BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Slot Exemption Proceeding 

at Ronald Reagan Washington National Airport

pursuant to 49 U.S.C. § 41718(b) 

Docket DOT-OST-2000-7182 

COMMENTS OF THE CITY OF HOUSTON 

AND THE GREATER HOUSTON PARTNERSHIP

Communications with respect to this document should be sent to: 

Mario C. Diaz 

 Director 

Ian Wadsworth 

 Chief Commercial Officer 

Department of Aviation 

CITY OF HOUSTON 

16930 John F. Kennedy Blvd. 

Houston, TX 77032 

(281) 233-3000 

(281) 233-1859 (fax) 

Robert Harvey 

 President and Chief Executive Officer 

GREATER HOUSTON PARTNERSHIP 

1200 Smith Street, Suite 700 

Houston, TX 77002 

(713) 844-3600 

(713) 844-0200 (fax) 

Rachel B. Trinder 

Jol A. Silversmith 

ZUCKERT, SCOUTT & 

 RASENBERGER, L.L.P. 

888 Seventeenth Street, N.W. 

Washington, D.C. 20006-3309 

(202) 973-7927 

(202) 342-0683 (fax) 

rbtrinder@zsrlaw.com

jasilversmith@zsrlaw.com

For the City of Houston 

 and the Greater Houston Partnership 

Dated: December 19, 2012 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Slot Exemption Proceeding 

at Ronald Reagan Washington National Airport

pursuant to 49 U.S.C. § 41718(b) 

Docket DOT-OST-2000-7182 

COMMENTS OF THE CITY OF HOUSTON 

AND THE GREATER HOUSTON PARTNERSHIP

The City of Houston and the Greater Houston Partnership (collectively, “Houston” 

or the “Houston Parties”) respectfully submit this answer in support of the application of 

Southwest Airlines Co. (“Southwest”) for the two AIR-21 slot exemptions available in 

this proceeding, previously allocated to Spirit, which Southwest would use to operate 

greatly needed nonstop flights between William P. Hobby Airport (“Hobby” or “HOU”) 

and Ronald Reagan Washington National Airport (“Washington National” or “DCA”). 

Pursuant to the Department’s Notice dated November 13, 2012, only airports 

designated as medium hub, small hub, or non-hub airports as statutorily defined are 

eligible for service using these slots. 

Houston strongly and enthusiastically supports Southwest’s application, which 

presents the Department with a rare opportunity to award highly limited and valuable 

DCA slots for service to a medium hub airport located in a City and region that is at the 

forefront of the nation’s economic recovery – and as a result of which an extensive array 

of public benefits would flow that far exceed the benefits projected by the other 

applicants. Grant of the award requested by Southwest will ensure that the available 

exemptions are put to their highest possible use in best promoting the nation’s air 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 2

transportation system, bringing extensive new benefits to communities, enhancing 

competition at important hubs, and maximizing the effective utilization of precious DCA 

slots. 

It is undisputed that Southwest’s application fulfills all of the basic criteria for an 

award of the available slot exemptions; i.e., Hobby is classified as a medium hub airport 

pursuant to the applicable standards promulgated at 49 U.S.C. § 41714(h)(9)1 – and the 

distance between the two airports is 1,218 miles, which falls within the Washington 

National 1,250-mile perimeter. See 49 U.S.C. § 49109. 

Moreover, by a wide margin Southwest’s application best fulfills the overall 

decisional criteria set forth in 49 U.S.C. § 41718(b) and supplemented by Departmental 

precedent. As the Department recently reiterated, an application for within-perimeter 

DCA slot exemptions need not satisfy all or even most of the statutory criteria, if it is 

found by the Department to have the best relative merits. See Order 2012-7-26, at 16. 

In this case, not only does Southwest satisfy more of the decisional criteria than do 

either of the other applicants, but the pending application with the best relative merits – 

based not just on the statute but also on other factors historically considered by the 

Department in DCA slot proceedings – is, by far, Southwest’s HOU-DCA application. 

In further support of Southwest, the Houston Parties state as follows: 

 

1

 The Department previously has established that, for the purposes of DCA slot proceedings, the 

technical criteria are fulfilled based on the size of an airport for which an application is submitted. See, 

e.g., Order 2000-7-2, at 18 (stating that MDW and DAL are defined as medium hub airports for DCA slot 

allocation purposes). 
Comments of the City of Houston and 

the Greater Houston Partnership 

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I. SOUTHWEST NOT ONLY AMPLY SATISFIES THE STATUTORY CRITERIA 

FOR AWARD OF THE AIR-21 SLOT EXEMPTIONS AT ISSUE IN THIS 

PROCEEDING, IT ALSO OFFERS BY FAR THE SUPERIOR PROCOMPETITION/MAXIMUM BENEFITS CHOICE 

The underlying statute, 49 U.S.C. § 41718(b), sets out five criteria for the award 

of within-perimeter slots at Washington National, two of which are mutually exclusive. 

