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BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

__________________________________________

)

Application of )

)

SOUTHWEST AIRLINES CO. )

)

For exemptions from 14 C.F.R. Part 93, Subparts ) Docket DOT-OST-2000-7182

K and S, pursuant to 49 U.S.C. § 41718(g)(2) )

(WITHIN-PERIMETER SLOT EXEMPTIONS )

)

For service between Ronald Reagan )

Washington National Airport (DCA) and )

Oklahoma City (OKC) )

__________________________________________)

COMMENTS OF THE

SOUTHWEST AIRLINES PILOTS’ ASSOICATION

Communications with respect to this document should be addressed to:

Therese Merrick

General Counsel

Southwest Airlines Pilots’ Association

1450 Empire Central

Dallas, TX 75247

(214) 722-4212

tmerrick@swapa.org
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I. INTRODUCTION

Southwest Airlines Pilots’ Association (“SWAPA”) is the exclusive bargaining 

representative for more than 6,000 Southwest Airlines pilots. Due to the Spring 2011 

Southwest Airlines Co. (“Southwest”) acquisition of AirTran Airways, Inc. (“AirTran”) and a 

recent seniority integration plan negotiated between Southwest, AirTran, SWAPA, and the 

Airline Pilots Association (“ALPA”) (the current bargaining representative of AirTran pilots), by 

2015 SWAPA will also represent AirTran’s nearly 1,700 pilots. Once all AirTran pilots have 

transitioned over to Southwest, SWAPA will be the sole bargaining representative for nearly 

8,000 pilots at the nation’s largest domestic carrier. 

Having reviewed the applications for exemption submitted by US Airways, Frontier 

Airlines, and Southwest Airlines, SWAPA strongly supports the application of Southwest Airlines 

for the slot exemptions to serve passengers between Ronald Reagan Washington National 

Airport (“DCA”) and Will Rogers World Airport in Oklahoma City, OK (“OKC"), with continuing 

single- plane service to Dallas Love Field (“DAL”).

II. ANALYSIS OF AVAILABLE DCA SLOT EXEMPTIONS

A. SOUTHWEST’S PROPOSED SERVICE USING DCA SLOT EXEMPTIONS BEST FULFILLS THE 

AIR-21 SELECTION CRITERIA

SWAPA recognizes that in accordance with Title 49 U.S.C. § 41718(b), the Secretary of 

Transportation must allocate perimeter slots in a manner that promotes air transportation: 

1) By new entrant air carriers and limited incumbent air carriers;

2) To communities without existing nonstop air transportation to Ronald Reagan 

Washington National Airport;
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3) To small communities;

4) That will provide competitive nonstop air transportation on a monopoly nonstop route 

to Ronald Reagan Washington National Airport; or

5) That will produce the maximum competitive benefits, including low fares.

The Southwest application fulfills four of these five criteria, the maximum possible. First, 

Southwest is a limited incumbent in the market and holds a disproportionately small number of 

slots given the carrier’s size. (Exhibit 1) Despite previous attempts to gain access to DCA, 

Southwest came up short until its recent acquisition of AirTran Airways which resulted in 

nominal slots and operating rights at DCA. Second, OKC currently has no nonstop service to 

DCA. Third, OKC is currently classified by the Federal Aviation Administration as a “small hub”

airport, which fulfills the “small community” criterion (to our knowledge, the term “small 

community” has not been defined by Congress or the Department in this context). Finally, and

most importantly, Southwest’s proposed service will provide nonstop air transportation that 

will introduce low fares and competitive benefits to the OKC – DCA market while also extending 

convenient same plane and connecting service beyond OKC to markets such as Dallas Love 

Field.

Available DCA slots are precious commodities that should be utilized in a manner that 

serves the greatest public benefit. Aircraft type and market size should be considered when 

determining the best-suited carrier for the available exemptions. Southwest Airlines proposes 

to operate a 137-seat1Boeing 737-700 aircraft between DCA and OKC. This aircraft is 71% 

larger than the Embraer 175 previously used by Delta Air Lines (“Delta”) to serve Mississippi’s 

Jackson-Medgar Wiley Evers International Airport (“JAN”) with these exemptions, and 99% 

 

1 Southwest is currently in the process of reconfiguring its entire fleet of -700s with 143 seats.
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larger than the Embraer 170 that US Airways has proposed to operate to JAN if awarded the 

exemptions.

Currently DCA – OKC is the number one inside-perimeter O&D market without nonstop 

service to DCA (Exhibit 2). More passengers currently fly between OKC and DCA, using either 

connecting or direct one-stop flights, than fly between JAN and DCA. This statistic includes the 

JAN advantage of available nonstop service to DCA for the last seven years. (Exhibit 2) Of the 

top 10 inside-perimeter markets without nonstop service to DCA, flights between DCA and OKC 

command the highest fares. (Exhibit 3) The OKC – DCA market is ripe to benefit from the 

“Southwest Effect”2, as Southwest Airlines can stimulate the market with its low fare model.

