Order 2010-12-16

Served: December 10, 2010

 UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

 OFFICE OF THE SECRETARY

 WASHINGTON, D.C.

 Issued by the Department of Transportation

 on the 10th day of December, 2010

Docket DOT-OST-2000-7182

ORDER REALLOCATING WITHIN-PERIMETER SLOT EXEMPTIONS AT

RONALD REAGAN WASHINGTON NATIONAL AIRPORT

SUMMARY

By this Order, the Department is reallocating the two within-perimeter slot exemptions at 

Ronald Reagan Washington National Airport (DCA) previously awarded to Midwest

Airlines, Inc. (Midwest) by Order 2004-4-2 to MN Airlines, LLC d/b/a Sun Country 

Airlines (Sun Country). Sun Country will provide a daily nonstop round trip to Lansing, 

Michigan, utilizing 129-seat or 162-seat Boeing B737 aircraft.

BACKGROUND

On April 1, 2004, pursuant to the provisions of the Vision 100 — Century of Aviation 

Reauthorization Act, P.L. 108-176 (Vision 100), the Department issued Order 2004-4-2, 

which awarded a total of 10 “within perimeter” slot exemptions at DCA, to be operated 

with Stage 3 aircraft. Among the awards were two slot exemptions to Midwest, to 

provide a daily nonstop round trip to Kansas City, Missouri, a medium hub. Midwest 

initiated service in the DCA-Kansas City market using those two slot exemptions on 

October 31, 2004.

Applications of

AIRTRAN AIRWAYS, INC.

MN AIRLINES, LLC d/b/a SUN COUNTRY 

AIRLINES

REPUBLIC AIRLINE, INC.

SOUTHWEST AIRLINES CO.

US AIRWAYS, INC.

For exemptions from 14 C.F.R. Part 93, Subparts 

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

Special rules for Ronald Reagan Washington 

National Airport (within-perimeter slot 

exemptions)
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On July 31, 2009, Republic Airways Holdings, Inc., the parent of Republic Airline Inc. 

(Republic), acquired 100% of the stock of Midwest Air Group, Inc., which became a 

wholly owned subsidiary of Republic Airways Holdings, Inc. In turn, Midwest became a

wholly-owned subsidy of Republic Airways Holdings, Inc.

By letter to the Department dated September 30, 2009, Republic announced its plans to 

begin operating all of Midwest’s schedules and become holder and operator of Midwest’s 

Vision 100 “within perimeter” slot exemptions at DCA awarded to serve Kansas City, 

effective November 3, 2009.

By letter dated November 25, 2009, the Department informed Republic and Midwest that 

the transfer of the slot exemptions under the circumstances described in Republic’s 

September 30, 2009, letter would contravene the statutory proscription against slot 

exemptions being “bought, sold, leased or otherwise transferred by the carrier to which it 

is granted.”1 The letter explained that Midwest, the party to which the awards were 

granted, would be relinquishing its Federal Aviation Administration (FAA) and 

Department certificates and ceasing all scheduled operations under those certificates, thus 

ceasing to exist as a carrier, and that Republic had no claim to the exemptions other than 

through its transaction with Midwest. The Department’s letter also informed Republic 

that, as a result of the Department’s determination, we would withdraw the two slot 

exemptions and conduct a proceeding to reallocate them to an airline in accordance with 

Title 49 U.S.C. § 41718(b). To minimize any inconvenience to Republic and its 

passengers, the Department also informed Republic that it would be allowed to operate 

the two “within perimeter” slot exemptions between DCA and Kansas City pendente lite 

until a final determination is made with regard to these slot exemptions. The letter also 

informed Republic that it could submit an application for Kansas City (or for any other 

service it believed would best satisfy the statutory criteria).

On March 3, 2010, counsel for JetBlue Airways Corporation (JetBlue) submitted a letter 

reiterating the air carrier’s desire to gain access to DCA and urging the Department to 

immediately initiate a slot exemption proceeding to redistribute these two slot 

exemptions. The JetBlue letter also questioned the legality of Republic’s utilization of 

the five additional slot slide exemptions discussed in the Department’s 

November 25, 2009,2 letter and requested that the Department initiate a proceeding to 

reallocate all seven DCA slot holdings.3

 1 See letter dated November 25, 2009, to Republic’s counsel from Assistant Secretary Susan L. Kurland for 

a full discussion as to why the Department found that the proposed transfer would violate 

