Order: 2012

- 7

- 29 Served: July 25, 2012

UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY WASHINGTON, D.C.

Issued by the Department of Transportation

on the 25 th day of J uly, 2012

Docket OST

- 2012

- 0107

ORDER

SUMMARY

By this order, the Department is granting the request of Southwest Airlines Co. (Sout hwest) to move the operation of slots at Ronald Reagan Washington National Airport (Reagan National or DCA) from the 2100 hour (9:00 p.m.) to alternative times.

BACKGROUND

On June 21, 2012, Spirit Airlines, Inc. (Spirit) announced its intention to sel l to the highest bidder four within

- perimeter 1 slots 2 at DCA . All four slots are designated as arrivals or departures in the 2100 hour. Spirit notified Southwest on June 28 that it was the winning bidder. On July 2, FAA approved the transfer of the four slots to Southwest with an effective date of September 6, 2012.

On July 3, Southwest filed an application with the Department to move or “slide” the allocated arrival and departure times for the four DCA slots acquired from Spirit to other

times. Sout hwest stated that it planned to use the slots to provide low

- fare service between DCA and Saint Louis (STL) with Stage 3 noise

- compliant single

- aisle Boeing 737 aircraft, and that the 2100 hour timing of the slots precluded it from providing an effective p attern of competitive nonstop service between the two airports and from

1 49 U.S.C. Section 49109 specifies that an air carrier may not operate an aircraft nonstop in air
transportation between DCA and another airport that is more than 1,250 statute miles away from DCA.

2 A “ slot” means “the operational authority to conduct one instrument flight rule landing or take

- off operation each day during a specific hour.” 14 CFR §93.213(a)(2). Application of

SOUTHWEST AIRLINES CO.

For an exemption from 14 CFR Part 93, pursuant

to 49 U.S.C. § 41714(d)2

serving points beyond STL with workable connections. Specifically, Southwest seeks to slide one slot to the 1100 hour, one slot to the 1200 hour, and two slots to the 1800 hour. 3

T he Department is authorized by law to grant such requests, and it has in the past made such grants to carriers that meet the requisite statutory conditions. Under 49 U.S.C.

Section 41714(d) the Department may, under circumstances that it finds to be

excep tional, grant exemptions to an air carrier that holds or operates slots at Reagan National to enable it to move or “slide” the operating times of slots to different times. Such exemptions are limited and must meet explicit conditions. Under Section

41714 (d)(1), an exemption cannot be granted if it would (A) result in an increase in the total number of slots per day at Reagan National; (B) result in an increase in the total number of slots at Reagan National from 0700 to 2159; (C) increase the number of

op erations at Reagan National in any one

- hour period by more than two operations; (D) result in the withdrawal or reduction of slots operated by an air carrier; or (E) result in a net increase in noise impact on surrounding communities resulting from changes in timing of the exempted operations.

APPLICATION

In its application, Southwest asserts that it complies with all of the conditions of 49 U.S.C. Section 41714(d)(1) (A

- E), and so meets those conditions for approval of slot slides. Also, Southwest co ntends that it is in compliance with the statute’s requirement that the grant of slot slide requests must be under exceptional circumstances.

Southwest states that as a limited incumbent air carrier at DCA, 4 it does not have a sufficiently large slot po rtfolio to create a viable DCA

- STL pattern of service without the slot slides. It asserts that it is unlikely that another air carrier would trade optimal times for its newly

- acquired and less desirable 2100

- hour slots. Southwest also contends that

appro val of its request would not only bring low

- fare competition to the local DCA

- STL market, but would also facilitate roundtrip connecting opportunities to points beyond Saint Louis. These circumstances, Southwest argues, are exceptional within the meaning and intent of Section 41714(d).

RESPONSIVE PLEADINGS

No comments were filed.

3 In so requesting, Southwest notes that Slot No. 1242 is currently traded for a 2200

- hour slot through October 27, 2012. Therefore, on an interim basis, Southwest proposes to use a 0700

- hour slot (Slot No. 1099) for its slide through October 27, 2012, when Slot No. 1242 would revert to a 2100

- hour slot and would be eligible for reassignment un der Section 41714(d).

4 The term “limited incumbent air carrier” is defined in 49 U.S.C. Section 41714(h)(5).3

DECISION

We have decided to grant Southwest’s request.

