HOGAN & 

HARTSON 

g (g [1 0 W d 

SEP, 1 8 2008 

FAA AIRPORTS 

PART 16 DOCKETS 

Hogan & Hartson LLP 

Columbia Square 

555 Thirteenth Street NW 

Washington, DC 20004 

+1.202.637.5600 Tel 

+1.202.637.5910 Fax 

www.hhlaw.com 

September 18, 2008 Robert E. Cohn 

(202) 637-4999 

recohn@hhla w .com 

Randall S. Fiertz 

Director, Airport Compliance and Field Operations 

Federal Aviation Administration 

800 Independence Avenue, S.W. 

Washington D.C. 20591 

Re: Director's Determination- FAA Docket No. 16-07-04 

Dear Mr. Fiertz: 

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The Complainants' hereby seek clarification of the Director's Determination 

served on August 19, 2008, as discussed below. 

The Director's Determination dismissed the Complaint on the ground that 

the Authority had represented that it will not apply the Landing Fee Rent Credit 

through the end of the current Lease between the Airlines and the Authority 

(December 31, 2010), and, as a result, the FAA was unable to find "current" 

violations because "there is no adverse impact to the Airlines without the FedEx 

Credit." Nevertheless, the Director's Determination repeatedly makes clear that 

any unilateral imposition of the FedEx Landing Fee Rent Credit on the 

Complainants by the Authority would violate the Grant Assurances and the Rates 

and Charges and Revenue Diversion Policies, which prohibit the Respondents from 

unilaterally imposing the costs of the Landing Fee Rent Credit on other carriers 

unless approved by those carriers. 

The Authority and the Airlines are in the process of discussing a two-year 

extension of the current Lease Agreement through December 31, 2012. In that 

context, the Complainants seek clarification of the following statement on page 33 

of the Director's Determination: 

' Northwest Airlines, Inc., Delta Air Lines, Inc., Air Tran Airways, Inc., 

Southwest Airlines Co., and Continental Airlines, Inc. 

.•,\DC • 029399/000001 • 2789079 vl 
Request of Complainants for Clarification 

Page 2 

"If the Complainants agree to extend the Lease Agreement and not amend it 

to recognize the Credit, [t]his matter would continue to be a contract dispute 

and Part 16 would not be the appropriate venue." Decision at 33. 

The Complainants read this statement to mean that if the Airlines and the 

Authority were to agree to an extension of the term of the current Lease, the Lease 

is not amended to recognize the Landing Fee Rent Credit, and the Authority 

continues not to apply the Landing Fee Rent Credit during the Lease extension, 

under those circumstances there would be no adverse impact on the Airlines, and 

Part 16 would not be the appropriate venue. However, if the Airlines and the 

Authority were to agree to the extension of the term of the Lease, the Lease is not 

amended to recognize the Landing Fee Credit, but the Authority were to 

unilaterally apply the Credit any time during the extended term of the Lease, then 

Part 16 would be an appropriate forum to challenge the Authority's action. 

This is the only plausible reading of this statement that can be reconciled 

with the numerous other unequivocal assertions in the Director's Determination 

that the Grant Assurances and the Rates and Charges and Revenue Diversion 

Policies would not permit the Authority to impose the Landing Fee Credit 

unilaterally on the Airlines. See, for example, the following statements in the 

Director's Determination: 

"If FedEx claims the Credit against its Additional Special Facihties 

Rental and the Airport System Operating Revenue under the Lease 

Agreement decreases by the amount of the Credit, it could cause the 

Airport System Requirement to rise, resulting in a higher landing fee 

than would otherwise be the case without the Credit. Under the 

existing Lease Agreement, the FedEx Credit cannot be imposed 

unilaterally on the Complainants. This is true even if the Airlines 

benefit from additional FedEx operations because airfield costs are 

spread over more operations and the Complainants actually pay less as 

a result." Decision at 21. 

"The [Rates and Charges] Policy would not permit the Authority to 

unilaterally impose the costs of one carrier on all other carriers by 

adding such costs to its common rate base unless approved by those 

carriers." Decision at 33. 