Title 49 U.S.C. 41714(j). 2 The Department instructed Republic to submit an application to retain its five slot slides within 60 days of 

the November 25, 2009, date of the letter. On January 20, 2010, Republic, d/b/a Midwest Airlines 

submitted its application to retain its slot slide exemptions at DCA and permanently retime one slot 

exemption in Dockets DOT-OST-2000-7189, DOT-OST-1999-6240 and DOT-OST No. 49741, arguing 

exceptional circumstances. 3 The Department will conduct a separate proceeding with regard to Republic’s five slot slide exemptions at 

DCA.
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On August 30, 2010, the Department initiated a reallocation proceeding, soliciting 

applications from air carriers for the two Vision 100 slot exemptions previously held by 

Midwest. As explained below, the solicitation was made for service between DCA and 

any medium hub or smaller airport within the 1,250-mile perimeter established for civil 

operations at DCA under Title 49 U.S.C. § 49109.

The selection criteria currently applicable to award the exemptions are contained in Title 

49 U.S.C. § 41718(b), which directs the Secretary to distribute within-perimeter slot 

exemptions4 in a manner that promotes air transportation: (1) by new entrant air carriers 

and limited incumbent air carriers;

5 (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 maximum 

competitive benefits, including low fares.

Further, 49 U.S.C. § 41718(c)(3) specifies additional requirements governing the award

of within-perimeter slot exemptions: “Of the exemptions granted under 

Title 49 U.S.C. § 41718: (A) without regard to the criteria contained in subsection (b)(1), 

six shall be for air transportation to small hub airports and nonhub airports;

6 (B) ten shall 

be for air transportation to medium hub and smaller airports; and (C) four shall be for air 

transportation to airports without regard to their size.” Under that provision, then, a 

maximum of four slot exemptions may be used to serve large hubs.

Midwest used the two slot exemptions for service between DCA and the Kansas City 

International Airport, a medium hub.

7

 The four slot exemptions allotted under 

§ 41718(c)(3)(C) are used by AirTran Airways, Inc. (AirTran) to serve Hartsfield-Jackson 

Atlanta International Airport (a large hub airport). Therefore, to be responsive to this 

request and eligible for award, carriers must have proposed service with Stage 3 aircraft 

to a medium hub or smaller airport within the 1,250-mile perimeter. Applicants were 

advised that proposals should also include the aircraft type, a schedule showing proposed 

times, and an approximate start-up date.

 4 AIR-21, which mandated the award of 12 within-perimeter slot exemptions as noted above, was amended 

in 2003 by P.L. 108-176, the Vision 100 – Century of Aviation Reauthorization Act. Section 425(b)(1) of 

Vision 100 increased the number of within-perimeter slot exemptions to 20. 5 A new entrant carrier is an air carrier that does not hold a slot at DCA and has never sold or given up a 

slot at the airport after December 16, 1985. 49 U.S.C. § 41714(h)(3); a limited incumbent carrier is defined 

as an air carrier or commuter operator that holds or operates (or held or operated, since December 16, 1985) 

fewer than 20 slots and slot exemptions at DCA. 49 U.S.C. § 41714(h)(5). 6 Because six of the twenty slot exemptions are used for service to small hub and nonhub airports, the new 

entrant/limited incumbent criterion must apply in this proceeding. See 49 U.S.C. 41718(c)(3)(A). 7 49 U.S.C. §§ 41714(h)(7), (8) and (9) require that hub classifications be based on the Federal Aviation 

Administration’s Primary Airport Enplanement Activity Summary for Calendar Year 1997.
- 4 -

APPLICATIONS

The Department received applications from AirTran, Republic, Southwest Airlines Co. 

(Southwest), Sun Country and US Airways, Inc. (US Airways). The proposals, 

summarized below, would be with Stage 3-compliant aircraft. Each carrier’s entire 

proposal, as well as the responses and additional comments filed, may be accessed online 

through the Federal Docket Management System at: http://www.regulations.gov by doing 

a “search” on docket number DOT-OST-2000-7182.

