March 29, 2011 

BY EMAIL 

Ms. Torlanda Archer 

Chief, Special Authorities Division, X-46 

Office of International Aviation 

U.S. Department of Transportation 

1200 New Jersey Avenue SE 

Washington DC 20590 

Re: Waiver Application of Spirit Airlines, Inc. 

Dear Ms. Archer, 

Pursuant to 14 CFR §§ 212.12 and 380.3( e), Spirit Airlines ("Spirit") hereby 

requests a waiver of certain provisions of the Department of Transportation's Public 

Charter regulations to the extent necessary to pennit Spirit to operate public charter 

flights, to the extent authorized by the Department of Treasury Office of Foreign Asset 

Control ("OFAC"), from Fort Lauderdale, Florida to Havana, Cuba. Specifically Spirit 

requests waiver of the financial security arrangements required by 14 CFR §§ 212.7, 

212.8,380.34, 380.34a, and 380.35. As discussed below, grant of this waiver will 

advance the public interest by expanding lower cost service options available to family 

members and others who are authorized to travel to Cuba. 

Background 

Spirit is the largest low-fare operator to the Caribbean and has substantial 

experience in the market. Spirit regularly conducts flights to 24 Caribbean and Central 

American destinations, including, Port au Prince, St. Maarten, St. Thomas and multiple 

locations in the Bahamas, the Dominican Republic, and Puerto Rico. Additionally Spirit 

has daily flights to nearby locations in Mexico, Costa Rica, EI Salvador, and Colombia. 

Spirit will operate Cuba charters with the same reliability as its scheduled service to these 

Caribbean and Central American destinations. 

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Ms. Torlanda Archer 

Spirit Waiver Request 

March 29,2011 

Page 2 of6 

A dramatic increase in demand for flights to Cuba has resulted from Obama 

Administration policies that eased the regulatory burden on travel by Americans to Cuba. 

On April 13,2009, President Obama initiated a policy to promote democracy and human 

rights in Cuba through the facilitation of person-to-person contact between Cubans and 

Americans, specifically, by broadening the category of Americans eligible to receive 

authorization to visit family members in Cuba and lessening the restrictions placed on the 

frequency of visits. 1 Removing restrictions on travel by family members resulted in a 

dramatic increase in the number of American visitors to Cuba, growing from 80,000 in 

2008 to over 330,000 in 2010. 2 

On January 14, 2011, the President released a memorandum further lifting 

restrictions on travel to Cuba, allowing for academic, religious and cultural trips to 

Cuba. 3 To better serve those visiting family or engaging in other purposeful travel to 

Cuba, the President authorize expanding the eligible points of embarkation and 

debarkation for Cuban flights beyond the Los Angeles, Miami, and New York JFK 

airports. In accordance with the memorandum, the Department of Homeland Security, 

Customs and Border Protection ("CBP") established procedures for any U.S. 

international airport to apply for a license to serve flights to and from Cuba. 4 Pursuant to 

these procedures, on March 8, 2011, Fort Lauderdale-Hollywood International Airport 

(FLL) was approved by CBP as one of the new gateways for licensed Cuba charter 

flights. 

These Presidential Directives seek to further democracy and human rights in Cuba 

by promoting person-to-person contact between Cubans and Americans. This is achieved 

through expanding the number of people eligible to travel to Cuba and making more 

travel options available. Despite the intent to enable more travel to Cuba, air service to 

Cuba remains restricted to licensed charter flights. The operator-participant contract 

requirements may be beneficial to ensuring that passengers fully understand their rights 

and obligations as a charter participant and help ensure that passengers on flights to Cuba 

possess proper Office of Foreign Asset Control ("OF AC") authorizations. However, Part 

380 also imposes limitations on direct air carriers that do not apply to scheduled air 

service and are not relevant to the unique requirements for travel to Cuba. Specifically, 

the financial security requirements place a burden on air carriers and are not necessary for 

Cuba flight because OFAC itself requires that carriers certify their financial responsibility 

to operate the flights. 5 

I Presidential Memorandum for the Secretary of State, the Secretary of the Treasury, and the Secretary of 

Commerce, Aprill3, 2009. 