Thus, no carrier can ever meet more than four of the criteria; in this case, Southwest 

fulfills three of them, exceeding the totals of both of the other applicants. (It should be 

noted that no applicant asserts that it meets the “service to small communities” criterion, 

and therefore that criterion is not at issue in this proceeding.) Beyond that, any 

objective analysis of the three applications demonstrates unequivocally that 

Southwest’s HOU-DCA proposal offers by far the best relative merits and the greatest 

overall public benefits in comparison to the other applications. Addressing the 

applicable statutory criteria: 

 Southwest Is A Limited Incumbent Air Carrier At Washington National.

Southwest clearly fulfills this standard. The carrier itself only started service at 

DCA in July 2012 – and even if flights operated by its subsidiary AirTran Airways are 

counted, it still has one of the smallest presences at the airport (3.5% of total slots), and 

specifically has a smaller presence than either of the competing applicants. See 

Southwest Application, at 3-4; Exhibit WN-100. The Department specifically has 

recognized that Southwest is a limited incumbent at Washington National as that term is 

defined in 49 U.S.C. § 41714(h)(5). See, e.g., Order 2012-7-26, at 18. 
Comments of the City of Houston and 

the Greater Houston Partnership 

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 Southwest Would Provide Competition On A Monopoly Nonstop Route To 

Washington National.

The existing nonstop flights between DCA (as well as IAD) and the greater 

Houston area (namely to George Bush Intercontinental Airport (“IAH”)) are all provided 

by a single carrier (United). Southwest would satisfy the “competition on a monopoly 

nonstop route” criteria by breaking that stranglehold. The Department previously has 

recognized the value of inter-carrier competition between Washington National and 

major markets – including the value of competition (and, specifically, low-cost carrier

competition) being provided via services to a second airport in such a market. See

Order 2000-7-2, at 19 (granting slots to ATA Airlines for MDW-DCA services, which 

would compete with existing ORD-DCA services). Similarly, Southwest now would 

compete by providing a new linkage – at much lower fares – between two multi-airport 

markets (Houston and Washington, D.C.), with projected DCA-HOU fares 38% lower 

than United’s current average DCA-IAH fares. See Southwest Application, at 4; Exhibit 

WN-103. 

Moreover, even when only one airport in a destination city has been at issue, the 

Department repeatedly has recognized the importance of enabling competition on 

nonstop DCA routes dominated by a single carrier. For example, another original 

recipient of AIR-21 slots was Midway Airlines, which the Department selected in order to 

ensure competition in the RDU market against US Airways, “the dominant incumbent 

airline at DCA”; the Department noted that the award would “maximiz[e] competitive 

benefits between the Southeast regional area and DCA.” See Order 2000-7-2, at 21. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 5

See also Order 2007-5-12, at 14 (awarding slots to AirTran for its fifth daily flight to ATL, 

in order to enable greater competition against Delta). 

 Southwest Would Produce The Maximum Competitive Benefits, Including 

Low Fares.

The implementation of Southwest’s service proposal would significantly benefit 

consumers traveling between Houston and Washington, as well as to/from beyond 

points connecting via Houston, both quantitatively and qualitatively. The “Southwest 

Effect” – by which the carrier’s entry into a market significantly drives down overall 

prices and dramatically expands traffic as a result – is both well-known and real. This 

“effect” is especially needed here because, as discussed infra in Section II, fare 

premiums at IAH continue to be among the highest in the U.S. Southwest would 

challenge the current high fares for nonstop Houston-DCA flights, offering average oneway fares of $207 and generating $19 million in annual consumer savings, in addition to 

stimulating 105,000 new annual passengers. See Southwest Application, at 2; Exhibits 

WN-103, WN-105 – WN-106. 

By analogy, Southwest already has succeeded in mitigating fares for HoustonBWI flights; United’s average BWI-IAH one-way nonstop fare is almost 30% less than its 

DCA-IAH fare. See Southwest Application, at 4-5; Exhibit WN-104.2

 This “effect” has 

been and continues to be seen nationwide. For example, Southwest’s recent entry into 

 

2

 Although DCA is not the only airport that serves the greater Washington area, the Department has 

recognized “the uniqueness of service to DCA, even when other area airports may have nonstop service 

to the same ... destination.” See Order 2012-5-12, at 20. See also Notice on Petition for Waiver of the 

Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, Grant of Petition with Conditions, 

75 Fed. Reg. 26322, 26332 (May 11, 2010) (“it is quite clear that the airports are not economic 

substitutes”). 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 6

Charleston, South Carolina and Greenville-Spartanburg, South Carolina has 

dramatically lowered fares (as well as stimulated traffic), including to/from Houston. 