AirTran

AirTran applied for two slot exemptions to operate one daily nonstop round trip between 

DCA and either Fort Myers or Sarasota, Florida, at its discretion, using 117-seat Boeing 

717 or 137-seat Boeing 737 aircraft, and would be willing to operate new flights at 1100 

and 1400. AirTran asserts that its proposal will provide maximum benefits for consumers 

and communities. The carrier states that it is a limited incumbent carrier, holding fewer 

than twenty slots at DCA. It also provides a summary of the growth of its passenger 

traffic and flights operated, along with the types and names of markets it serves. It details 

the impact it has had on lowering fares by citing several specific statistics relating to its 

entry into the Atlanta market. As further example of the type of service it provides, 

AirTran highlights its rankings on the Airline Quality Rating. The carrier explains that 

business class sections are included on its aircraft, an amenity not offered on many 

aircraft operated at DCA to small and medium markets. It contends that it would provide 

additional low-fare options between DCA and Fort Myers, and summarizes the 

connections it offers at Fort Myers. Similarly, the carrier also details the existing service 

it provides at Sarasota and states that it would offer first time low-fare service between 

DCA and Sarasota. Lastly, AirTran argues that its proposal would increase competition 

and is in the public interest.

Republic

Republic seeks to obtain the two available within-perimeter slot exemptions at DCA to 

maintain its minimum service pattern of three daily nonstop flights to Kansas City. The 

carrier would continue to utilize 99-seat Embraer 190 aircraft,

8 and operate as Frontier 

Airlines branded service through FY 2011.

Republic argues that it has provided a consistent presence in the DCA-Kansas City 

market and that many of the findings the Department made in awarding the slot 

exemptions to Midwest in April 2004 hold true today, including the importance of Kansas

City as a mid-country community and business linkages the city shares with the 

Washington, D.C. Metropolitan Area. Similar to AirTran, Republic also provides a 

summary of the growth of its passenger traffic, flights operated, and a list of the markets 

it serves from Kansas City. The airline details the competitive service currently offered 

 8 Republic notes that effective December 1, 2010, all three of Republic’s nonstop DCA-Kansas City 

services will be operated with this type aircraft.
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by other carriers at DCA, Baltimore/Washington International Thurgood Marshall Airport 

(BWI) and Washington Dulles International Airport (IAD). The carrier also highlights its

ranking as the “lowest fare carrier” in the two most recent periods (4th Quarter 2009 and 

1st Quarter 2010) of the Domestic Airline Fare Consumer Report and mentions that its 

DCA-Kansas City service is part of the General Service Administration (GSA) City-Pair 

Program. Republic insists that this proceeding is atypical and if the slot exemptions are 

awarded to another carrier and city combination it would result in the elimination of 

service in the DCA-Kansas City market and cause significant harm to both the 

Washington, D.C. and Kansas City Metropolitan Areas. Lastly, Republic also argued that 

its acquisition of Midwest did not constitute a prohibited transfer of slot exemptions 

warranting our reallocation.

Southwest

Southwest applied for two slot exemptions to initiate its first ever service at DCA. The 

carrier proposes to provide a daily nonstop round trip between DCA and Kansas City, 

using 137-seat Boeing 737 aircraft, and is willing to operate new flights at 1100 and 

1400. Southwest asserts that its proposed service would advance the goals of AIR-21 and 

Vision 100 by facilitating entry by a new low-fare carrier at DCA and enable low-fare 

competition on a high-fare route. In support of its claims, the carrier provides detailed

traffic forecasts, fare savings estimates and quantifies the network benefits associated 

with adding service in the DCA-Kansas City market.

9

Sun Country

Sun Country applied for two slot exemptions to operate a daily nonstop round trip 

between DCA and Lansing, Michigan, utilizing 129-seat or 162-seat Boeing 737 aircraft, 

with two-class seating. The carrier affirms its status as a new entrant at DCA, and states 

that its service would be to a small community that currently does not have nonstop 

service to DCA. Sun Country asserts that its proposal will provide substantial benefits 

for passengers traveling between DCA and Central Michigan, by substantially reducing 

the elapsed travel time between Washington, D.C. and Lansing and offering significantly 

lower fares. In support of its claims, the carrier provides detailed traffic forecasts and 

fare savings estimates. The carrier also highlights several key attributes and statistics 

unique to Central Michigan. The airline explains that its proposal would include

continuing service to Minneapolis/St. Paul and therefore provides associated traffic 

forecasts and fare savings estimates. Sun Country argues that its proposal achieves all of 

the Vision 100 statutory criteria applicable to the proceeding and provides the traveling 

public with substantial competitive benefits.

