin-Bergstrom International Airport

jimsmith@ci.austin.tx.us

John E. Potter

President and Chief Executive Officer 

Metropolitan Washington Airports Authority

john.potter@mwaa.com

info@airlineinfo.com

__________________________

Leslie C. Abbott
Summary Section
Southwest Airlines Would Generate More Consumer Savings 

Than Any Other Applicant

Annual Fare Savings 

(Millions)

$23.1

$12.4

$5.5

$10.6

$0.0 $0.0 $0.0 $0.0

$0

$5

$10

$15

$20

$25

WN F9 AS AS B6 V X SY AC

1/ It is unclear from Frontier’s exhibits whether this estimate includes savings claimed for COS-SAN local O&D passengers. This market is irrelevant to this case and

should not be included in any estimate of benefits.

Source Exhibit WN-120, Exhibit F9-4 and AS-D-10.

Docket OST-2012-0029

Exhibit WN-R-101

 (PDX) (SAN)

Did Not Address Consumer Savings

1/
y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

DCA – AUS is the Most Overpriced of 

All Markets Proposed in This Case

Nonstop Miles

YE Q3 2011 

Market Yield

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

SJU SAN

COS

PDX

SFO

Docket OST-2012-0029

Exhibit WN-R-102

Page 1 of 2

LAS
Percentage Market

Yield Above DCA 

Market Yield Curve

11%

5%

4%

2%

-3%

-9%

-11%

-15%

-10%

-5%

0%

5%

10%

15%

AUS COS PDX SAN LAS SFO SJU

1/ Regression curve shown on page 1.

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

Current 

DCA Yield 20.1¢ 17.1¢ 11.3¢ 11.4¢ 11.7¢ 9.5¢ 13.9¢ 

Market Yield 

Curve Yield1 18.0¢ 16.2¢ 10.8¢ 11.1¢ 12.0¢ 10.5¢ 15.6¢

DCA – AUS is the Most Overpriced of 

All Markets Proposed in This Case

Docket OST-2012-0029

Exhibit WN-R-102

Page 2 of 2
Southwest is One of Only Two Applicants That Estimated Traffic Stimulation

New Passengers

(000)

146,082

41,610

36,500

0 0 0 0 0

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

WN B6 B6 AS F9 V X SY AC

1/ JetBlue provided no evidence or analysis to support its claims of traffic stimulation (Application Page 27, footnotes 28 and 29).

Source: Exhibit WN-124, JetBlue Application, page 27.

Docket OST-2012-0029

Exhibit WN-R-103

Applicant:

(SJU) (AUS)

A320 E190

Did Not Address Stimulation

1/

1/
Southwest Proposes to Operate the Largest Aircraft Among All Applicants

Seats

100

150

168

175

0

20

40

60

80

100

120

140

160

180

200

WN F9 AS AS B6 B6 VX SY AC

Docket OST-2012-0029

Exhibit WN-R-104

Applicant:

DCA Market: AUS COS PDX SAN SJU AUS SFO LAS YVR

Aircraft Type: B737-800 A320 B737-800 B737-800 A320 E190 A319 B737-700 A319

157 157

129

119 120
DCA-AUS Is the Second Largest 

Fared O&D Un-Served Market In This Case

Passengers

YE Q3 2011

76,995

51,061

85,294

29,435

117,143

133,170

163,318

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

AUS SJU PDX COS YVR SAN SFO LAS

Docket OST-2012-0029

Exhibit WN-R-105

1/ Frontier operates 3 DCA-DEN round trips per day and United has one per day. 

2/ Notice of US Airways of Beyond-Perimeter Service, March 21, 2012

3/ Notice of Intent of United Air Lines, February 27, 2012.

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

Current DCA 

Nonstops:

Carrier

Daily Frequency

--

0

--

0

US

1

2

--

0

--

0

1

UA

1

3

US

1

--

0

NA
Current Nonstop Frequencies Between Washington and 

Applicants’ Beyond-Perimeter Market Choices

Weekly 

Roundtrips

102

28

7

7

0

7 7 7

1 4

7 6

1 4 2 1

7

0

20

40

60

80

100

120

AUS DEN COS SFO LAS SAN PDX SJU YVR

Docket OST-2012-0029

Exhibit WN-R-106

Market:

DCA : F9-21 UA-7 US-7 US-7

UA-7

IAD: UA-14 UA-62 UA-7 UA-75 UA-14 UA-21 UA-7 UA-7

WN-14 VX-27

104

DCA

IAD

109

21

Source: OAG Schedules for the week of June 11th through 17th, 2012. Includes US Airways’ recently announced choice to serve DCA-SAN.

