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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

REPUBLIC AIRLINE INC.

for an exemption from 14 CFR Part 93 under 49

U.S.C. § 41714(d)

)

)

)

)

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)

)

Docket DOT-OST-1999-6240

Docket DOT-OST-2013-0086

JOINT NOTICE OF

REPUBLIC AIRLINE INC. AND SHUTTLE AMERICA CORPORATION

CONCERNING SLOT SLIDE EXEMPTION AUTHORITY

Communications with respect to this document should be addressed to:

Ethan J. Blank

Vice President, General Counsel

REPUBLIC AIRWAYS HOLDINGS INC.

8909 Purdue Road

Indianapolis, Indiana 46268

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

Columbia Square

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

robert.cohn@hoganlovells.com

patrick.rizzi@hoganlovells.com

Counsel for

REPUBLIC AIRLINE INC. and

SHUTTLE AMERICA

CORPORATION

January 6, 2014
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BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of

REPUBLIC AIRLINE INC.

for an exemption from 14 CFR Part 93 under 49

U.S.C. § 41714(d)

)

)

)

)

)

)

)

)

Docket DOT-OST-1999-6240

Docket DOT-OST-2013-0086

January 6, 2014

JOINT NOTICE OF

REPUBLIC AIRLINE INC. AND SHUTTLE AMERICA CORPORATION

CONCERNING SLOT SLIDE EXEMPTION AUTHORITY

Republic Airline Inc. (“Republic”) and its corporate affiliate, Shuttle America

Corporation (“Shuttle America”), jointly notify the Department of Shuttle America’s

planned use of three DCA “slot slide exemptions” issued to its sister carrier Republic,

beginning on or about March 1, 2014. The flights will be operated under the Delta

Connection brand serving Madison, Wisconsin and Omaha, Nebraska, the current

DOT-approved destinations, in their currently approved time periods.

Republic and Shuttle America do not believe that Department approval to

enable Shuttle America to utilize the three slot slide exemptions is required, because

Republic and Shuttle America are commonly owned and are deemed to be the same

carrier for purposes of the Department’s slot rules (14 C.F.R. § 93.213). As a result,

the utilization of the slot slide exemptions by Shuttle America would not constitute a

“transfer” of the slot exemptions. However, to the extent necessary, Republic and

Shuttle America request approval to enable Shuttle America to utilize the slot slide

exemptions.
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As explained below, the exemptions will continue to meet the statutory

requirements, including the “exceptional circumstances” standard, and would be in

the public interest. The operation of the slot slide exemptions by Shuttle America

would permit the continuation of highly beneficial DCA nonstop service that has been

critical to Madison and Omaha. The service will benefit consumers and competition

by continuing Madison’s only nonstop DCA service and Omaha’s only nonstop DCA

competition to US Airways.

To the extent that the Department determines that approval is required,

Republic and Shuttle America request expedited action. These slot slide exemptions

have been used by Republic for nonstop DCA service to Madison and Omaha under

the Frontier Airlines brand. Following the recent sale of Frontier, Frontier has advised

Republic that it will not continue to hold out service between DCA and

Madison/Omaha as of March 1, 2014. Expedited action is necessary to ensure that

DCA service to Madison and Omaha continues without interruption.

BACKGROUND

This Notice involves the following three DCA slot slide exemptions:

#4126/1236 (Madison),

#4124/1087 (Omaha), and

#4137/1001 (Omaha).

Slot slide exemption #4137/1001. This slot slide exemption was originally

granted to Midwest Express Airlines (“Midwest Express”)1for service to Omaha. In

1 DOT Order 1994-9-49.
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2011, after Midwest was acquired by Republic Airways Holdings Inc. (“RJET”), the

Department approved Republic’s request to retain the slot slide exemption.2This slot

slide exemption is currently used for service to Omaha.3

Slot slide exemptions #4126/1236 and #4124/1087. These slot slide

exemptions were originally granted to Midwest Express for DCA-Milwaukee service.4

In 2011, the Department granted Republic’s request to retain these slot slide

exemptions after RJET acquired Midwest5and, in 2013, the Department authorized

Republic to use the slot exemptions for service to Madison (slot #4126/1236) and to

Omaha (slot #4124/1087).6

Republic currently utilizes these slot slide exemptions to serve DCA-Madison

and DCA-Omaha on behalf of Frontier. However, Frontier has recently been sold,

and it does not plan to continue to hold out DCA-Madison/Omaha service after March

1, 2014. Shuttle America, Republic’s sister carrier, plans to continue these services

to Madison and Omaha using these slot slide exemptions under the Delta Connection

brand pursuant to Shuttle America’s existing fee-for-service/codesharing agreement

with Delta.