 9 Campbell-Hill Aviation Group prepared the majority of analysis detailed in Southwest’s application and 

reply comments.
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US Airways

US Airways applied for two slot exemptions to launch daily nonstop service between 

DCA and the Pensacola Regional Airport utilizing 76-seat Embraer E-170 aircraft from 

September through February, and 86-seat Embraer E-175 aircraft from March through 

August.

10 This is the third recent slot allocation proceeding in which US Airways has 

sought slot exemptions to serve the DCA-Pensacola market. The airline states that its 

proposed service would bring convenient service and competitive benefits to consumers 

throughout the Florida-Alabama Gulf Coast Region – including Mobile, Pensacola, and 

Ft. Walton Beach – and highlights the importance that Congress has placed on 

maintaining convenient air service to small communities. US Airways argues that an 

award to it at Pensacola would benefit more passengers than currently benefit from any 

other award of AIR-21 small community slot exemptions. US Airways also notes that the 

Pensacola region’s economy is diverse and home to several military bases and defense 

installations, indicating that the economic ties between Pensacola and Washington, D.C. 

are strong. The carrier also explains that neither Pensacola nor any of the Pensacola 

region’s other airports have nonstop air service to DCA, requiring travelers to drive in 

excess of three hours for nonstop service.

RESPONSIVE PLEADINGS

The applicants submitted their responsive pleadings on October 15. Southwest and 

Republic also filed late comments. The additional comments filed by each applicant are 

summarized below.

Concerning AirTran’s Application

In its response comments, AirTran paraphrases the key attributes of its application as 

discussed above, including the proposed aircraft type (including its provision of both 

business and coach class), markets to be served, departure and arrival schedules, 

connecting opportunities, passenger demand and airfare impacts associate with its 

entrance into Atlanta and other markets, along with its public interest arguments. The 

carrier makes note of the many recent accolades and high rankings that Sarasota County 

has received from many popular business and travel publications, and details its impact 

on passenger demand and fare levels when it began service in the BWI-Sarasota market. 

AirTran reasserted its status as a limited incumbent and belief that its proposed service 

will provide the greatest benefits to consumers while allowing it to strengthen its service 

and increase low-fare travel options at DCA and popular Florida markets.

Other applicants argue that the Department should reject AirTran’s application because it 

proposes two markets as alternatives for service, giving itself the discretion to choose 

between them, and making note of the Department’s statements in previous slot 

exemption cases where a carrier has submitted multiple market applications. The 

competitors also argue that AirTran’s service commitment to Fort Myers has been 

inconsistent and question the applicability of many of the traffic-demand and fare-saving 

 10 Aircraft will be operated by US Airways or US Airways Express carriers.
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statistics used by AirTran by arguing that Atlanta and Fort Myers are not comparable 

markets. Similarly, other carriers assert that Sarasota, Atlanta and Milwaukee are not 

comparable either and therefore it is unlikely that AirTran’s proposal to serve Sarasota 

would offer similar increases in passenger demand or the fare savings experienced in 

Atlanta and Milwaukee. Other parties state that AirTran has ignored US Airways’

presence in the DCA-Fort Myers and Sarasota markets and that AirTran’s application will 

only offer duplicative service. The new entrant carriers also argue that an award to 

AirTran would not add new DCA competition. The competitors in this proceeding 

further make note of Southwest’s proposed acquisition of AirTran and argue that an 

award to AirTran may result in another proceeding shortly after the completion of this 

case as Vision 100 and AIR-21 slot exemptions are not transferable between carriers.

Concerning Republic’s Application

In submitting its additional comments, Republic reviews the key characteristics (aircraft 

type, proposed schedule, consistency of its commitment to and status as the “lowest fare 

carrier” on DCA-Kansas City route, etc.) of its application as discussed above. The

carrier also includes a letter of support for its proposal from the Kansas City Aviation 

Department, and summarizes many of the key statements the Airport Director makes in 

comparing its proposal to Southwest’s. Republic also claims that continuation of its third 

daily round trip between DCA and Kansas City would maximize the public interest and 

competitive benefits, particularly low fares. The carrier asserts its status as a limited 

incumbent stating that it controls and operates only 15 DCA slot holdings within the 

controlled hours of 0700 and 2159, which include the slot exemptions that are the subject 

of this proceeding. It explains that the award of these two slot exemptions will support 

the on-going development of its network and facilities at Kansas City, arguing that the 

loss of these two slot exemptions will significantly harm Kansas City.