111

28
Total 

Domestic O&D 

Passengers

(Millions) 20.4 101.4 10.7 N/A 15.1 5.5 1.1 4.3 41.6 78.9 46.2 64.2 

Percent of 

Airport Total 4.0% 2.9% 2.3% 2.1% 0.7% 0.7% 0.2% 0.0% 53.9% 12.8% 11.4% 8.9% 

DCA Slots by Carrier

1/ In its Answer filed March 20, 2012 in the inside-perimeter case (Docket DOT-OST-2000-7182) Frontier advances the theory that it only has 12 slots because 8 

of its 20 are actually held by its sister company Republic Airlines. Consistent with Frontier’s theory, while Southwest has 25 slots it is in fact a new entrant and 

not even a limited incumbent because its slots are operated by its wholly owned subsidiary AirTran Airways.

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

34 25 20 18

6 6 2 0

460

109

97

76

0

50

100

150

200

250

300

350

400

450

500

B6 WN F9 AC AS NK SY V X US DL AA UA

Limited Incumbent Carriers Non-Limited Incumbent Carriers

DCA Slots

Total Slots = 853

Docket OST-2012-0029

Exhibit WN-R-108

1
Southwest’s Share of DCA Slots is 

Disproportionately Small Among Limited Incumbents 

DCA Slots 

per 100,000

Daily Domestic

O&D Passengers

8

13

38

59

66 68

0

10

20

30

40

50

60

70

80

WN AS NK B6 F9 SY

Docket OST-2012-0029

Exhibit WN-R-109

Note: VX and AC excluded (VX= 0 slots, AC=unreported O&D).

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

FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.
Rebuttal to JetBlue
8

59

0

10

20

30

40

50

60

70

Southwest JetBlue

JetBlue Has 7 Times More DCA Slots Than

Southwest On a Size-Adjusted Basis

DCA Slots per

100,000 Daily 

Domestic O&D

Passengers

Docket OST-2012-0029

Exhibit WN-R-201

Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.
JetBlue Has Relegated Its Request to Serve 

Austin to a Distinctly Conditional Status

Source: JetBlue’s Application

“JetBlue requests two (2) slot exemptions for new service between DCA and 

JetBlue’s focus city at SJU and, if the slots for SJU are granted, two (2) slot 

exemptions for new service between DCA and JetBlue’s growth city of AUS...” (p. 1)

“Only if that service to our focus city (SJU) is granted does JetBlue request that 

DOT consider its second request for service to Austin, Texas.” (p. 1)

“If, and only if, the SJU service proposal is selected, JetBlue also requests that it be 

awarded two (2) slots for service between DCA and Austin, Texas...” (p. 29)

Excerpts from JetBlue’s Application

Docket OST-2012-0029

Exhibit WN-R-202
175

100

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 JetBlue E190

Southwest Would Offer 75% More DCA-AUS Seats 

Per Flight Than JetBlue’s Conditional RJ Proposal

+75%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-203
106,416

60,809

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 JetBlue E190

+45,607

Source: Carrier Applications. Assumes an 85% load factor for both carriers.

Docket OST-2012-0029

Exhibit WN-R-204

Annual Onboard Passengers 

Assuming 85% Load Factor

Southwest Would Carry 45,000

More DCA-AUS Annual Passengers than JetBlue’s Conditional Proposal 
AUS

OAK

SJC

ATL

BNA

BW I

CUN

DAL

DEN

ELP

FLL

HOU

HRL

LAS

LAX LBB

MCO

MDW

PHX SAN

TPA AUS

BOS

FLL

JFK

LGB

MCO

SFO

Southwest AUS

Nonstop Service

JetBlue AUS 

Nonstop Service

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

364

49,829

20

36%

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

49

7,350

6

6%

Docket OST-2012-0029

Exhibit WN-R-205

Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11th through the 17th, 2012.

 Southwest Is 7 Times the Size of JetBlue at Austin
5.6

10.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Southwest B737-800 JetBlue E190

JetBlue’s Conditional Proposal to Serve AUS Would Use a Small Aircraft 

With Unit Costs 88% Higher Than Southwest’s B737-800

+88%

Aircraft Direct Operating 

Cost per ASM (cents)

Docket OST-2012-0029

Exhibit WN-R-206

Source: US DOT Form 41, via Diio, LLC. Southwest’s Direct operating cost for the B737-800 is based on its reported Form 41 costs for the B737-700 adjusted for 

differences in unit operating costs between the two aircraft types.

Average Stage Length (Miles) 732 672

¢

¢
$169

$199

$0

$50

$100

$150

$200

$250

Proposed Southwest AUS Fare

Docket OST-2012-0029

Exhibit WN-R-207

DCA Fared 

O&D Passengers

JetBlue’s DCA-AUS Fares Would Be 

At Least $30 Higher Than Southwest’s

+18%

1/ Includes all markets over 1000 miles where B6 operated for the entire YE Q3 2011 period exclusively with E190s.

