- •'"••'ORyAT-Oi ; ' '"•li'C : • * >"|('^ ' •

• 120 0 Ne w Jerse y Avenue , S.E

. U.S

. Departmen t ' : . . 1 •> ! ''. M ..- • Washington , D.C

. 2059 0 o f Transportatio n Researc h an d : ' 3 ' \ > C g Innovativ e Technolog y Administratio n JohnVarle y Ma y 17,201 1 Senio r Vic e Presiden t

an dGenera l Counse l Virgi n Americ a 55 5 Airport

Boulevar d Burlingame,C A 9401 0 Revie w o f Staf f Actio n Dea r Mr , Varley : Base do n m

y revie w o f

th e Docke t

DOT-OST-2011-0016, 1 a mmodifyin g th e Januar y 21 , 201 1 staf f actio n whic h require dVirgi n Americ at o submi t Lati n Americ aentity reports . Thus , i n accordanc e with 1 4 CF R385.33, 1 a mgrantin g Virgi n Americ apartia l relie f b y establishin g a

n effectiv e dat e o f

Januar y 1 , 201 1 fo r

Lati n Americ aentit y reporting
. Virgi n America' s firs t quarterl y financia l report

for th e Lati n Americ aentit y breakou t wil l b e du e a

t th e Bureau o f Transportatio n Statistic s (BTS ) o n o r befor e Augus t

10 , 2011
. Backgroun d I n Decembe r

2010 , Virgi n Americ aoperate d1 2 roun dtri p flight s betwee n Sa n Francisco , Californi aan dSa n Jos e de l Cabo , Mexico
. O n Januar y 2011 , Virgi n Americ aincrease dit s operation s t o Mexic o s o tha t i t i s no w providin g th e followin g service ; Sa n Francisc o - Sa

n Jos e de l Cab o 5 weekl y roun dtrip s Lo s Angele s - Cancu n 5 weekl y roun dtrip s Sa n Francisc o - Cancu n 3 weekl y roun dtrip s O n Januar y 7 , 2011 , Virgi n Americ arequeste dawaive r fro mLati n Americ aentity reportin g base do n it s belie f

tha t it s operation s t o Mexic o wer e limite di n scop e an dthat

BT S grante da similar waive r i n 200 4 t o Je t

Blu e whe n JetBlu e inaugurate dservic e t o th e Caribbean
. Virgi n Americ astate dit s flight s t o Mexic o accoun t for onl y 2.7 % of

it s tota l flights
. O n January 31 , 2011 , Virgi n Americ asubmitte dapetitio n fo r revie w o f

staf f actio n an damotio n t o sta y th e effectivenes s o f

staf f action
. Virgi n Americ aargue s tha t th e initia l decisio n i s contrary t o th e Department' s rules , i s substantiall y deficient , an dinvolve s asubstantia l an d importan t questio n o f

policy
. Specifically , Virgi n Americ aclaim s tha t BT S ignore dth e previou s JetBlu e waive r

an ddi dno t

provid e abrie f

referenc e t o th e righ t

o f aggrieve dpartie s t o petitio n th e Reviewin g Official for revie w unde r

applicabl e procedura l rule s includin g astatemen t o f tim e withi n suc h petition s for

revie w mus t

b e filed
.O n Februar y 9 , 2011 , Alask aAirline s (Alaska ) answere di n oppositio n t o th e Petitio n for Revie w of staf f action
. Alask abelieve s that th e rea l reaso n for

Virgi n America' s waive r reques t i s no t th e "burden " of

Lati n Americ aentit y reporting , bu t rathe r th e hop e t o analyz e Alask aAirlines ' Lati n Americ aentit y report s whil e Virgi n America' s Mexic o operationa l expense s ar e "shielded " i n Virgi n America' s domesti c reports . Alask abelieve s th e gran t o f awaive r woul dgiv e Virgi n Americ apreferentia l treatmen t givin g i t a n unfai r competitiv e advantag e ove r Alaska' s Lati n America n operations
. Also , Alask astate dtha t sinc e 200 4 (th e tim e whe n JetBlu e wa s grante dit s waiver), advance s i

n technolog y ha s reduce dth e reportin g burden ; an dJetBlue' s Lati n Americ a operation s wer e muc h smalle r than Virgi n America' s Lati n America n operations
. O n February 15 , 2011 , Virgi n Americ afile darepl y t o Alask aAirline s comment s statin g tha t Alask ami s characterize dVirgin' s America' s waive r request . Virgi n Americ adisagree s wit h Alaska' s clai mthat