DISCUSSION

Shuttle America’s DCA service for Madison and Omaha will continue to satisfy

the “exceptional circumstances” requirement and each of the “statutory operational

requirements” under 49 U.S.C. § 41714(d)(1)(A)-(E).

2 DOT Notice, served April 19, 2011 (Docket DOT-OST No. 49741).

3

This slot slide exemption may be used for service to Omaha or Kansas City. See DOT Notice, August 13,

2013 (Docket DOT-OST-2013-0086). The Joint Movants wish to retain that flexibility.

4 DOT Order 1999-11-4.

5 DOT Notice, April 14, 2011 (Docket DOT-OST-1999-6240)

6 DOT Notice, August 13, 2013 (Docket DOT-OST-1999-6240).
Joint Notice of Republic and Shuttle America

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With respect to the “operational” requirements, Shuttle America’s use of the

slot slide exemptions would not:

 increase the total number of slots per day at DCA;

 increase the total number of slots at DCA from 7:00 a.m. to 9:59 p.m.;

 increase the number of operations at DCA in any one-hour period by

more than two operations;

 result in the withdrawal or reduction of slots operated by an air carrier;

and

 result in a net increase in the noise impact on surrounding communities.

With respect to the “exceptional circumstances” requirement, Shuttle America,

a limited incumbent, would continue to provide the very same beneficial DCA services

for which the Department has already determined that the exceptional circumstances

standard has been fully satisfied.

The exceptional circumstances and public interest benefits underlying the

original awards of these slot slide exemptions remain as compelling today as they

were when the Department granted them. The Department previously determined

that these slot slide exemptions met the “exceptional circumstances” requirement and

were in the public interest, concluding that the exemptions would address the needs

of small and mid-sized Midwest communities, enhance service and competition, and

improve connecting options. See DOT Order 1999-11-4, at 4; DOT Order 1994-9-49,

at 3.

The benefits resulting from Shuttle America’s operation of these services are

compelling and indisputable. The continuation of the DCA-Madison and DCA-Omaha
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flights, operated by Shuttle America, is critical to each of those communities. These

slot slide exemptions have been continuously used to provide beneficial service to

smaller communities in the Midwest. The DCA-Omaha flights have been operated

continuously for almost twenty years, since 1994. And, the DCA-Madison service is

critically important to the community, maintaining Madison’s only nonstop service to

Washington, D.C. In both cases, the communities and the traveling public have come

to rely on these services to provide critical access to the Nation’s Capital. These

flights represent important links to the Nation’s Capital and provide much-needed

service for businesses and the military to Washington, D.C.

The continuation of service to Madison is supported by particularly strong

exceptional circumstances. Madison, the capital of Wisconsin, is a smaller Midwest

community. The DCA-Madison service currently offered by Republic, to be operated

by Shuttle America, is the only nonstop service between Wisconsin’s capital and

the Nation’s capital. There are no other nonstop DCA flights to Madison. Indeed,

there is no other nonstop service between Madison and the entire Washington, D.C.

Metropolitan area. Thus, continuation of this service is a compelling exceptional

circumstance.

With respect to Omaha, the Department has expressly acknowledged that

Omaha is a city to which the exceptional circumstances requirement applied: “it is

also clear from the Congressional language that the needs of the communities of

Nebraska, especially Omaha and its surrounding area, and the intent of Midwest

to provide nonstop service are additional factors that satisfy the exceptional-
Joint Notice of Republic and Shuttle America

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circumstances requirement of the Act.” DOT Order 1994-9-49, at 3 (emphasis

added).

The DCA-Omaha service is the only competitive nonstop service between

DCA and Omaha, offering direct competition to the nonstop DCA-Omaha service

operated by US Airways, by far the largest operator at Washington National. There

are no other nonstop flights between Omaha and the Washington, D.C. Metropolitan

area. This service is also very important to military personnel traveling between the

Pentagon and U.S. Strategic Command (located at Offut Air Force Base in

Nebraska). Furthermore, the Department has twice approved slot slide exemptions

for service to Omaha. See DOT Notice, served April 19, 2011, and DOT Notice,

served August 13, 2013.

The Madison-DCA and Omaha-DCA flights are very popular as evidenced by

consistently high load factors. The DCA-Madison nonstop flights have average load

factors of approximately 75%. And, nearly 60% of the traffic uses the nonstop

flights.7The DCA-Omaha route also has consistently high load factors (nearly 80%),

with over 70% of the traffic using the nonstop flights.8The high load factors and

relatively high connecting ratios indicate that not all passengers can get on the

nonstop flights and are indicative of the need to preserve these nonstop DCA

services.

Shuttle America will enhance service by offering dual-class ERJ aircraft

(instead of Republic’s single-class service offering), thereby further enhancing

competition and service options for business and leisure travelers on this route.