2 Marc Frank, Big Jump Seen in U.S. Travel to Cuba in 20 I 0, REUTERS, Dec. 6, 20 I O. 

3 Office of the Press Secretary, Reachingoutto the Cuban People, Jan. 14,201 l. 

4 Airports of Entry or Departure for Flights to and From Cuba, Final Rule, DHS, 76 FR 5058 (2011) 

5 Office of Foreign Asset Control, Travel, Carrier and Remittance Forwarding Service Provider Program, 

Circular 2006, at p.7; Appendix II (2006) (outlining the operational guidelines for travel and carrier service 

providers with specific operator-participant contract requirements, but do not reference the fmancial 

arrangements). 
Ms. Torlanda Archer 

Spirit Waiver Request 

March 29, 2011 

Page 3 of 6 

14 C.F.R. Parts 212 and 380 (the "Charter Rules") require certificated air carriers 

who wish to sell Public Charter flights directly to the public to furnish a security 

agreement that insures the financial responsibilities of the air carrier and to enter into a 

depository agreement with a designated bank whereby the bank will maintain charter 

participant funds and disburse those funds to the air carrier only after completion of a 

charter flight. These financial security arrangements may be of particular importance for 

flights operated bl charter air carriers. However, these requirements impose burdensome 

transaction costs, which increase the price of Cuba charters to consumers and are 

inhibiting Spirit from offering low cost charters to Cuba. 

Necessity and Public Interest 

Spirit desires to meet the demand for flights to Cuba in a manner and at a price 

similar to its current scheduled service to other Caribbean destinations; however, this 

cannot be accomplished without waiver of the financial security arrangement 

requirements. Granting this waiver would serve the public interest by enabling an 

experienced, financially stable, low-cost air carrier to provide additional low fare service 

options for travel to Cuba. In accordance with the President's Directives designed to 

encourage positive change in Cuba through person-to-person contact, this waiver would 

allow for increased contact between Americans and Cubans by expanding the travel 

service options available to licensed travelers, increasing competition and decreasing 

prices in the market. Passengers could connect to Spirit's wide service network which 

would allow low cost travel from airports across the U.S. to Havana, Cuba via connection 

to its charter flights in Fort Lauderdale. 

Expanded and low-cost service options to Cuba are in the public interest. 

Currently, charter service between Miami and Havana (an hour-long flight) routinely 

costs over $350 for a round trip ticket. 7 Before, the Administration's easing of 

restrictions on travel to Cuba only a handful of charter companies regularly flew to Cuba 

from Florida, where the largest number of Cuban-Americans eligible for travel to Cuba 

reside.s According to Mauricio Claver Carone, director of the U.S.-Cuba Democracy 

PAC, these charter companies "are a virtual cartel that control the travel sector from the 

U.S. to Cuba, charging egregious fees in collusion with Cuban authorities.,,9 The 

demand for flights to Cuba has more than doubled since the President first lifted travel 

restrictions in 2009 and continues to grow.

IO Notwithstanding this growth there remain 

6 Revision of Aviation Charter Rules, DOT Final Order, 63 FR 28225, 28230 (1998). 

7 See. e.g., Marazul fares from Miami to Cuba, http://www.marazul.com/tlightMiamifareseng.htm!. 

(ranging from $350 to $480 for a round trip flight to Cuba from Miami). 

8 Damien Cave, Charter Companies F~ying to Cuba Thrive Despite Complaints. NEW YORK TIMES, May 

19,2009 available at http://www.nytimes.com/2009/05/20/usl20cuba.html. 

9 1d. 

10 Marc Frank, Big Jump Seen in u.s. Travel to Cuba in 2010, REUTERS, Dec. 6, 20 IO available at 

http://www.msnbc.msn.comlid/40533558/nsltravel-destination travel!. .. -- ')i} ;i i ~'H i ":-5 ;'I!RI{ L,) 0..-'- " . .!-'£..-
Ms. Torlanda Archer 

Spirit Waiver Request 

March 29,2011 

Page 4 of6 

only a small number of charter operators who are licensed providers and licensed air 

carrier providers serving the Cuba charter market. Expanded service options will be 

necessary to meet this demand and prevent monopolistic pricing structures. 