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

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC; Exhibit WN-121.

1

Estimated at Weighted Average 

B6 Yield In E190 Markets Over 1000 Miles 
y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

DCA-SJU Already Has Low Fares 

But DCA-AUS Does Not

Nonstop Miles

Market Yield per RPM 

YE Q3 2011 

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

SJU

Docket OST-2012-0029

Exhibit WN-R-208

Page 1 of 2
-11%

11%

-15%

-10%

-5%

0%

5%

10%

15%

AUS SJU

Docket OST-2012-0029

Exhibit WN-R-208

Page 2 of 2

Percentage Market

Yield Above DCA 

Market Yield Curve

Note: Regression curve shown on page 1.

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

Current 

DCA Yield 20.1¢ 13.9¢

Market Yield 

Curve Yield1 18.0¢ 15.6¢ 

DCA-SJU Already Has Low Fares 

But DCA-AUS Does Not
76,995

51,061

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

DCA-AUS DCA-SJU

+51%

Docket OST-2012-0029

Exhibit WN-R-209

DCA Fared 

O&D Passengers

The DCA-AUS Market Is 51% Larger than the DCA-SJU Market

Note: Fared passengers only. 

Source: US DOT O&D Survey YE Q3 2011,via Diio, LLC.
$216

$187

$0

$50

$100

$150

$200

$250

Current DCA-SJU Market Fare

JetBlue’s DCA-SJU Fares Would Not Be More 

Than 13% Below Current Fares

SJU Average Fare

Docket OST-2012-0029

Exhibit WN-R-210

1/ Estimated DCA-SJU fare based on fare per mile in JetBlue’s nonstop JFK route.

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

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

Nonstop Distance: 1,554 1,597 

1

Estimated JetBlue Fare 

Based on Its JFK-SJU Yield
175

150

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 JetBlue A320

Southwest Would Offer 17% More Seats 

Per Flight Than JetBlue’s Proposed SJU Service

+17%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-211
106,416

91,214

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 JetBlue A320

+15,202

Source: Carrier Applications. Assumes as 85% load factor for both carriers.

Docket OST-2012-0029

Exhibit WN-R-212

Annual Onboard Passengers 

Assuming 85% Load Factor

Southwest Would Carry 

15,000 More Annual Passengers than JetBlue’s SJU Proposal 
Rebuttal to Alaska
0.0¢

2.0¢

4.0¢

6.0¢

8.0¢

10.0¢

12.0¢

14.0¢

16.0¢

18.0¢

20.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

Alaska Is Not a Low Fare Carrier And Will

Not Likely Reduce Yields in Its Proposed Markets

Nonstop Miles

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

Includes all markets domestic markets with 600 or more one-way flights for YE Q3 2011.

Alaska Yield Curve: y = 2219.9x-.692

Southwest Yield Curve: y= 2292.2x-.722

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

Southwest Yield 

Curve

Docket OST-2012-0029

Exhibit WN-R-301

Alaska Yield 

Curve

AS Yield Curve

Nonstop Miles

Higher than WN Yield 

Curve

1200 20%

1500 21%

2000 22%

2500 23%

Yield per RPM 

YE Q3 2011 
8

13

0

2

4

6

8

10

12

14

Southwest Alaska

For Its Size Alaska Has Significantly More DCA Slots Than Southwest

DCA Slots per

100,000 Daily

Domestic O&D 

Passengers

Docket OST-2012-0029

Exhibit WN-R-302

Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.
Southwest Has A Significantly Larger San Diego Presence than Alaska

Source: OAG Schedules for June 2012; US DOT O&D Domestic Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

Docket OST-2012-0029

Exhibit WN-R-303

OGG

HNL

SEA

PDX

MRY

FAT

STS

SAN

PVR

SJD

SFO

OAK

SAN

ABQ

AUS

BNA

BW I

DEN

ELP

HOU

LAS

MCI

MDW

PHX

RNO

SAT

SJC

SMF STL

TUS

Southwest Nonstop 

Service at SAN

Alaska Nonstop

Service at SAN

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

648

88,851

19

41%

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

137

18,611

9

6%
175

157

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 Alaska B737-800

Southwest Would Offer 11% More Seats Per Flight Than Alaska

+11%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-304
106,416

95,470

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 Alaska B737-800

Southwest Would Carry 

Nearly 11,000 More Annual Passengers than Alaska

+10,946

Note: Includes fared and non-fared passengers. Assumes a 98% completion factor.