See Exhibit HOU-101. Passengers traveling between Houston and DCA are equally 

deserving of low fares; enabling those low fares through an award to Southwest in this 

proceeding would maximize the public benefits and ensure the most beneficial use of 

these highly valuable slots. As Southwest has shown, HOU has a strong base of 

domestic nonstop O&D passengers, with almost as many as does IAH. See Exhibit 

WN-109. 

As discussed infra in Section III, the benefits flowing from implementation of 

Southwest’s HOU-DCA proposal also would extend beyond the greater Houston area to 

other areas of Texas and the southwest region. Compared with other Texas airports, 

Hobby has the largest number of low-cost carrier seats and flights within the U.S. 

domestic market. See Exhibit HOU-102. With round-trip LCC connectivity from HOU to 

seven other Texas communities (as well as four communities in other states),3

 new 

Southwest nonstop service to DCA would provide consumer benefits to one of the 

fastest growing state economies in the United States. See Exhibit HOU-104. Thus, 

Southwest would not only fulfill the statutory maximum benefits/low fares standard, but 

would fulfill it extraordinarily well by utilizing rare DCA slots for services that will bring 

benefits not only to the targeted nonstop market but also to communities that will gain 

from Southwest’s extensive network services. 

 

3

 The destinations in Texas are Austin, Corpus Christi, Dallas Love Field, El Paso, Harlingen, 

Midland/Odessa, and San Antonio, and in neighboring states are Albuquerque, New Orleans, Oklahoma 

City, and Tulsa. See Exhibit HOU-103. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 7

The Department long has recognized the value of introducing a second carrier to 

provide low-fare competition to a monopoly airline in DCA markets – just as Southwest 

proposes to do for Houston. See, e.g., Order 2004-4-2, at 17 (finding that the 

introduction of Spirit would enable low-fare competition against Northwest in the DTWDCA market); Order 2004-8-3, at 6 (finding that the introduction of Spirit would enable 

low-fare competition against US Airways in the MYR-DCA market). See also Order 

2000-7-2, at 19 and 21; Order 2007-5-12, at 14 (endorsing low-fare carrier competition). 

An award to Southwest for Hobby would be fully consistent with these and similar 

precedents, and would advance the Department’s laudable goal of providing significant 

public benefits by introducing low-fare competition into a high-fare monopoly DCA 

market. 

II. HOUSTON’S HOBBY AIRPORT IS LOCATED IN THE HEART OF ONE OF 

THE NATION’S MOST VIBRANT AND DYNAMIC COMMUNITIES, BUT 

LACKS NONSTOP SERVICE TO THE HEART OF THE NATION'S CAPITAL. 

OTHER DCA SERVICE FROM HOUSTON IS PROVIDED ON A MONOPOLY 

BASIS AT SOME OF THE HIGHEST FARE PREMIUMS IN THE NATION. 

SOUTHWEST’S NEW LOW-FARE COMPETITIVE SERVICE OFFERS BY FAR 

THE GREATEST PUBLIC BENEFITS 

In DCA exemption decisions in which none of the proposed destinations was a 

statutory small market, as is the case here,4

 the Department has indicated that market 

size is an important decisional factor in a within-perimeter slot proceeding. See, e.g., 

Order 2000-7-2, at 19 and 21 (stating that a reason for the selection of ATA Airlines’ 

Chicago proposal was that the city was the largest market under consideration – and 

 

4

 There is no suggestion in the JetBlue and US Airways applications that either Jacksonville or Oklahoma 

City should be preferred as a statutory “small” community pursuant to 49 U.S.C. § 41718(b)(3). 
Comments of the City of Houston and 

the Greater Houston Partnership 

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that a reason Atlantic Southeast’s Jacksonville proposal was not selected was its small 

market size);5

 Order 2008-2-28, at 9 (preferring AirTran and Spirit applications because 

they would “servic[e] a larger pool of potential passengers”). 

In this proceeding, it is indisputable that the market Southwest proposes to serve 

is larger and would generate greater public benefits than the others at issue. The City 

of Houston and its surrounding region are collectively an economic powerhouse, and 

one of the driving forces in the recovery of the U.S. economy and in job growth in 

particular. Houston is the nation’s fourth-most populous city, and the metropolitan area 

population is the nation’s fifth-largest, more than four times that of Oklahoma City or 

Jacksonville – and growing at a faster rate. See Exhibits HOU-105 – HOU-106.6

 

Notably, the greater Houston area is home to the headquarters of twenty-five Fortune 

500 companies – the third-largest total in the nation, see Exhibits HOU-108 – HOU-109, 

and four times more than the other two cities at issue in this proceeding combined. See

Exhibit HOU-110. Of these twenty-five companies, approximately half also maintain 

operations in the Washington, D.C. metropolitan area. See Exhibit HOU-111. Similarly, 

of the twenty Fortune 500 companies with headquarters in the Washington, D.C. 

metropolitan area, three-quarters also maintain operations in the Houston metropolitan 

area. See Exhibit HOU-112. 

