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, ) Docket DOT-OST-2000-7182

Subparts K and S, pursuant to 49 U.S.C. )

§ 41718(b) )

)

For service between Kansas City, MO and )

Ronald Reagan Washington National Airport )

(DCA-MCI) )

_____________________________________ )

APPLICATION OF 

SOUTHWEST AIRLINES CO. 

Communications 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

Mark Shaw Senior Attorney

 Vice President General Counsel & SOUTHWEST AIRLINES CO.

 Corporate Secretary 919 18th Street, NW

SOUTHWEST AIRLINES CO. Suite 600

2702 Love Field Drive Washington, DC 20006

Dallas, TX 75235-1611 bob.kneisley@wnco.com

(202) 263-6284

March 25, 2014
1

BEFORE THE

OFFICE OF THE SECRETARY

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

_____________________________________

)

Application of )

)

Southwest Airlines Co. )

)

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

Subparts K and S, pursuant to 49 U.S.C. )

§ 41718(b) )

)

For service between Kansas City, MO and )

Ronald Reagan Washington National Airport )

(DCA-MCI) )

_____________________________________ )

APPLICATION OF 

SOUTHWEST AIRLINES CO. 

On March 5, 2014, the Department of Transportation (“DOT” or “Department”) 

issued a Notice establishing a proceeding pursuant to 49 U.S.C. § 41718(b) to 

permanently reallocate two Ronald Reagan Washington National Airport (“Washington 

National Airport” or “DCA”) slot exemptions previously awarded to Republic Airline Inc. 

(“Republic”). The Notice invites applications from air carriers using Stage 3 aircraft for 

service to a small or medium hub airport within the 1,250-mile perimeter established for 

civil operations at Washington National Airport under Title 49 U.S.C. § 49109. 

The Department previously awarded these slot exemptions to Republic to 

provide competitive service between DCA and Kansas City International Airport 
2

(“MCI”).

1

 When Republic announced that it would terminate its service on February 1, 

2014, the Department authorized Southwest Airlines (“Southwest”) to use the slot 

exemptions to serve the DCA-MCI route on a pendente lite basis.2 Southwest now 

applies to provide this valuable service on a permanent basis, and proposes to further 

leverage the scarce slot exemptions by providing one-stop, same-plane service 

between DCA and Oakland International Airport (“OAK”) via MCI. See Exhibit WN-1.

As set forth in the Department’s March 5, 2014 Notice, the Wendell H. Ford 

Aviation Investment and Reform Act for the 21st Century (“AIR-21”), as amended by the 

Vision 100 Century of Aviation Reauthorization Act of 2003 (“Vision 100”), directs the 

Department to grant inside-perimeter slot exemptions at DCA consistent with Title 49 

U.S.C. § 41718(b) 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;

(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.

In its Notice, DOT reiterates that “the Department has the discretion to premise an 

award of within-perimeter slot exemptions on the satisfaction of less than the greatest 

 

1

This service was most recently provided by Frontier Airlines, then a wholly-owned subsidiary of Republic

Airways. 

2 Order Confirming Grant of Temporary Slot Exemption Authority, Order 2014-1-6, Docket DOT-OST2000-7182 (Jan. 27, 2014).
3

number of criteria, or even one criterion listed in Section 41718(b), based upon the 

Department’s analysis of the relative merits of each carrier’s proposal ....”3

Southwest’s proposed continuation of its service to Kansas City, a medium hub 

airport as defined by the FAA,

4 would significantly advance the statutory goals of AIR21 and Vision 100 by: (1) providing strong low-fare competition on a monopoly DCA 

route; (2) offering the only large-jet service in the market and significantly increasing the 

available capacity on this otherwise under-served route; and (3) providing one-stop, 

same-plane service between DCA and OAK, the largest domestic airport without direct 

service to DCA. 

I. Southwest’s DCA-MCI Service Will Produce Maximum Competitive Benefits 

by Providing Critical Low-Fare Competition on a Monopoly Route

Southwest’s proposed service would fulfill one of the most critical statutory 

criteria for the award of DCA slot exemptions, providing low-fare competition on a 

monopoly route. Absent Southwest’s service, the only nonstop option in the DCA-MCI 

market would be high-fare service on small, regional jet aircraft by US Airways. 

Southwest’s competition is essential to maintaining low fares in this important market. 

As shown in Exhibit WN-2, US Airways charges significantly higher fares in its DCA 

inside-perimeter monopoly markets than it does when it faces LCC competition. 