7

Load Factor: T-100 (YE Jul2013); Local/Connecting: DOT O&D Survey (YE Jun2013).

8

Load Factor: T-100 (YE Jul2013); Local/Connecting: DOT O&D Survey (YE Jun2013).
Joint Notice of Republic and Shuttle America

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Moreover, passengers on the Delta Connection flights will have access to Delta’s

global frequent flyer program and to enhanced connectivity options.

In addition, the Department’s practice is to authorize slot slide exemptions to

“carriers holding a limited number of slots at Washington National.” DOT Order 1994-

9-49, at 3; DOT Order 99-11-4, at 2. The Republic carriers (Republic, Shuttle

America, and Chautauqua) hold only a limited number of DCA slots. In fact, together

they hold only six DCA air carrier slot exemptions and four DCA commuter slot

exemptions.9

This request does not involve a transfer of the slot slide exemptions and thus

is consistent with 49 U.S.C. § 41714 and the applicable slot slide exemption orders.

Republic and Shuttle America are deemed to be “a single operator” under the DCA

High Density Rule, as they are both wholly-owned subsidiaries of RJET. Under 14

C.F.R. § 93.213(c) of the High Density Rule:

“For purposes of this subpart, if an air carrier, commuter operator, or

other person has more than a 50-percent ownership or control of one

or more other air carriers, commuter operators, or other persons, they

shall be considered to be a single air carrier, commuter operator, or

person. In addition, if a single company has more than a 50-percent

ownership or control of two or more air carriers and/or commuter

operators or any combination thereof, those air carriers and/or

commuter operators shall be considered to be a single operator.

A single operator may be considered to be both an air carrier and

commuter operator for purposes of this subpart.” (emphasis added)

In addition, the Department’s granting Orders and Notices do not restrict the

use of these slot slide exemptions to any particular brand, nor do they prohibit their

use for codeshare services. See DOT Order 1994-9-49; DOT Notice, served April 19,

9 Republic holds only six DCA slot exemptions; Shuttle America holds no DCA slot exemptions, and

Chautauqua holds only four DCA commuter slot slide exemptions.
Joint Notice of Republic and Shuttle America

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2011 (Docket DOT-OST No. 49741); DOT Notice, August 13, 2013 (Docket DOTOST-2013-0086); DOT Order 1999-11-4; DOT Notice, April 14, 2011 (Docket DOTOST-1999-6240); DOT Notice, August 13, 2013 (Docket DOT-OST-1999-6240).

And, the Department has also granted slot slide exemptions for services to be

operated on behalf of mainline carriers under fee-for-service/codeshare

arrangements without considering such arrangements to constitute a “transfer” of the

slot slide exemptions. For example, by DOT Order 2003-9-30, the Department

granted Colgan and Chautauqua slot slide exemptions, over the objection of another

carrier, knowing that they would be used for US Airways Express flights. And, the

Department recently approved an amendment to Chautauqua’s slot slide exemptions

to authorize Republic to utilize them for service to the same destinations (Columbus,

Ohio; Indianapolis, Indiana) on behalf of US Airways Express. See DOT Notice,

August 13, 2013 (Docket DOT-OST-2003-15989).
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CONCLUSION

To the extent that DOT believes approval to be necessary, Republic and

Shuttle America request that the Department promptly approve Shuttle America’s

utilization of three slot slide exemptions issued to its sister carrier, Republic, for

service to Omaha and Madison, for the reasons discussed above.

Respectfully submitted,

__________________________________

Robert E. Cohn

Patrick R. Rizzi

HOGAN LOVELLS US LLP

555 Thirteenth Street, NW

Washington, DC 20004

+1 202 637 4999/5659

Counsel for

Republic Airline Inc. and

Shuttle America Corporation
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CERTIFICATE OF SERVICE

I hereby certify that a copy of the Joint Notice of Republic Airline Inc. and

Shuttle America Corporation has been served this 6th day of January 2014, upon

each of the following addresses:

bob.kneisley@wnco.com

marshall.sinick@squiresanders.com

robert.wirick@aa.com

francis.heil@aa.com

sascha.vanderbellen@delta.com

jhill@cooley.com

jyoung@yklaw.com

dkirstein@yklaw.com

dan.weiss@united.com

steve.morrissey@united.com

Thomas.Ting@suncountry.com

howard_kass@usairways.com

benjamin.slocum@usairways.com

anita.mosner@hklaw.com

barbara.russell@virginamerica.com

brian.ctr.meehan@faa.gov

reese.davidson@dot.gov

cindy.baraban@dot.gov

Kevin.Schlemmer@dot.gov

Dennis.DeVany@dot.gov

Rob.Hawks@faa.gov

Patrick Rizzi