Other carriers in the proceeding argue that Republic has a significant existing DCA slotholding portfolio and could take steps to maintain its existing level of DCA-Kansas City 

service without these two slot exemptions. They also note that Republic’s growth over 

the past six year at Kansas City has been modest but that it is the largest carrier in the 

DCA-Kansas City market. The other applicants state that Republic’s attempts to justify 

the need for three daily round trips in DCA-Kansas City market by contrasting its own 

service to the service provided by other carriers in the BWI-Kansas City and IAD-Kansas 

City markets is flawed because there is nothing preventing Republic from operating 

service between Kansas City and BWI or IAD. The other commenting parties argue that 

competition already exists in the DCA-Kansas City market and that Republic’s proposal 

will not result in lowered fares on the route. Several other carriers also make note of 

Republic’s use of smaller capacity aircraft, especially when compared to their respective 

proposals. The other applicants call into question several of the connecting opportunities 

touted by Republic at Kansas City. They claim that Republic, which now owns Midwest 

and Frontier Airlines, may offer connecting (through Milwaukee or Denver) and/or direct 

service to many of the important connections that Republic currently provides at Kansas 

City. The other applicants also question Republic’s arguments regarding government 
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contract airfares by explaining that they do not justify the need for more air service in the 

DCA-Kansas City market and are inaccessible to the majority of travelers.

In its late filing, Southwest provided additional analysis seeking to refute Republic’s 

claims that it offers low fares on the DCA-Kansas City route.

In response to Southwest’s late filing, Republic challenges Southwest’s arguments and 

insists that its fares are lower than average in the DCA-Kansas City market.

Concerning Southwest’s Application

Southwest submitted additional comments, which included a summary of its proposal 

discussed above and a number of detailed exhibits that claimed to rebut the specific 

analysis and arguments made by the competing applicants. It asserts both its status as a 

new entrant at DCA and as a well-known low-fare airline. The carrier claims that its 

application will produce maximum competitive benefits and fare savings. If awarded the 

slot exemptions, Southwest also states that it would intend to grow at DCA, thereby 

providing additional competition.

The competitors in this case state that two carriers, providing multiple daily flights, 

already serve the DCA-Kansas City market. When comparing Southwest’s proposal to 

their own, some applicants note that Southwest serves more domestic passengers than any 

other carrier and when compared to Kansas City, their proposals offer service to smaller 

communities. Commenting parties also make note that many of the connecting 

opportunities Southwest may offer from Kansas City already receive direct Southwest 

service from BWI or are not feasible due to the limitation associated with the timing of 

the slot exemptions. Other applicants also express doubt that Southwest could 

successfully operate at DCA with only a single daily round trip, and therefore believe the 

public would be better served by their own proposals. Other carriers also argue that 

Southwest has had ample opportunity, through the many recent DCA slot exemption 

proceedings and other industry transactions, to commence service at the airport. 

Commenting parties further assert that Southwest has overstated the benefits associated 

with its proposal, taking particular issue with the fare impact analysis Southwest 

provided, especially when considering that Southwest would only be able to offer a single 

round trip with the two slot exemptions. Finally, other carriers make mention of the 

carrier’s proposed purchase of AirTran, which may provide it an alternative means of 

entry into DCA.

In its late filing, Southwest challenges the other applicants’ claims that its proposed 

service may not be viable and reiterates its intent on expanding service at DCA after 

gaining entry. The filing also reiterates the claim that Southwest consistently offers lowfares to consumers.
- 9 -

Concerning Sun Country’s Application

In a similar manner as the other applicants, Sun Country also submitted additional 

comments. The carrier repeats many of the same arguments it made in its application as 

summarized above, including that it qualifies as a new entrant and that its proposal would 

not only provide service to a small community that currently lacks direct DCA service but 

also offer low fares. It argues that its application meets all of the applicable selection 

criteria. Sun Country also provided specific examples of the impact of fares its service 

has had in the Minneapolis/St. Paul-Portland market, and claimed that its continuing 

service to Minneapolis/St. Paul would also discipline fares in the DCA-Minneapolis/St. 

Paul market. Sun Country also argues that an overwhelming majority of Michigan’s

population is within a 90-minute drive to Lansing, so the benefits of its proposed service 

would extend beyond the Lansing Metropolitan Area.