Southwest’s current DCA-MCI fares average $147, offering a considerable savings to 

consumers. If Southwest were forced to exit the market, average fares in the market 

would increase sharply, by as much as 21% based on US Airway’s fares in other DCA 

monopoly markets. See Exhibit WN-2.

 

3 Notice Establishing Slot Exemption Proceeding, pg. 2, Docket DOT-OST-2000-7182 (March 5, 2014).

4

Based on the FAA’s Primary Airport Enplanement Activity Summary for Calendar Year 1997. 
4

Even in the relatively short period of time that Southwest has served this route,

and without the benefit of advance marketing prior to its entry, Southwest’s low-fare 

service has been extremely well received. The flight now achieves an 85% load factor

and has garnered significant support from the community and its elected officials. See 

Exhibit WN-3 and Attachment 1. 

II. Without Southwest’s Service, Kansas City Would be DCA’s Most UnderServed Medium/Large Market Within the DCA Perimeter 

Today, Kansas City International Airport serves nearly ten million annual 

passengers from Missouri and surrounding states. The states and communities that 

rely on MCI for air service have important ties to the federal government and the 

Washington, D.C. area. Without Southwest’s service, Kansas City would be the most 

under-served medium or large market within the DCA perimeter. See Exhibit WN-4. 

With just one roundtrip flight a day, Southwest’s service with 143-seat Boeing 

737-700 aircraft provides nearly 50% of the seats in the market. US Airways, in 

contrast, uses E170 and CRJ regional jet aircraft with an average of only 63 seats per 

departure. Southwest would achieve 128% greater efficiency, or 80 more seats per 

aircraft, on the DCA-MCI route than US Airways (Exhibit WN-5). 

Not only does Southwest’s service offer the comfort and capacity of a full-sized 

jet aircraft, but all Southwest Boeing 737-700s are equipped with gate-to-gate Wi-Fi, 

beneficial to both business and leisure travelers. In addition, under Southwest’s “Bags 

Fly Free” policy, unmatched in the industry, passengers are able to check up to two 

bags for no additional cost, offering an outstanding value for consumers, particularly

families, and a true choice in air travel. 
5

III. Southwest Will Further Leverage the Slot Exemptions by Providing SamePlane Service between DCA and OAK, As Well As Numerous One-Stop 

Beyond-Perimeter Connecting Options

In addition to the significant benefits to local consumers in the DCA-MCI nonstop 

market, Southwest would provide daily, same-plane service between OAK and DCA via 

Kansas City. Southwest’s proposed same-plane DCA-MCI-OAK service will benefit 

thousands of Washington D.C. and Bay Area passengers annually by providing a more 

convenient option than is currently available between DCA and OAK. OAK, which 

serves the Oakland/East Bay area with a population of roughly 2.5 million, 5is the 

largest airport beyond DCA’s perimeter without direct flights today. See Exhibit WN-6.

Southwest’s DCA-MCI service would also provide efficient one-stop connecting 

options via MCI between DCA and eight other important beyond-perimeter cities, many 

with limited service to DCA – Albuquerque, Denver, Las Vegas, Los Angeles, Phoenix, 

Portland, San Diego and Seattle.

6 See Exhibit WN-1. Southwest’s ability to integrate

the DCA-MCI service into its extensive route network will provide unmatched low-fare 

access to DCA. This will offer substantial benefits to travelers and cities both inside and 

outside the DCA perimeter, again making optimal use of these two valuable slot 

exemptions.

 

5

Based on the population of Alameda and Contra Costa Counties alone. Many more passengers in 

counties such as Marin, Napa, and Sonoma also fly out of OAK. 

6

 Southwest also provides one-stop connecting service via MCI between DCA and the following insideperimeter cities: Chicago, Dallas, Houston, Indianapolis, Milwaukee, Nashville and St. Louis.
6

Conclusion

For the reasons stated above, we urge the Department to grant the two slot 

exemptions at issue in this proceeding to Southwest Airlines to enable it to continue 

providing low-fare, large-jet competitive service on the MCI-DCA route, with same-plane 

service between DCA and OAK via MCI. 