Source: Carrier Applications. Assumes an 85% load factor for both carriers.

Annual Onboard Passengers 

Assuming 85% Load Factor

Docket OST-2012-0029

Exhibit WN-R-305
AUS-DCA Yields Are Significantly Higher 

Than PDX and SAN Yields

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Docket OST-2012-0029

Exhibit WN-R-306

Page 1 of 2

y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

Nonstop Miles

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

SAN PDX

Market Yield per RPM 

YE Q3 2011 
2%

4%

11%

0%

2%

4%

6%

8%

10%

12%

14%

AUS PDX SAN

Docket OST-2012-0029

Exhibit WN-R-306

Page 2 of 2

Percentage Market

Yield Above DCA 

Market Yield Curve

Note: Regression curve shown on page 1.

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

Current 

DCA Yield 20.1¢ 11.3¢ 11.4¢

Market Yield 

Curve Yield1 18.0¢ 10.8¢ 11.1¢ 

AUS-DCA Yields Are Significantly Higher 

Than PDX and SAN Yields
$265

$277

$0

$50

$100

$150

$200

$250

$300

Current DCA-PDX DCA-PDX at Current AS Actual DCA Yield

Using Actual Alaska Yields at DCA Its Fares 

for DCA-PDX Would Be Higher Than the Current Market Average

Average Fare

Docket OST-2012-0029

Exhibit WN-R-307

+5%

1/ See Exhibit WN-R-309 for calculation of AS current yield for LAX and SEA to/from DCA.

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

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

1

DCA-PDX Local 

Fare Savings with 

Alaska =$0
$258

$196

$269

$0

$50

$100

$150

$200

$250

$300

Current DCA-SAN DCA-SAN at Current AS Actual DCA

Yield

WN Proposed DCA-SAN Fare

DCA-SAN Local 

Fare Savings with 

Alaska =$0

Alaska’s Fares for DCA-SAN Would Be 4% Higher than the 

Current Market Average And 37% Higher Than Southwest’s Fare

Average Fare

Docket OST-2012-0029

Exhibit WN-R-308

+4%

1/ See Exhibit WN-R-309 for calculation of AS current yield for LAX and SEA to/from DCA.

2/ From Exhibit WN-122.

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

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

1

+37%

2

(All Carriers)
Calculation of Actual Alaska Average Yield 

in Current DCA Nonstop Markets

Docket OST-2012-0029

Exhibit WN-R-309

AS DCA-SEA and DCA-LAX Actual 

Source/Basis

1 Fared Passengers 195,987 YE Q3 2011 from O&D Survey via Diio, LLC.

2 Fared Revenue Including Fees1 $53,762,971 YE Q3 2011 and Form 41 Data from O&D Survey via Diio, LLC.

3 Fared RPM’s 455,245,747 YE Q3 2011 from O&D Survey via Diio, LLC.

4 Average Fare Including Fees1 $274 Line 2 / Line 1

5 Average Yield (cents) 11.8 Line 2 / Line 3 x 100

1/ Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees.
US Airways’ DCA-SAN Average Fare Should Approximate $395

Docket OST-2012-0029

Exhibit WN-R-311

1/ From U.S. DOT, Origin-Destination Passenger Survey, via Diio, LLC. Inc. Fared passengers only. Excludes all taxes and government charges. Includes 

estimated checked baggage and rebooking/change fees.

2/ Nonstop Miles

3/ Row 1 x Row 2

1. US DCA-PHX Yield (Cents) 17.34

2. DCA-SAN Nonstop Miles 2,276

3. Estimated US DCA-SAN Fare $395
Rebuttal to Virgin America
DCA

SAN

LAX

SFO

California Will Receive Three New Nonstop

Routes from DCA Added By Large Incumbent Carriers

Docket OST-2012-0029

Exhibit WN-R-401

Source: American and United Announcements

Weekly Departures

Weekly Seat-Departures

LAX

7

1,309

SFO

7

868 United DCA-SFO

American DCA-LAX

US Airways DCA-SAN 

UA

B737-700

AA

B757

From DCA To:

SAN

7

1,050

US

A320
175

119

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 Virgin America A319

Southwest Would Offer 47% More Seats Per Flight Than Virgin America

+47%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-402
106,416

72,363

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 Virgin America A319

Southwest Would Carry 34,000 More Annual Passengers

than Virgin America With One Slot Pair

+34,053

Note: Includes fared and non-fared passengers. Assumes a 98% completion factor.

Source: Carrier Applications. Assumes an 85% load factor for both carriers.