The commenting parties express concern over the stand-alone status and financial 

viability of Sun Country’s proposed service. Without any supplemental service at DCA 

or any other East Coast airports, the other applicants note that passengers would be 

subject to significant delay and financial risks if Sun Country cancelled or delayed flights 

operated using these two exemptions. The other applicants also argue that Sun Country’s 

primary goal is to provide one-stop service in the DCA-Minneapolis/St. Paul market.

Concerning US Airways’ Application

US Airways also submitted a responsive pleading restating many of the basic elements 

contained in its application. US Airways argues that this proceeding should focus on 

small community access to DCA and maintains that when compared to other carriers at 

the airport, it provides the most small community service. It contends that DCA is 

separate and distinct from other Washington, D.C. Metropolitan Area airports, which 

include BWI and IAD, but that the airport is constrained for all carriers. The carrier 

explains that it cannot add service to a new market without reducing service to an existing 

market. US Airways maintains that intent of AIR-21 was for small communities to 

receive the maximum amount of service permitted, and confirms that its proposal would 

provide first ever service to three different small communities in the Florida-Alabama 

Gulf Coast Region.

In response to US Airways’ application, the other applicants argue that providing 

additional slots to the largest slot holder at DCA would not maximize competitive 

benefits. They claim that US Airways does not bring lower fares to markets unless the

carrier is faced with low-fare competition. Competing applicants discourage the 

Department from awarding these slot exemptions to US Airways because it would 

increase the dominance of the largest slot holder at DCA rather than provide 

opportunities to smaller DCA carriers. They also observe that the Department has twice 

rejected US Airways’ very same proposal and state that the carrier could begin service to 

Pensacola without the two slot exemptions at issue here by using other slots in its 

portfolio. Several other carriers also make note of US Airways’ use of smaller capacity 
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aircraft and note that it could provide its proposed off-season service utilizing less 

valuable commuter slots rather than these slot exemptions.

DECISION

We have decided to reallocate the two within-perimeter slot exemptions at DCA to Sun 

Country to enable it to provide nonstop service to Lansing utilizing 129-seat or 162-seat 

Boeing B737 aircraft, conditioned as described below.

All of the proposals would provide service to a medium hub and smaller airport within 

the 1,250–mile perimeter with Stage 3 aircraft, and so are responsive to the solicitation. 

The statutory criteria for assessing the proposals in this docket are set out in 49 U.S.C. § 

41718. As discussed in detail below, Sun Country’s proposal meets four out of five 

selection criteria, the maximum number possible.

11

New entrant or limited incumbent air carriers: Southwest and Sun Country qualify as

new entrants under the terms of the statute, as neither carrier operated at DCA. 

US Airways has more DCA slot holdings than any other carrier. Republic currently 

operates over 100 DCA slots for US Airways, and the carrier also has control over more 

than 25 DCA slots or slot exemptions through its subsidiaries, Midwest, Frontier 

Airlines, and Chautauqua Airlines. AirTran, one of the smaller carriers at DCA, operates

or has returned slightly more than the number of holdings that would qualify it as a

limited incumbent air carrier.

12

Communities without existing nonstop DCA service: Both Sun Country’s and US 

Airways’ applications would provide air transportation to a community without existing 

nonstop DCA service. No commercial airline currently offers nonstop service between 

DCA and Lansing or Pensacola. Republic’s proposal would maintain one of five existing 

nonstop round trips between DCA and Kansas City, while at least one weekday round trip 

is already provided from DCA to Fort Myers and Sarasota.

Small Communities: The statute does not provide a definition of a small community;

however, by comparison, Lansing and Pensacola are the smallest cities included in the 

applications. Republic does not claim that Kansas City should qualify as a small 

community under the statute, and Southwest makes only passing mention that Kansas 

City is a small community. Rather, both carriers detail the many benefits that may exist 

by connecting to their respective networks at Kansas City. Fort Myers and Sarasota have 

smaller populations than Kansas City.

13

 11 Two of the criteria are mutually exclusive in that carriers cannot have both the first nonstop service and

the second nonstop service in a market.

12 AirTran currently holds 18 DCA slots and slot exemptions and operates 24. This includes 7 slots that are 

in hours not included for the limited-incumbent determination. Previous turnbacks of slot exemptions push 

AirTran over the threshold for limited-incumbent status. See 49 U.S.C. § 41714(h)(5), 14 C.F.R. § 

93.213(a)(5), (c).