 

5

 Notably, in granting slots to ATA Airlines for MDW-DCA services, the Department looked to the size of 

the overall Chicago (MDW and ORD) – Washington (DCA and IAD) market – not that of the MDW-DCA 

market, which necessarily had been limited by the lack of nonstop service. See Order 2000-7-2, at 19. 

6

 In addition, the Houston metropolitan area’s number of households is more than four times that in each 

of the Jacksonville and Oklahoma City metropolitan areas. See Exhibit HOU-107. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 9

There are also extensive “Federal” connections between Houston and 

Washington, highlighted by the City being the home of NASA’s Johnson Space Center 

and the Michael E. DeBakey Veterans Affairs Medical Center. Indeed, there are 

considerably more Federal workers and establishments in the Houston metropolitan 

area than in either of the Jacksonville or Oklahoma City metropolitan areas. See

Exhibits HOU-113 – HOU-114. The Houston metropolitan area’s overall employment 

also is more than four times that of both Jacksonville and Oklahoma City, see Exhibit 

HOU-115, and its Gross Regional Product is more than that of both cities by a factor of 

six. See Exhibit HOU-116. Thus a broad range of passengers, entities and industries 

would benefit from Southwest’s new HOU-DCA service. 

The extent of the pro-consumer benefits that would flow from such service is 

further reflected in the overall depth and breadth of Houston’s economic strengths. 

While not immune to the global economic downturn, Houston has proven much more 

resilient than most regions in the United States, and its economy has continued to grow 

despite the challenges that have been felt worldwide: (i) Houston has already regained 

nearly 170% of jobs lost due to the downturn, leading all major U.S. metropolitan 

areas;7

 (ii) job growth in the Houston 10-county MSA reached nearly 4% between 

September 2011 and September 2012; and (iii) the region’s industrial market remains 

one of the top five in the United States. See Exhibit HOU-117. Similarly, Houston’s 

foreign trade was up by 5.1% in September 2012 year-to-date over the same period a 

 

7

 Notably, the Washington, D.C. area regained the second highest percentage of jobs lost due to the 

downturn – 125% – further supporting the merits of additional air service between these two economically 

strong communities. See Exhibit HOU-117. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 10

year earlier.8 The Gross Regional Product of the greater Houston area totaled $442 

billion in 2011; if Houston were a sovereign nation, it would have the 26th largest 

economy in the world, ahead of the GDP of countries such as Austria, South Africa, the 

United Arab Emirates, and Thailand. See Exhibit HOU-118. 

A center for global trade, Houston is a major, multi-cultural, multi-faceted 

international business center, hosting the nation’s third-highest concentration of foreign 

consular and trade offices (94), see Exhibit HOU-119, and home to the third-largest 

(and fastest-growing) trade district for international trade. See Exhibit HOU-120. The 

City also has a highly diverse economic base. While energy remains a cornerstone of 

the economy (11 of the top 25 publicly-traded oil and gas firms are based in Houston), 

the metropolitan area also includes significant manufacturing facilities, especially in the 

aerospace and chemical industries; over 190 life science companies; and 100 hospitals 

and health clinics, including the world’s largest medical facility, the Texas Medical 

Center. See Exhibit HOU-121. 

In addition, the Houston region anticipates significant additional growth and job 

creation stemming from the Panama Canal expansion, which is scheduled for 

completion in 2015. Conservative estimates project a 10% increase in cargo coming 

through the Port of Houston from the Pacific Rim due to the expansion, which will likely 

place Houston among the world’s top three busiest ports. See Exhibit HOU-122. 

Hobby is located at the very heart of this activity, a short distance from the center 

of downtown Houston, and only twenty miles from the Port of Houston. The City’s 

 

8

 See Greater Houston Partnership, Houston: The Economy at a Glance, at 4 (vol. 21, no. 12; December 

2012), http://www.houston.org/pdf/research/eag.pdf. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 11

original airport, first established in 1927 and City-owned since 1937, the airport today 

plays a key role in the City and region’s economy and in the national air transportation 

system.9 As an economic engine in its own right, Hobby alone supports 52,000 jobs 

and contributes $4.4 billion annually to the local economy.10 Hobby is the 33rd largest 

airport in the U.S., based on CY 2011 passenger enplanements (4.7 million).11 With 

four state-of-the-art runways and fully-updated terminal facilities, it has for forty years 

played a key role for Southwest and is now its largest Texas gateway, in addition to 

serving four other carriers. See Exhibit HOU-123. New or expanded services to six 

destinations have been implemented by Southwest since the start of the year, with two 

additional new markets recently announced.12

Hobby also serves as an essential mid-continent connecting point – which means 

that HOU services benefit not just the greater Houston area but also many other 

communities, both in Texas and several other states. By next summer, Southwest will 