Annual Onboard Passengers 

Assuming 85% Load Factor

Docket OST-2012-0029

Exhibit WN-R-403
105

61

91

0

20

40

60

80

100

120

Austin With Southwest Proposal SFO With 1 VX Slot SFO With 2 VX Slots

DCA-AUS Is Under-Served Relative to DCA-SFO Including 

the Proposals of Southwest and Virgin America

Source: OAG Schedules for the week of June 11, 2012 and proposals of Southwest and Virgin America and announced United service.

PDEW

per Daily

Flight

Docket OST-2012-0029

Exhibit WN-R-404

Fared O&D Passengers 76,995 133,170 133,170 

Daily Roundtrips 

including WN and

VX Proposals: 1 2 3

+15%

+72%
y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

DCA-SFO Already Has Low Fares 

But DCA-AUS Does Not

Nonstop Miles

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

SFO

Docket OST-2012-0029

Exhibit WN-R-405

Page 1 of 2

Market Yield per RPM 

YE Q3 2011 
-9%

11%

-10%

-5%

0%

5%

10%

15%

AUS SFO

Docket OST-2012-0029

Exhibit WN-R-405

Page 2 of 2

Percentage Market

Yield Above DCA 

Market Yield Curve

Note: Regression curve shown on page 1.

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

Current 

DCA Yield 20.1¢ 9.5¢

Market Yield 

Curve Yield1 18.0¢ 10.5¢ 

DCA-SFO Already Has Low Fares 

But DCA-AUS Does Not
$265

$233

$0

$50

$100

$150

$200

$250

$300

DCA-AUS DCA-SFO

Despite a Nonstop Distance Nearly Double that of DCA-AUS, 

the Current DCA-SFO Fare is 12% Lower than the DCA-AUS Fare

Average Fare

Docket OST-2012-0029

Exhibit WN-R-406

12%

Distance (Miles) 1,315 2,442

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

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.
Virgin America Had No Effect on United’s Fares Or

Passenger Volume After It Entered the IAD-SFO Nonstop Market

$383

$407

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

$250

$275

$300

$325

$350

$375

$400

$425

$450

United IAD-SFO Fare Before

And After VX Nonstop

Last Full Year

For VX Nonstop

(YE Q2 2007)

355,541 356,813

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

400,000

First Full Year

With VX Nonstop

(YE Q3 2008)

Last Full Year

For VX Nonstop

(YE Q2 2007)

First Full Year

With VX Nonstop

(YE Q3 2008)

United IAD-SFO Fared 

Passengers Before

And After VX Nonstop

Note: Fared passengers only. Excludes all taxes and government charges.

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

Docket OST-2012-0029

Exhibit WN-R-407

+0.4%

Over

15 Mos.

+6.3%

Over

15 Mos.
Virgin America Had Virtually No Effect on United’s Fares 

Or Passenger Volume After It Entered the IAD-LAX Nonstop Market

$292 $288

$0

$25

$50

$75

$100

$125

$150

$175

$200

$225

$250

$275

$300

United IAD-LAX Fare Before

And After VX Nonstop

Last Full Year

For VX Nonstop

(YE Q3 2007)

378,736 370,473

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

400,000

First Full Year

With VX Nonstop

(YE Q4 2008)

Last Full Year

For VX Nonstop

(YE Q3 2007)

First Full Year

With VX Nonstop

(YE Q4 2008)

United IAD-LAX Fared 

Passengers Before

And After VX Nonstop

Note: Fared passengers only. Excludes all taxes and government charges.

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

Docket OST-2012-0029

Exhibit WN-R-408

-2.2%

Over

15 Mos.

-1.4%

Over

15 Mos.
$243

$233

$0

$50

$100

$150

$200

$250

$300

VX IAD-SFO DCA-SFO-All Carriers

Virgin America’s Fares for IAD-SFO Are $10 More 

than the Market Average for DCA-SFO – Negating Any 

Fare Stimulation From DCA-SFO Service

Average Fare

Docket OST-2012-0029

Exhibit WN-R-409

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

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.
Rebuttal to Frontier
There Are Already 16 Daily Nonstops Between DCA/IAD and COS/DEN

DEN

COS

IAD

DCA

Airline

Frontier

Southwest

United

United

United

Origin

Denver

Denver

Colorado Springs

Denver

Denver

Destination

DCA

IAD

IAD

DCA

IAD

Total

Daily 

Departures

3

2

1

1

9

16

Daily SeatDepartures

486

274

66

170

1,348

2,284

Docket OST-2012-0029

Exhibit WN-R-501

UA

UA

WN

UA

F9
8

66

0

10

20

30

40

50

60

70

Southwest Frontier

On a Size-Adjusted Basis Frontier Has 

Eight Times As Many DCA Slots As Southwest

DCA Slots per

100,000 Daily 

Domestic O&D

Passengers

Docket OST-2012-0029

Exhibit WN-R-502

Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.
76,995

29,435

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

DCA-AUS DCA-COS

The AUS-DCA Market Is Over 160% Larger than the DCA-COS Market

+162%

Fared DCA O&D 

Passengers (YE Q3 2011)

Docket OST-2012-0029

Exhibit WN-R-503

Note: Fared passengers only. 

Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.
AUS

OAK

SJC

ATL

BNA

BW I

CUN

DAL

DEN

ELP

FLL

HOU

HRL

LAS

LAX LBB

MCO

MDW

PHX SAN

TPA

Southwest AUS

Nonstop Service

Frontier COS

Nonstop Service

Departures per Week

Seat-Departures per Week

Number of Destinations

364

49,829

20

Departures per Week

Seat-Departures per Week

Number of Destinations

46

5,009

5

Docket OST-2012-0029

Exhibit WN-R-503A

Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11th through the 17th, 2012.

 Southwest’s Network at AUS is Over 9 Times 

Larger Than Frontier’s at COS

DEN

COS

LAX

PDX

PHX

SEA
1,771,161

416,427

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Austin Colorado Springs

Austin’s Population is Over 4 Times the Size of Colorado Springs

+325%

Source: US Census 2010.

Population

Docket OST-2012-0029

Exhibit WN-R-504
y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

Nonstop Miles

YE Q3 2011 

Market Yield

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

COS

Docket OST-2012-0029

Exhibit WN-R-505

Page 1 of 2

Current DCA-AUS Yields Are Higher Than DCA-COS Yields
5%

11%

-5%

-3%

-1%

1%

3%

5%

7%

9%

11%

13%

AUS COS

Docket OST-2012-0029

Exhibit WN-R-505

Page 2 of 2

Percentage Market

Yield Above DCA 

Market Yield Curve

Note: Regression curve shown in Page 1.

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

Current 

DCA Yield 20.1¢ 17.1¢

Market Yield 

Curve Yield1 18.0¢ 16.2¢ 

Current DCA-AUS Yields Are Higher Than DCA-COS Yields
There Are 13 Beyond-Perimeter Markets Without DCA Nonstop

Service That Have More Passengers Than COS 

Docket OST-2012-0029

Exhibit WN-R-506

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

Market

San Antonio (SAT)

Portland (PDX)

Austin (AUS)

Tucson (TUS)

Albuquerque (ABQ)

San Juan (SJU)

San Jose (SJC)

Honolulu (HNL)

Sacramento (SMF)

El Paso (ELP)

St. Thomas (STT)

Ontario (ONT)

Anchorage (ANC)

Colorado Springs (COS)

$226 

$265 

$265 

$241 

$261 

$216 

$230 

$489 

$268 

$225 

$237 

$239 

$404 

$254 

16.3 

11.3 

20.1 

12.3 

15.8 

13.9 

9.5 

10.1 

11.3 

13.1 

14.9 

10.6 

12.0 

17.1 

Excludes applicant markets with nonstop service (SFO and LAS) and YVR is not shown.

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

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

DCA Fared

PDEW

136 

117 

105 

89 

78 

70 

64 

60 

59 

57 

50 

50 

48 

40 

Average Fare Yield (Cents)
DCA is Only the 10th Ranked COS O&D Market

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

Docket OST-2012-0029

Exhibit WN-R-507

Rank

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Market

Dallas (DFW)

Las Vegas (LAS)

Houston (IAH)

Los Angeles (LAX)

Washington (IAD)

Atlanta (ATL)

Orlando (MCO)

Chicago (ORD)

Salt Lake City (SLC)

Washington (DCA)

San Antonio (SAT)

Phoenix (AZA)

Long Beach (LGB)

Phoenix (PHX)

Tampa (TPA)

103

78

64

55

47

45

45

43

41

40

40

38

37

37

36

COS Fared

PDEW
Denver Has More DCA Flights

Than Any Other Beyond-Perimeter Market

DCA

Daily Roundtrips

4

3

2 2 2

1 1

0

1

1

2

2

3

3

4

4

5

DEN PHX LAX SLC SEA LAS SFO

Docket OST-2012-0029

Exhibit WN-R-508

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

OAK

SAN

ABQ

AUS

BNA

BW I

DEN

ELP

HOU

LAS

MCI

MDW

PHX

RNO

SAT

SJC

SMF STL

TUS SAN

DEN

Southwest Nonstop

Service at SAN

Frontier Nonstop

Service at SAN

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

648

88,851

19

41%

Departures per Week

Seat-Departures per Week

Number of Destinations

Share of Point of Sale SAN O&D Passengers

28

3,825

1

2%

Docket OST-2012-0029

Exhibit WN-R-509

Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11th through the 17th, 2012.