In order to provide reliable, low-cost service to Cuba Spirit requests a waiver of 

the financial security requirements in14 CFR §§ 212.7, 212.8, 380.34, 380.34a, and 

380.35. These requirements are unnecessary to protect funds of charter participants 

flying on Spirit, and they unnecessarily increase the cost of travel to Cuba, such that 

Spirit will be unable to charge low fares commensurate with those it provides to other 

Caribbean destinations. Waiving these requirements for Spirit would promote the goals 

of the Airline Deregulation Act (ADA) by encouraging an air transportation system that 

relies on actual and potential competition, further strengthening a small air carrier and 

enabling entry into a new market and imposing "the fewest possible restrictions on 

charter air transportation." 49 U.S.c. 40101(a)(12),(l3) and (e)(3). The elimination of 

burdensome and unnecessary transaction costs with respect to Cuba charters operated by 

Spirit is also in accordance with President Obama's Executive Order "Improving 

Regulation and Regulatory Review" of January 18, 20 II, which directs agencies to find 

the least burdensome means of achieving regulatory ends. II 

Increased protection of charter participant funds for Spirit charters is unnecessary. 

The Department has previously recognized that the financial security arrangement 

requirements may be unnecessary for established air carriers, like Spirit, who are 

conducting their own charter flights. 12 Spirit is an experienced air carrier with adequate 

financial reserves to assure reimbursement of charter participant funds in the event of an 

improper nonperformance of service, therefore a surety bond is unnecessary. Spirit 

currently operates a fleet of 35 A-320 family aircraft and has committed to deliveries of 

33 new A-320 family aircraft through 2015 for a total fleet of 68 aircraft. In addition, 

while substantially smaller than the legacy carriers, Spirit has earned a net profit each of 

the last three years, including net income of $72.5 million in 2010 on operating revenue 

of $781.3 million, despite rising fuel prices and a five day pilot strike in June 2010. 

Spirit's innovative service and pricing structure allow it to continue to be flexible in the 

face of an economically uncertain industry. 

Spirit plans to conduct regular charters to Cuba, and would be able to prevent 

stranding passengers in the event of a mechanical problem by transferring them to other 

Spirit flights departing from Havana. Spirit foresees eligible travelers who are not 

located in South Florida being able to travel from points on Spirit's domestic routes to 

Fort Lauderdale at low cost and proceed on to Cuba on a low cost Spirit charter flight. 

This will facilitate eligible travel. In addition, unlike charter operators who may be 

motivated to cancel flights when demand is low, Spirit does not foresee cancellations 

II Exec. Order No. 13563 (January 18,201 I). 

12 Revision of Aviation Charter Rules, DOT Final Order, 63 FR 28225,28235 (concluding not to eliminate 

the financial security requirements placed on direct air carriers because no comments were received on the 

proposed elimination). 
Ms. Torlanda Archer 

Spirit Waiver Request 

March 29,2011 

Page 5 of6 

because providing reliable service to Cuba will be important to maintaining Spirit's 

overall customer service reputation, further lessening the need to expand protection of 

Spirit charter participant payments. 13 

Spirit's business model relies on lower costs through efficiencies and passing 

those savings on to its customers, and is commitment to providing affordable air travel to 

its customers. Unlike major airlines that generate significant gross revenue each year, 

Spirit's operations are smaller and cannot as easily absorb the increased costs created by 

the financial arrangement requirements. Spirit's request for waiver is specific to the 

unique regulatory requirements of entering the Cuban market. Spirit does not intend to 

conduct public charter flights to other destinations. 

Conclusion 

Facilitating additional service between South Florida and Cuba advances the 

public interest and the Administration's policy to lessen restrictions on travel to Cuba. 

Grant of this waiver is necessary for Spirit to provide air service to Cuba at a price and in 

a manner similar to its current service to other Caribbean destinations. 

For the foregoing reasons, Spirit respectfully requests a waiver from the financial 

security arrangement requirements contained in Parts 212 and 380. 

Respectfully submitted, 

Joanne W. Young 

David M. Kirstein 

Kirstein & Young, PLLC 

1750 K Street NW 

Suite 200 

Washington, D.C. 20006 

Phone 202.331.3348 

Fax 202.331.3933 

jyoung@yklaw.com 

dkirstein((l{yklaw.com 

Counsel for Spirit Airlines 

IJ Id. at 28227-28 (explaining that flight cancellations are more likely to occur on charter flights for lack of 

participations because charter carriers are not subject to the market forces that might modifY the behavior 

of scheduled carriers). 
Ms. Torlanda Archer 

Spirit Waiver Request 

March 29, 2011 

Page 6 of6 

cc: The Honorable Susan Kurland 

. Assistant Secretary 

Aviation and International Affairs 

Paul Gretch, Esq. 

Director 

Office of International Aviation 

Esta Rosenberg, Esq. 

Chief, U.S. Air Carrier Licensing Division 

Office of International Aviation 

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