 

9

 Hobby enjoys a rich history that reflects Houston’s impressive growth throughout the 20th century and to 

the present. Originally named Houston Municipal Airport, it was the City’s primary commercial airport until 

the opening of IAH in 1969, and was home base for many years to Houstonian Howard Hughes, who was 

involved in developing various infrastructure enhancements. In 1950, Hobby saw its first international 

flights, via Pan Am to Mexico City, and in 1957 Dutch carrier KLM inaugurated flights to Hobby from 

Europe via Montreal. The airport was renamed in 1967 after William P. Hobby, the 27th Governor of 

Texas and publisher of the Houston Post; Hobby was the spouse of Oveta Culp Hobby, Parliamentarian 

of the Texas House of Representatives, the first U.S. Secretary of Health, Education and Welfare (as a 

Democratic cabinet member in the Eisenhower Administration), and a recipient of the Army’s 

Distinguished Service Medal for her efforts during World War II. Today Houston’s 1940 Air Terminal 

Museum, located in Hobby’s original art deco terminal, celebrates the airport’s history and welcomes 

visitors and aviation enthusiasts from around the world. 

10 Houston Airport System Economic Impact Study, Final Report, at 5 (June 30, 2011), 

http://system.gocampaign.com/file/511462. 

11 Calendar Year 2011 Primary Airports Enplanements (September 27, 2012), http://www.faa.gov/

airports/planning_capacity/passenger_allcargo_stats/passenger/media/cy11_primary_enplanements.pdf. 

12 Southwest Airlines Continues Houston Growth (November 5, 2012), http://www.fly2houston.com/

0/3920522/0/83280D83283/. 
Comments of the City of Houston and 

the Greater Houston Partnership 

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offer 1,055 nonstop flights to 42 cities each week from Hobby. See Southwest 

Application, at 6. Many of these cities are located outside the DCA perimeter, and 

would gain new connecting opportunities to Washington National, as discussed infra in 

Section III.13

In addition, Hobby is on the cusp of a major expansion that will significantly 

enhance the many service opportunities already available, including new international 

flights. In May 2012, Houston’s City Council approved plans for a new international 

terminal at Hobby and a state-of-the-art Federal Inspection Services facility to be 

completed in 2015. See Exhibit HOU-123; Southwest Application, at 6. Inauguration of 

new international services – primarily to destinations in Mexico, the Caribbean, and 

Central America – by Southwest and other low-fare carriers is planned, which will 

further expand the DCA connecting opportunities available at Hobby and add even 

more value to the two DCA slots Southwest seeks in this proceeding.14

However, Hobby lacks much-needed nonstop service to the heart of the nation’s 

capital, and nonstop fares to DCA from IAH are among the highest DCA fares in the 

nation. The average DCA-IAH fare for nonstop passengers is $334, 43% above 

average DCA fares for comparable distances, the fourth most overpriced DCA market. 

 

13 Hobby is also a major gateway for corporate and private aviation. In CY 2011 there were 45,090 air 

taxi and 63,617 general aviation operations at HOU. See Houston Airport System Statistical Report, 

Calendar Year 2011, http://system.gocampaign.com/file/512012. Hobby facilities include five FBOs and 

42 aircraft hangars; there are also approximately 250 Hobby-based aircraft, including more than 90 jets. 

14 The restoration of international services at HOU is anticipated to lead to lower fares in such markets, 

attract 1.3 million new passengers per year, create 14,000 jobs, and have an annual economic impact of 

$1.2 billion. See The Economic Impact of International Air Service at William P. Hobby Airport, (May 9, 

2012), http://system.gocampaign.com/file/514947. 
Comments of the City of Houston and 

the Greater Houston Partnership 

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See Southwest Application at 4; Exhibits WN-101 – WN-102.15 Indeed, IAH is DCA’s 

third-largest domestic nonstop monopoly O&D passenger market, and DCA is IAH’s 

fourth-largest such market, with the dominant carrier in that market enjoying an 

overwhelming 86% share of all IAH-DCA O&D traffic. See Exhibits HOU-124 – HOU126. Southwest, of course, is known for its powerful fare-lowering and traffic-stimulating 

“Southwest Effect”,16 an effect that is greatly needed in the DCA-Houston market and 

that would bring extensive public benefits to a broad range of passengers, industries, 

and communities. 