"Absent a written agreement, the taking of 'common use' revenue and 

using it for an 'exclusive use' FedEx apron could amount to a violation 

of Grant Assurance #22." Decision at 32-33. 

"[S]ince the Complainants and FedEx are similarly situated, if the 

Authority were to implement Amendment No. 3 at this time contrary 

- \-DC - 029399/000001 - 2789079vl 
Request of Complainants for Clarification 

Page 3 

to the terms of the Lease Agreement, it could amount to a violation of 

Grant Assurance 22..." Decision at 35. 

"[T]he Authority cannot impose the cost of FedEx's rent Credit on other 

carriers even if the other carriers benefit from the additional 

operations by FedEx, as a result of having the airfield costs spread 

over more operations, and even if the other carriers actually pay less 

as a result of the overall deal. Moreover, the FAA has made clear it is 

not reasonable for the costs of even a one-or two-year promotional fee 

waiver to be borne by other carriers. Thus, it would clearly be 

unreasonable to impose the much longer-term facility rent Credit for 

FedEx at IND on other carriers." Decision at 40. 

"The Director concludes that the benefits of FedEx's landing fees for 

the new operations do not cancel out the issue of charging FedEx's 

facility costs to the other carriers. FedEx's additional operations will 

impose costs on the airfield proportionate to the additional fees it is 

paying in the form of pavement wear and tear and airport operations 

costs." Decision at 43. 

"The Rates and Charges Policy offers the airlines two significant 

protections: an airport may not without written agreement include 

exclusive use facilities in its rate base, and limits costs that can be 

included in its common use rate base." Decision at 44. 

The Complainants request that the Director clarify the Director's 

Determination that Part 16 would be an appropriate forum to challenge the 

Authority's actions if the Lease term were extended without recognizing the 

Landing Fee Credit, and the Authority were to unilaterally impose the costs of 

the Landing Fee Credit on other airlines, unless the Credit was approved by 

those airlines. 

Respemully^submitted, 

L 

peCMuiiy^suDmitte 

lobert E. Cohn 

Patrick R. Rizzi 

Hogan & Hartson L.L.P 

Attorneys for 

Northwest Airlines, Inc. an d 

Delta Air Lines, Inc. 

\DC - 029399/000001 • 2789079 vl 
Request of Complainants for Clarification 

Page 4 

Dave Aschenbach 

Director, Properties and Contract Services 

For AirTran Airways, Inc. 

Thomas Newton Boiling / 

Managing Attorney, Regulatory Affairs 

Lorraine B. Halloway 

Crowell & Moring LLP 

1001 Pennsylvania Avenue, N.W. 

Washington, D.C. 20004 

For Continental Airlines, Inc. 

Robert W. Kneisley ' 

Associate General Counsel 

Leslie Abbott, Attorney 

1901 L Street, N.W. 

Washington, D.C. 20036 

For Southwest Airlines Co. 

^DC - 029399/000001 • 2789079 vl 
Request of Complainants for Clarification 

Page 5 

CERTIFICATE OF SERVICE 

I hereby certify that I have this day served the foregoing Letter of Northwest 

Airlines, Inc., Delta Air Lines, Inc., AirTran Airways, Inc., Continental Airlines, Inc., 

and Southwest Airlines Co., on the following by hand-delivery, fax, and/or email, as 

noted below, at the following addresses: 

Dated this September 18, 2008 ( ^ ^<LI^/£A.r^' 

R. Diane Carlson 

Office of the Chief Counsel 

Attention- FAA Part 16 Airport Proceedings Docket 

AGC-610, Room 925 

Federal Aviation Administration 

800 Independence Ave., SW 

Washington, DC 20591 

(hand-delivery) 

Robert A. Duncan 

General Counsel 

Indianapolis Airport Authority 

Indianapolis International Airport 

2500 South High School Road, Suite 100 

Indianapolis, IN 46241-4943 

Counsel for Respondents 

Pablo O. Nuesch 

Jeffrey A. Schwarz 

Spiegel & McDiarmid 

1333 New Hampshire Avenue, N.W. 

Washington, DC 20005 

Email: pablo.nuesch@spieQelmcd.com 

Counsel for Respondents 

\\\D C - 029399/000001 - 2789079 v