When using current yield curves as a predictive guide, Southwest anticipates that it will offer

fares that average $108 less than the current average in the market base. (See Southwest 

Application)

If awarded the slot exemptions, Southwest could stimulate 46,220 new passengers in 

the local OKC to DCA market, increasing the total O&D market size to some 80,000 passengers, 

including both revenue and non-revenue passengers. (Southwest Application, Exhibit WN-203)

Southwest service will also likely stimulate further demand nation-wide by providing new onestop (same plane) and connecting service to DCA, complete with lower fares, from the large 

Dallas, Las Vegas, Phoenix, Denver, and Houston markets. The Southwest proposal may also 

provide two-stop connecting opportunities to other points in Texas such as Lubbock and 

Amarillo. 

 

2 The “Southwest Effect” was coined in 1993 by the U.S. DOT to describe the considerable boost in air travel that 

invariably resulted from Southwest’s entry into new markets. Market stimulation results from Southwest’s 

competitive, low-cost service, particularly in markets where so-called “Legacy” airlines previously enjoyed 

monopoly or near-monopoly status on certain routes.
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Southwest is likely to carry approximately 29,000 passengers in the single-plane DCADAL market plus other connecting markets during the first year of DCA – OKC service. (Exhibit 

WN-202) Lower fares will have an added benefit of imposing pricing discipline on competitive 

connecting routes from DCA. In essence, the “Southwest Effect” will benefit not only 

Southwest’s customers, but also our competitors’ customers. Neither US Airways nor Frontier 

Airlines can offer consumers benefits from a vibrant, competitive and dynamic system like 

Southwest.

B. OTHER APPLICANTS’ PROPOSED USES OF DCA SLOT EXEMPTIONS WILL NOT BENEFIT 

THE FLYING PUBLIC TO THE SAME EXTENT AS SOUTHWEST

The slot exemptions recently relinquished by Delta Airlines were flown using a 50-seat 

CRJ or a 75-seat CRJ-700. Based on load factor reports from the Department of Transportation, 

this regional jet service was not particularly successful for Delta. Since 2005, load factors were 

generally at or below 50% of seat capacity, ranging from 24 to 33 passengers per flight on 

average. (Exhibit 4) Despite the high-yield nature of DCA traffic, Delta was losing significant 

money on the JAN – DCA route.

In applications and letters of support for the DCA slot exemptions, the value of US 

Airways’ service to JAN has been debated. Some suggest that any action taken by the DOT 

other than awarding the exemptions to US Airways will result in reduced JAN service. However, 

it must be noted that US Airways does not require these slot exemptions to continue servicing 

the JAN – DCA market. US Airways controls a huge number of DCA slots and certainly could 

assign one of its existing slots to the JAN market if its service is demanded as asserted in the US 

Airways application. (Exhibit 1) Nonetheless, a decade’s worth of empirical data makes it clear 

that JAN-DCA passengers do not regularly travel to DCA. (Exhibit 4)
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US Airways has a cost structure similar to that of Delta, so it may very well see the same 

negative 20% margins that Delta experienced flying nonstop between DCA and JAN. (Exhibit 5).

Facilitating hub-and-spoke style connection options is not a stated, or even implied objective 

for the Air-21 slots. However, even if connecting options were a selling point, one must

question how long US Airways would maintain a route with low load factors and negative net 

margins. 

Frontier Airlines (“Frontier”) proposes service to Louisville, Kentucky with the available 

exemptions, but this appears to be a very limited market opportunity due to Frontier’s lack of a 

robust network at Louisville International Airport’s Standiford Field (“SDF”). Although Frontier 

commits to fly a 138-seat A-319 aircraft for the nonstop service between Louisville and DCA, its 

use of the exemptions would simply not benefit the flying public on a far-reaching basis like 

Southwest would, considering Southwest’s robust route network based at OKC. To date, 

Southwest operates 21 daily flights (all Boeing 737 aircraft) to eight cities on a nonstop basis, 

plus an additional 64 cities on a one-stop or connecting basis.

Keeping it simple, Southwest proposes to use the DCA exemptions to fly one round-trip 

flight per day between DCA and OKC, using a 137-seat Boeing 737 aircraft. SWAPA supports 

Southwest’s forecast model which projects this number to be nearly 110 passengers on each 

leg by the latter part of the first year of service. Furthermore, these passengers will likely have 

paid a significantly lower fare to travel between OKC and DCA than the US Airways’ passengers 

would be forced pay to fly between DCA and JAN. In total, Southwest’s use of the exemptions

could have a far-reaching effect on U.S. travelers. Full airplanes, low fares and sustainable 
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service should be a goal of the Department in the award of these scarce and valuable withinperimeter slots. 