Thus the Department has a unique opportunity in this proceeding to ensure the 

utilization of rare DCA slot exemptions for the widest and best possible use – providing 

a new nonstop link between the heart of the nation’s capital and the heart of one of its 

most important business and residential centers, helping to ensure the future growth 

and prosperity of both of those communities and the U.S. as a whole. Where, as here, 

no small communities are at issue, Department precedent fully supports an award to the 

market that by virtue of its size, depth and breadth, will produce the most wide-ranging 

public benefits. Just as in the Department’s decision to award DCA slots to ATA 

Airlines’ Chicago service – the largest market under consideration for the allocation of 

 

15 The Department’s most recent report on domestic airline fares found that the overall “premium” paid by 

IAH passengers was 33.2%. See Domestic Airlines Consumer Fare Report (Second Quarter 2012), 

http://www.dot.gov/sites/dot.dev/files/docs/Consumer%20Airfare%20Report%20June%202012.pdf. 

16 The term was first coined in a Department study, The Airline Deregulation Evolution Continues: The 

Southwest Effect (May 1993), but remains valid today. For example, the year after Southwest’s entry into 

Minneapolis-St. Paul, the average ticket prices at MSP – not limited to markets specifically served by 

Southwest – were reported to have fallen by nearly 32%. See The “Southwest Effect”, (May 21, 2010), 

http://www.journalwatchdog.com/business/666-the-southwest-effect. See also Exhibits HOU-101 and 

HOU-127 (highlighting effects of new Southwest service at Charleston and Greenville-Spartanburg). 
Comments of the City of Houston and 

the Greater Houston Partnership 

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slots not reserved for small communities (see Order 2000-7-2, at 19) – and in its 2008 

decisional preference for AirTran and Spirit because they would serve a larger pool of 

potential passengers (see Order 2008-2-28, at 9), so too here a decision in favor of 

Southwest for Hobby service would ensure the most beneficial use of these rare and 

valuable slots. 

III. THE STATUTORY FACTORS APPLIED BY THE DEPARTMENT IN OTHER 

DCA SLOT PROCEEDINGS OVERWHELMINGLY FAVOR SOUTHWEST; NO 

OTHER APPLICANT CAN GENERATE EVEN REMOTELY COMPARABLE 

BENEFITS 

The other applicants – JetBlue Airways Corporation (“JetBlue”) and US Airways, 

Inc. (“US Airways”) – also are carriers that operate services to Houston airports, and 

Houston greatly appreciates the benefits that they provide. But in this case the 

Department must choose between competing applications for an extremely rare 

opportunity. The statutory factors and Department precedent heavily favor an award to 

Southwest for Hobby service based on any objective comparison of the relative benefits 

offered. 

 Southwest’s HOU-DCA Proposal Would Deliver Far More Public Benefits 

Than JetBlue’s JAX-DCA Proposal, Based On The Size Of The Houston 

Market; The Establishment Of A New DCA Gateway Airport In Houston; And 

The Network Benefits Beyond Houston.

Southwest’s proposal offers significantly greater public benefits than does 

JetBlue’s. While JetBlue’s application meets certain of the statutory criteria, the facts 

demonstrate indisputably that the benefits JetBlue offers are extremely limited in 

comparison to those that would be generated by Southwest’s HOU-DCA proposal, 

which would utilize these precious slots to bring the widest public benefits. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 15

Although both Southwest and JetBlue would compete with an incumbent carrier 

in a DCA market, only Southwest would do so by establishing a new DCA gateway 

within the destination metropolitan area, which would be far more convenient for a 

significant number of passengers, as well as introducing new competition and low fares. 

See Southwest Application, at 7; Exhibits WN-107 – WN-108. As discussed supra in 

Section I, HOU has a strong base of domestic nonstop O&D passengers. See Exhibit 

WN-109. In contrast, JetBlue would serve Jacksonville via the same airport as the 

existing US Airways services. The Department has recognized the value of allocating 

limited-entry authority so as to ensure a choice of gateways within a metropolitan area. 

See Order 2000-7-2, at 19 (granting slots to ATA Airlines for MDW-DCA services, which 

would compete with existing ORD-DCA services). See also Order 2000-12-13, at 9 (by 

providing Argentina service from EWR instead of JFK, Continental would “provide 

competition between the airports”); Order 97-4-13, at 6 (likewise, for Brazil). 