Southwest Is Over 20 Times Larger Than Frontier at San Diego
Frontier’s Schedules Do Not Provide Roundtrip Connections

to Any of Its Claimed Markets Beyond COS Including Its DEN Hub

1/ Used 30 minute minimum connect time, 3 hour maximum connect time.

Source: OAG Schedules for the week of June 11th through the 17th, 2012 Claimed connecting markets are from Exhibit F9-3.

Docket OST-2012-0029

Exhibit WN-R-510

Westbound

Connection 

Within 3 Hours1

NO

NO

NO

NO

NO

Los Angeles

Phoenix

Seattle

Portland

Denver

Eastbound 

Connection 

Within 3 Hours1

NO

NO

NO

NO

YES

Eastbound 

Same Day

Over 3 Hours

NO

NO

NO

NO

NO

Westbound 

Same Day

Over 3 Hours

NO

NO

NO

NO

NO
A Selection of Austin – Washington DC Links

No supportable traffic forecast is provided. Without analysis Frontier 

simply assumes an 80% load factor.

No details or derivation are provided for the “blended O&D average fare,” 

or for the “blended forecast average fare.”

It appears that benefits are erroneously claimed for local COS-SAN O&D 

passengers (an irrelevant market for this case).

It appears that Frontier has double-counted its claimed benefits for DCASAN passengers (counted once on the DCA-SAN segment and once more 

on the SAN-COS segment). 

Frontier Provides No Evidence or Analysis to

Support Its Claimed Consumer Savings

Docket OST-2012-0029

Exhibit WN-R-511

Rebuttal to Exhibit F9-4
Because the DCA-COS Market Is So Small Frontier Would 

Need to Achieve A Traffic Stimulation Rate of At Least 330% to 545%

Docket OST-2012-0029

Exhibit WN-R-512

Source/Basis

1 F9 Forecast DCA-COS Onboard Passengers 98,381 Exhibit F9-4 (196,761 Onboard Passengers /2)

2 Maximum F9 DCA-SAN One-Stop Passengers 17,313 WN Projected Unconstrained DCA-SAN Passengers including non-fared passengers. 

Exhibit WN-202 Line 9 x 1.086 (adjustment to include non-fared passsengers).

WN passengers should exceed F9 passengers because of WN's larger presence at SAN.

3 Other Connections 0 F9 Has No roundtrip connections for its proposed times at COS.

4 Total Remaining for DCA-COS 81,067 Line 1 - Line 2 - Line 3

5 Current DCA-COS O&D Passengers (Including Zero-Fared) 31,443 U.S. DOT, Origin-Destination Passenger Survey, YE Q3 2011 via Diio, LLC.

Required DCA-COS Stimulation 

Assumed Share Stimulation

6 40% 545% Line 4 / Line 5 / 40% Share

7 50% 416% Line 4 / Line 5 / 50% Share

8 60% 330% Line 4 / Line 5 / 60% Share
Rebuttal to Sun Country
LAS

DCA

DCA-LAS Already Has Nonstop Service

Docket OST-2012-0029

Exhibit WN-R-601

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

Weekly Departures

Weekly Seats

7

1,050

US

A320
y = 10,244x-0.883

0.0¢

5.0¢

10.0¢

15.0¢

20.0¢

25.0¢

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200 2300 2400 2500

DCA-LAS Already Has Low Fares 

But DCA-AUS Does Not

Nonstop Miles

Market Yield per RPM 

YE Q3 2011 

1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. 

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

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

Yield Curve for DCA Beyond

Perimeter Markets1

AUS

LAS

Docket OST-2012-0029

Exhibit WN-R-602

Page 1 of 2
-3%

11%

-5%

-3%

-1%

1%

3%

5%

7%

9%

11%

13%

AUS LAS

Docket OST-2012-0029

Exhibit WN-R-602

Page 2 of 2

Percentage Market

Yield Above DCA 

Market Yield Curve

Note: Regression curve shown on page 1.

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

Current 

DCA Yield 20.1¢ 11.7¢

Market Yield 

Curve Yield1 18.0¢ 12.0¢ 

DCA-LAS Already Has Low Fares 

But DCA-AUS Does Not
175

129

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 Sun Country B737-700

Southwest Would Offer 36% More Seats Per Flight Than Sun Country

+36%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-603
106,416

78,444

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 Sun Country B737-700

Southwest Would Carry 28,000 

More Annual Passengers than Sun Country

+27,972

Note: Includes fared and non-fared passengers. Assumes a 98% completion factor.

Source: Carrier Applications. Assumes an 85% load factor for both carriers.