Sincerely,

__________________________

Robert W. Kneisley

March 25, 2014
CERTIFICATE OF SERVICE

I hereby certify that on March 25, 2014, a copy of the foregoing was served via email on the following persons:

msinick@ssd.com (Alaska Airlines)

howard.kass@aa.com (American Airlines)

francis.heil@aa.com (American Airlines)

sascha.vanderbellen@delta.com (Delta Air Lines)

robert.cohn@hoganlovells.com (Republic Airways)

patrick.rizzi@hoganlovells.com (Republic Airways)

robert.land@jetblue.com (JetBlue Airways)

jhill@dowlohnes.com (JetBlue Airways)

perkmann@dowlohnes.com (JetBlue Airways)

shawn.voyles@flypex.com (People Express)

dkirstein@yklaw.com (Spirit Airlines)

jyoung@yklaw.com (Spirit Airlines)

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

dan.weiss@united.com (United Air Lines)

pmurphy@lopmurphy.com (USA3000)

john.varley@virginamerica.com (Virgin America) 

susan.kurland@dot.gov

bob.goldner@dot.gov

james.dann@dot.gov

todd.homan@dot.gov

peter.irvine@dot.gov

brian.ctr.meehan@faa.gov

Mark D. VanLoh, A.A.E.

Director of Aviation

Kansas City International Airport

Mark.VanLoh@kcmo.org

Deborah Ale Flint

Aviation Director for the Port of Oakland

Oakland International Airport

dale@portoakland.com

John E. Potter

President and Chief Executive Officer 

Metropolitan Washington Airports Authority

john.potter@mwaa.com

info@airlineinfo.com

__________________________

Leslie C. Abbott
OAK OAK OAK

DCA DCA

MCI MCI

LAS LAS LAS LAS

LAX LAX LAX LAX

SAN SAN SAN SAN

DEN DEN DEN DEN

PHX PHX PHX PHX

ABQ ABQ ABQ

PDX PDX PDX PDX

SEA SEA SEA SEA

Southwest Airlines’ Proposed DCA-MCI Service

Proposed DCA Route

Direct OAK Service

Current WN Beyond MCI Routes 

 

Note: Includes Seattle which is served seasonally.

Source: Innovata Schedule data for Wednesday, March 12, 2014.

Aircraft to be Used: B737-700

Seats per Aircraft: 143

Daily DCA Departures: 1

Exhibit WN-1
$207

$188

$171

$147

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

$190

$200

$210

Current WN DCA-MCI Fare Current DCA-MCI Average

Fare (All Carriers)

Current US DCA-MCI Average

Fare

US DCA-MCI Fare at US DCA

Monopoly Pricing

Average One-Way

DCA Fare

Without Competition from Southwest, US Airways

DCA-MCI Fares Would Increase

1/ Latest available WN average local fare on DCA-MCI nonstop (week of March 17, 2014).

2/ Derived from a yield curve that plots US Airways’ yields in monopoly markets at DCA. The equation is 3404.7(distance)-0.737

Note: Average fare paid per mile excludes zero fare passengers (frequent flyer redemptions, etc.). Includes carriers’ average per-passenger baggage and cancellation/rebooking fees.

Source: U.S. DOT, Origin-Destination Passenger Survey, YE Q3 2013, via DIIO. 

Exhibit WN-2

/1

/2
Even Without Advance Marketing, Southwest’s Low-Fare Service Has Been Well 

Received by Consumers and Has Achieved an 85% Load Factor

45%

49%

41%

64%

70%

85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2/9 2/16 2/23 3/2 3/9 3/17

WN DCA-MCI

Load Factor

Source: Southwest Airlines.

Exhibit WN-3

Based on Southwest internal data for the period February 9, 2014 to March 21, 2014. 

Week Beginning
Without Southwest's Service, MCI would be DCA's Most Under-Served 

Medium/Large Market Inside the Perimeter

1.38

0.78

0.70 0.68 0.66 0.62

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

MCI MCO MSY FLL TPA STL

DCA O&D

Passengers per

Seat Departure

1Includes markets with 200 or more passengers per day each way from DCA.

Source: Innovata Schedule data for March 12, 2014; U.S. DOT Origin-Passenger Survey, YE Q3 2013, via Diio.

 259 991 264 646 509 296

Passengers per

Day Each Way

Exhibit WN-4
0

20

40

60

80

100

120

140

160

Southwest Frontier U.S. Airways

Average Seats per

DCA-MCI Departure

Southwest’s Average DCA-MCI Seats per Departure 

Is More Than Double US Airways’ Average

143

99

63

(737-700) (E190) (2-E170, 1-CRJ)

+44%

+44 Seats

+128%

+80 Seats

Source: Innovata Schedule data for March 12, 2014 and January 8, 2014 for Frontier.

Exhibit WN-5
OAK is the Largest Domestic Airport Without Direct Service to DCA

9.7

8.7 8.6 8.4

7.7

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

OAK SNA SMF SJC SAT

Total Domestic Onboard

Passengers (Millions)

Source: U.S. DOT T-100 Data, YE Nov 2013, via Diio.

Exhibit WN-6

Largest U.S. Airports Without Direct (Same-Plane) Service to DCA
ATTACHMENT 1