Additionally, the greater Houston area has a population that is more than four 

times as large as the population of the greater Jacksonville area, see Exhibit HOU-106, 

and the Houston-DCA O&D market is more than twice as large as the Jacksonville-DCA 

market. See Exhibit HOU-128. As discussed supra (see, e.g., Order 2000-7-2, at 19 

and 21; Order 2008-2-28, at 9), the Department previously has indicated that market 

size is a relevant factor to be considered in the allocation of DCA within-perimeter slot 

exemptions – especially if none of the proposed destinations is a statutory small market, 

as is the case in this proceeding. 
Comments of the City of Houston and 

the Greater Houston Partnership 

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Regrettably, JetBlue did not submit passenger/load forecasts with its application, 

thereby depriving interested parties and the Department of a comparison with those of 

Southwest and US Airways. Although the notice that opened this proceeding did not 

specifically require such forecasts, the Department has stated that if a carrier submits a 

vague DCA slots proposal, the Department will assume that the proposal “would tend to 

least satisfy the statutory criteria.” See Order 2004-12-6, at 6 (noting that “Spirit having 

structured its proposal in that fashion makes it difficult to make a comparative analysis”). 

In light of JetBlue’s omission, that standard must be applied here. 

Furthermore, Southwest would offer network benefits that cannot be matched by 

JetBlue. By JetBlue’s own admission, the only plausible service beyond JAX is to SJU, 

a destination that JetBlue already serves from DCA on a nonstop basis, using other 

valuable DCA slots. See JetBlue Application, at 2.17 In contrast, if Southwest were 

authorized to operate HOU-DCA services, eleven destinations would benefit from new 

competitive round-trip connecting opportunities via HOU. See Exhibit HOU-103. See 

also Southwest Application, at 7; Exhibit WN-105. Although not a specific statutory 

factor for within-perimeter slots, the Department previously has recognized that the 

existence of network benefits is indeed a factor to be preferred in allocating such slots. 

See, e.g., Order 2004-4-2, at 16 (noting that in addition to hub benefits, AirTran and 

Spirit also would benefit surrounding geographic regions and communities). 

 

17 Additionally, the connection is of questionable value because JetBlue’s proposed DCA-JAX flight 

departs at 8:00 AM – the exact same departure time as JetBlue’s current DCA-SJU nonstop flight – but 

passengers would arrive in SJU, after stopping in JAX, nearly two hours later than does the nonstop flight 

from DCA. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 17

In short, the statutory criteria applicable to this proceeding, the extensive benefits 

offered by Southwest relative to those offered by JetBlue, the deficiencies in JetBlue’s 

application, and a plethora of Department precedent overwhelmingly favor Southwest’s 

application to that of JetBlue and would produce significantly greater benefits for the 

traveling public. 

 Southwest’s HOU-DCA Proposal Would Deliver Much More Extensive 

Public Benefits Than Would US Airways’ OKC-DCA Proposal, Based On US 

Airways’ Existing Dominant, High-Fare Position At DCA; The Size Of The 

Houston Market; And The Network Benefits Beyond Houston.

Southwest’s application also is far superior to that of US Airways and would 

generate significantly greater public benefits. Indeed, the only argument in favor of US 

Airways is that it would establish service to a city that does not presently have nonstop 

access to DCA – and while the Houston Parties acknowledge that this satisfies one of 

the statutory factors, any merits that it may have are far outweighed by the overall 

deficiencies of US Airways’ proposal, which does not fulfill any other statutory factor – or 

fulfill other criteria previously prioritized in DCA slot cases. 

As the Department knows, US Airways is by far the dominant carrier at DCA, 

now holding over 54% of the airport’s slots – unlike Southwest, which is a limited 

incumbent pursuant to 49 U.S.C. § 41718(b)(1). See Southwest Application, at 4.18 

Moreover, US Airways could start OKC-DCA service today by re-allocating some of its 

 

18 US Airways recently solidified its position at Washington National through a “swap” of LGA slots with 

Delta, through which US Airways obtained a net 34 additional slot-pairs at DCA. See Petition for Waiver 

of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, Notice of Grant of Petition 

with Conditions, 76 Fed. Reg. 63702 (October 13, 2011). Notably, the Department recognized the 

importance of other carriers obtaining a “critical mass” of slots in order to effectively compete, including 

against US Airways at DCA. See id. at 63706, 63708. See also Southwest Application, at 4. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 18

extensive slot portfolio. By contrast, Southwest, which holds only 3.5% of DCA slots, 

simply does not have that luxury at DCA. This alone is sufficient to warrant rejection of 

US Airways’ proposal. See Order 2008-2-28, at 10 (noting that “US Airways could elect 

to serve Pensacola with [its] existing slot holdings, if the commercial merits ... were 

compelling”). See also Order 2010-12-16, at 11; Order 2003-1-16, at 9 and 11 (similarly 

rejecting US Airways applications). 

Nor would US Airways offer consumers the benefit of low fares. While its 

application acknowledges that low fares are a component of one of the statutory 

decisional factors, see US Airways Application, at 4, US Airways does not assert that it 

can or will fulfill that factor by actually offering low fares – only so-called “competitive” 

fares that would not be an improvement over current OKC-DCA fares. See id. at 3. 