III. CONCLUSION

As a representative for Southwest employees, SWAPA is acutely aware of Southwest’s

lack of access to major airports such as DCA and LGA where grandfathered rights--in some cases 

dating back before deregulation--dictate all the places where the largest U.S. domestic carrier is 

prohibited from providing its legendary low-fare service. The rare availability of two DCA 

within-perimeter slot exemptions provides the Department with a compelling opportunity to 

enable Southwest to expand its limited DCA service with a new low-fare, large aircraft nonstop 

flight to OKC, a market currently without nonstop service. By awarding the DCA slot exemptions

to Southwest, utilization of a scarce resource can be maximized to produce the greatest public 

benefits.

For the reasons stated above, SWAPA fully supports the Southwest application and 

urges the Department to grant the two currently available DCA slot exemptions to Southwest 

Airlines so that it may begin non-stop service from Oklahoma City to Washington National 

Airport.
CERTIFICATE OF SERVICE

I hereby certify that on March 20, 2012, a copy of the foregoing was served via e-mail on 

the following persons:

robert.cohn@hoganlovells.com (Frontier Airlines)

patrick.rizzi@hoganlovells.com (Frontier Airlines)

leslie.abbott@wnco.com (Southwest Airlines)

bob.kneisley@wnco.com (Southwest Airlines)

howard_kass@usairways.com (US Airways)

benjamin.slocum@usairways.com (US Airways)

susan.kurland@dot.gov

todd.homan@dot.gov

mark.kranenburg@okc.gov (Mark Kranenburg)

john.potter@mwaa.com (John E. Potter)

___________________

Therese Merrick
Exhibit #1: DCA Slots vs. Carrier Size

Based on July 2012 peak day slots. Based on schedules filed with Innovata LLC as of March 8th, 2012 and certain assumptions made about future operations. 

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

Domestic O&D Passengers

O&D Passengers By Carrier Brand YE2011Q3

Based on US Origin & Destination Survey updated as of January 10th, 2012

DCA Slot Breakdown - July 2012 

0

50

100

150

200

250

300

350

400

450

500

DCA Slots
Exhibit #2: Top DCA markets without N/S Service

Based on YE2011Q3 US Origin & Destination Survey

Fared Passengers Daily Each Way YE2011Q3

97

87

74

59

55 54 53 52 50 48

66

0

20

40

60

80

100

120

OKC TUL ICT MLI CID EYW XNA GPT BTR MGM JAN

Passengers Daily Each Way
Exhibit #3: Fare Comparison for Top DCA markets 

without N/S Service

$263.06

$254.19

$241.02

$224.80

$211.24

$200.71 $198.99

$186.76

$177.75 $174.35

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

OKC CID MGM XNA BTR TUL GPT EYW MLI ICT

O&D Net Fare

Net Fare for Fared O&D Passengers YE2011Q3

Based on YE2011Q3 US Origin & Destination Survey. Fare is net of estimated taxes and government fees.
Exhibit #4: Historic DCA – JAN Performance

69.9%

58.8%

57.4%

59.0%

55.4%

46.5%

47.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

2005 2006 2007 2008 2009 2010 2011*

Load Factor

Delta Airlines Bidirectional Load Factor

Sourced from T100 Segment data filled as of 02/23/2011 *Data is through November 2011

Delta Airlines Average Onboard Passengers Per Flight

33

29 28 28

27

24

29

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009 2010 2011*

Onboard Passengers

Sourced from T100 Segment data filled as of 02/23/2011 *Data is through November 2011
Exhibit #5: Estimated Delta Performance

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

Total Segment Cost Total Revenue Allocated to

Segment

Estimated Ancillary Revenue Prorated to

Segment

Prorated Portion of Connect Revenue

Local Revenue

Total Segment Cost

$5,159,490

$3,447,182

($1,712,308) Estimated Segment Loss

Bidirectional Delta Segment Profit(Loss) for DCA-JAN

Based on O&D Survey, T-100, and Form 41 data for the YE2011Q3. Segment costs includes direct, indirect, CPA, and ownership costs associated with ASA or 

Comair flying a CRJ-700 with 65 seats for Delta Airlines. Fuel was assumed to by at average cost for the time frame for the Delta domestic system. Proration of 

connect revenue was done on a individual ticket basis and used the common SQRT(Segment A)/(SQRT(Segment A)+SQRT(Segment B)) method.

Summary Table

Local Passengers 11,493

Connecting Passengers 4,685

Total Onboard Passengers 16,628

Local Revenue $2,734,428

Prorated Portion of Connect Revenue $551,629

Beyond Portion of Connect Revenue $536,608

Estimated Ancillary Revenue Prorated to Segment $161,125

Total Segment Revenue $3,447,182

Departures 622

Estimated Cost Per Departure $8,295 ($3,822 per hour, 14.84¢ per ASM)

Total Cost $5,159,490

Profit (Loss) ($1,712,308)