Virgi n Americ awant s t o shiel dit s Lati n America n cost s an drevenues . Virgi n Americ astate dtha t "th e underlyin g financia l performanc e metric s fo r thes e flights , includin g passenge r

uni t revenu e an duni t

cost , coul dstil l b e approximate dwith ahig h degre e of accurac y b y utilizin g Virgi n America' s syste mwid e financial filings. " Virgi n Americ aals o claim s tha

t nothin g ha s chang e i n th e way ai r carrier s maintai n .separat e system s o f

account s fo r geographi c entity reporting
. Virgi n Americ aargue dtha t it s waive r

reques t wa s consisten t

with th e JetBlu e waiver
. First , I wil l addres s Virgi n America' s procedura l complaint
. Th e Januar y 21 , 201 1 initia l decisio n denyin g Virgi n America' s waive r reques t advise dVirgi n Americ atha t i t coul dsubmi t

a petitio n fo

r reconsideratio n withi n 1 0 days
. Virgi n Americ adi dsubmi t suc h apetitio n whic h 1 hav e reviewe dan dthus
. Virgi n America' s administrativ e du e proces s right s \ver e no t violate do r denied
. Whe n BT S grante dJetBlu e it s waive r fro mLati n Americ aentit y reportin g Je t Blu e wa s operatin g 3 weekl y roun dtri p flights
. Th e waive r wa s late r rescinde dwhe n JetBlu e increase dit s operation s t o Lati n America
. I n orde r t o treat Virgi n Americ ai

n asimilar

fashio n t o JetBlue , I a mwaivin g th e Lati n Americ a entity report

for th e 4 ^ quarte r

2010 , whe n Virgi n Americ aoperate datota l of 1 2 flight s t o Mexico ; howeve r

I a mestablishin g aLati n Americ aentity reportin g dat e effectiv e a s o f Januar y 1 , 2011
. I not e that Virgi n Americ aha s schedule dapproximatel y 15 0 (light s t o Mexic o i n th e firs t quarte r 2011
. Base do n m

y review , I concu r

with Alask aAirhne s that i t woul dno t

b e aleve l playin g fiel dt o allo w Virgi n Americ at o hav e acces s t o Alaska' s Lati n Americ aentity report s whil e Virgi n America' s cos t an drevenu e dat afo r

Mexica n servic e i s burie di n th e detail s o f Virgi n America' s domesti c entit y reports . I d o no t believ e an y cos t

o r revenu e difference s betwee n Virgin' s Domesti c an dLati n Americ aservice s can b e approximate dwit h ahig h degre e o f accurac y b y utilizin g Virgi n America' s syste mwid e financia l filings
.Thi s actio n i s take n b y authorit y grante di n 1 4 CF RPar t 385.19(c) , 385.3 3 an dappeal s may b e mad e withi n 7 day s pursuan t t o th e requirement s o f

Par t 385.31(a ) o f

1 4 CFRPar

t 385
. Th e appeal woul db e mad e t o th e Directo r o f th e Bureau o f

Transportatio n Statistics , Researc h an d Innovativ e Technolog y Administratio n (RITA) , wh o woul dmak e th e fina l administrativ e determination i

n this matter . Sincerely ,

Arm e Suiss a Directo r Offic e o f Airlin e Informatio n
CC : Joh n E
. Gillic k Zuckert , Scoutt

& Rasenberge r

L.L.P
. 88 8 Seventeenth Street , NW Suit e 70 0 Washington , D C 2000 6CC :

Monnier e Stanku s Gorham Leonar d Fabriz i Smit h