As we noted previously, to qualify under 49 U.S.C. Section 41714(d) for a slide of slot operating times, the Depa rtment must find exceptional circumstances and that grant of the authority would not (A) result in an increase in the total number of slots per day at Reagan National; (B) result in an increase in the total number of slots at Reagan National

between the ho urs of 0700 through 2159; (C) increase the number of operations at Reagan National in any one

- hour period by more than two operations; (D) result in the withdrawal or reduction of slots operated by an air carrier; and (E) result in a net increase

in noise impact on surrounding communities resulting from changes in timing of the exempted operations. Southwest has stated that it has complied with all of the conditions specified in 49 U.S.C. Section 41714(d )(1)(A

- E), and no party has disputed these
representa tions.

With regard to the two operations per hour criterion (C, above), we have reviewed, in conjunction with the FAA Slot Administration Office, our past actions granting exemptions for the reassignment of Reagan National slots pursuant to 49 U.S.C. Se ction 41714(d), and we have found that the slot times requested by the applicant would not violate the two slot slides per hour criterion. As no issues with regard to the other four conditions appear, we find that Southwest’s request meets the five statut ory criteria in Section 41714(d)(1)(A

- E).

Insofar as its claim to “exceptional circumstances,” Southwest is a limited incumbent at DCA with a constrained ability to trade slots within its own portfolio to create a viable

schedule between DCA and STL. W e agree that 2100

- hour slots have little or no utility to a carrier that has few other slots. While other alternatives may exist that could enable Southwest to create a viable pattern of service in the long

- term, none are as practical or sure as the appro ach they have pursued here

-- that of seeking authority under Section 41714(d) to move 2100

- hour slots to other available times. Precisely because the flexibility of Southwest, a limited incumbent, is so constrained, its circumstances are exceptional.

A DMINISTRATIVE TERMS

As the FAA slot regulation makes clear, “slot(s) do not represent a property right but represent an operating privilege subject to absolute FAA control (and) slots may be withdrawn at any time to fulfill the Department’s operating need s...” 14 CFR Section 93.223(a). The exemptions authorized by this Order for Southwest must be used only by Southwest to provide nonstop service between STL and DCA.

The Department is authorizing the movement of certain slot operations by this ord er on the basis that the services proposed by the applicant meet the statutory requirements of4

49 U.S.C. Section 41714(d). The Department reserves the right to modify or terminate such authority if the Department determines that, due to changed circumstan ces, these criteria are no longer satisfied by the applicant’s use of the authority. Under the provisions of 49 U.S.C. Section 41714(j), the carrier may not sell, lease, or otherwise

transfer the subject exemption, except through an air carrier merger or acquisition.

This Order is issued under authority delegated in 49 CFR Section 1.56a(f)(1).

ACCORDINGLY

,

1. The Department grants an exemption from 14 CFR Part 93, subparts K and S to

Southwest Airlines Co. to the extent that Southwest is allowed to move the operation of the subject 2100

- hour slots at Ronald Reagan Washington National Airport as follows:

Slot No. 1383 to the 1100

- 1159 period, Slot No. 1535 to the 1200

- 1259 period, and Slot Nos. 1536 and 1242, to the 1800

- 1859 period, and Slot No. 10 99 to the 1800

- 1859 period for September 6, 2012

, through October 27 , 2012, only, until Slot No. 1242 becomes available;

2. This exemption is granted only to the extent that Southwest is allowed to move the operation of Slot Nos. 1383, 1535, 1536, an d 1242 for the purpose of providing nonstop service between Saint Louis (STL) and Ronald Reagan Washington National Airport (DCA). Should Southwest operate these slots to provide service to an airport other than STL, this exemption will expire and the o peration of these slots will revert back to the 2100 hour;

3. This exemption is granted only to the extent that Southwest is allowed to move the operation of the slots identified above by this Order and, therefore, Southwest continues to be subject to all of the other requirements delineated in 14 CFR Part 93, Subparts K and S including, but not limited to, the reporting provisions and use or lose requirements;

4. The exemption may not be sold, leased, or otherwise transferred by Southwest, except throu gh an air carrier merger or acquisition.

5. We direct Southwest to contact the Federal Aviation Administration’s Slot Administration Office prior to beginning any operations authorized under this Order to determine the effective date for the exemption gra nted here. The Federal Aviation Administration will assign slot numbers for the slots listed in ordering paragraph 1;

6. This exemption will become effective September 6, 2012; except for Slot

No. 1242, which will become effective October 28

, 2012; and5

7. We shall serve a copy of this Order on the parties in this docket.

By:

SUSAN L. KURLAND Assistant Secretary for Aviation

and International Affairs

(SEAL)

An electronic version of this document will be made availa ble on the World Wide Web at: http://dms.dot.gov/