Annual Onboard Passengers 

Assuming 85% Load Factor

Docket OST-2012-0029

Exhibit WN-R-604
8

68

0

10

20

30

40

50

60

70

80

Southwest Sun Country

Sun Country Has Significantly More DCA Slots for Its Size Than Southwest

DCA Slots per

100,000 Daily 

Domestic O&D

Passengers

Docket OST-2012-0029

Exhibit WN-R-605

Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.
31,390

21,740

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Sun Country’s DCA-LAN Traffic is 31% Below Forecast and 

It Has Had Little Effect on Delta’s Fares

$188

$171

$0

$50

$100

$150

$200

$250

DCA-LAN Local Passengers

Forecast First Year1 Actual2

Delta Average Fare

1/ See corrected Exhibit SY-2, Docket DOT-OST-2000-7182.

2/ Q2 and Q3, 2011 traffic in letter from Sun Country to Docket FAA-2012-, January 26, 2012, Attachment A. Two quarters of data annualized by doubling the number from Attachment A.

3/ From Sun Country letter to Docket FAA-2012-, January 26, 2012, Attachment A. 

Docket OST-2012-0029

Exhibit WN-R-606

Q2 + Q3 2010 Q2 + Q3 2011

-31%

-9%
Rebuttal to Air Canada
Air Canada and United Have Attempted IAD-YVR

Five Times And Have Failed Every Time

Docket OST-2012-0029

Exhibit WN-R-701A

Source: U.S. DOT, T-100 Data, via Diio LLC.

Historical YVR-IAD Service

Average Low Month

Period Load Factor Load Factor

Air Canada

June 2000-October 2001 52% 32%

June 2002-September 2002 57% 36%

June 2004-September 2004 63% 49%

United

May 2006-September 2007 70% 39%

June 2008-August 2008 86% 82%

0 12 24 36 48 60 72 84 96 108 120 132 144

UA Attempt 2

UA Attempt 1

AC Attempt 3

AC Attempt 2

AC Attempt 1
Vancouver is the Only Proposed Market 

That Does Not Have Service from IAD

Weekly IAD Roundtrips

102

21

14 14

7 7 7

0

0

20

40

60

80

100

120

SFO SAN AUS LAS COS PDX SJU YVR

Docket OST-2012-0029

Exhibit WN-R-701

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

IAD

If YVR Doesn’t Work at United’s IAD Hub How Would it Work at DCA?

Docket OST-2012-0029

Exhibit WN-R-702

Air Canada Beyond YVR

Weekly Departures

Weekly Seat-Departures

Destinations

454

35,715

17

United Beyond IAD

Weekly Departures

Weekly Seat-Departures

Destinations

1,311

105,749

68

Note: United and Air Canada are Star Alliance partners.

Source: OAG Schedules for the week of June 11th through 17th, 2012
The Asia Connecting Markets Proposed By 

Air Canada Are Well Served By United

Hong Kong (HKG)

Seoul (ICN)

Tokyo (NRT)

Beijing (PEK)

Shanghai (PVG)

Sydney (SYD)

YES

YES

YES

YES

YES

YES

UA @ SFO

Docket OST-2012-0029

Exhibit WN-703

YES

YES

YES

YES

YES

YES

AC @ YVR

NO

NO

YES

NO

YES

YES

UA @ LAX

YES

NO

YES

YES

YES

NO

UA @ ORD

NO

NO

YES

YES

NO

NO

UA @ IAD

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

Nonstop Service Offered From:
5

61

0

10

20

30

40

50

60

70

Southwest Air Canada

Air Canada Has Significantly More DCA Slots for Its Size Than Southwest

DCA Slots per

100,000 Daily U.S. Domestic 

or Transborder Seats

Docket OST-2012-0029

Exhibit WN-R-704

Source: OAG Schedules for the week of June 11th through 17th, 2012; FAA Slot Reports, Current and Future, dated 2-13-2012 and OAG schedules June 2012.

No. of DCA Slots 25 18
175

120

0

20

40

60

80

100

120

140

160

180

200

Southwest B737-800 Air Canada A319

Southwest Will Offer 46% More Seats Per Flight Than Air Canada

+46%

Source: Carrier Applications.

Seats per Departure

Docket OST-2012-0029

Exhibit WN-R-705
106,416

72,971

0

20,000

40,000

60,000

80,000

100,000

120,000

Southwest B737-800 Air Canada A319

Southwest Would Carry Over

33,000 More Annual Passengers than Air Canada

+33,445

Note: Includes fared and non-fared passengers. Assumes a 98% completion factor.

Source: Carrier Applications. Assumes an 85% load factor for both carriers.

Annual Onboard Passengers 

Assuming 85% Load Factor

Docket OST-2012-0029

Exhibit WN-R-706