13 U.S. Census Bureau, MSA Population Estimates, July 1, 2008: Lansing – 454,035, Pensacola – 452,992, 

Fort Myers – 593,136, Sarasota – 687,823, and Kansas City – 2,002,047.
- 11 -

Competitive nonstop air transportation on a monopoly nonstop route to DCA: Only 

AirTran’s alternative proposal to serve Sarasota would provide competition on an 

existing monopoly nonstop route to DCA. As discussed above, Sun Country and 

US Airways are proposing to initiate the first nonstop service between DCA and Lansing 

and Pensacola, respectively. Republic’s application seeks to maintain its current number 

of nonstop frequencies on a route where nonstop competition already exists, while

Southwest’s application would add a third carrier providing service on the DCA-Kansas 

City route.

Maximum competitive benefits, including low fares: With respect to the criterion that the

award produce the maximum competitive benefits, including low fares, we find that 

AirTran’s, Sun Country’s and Southwest’s applications would offer more significant 

competitive benefits than the other applications. These three proposals include not only 

stated intentions to offer low fares, but ones supported by well-established carrier records

of providing low-fare service. Also, AirTran’s proposal to add competitive nonstop air 

transportation on a monopoly nonstop route to DCA (Sarasota) would be expected to 

have an immediate competitive impact on fares in that market, if AirTran chose to 

operate to Sarasota instead of Fort Myers. Republic goes to great detail to explain that its 

fares are competitive and references its ranking as the “lowest fare carrier” in the two 

most recent periods (4th Quarter 2009 and 1st Quarter 2010) of the Domestic Airline Fare 

Consumer Report. US Airways would offer the only nonstop service in the market they 

have proposed; it is therefore reasonable to assume that their service would have a more 

limited competitive impact on existing connecting services.

In other observations, we reiterate that US Airways is the single largest slot holder at 

DCA and could elect to serve Pensacola with its existing slot holdings. Of the five 

applicants, US Airways would operate the fewest passenger seats, because of the aircraft 

types it has proposed. Likewise, Republic, based on its proposed aircraft type, would 

offer fewer seats when compared to AirTran, Southwest or Sun Country. Lansing, the 

seat of Michigan’s state government with Michigan State University situated close-by, 

has a population of over 450,000. It is within a 90-minute drive of an overwhelming 

majority of the State’s entire population and is an important economic center within the 

DCA perimeter.

In summary, Sun Country is a new entrant, would provide nonstop service to a small 

community that currently does not have nonstop service to DCA, and has a history of 

offering low-fares.

14

 14 As to Republic’s arguments that we lack authority to withdraw and reallocate the slot exemptions, we 

note that we carefully considered, and rejected, these arguments in our September 25, 2009 letter to 

Republic counsel and in instituting this proceeding. As indicated above, the applicable statute, 49 U.S.C. § 

41714(j), authorizes us to take this action.
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OTHER CONDITIONS

Start-up

The Department requires that Sun Country inaugurate full service by no later than 

April 1, 2011. If, for any reason, Sun Country is not able to use these slot exemptions by 

April 1, 2011, we request that it notify the Department as soon as possible, but not later 

than ten days after the date of service of this Order.

Assignment of Slot Times

We are directing Sun Country to file in the Docket, no later than 10 business days from 

the service date of this Order, their proposed flight schedule and effective date for 

inauguration of operation authorized by this Order.

As we stated in our Notice of August 30, 49 U.S.C. Section 41718(c)(2) allows us to 

assign only one additional slot exemption per one-hour period, an increase from the 

original two per hour authorized by the Wendell H. Ford Aviation Investment and Reform 

Act for the 21st Century (AIR-21). Slot times for these two exemptions are in the 1100 

and 1400 hour periods. Almost all time periods have been fully subscribed and, thus, the 

Department may not be able to accommodate alternative slot exemption times. Sun 

Country, in accordance with statute and Department regulations, may request the FAA’s

Slot Administration Office to approve temporary exchanges of the assigned slot exemption

times with other slots or slot exemptions in a different hour for the purpose of conducting 

operations authorized by this Order. In acting on such a request, the FAA will employ 

standard practices in conjunction with applicable statutory and regulatory requirements for 

the utilization of slot times between and among individual carriers. Regardless of any

subsequently approved slot time exchanges, the slot times assigned by the Department or 

the FAA’s Slot Administration Office pursuant to this Order will be tagged such that, if 

the service granted by this Order is either suspended or is not inaugurated in a timely 

manner, the Department will withdraw the slot exemptions based on their tagged slot time 

rather than by any subsequent slot time operated.

ENVIRONMENTAL ISSUES

Although 49 U.S.C. Section 41718(e) specifically exempts our action here from the review 

under the National Environmental Policy Act,

15

 15 Section 41718(e) states, “Neither the request for, nor the granting of an exemption, under this section 

shall be considered for the purposes of any Federal law a major Federal action significantly affecting the 

quality of the human environment.”

we remain sensitive to the environmental 

impact of increased operations at DCA. Consistent with the statute, we will require that 

all operations authorized by this Order be conducted with Stage 3 aircraft. Also, under 49 

U.S.C. Section 41718(e), the Department will give DCA priority in making grants for 

airport noise compatibility planning and programs that qualify for Federal financial 

assistance.
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ADMINISTRATIVE TERMS

Under the provisions of 49 U.S.C. Section 41714(j), Sun Country may not sell, trade, 

transfer, or convey the operating authorities granted by the subject exemptions unless 

otherwise authorized therein.

Further, granting of these exemptions in no way is to be construed as allowing a carrier to 

operate services that it could not otherwise operate. Sun Country must still meet all the 

requirements of the Department of Transportation, the Federal Aviation Administration, 

including but not limited to use-or-lose provisions, and all other statutes and regulations 

governing air transportation.

This Order is issued under authority delegated in 49 C.F.R. § 1.56(a).

ACCORDINGLY,

1. The Department reallocates the two slot exemptions to MN Airlines, LLC d/b/a Sun 

Country Airlines, to enable it to provide one nonstop round trip a day between Ronald 

Reagan Washington National Airport and Lansing, Michigan;

2. The Department directs MN Airlines, LLC d/b/a Sun Country Airlines, to file in 

Docket DOT-OST-2000-7182, no later than 10 business days after the service date of this 

Order, its acceptance or rejection of this award. An acceptance filing should also include 

proposed flight schedules and effective dates of operations authorized by this Order. 

Further, MN Airlines, LLC d/b/a Sun Country Airlines must commence its proposed 

service no later than April 1, 2011. The slot exemptions granted must be conducted with 

Stage 3 aircraft, may not be used for operations between the hours of 10:00 p.m. and 6:59 

a.m., and may not increase the number of operations at Ronald Reagan Washington 

National Airport in any one-hour period during the hours between 7:00 a.m. and 9:59 

p.m. by more than three operations. MN Airlines, LLC d/b/a Sun Country Airlines is 

advised to exercise maximum flexibility in their proposed operating times to ensure 

compliance with these limits;

3. The Department directs MN Airlines, LLC d/b/a Sun Country Airlines to keep 

Republic Holdings, Inc. informed of its service plans and schedules, and directs Republic 

Holdings, Inc. to phase out its service under the existing exemptions commensurate with 

the introduction of service by MN Airlines, LCC d/b/a Sun Country Airlines. The 

authority of Republic Holdings, Inc. and its subsidiaries to operate under the 

Department’s pendente lite exception shall terminate as of 11:59 p.m. on the date prior to 

the date MN Airlines, LCC d/b/a Sun Country Airlines commences service under this 

award;
- 14 -

4. The Department prohibits MN Airlines, LLC d/b/a Sun Country Airlines from selling, 

trading, transferring, or conveying the operating authorities granted by the subject 

exemptions;

5. The Department grants all motions to file otherwise unauthorized documents and 

denies motions to strike such documents;

5. Except as otherwise granted, we deny all other applications for exemptions from 

14 C.F.R. Part 93, Subparts K and S, filed in this docket;

6. The authorities granted under these exemptions are subject to all of the other 

requirements delineated in 14 C.F.R. Part 93, Subparts K and S, including, but not limited 

to, the reporting provisions and use-or-lose requirements; and

7. We will serve this Order on all parties in Docket DOT-OST-2000-7182 and the FAA 

Slot Administration Office. We direct MN Airlines, LLC d/b/a Sun Country Airlines to 

contact the Federal Aviation Administration’s Slot Administration Office prior to start-up 

in Order to complete the assignment of the slot exemption times and identification 

numbers.

By:

SUSAN L. KURLAND

Assistant Secretary for

Aviation and International Affairs

(SEAL)

An electronic version of this document is available in the Federal Docket Management 

System (FDMS) at http://www.regulations.gov