This represents a significant deficiency in US Airways’ application. Although the 

“maximum competitive benefits” factor also can be fulfilled through other means, the 

Department has emphasized that “specifics, not speculation, must be offered to support 

such an argument.” See Order 2008-12-22, at 4 (concluding that Midwest had not 

shown that it would offer any competitive benefits); Order 2008-2-28, at 11 (rejecting 

another Midwest application and noting the carrier’s failure to show that it would offer 

low fares). 

Looking beyond the statute, it is amply evident that the selection of Southwest’s 

HOU-DCA proposal would be far superior to the selection of US Airways and its 

Oklahoma City proposal based merely on the greater public benefits that would flow 

from HOU service, given relative population and O&D data. The greater Houston area 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 19

has a population that is nearly four times as large as the population of the greater 

Oklahoma City area, see Exhibit HOU-106, and the Houston-DCA O&D market is more 

than eight times as large as the Oklahoma City-DCA market. See Exhibit HOU-128.19 

As discussed supra (see, e.g., Order 2000-7-2, at 19 and 21; Order 2008-2-28, at 9), 

the Department previously has indicated that the size of a market should be considered 

when a statutory small community is not at issue, a principle that must be applied here. 

Indeed, based on the forecasts in the record, US Airways has predicted that it would 

transport only 56,000 passengers annually in the OKC-DCA market, using regional jets. 

See US Airways Application, at 3. Even if this prediction is accepted at face value – i.e., 

it is unclear to what extent that number includes connecting traffic between OKC and 

third cities that is merely using DCA as a hub20 – US Airways predicts carrying little 

more than two-thirds the number of passengers that Southwest anticipates transporting 

to/from DCA, using mainline aircraft. See Exhibit WN-105. 

Finally, any benefits of US Airways’ Oklahoma City proposal would be entirely 

limited to the local market. US Airways does not propose to operate any plausible 

connecting services beyond OKC.21 As discussed supra (see, e.g., Order 2004-4-2, at 

16), the Department recognizes the value of network benefits – and Southwest would 

 

19 Indeed, even without nonstop service, the Hobby-Washington National O&D market today is larger than 

the Oklahoma City-Washington National O&D market. See Exhibit HOU-127. 

20 US Airways has stated that it will offer “convenient connections to cities throughout the Northeast” via 

DCA but has not provided quantitative data. See US Airways Application, at 4. 

21 US Airways has stated that if – and only if – it is awarded the AIR-21 slots available in this proceeding, 

it will also start service in the OKC-CLT market. But US Airways does not appear to anticipate any 

connecting traffic, and has not explained why it cannot start OKC-CLT service today, independent of the 

Department’s decision in this proceeding. See Order 2000-7-1, at 6-7 and 23 (citing connecting services 

– but not asserted general “catalyst for developing an integrated LAX network” and intra-gateway 

competition at LAX – as basis for award of DCA slots to TWA). 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 20

offer a network of connections beyond Hobby, which would provide competitive new 

connecting opportunities beyond HOU. See Exhibit HOU-103. 

As for any argument that US Airways would offer network benefits to passengers 

traveling between OKC and third cities via DCA, it must be rejected outright. US 

Airways is by far the dominant carrier at DCA, and both the nonstop and connecting 

services it proposes could be implemented by US Airways today without an award.22 By 

contrast, an award to Southwest would provide far superior network benefits at HOU, 

and would help build Southwest’s existing small DCA slot share (only 3.5% compared to 

US Airways’ 54%, see Exhibit WN-100) towards the critical mass of slots that the 

Department recognizes is so vital for effective competition at DCA.23

As in the case of JetBlue, Southwest’s application is by far the superior choice in 

terms of satisfaction of the statutory criteria, Department precedent, and the extent of 

public benefits that would be generated from the services it proposes. The Department 

would significantly benefit the traveling public by selecting Southwest’s application over 

that of US Airways. 

 

22 As another carrier observed in a prior DCA slots proceeding: “Washington National’s close-in proximity, 

and its convenience for traveling to downtown Washington, D.C. – coupled with it[s] operational 

constraints on the number of flights it can handle – yield the inescapable conclusion that Washington 

National is uniquely valuable as an airport primarily for travelers to/from the Nation’s Capital – not as a 

connecting hub....” Answer of Comair, at 12 (February 12, 2007). See also Order 2004-4-1, at 22 (in 

beyond-perimeter slot case, Department noted that 88% of predicted connecting passengers in market 

unsuccessfully proposed by US Airways could be served by the carrier other than via DCA). 

23 See Petition for Waiver of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, 

Notice of Grant of Petition with Conditions, 76 Fed. Reg. 63702, 63706 (October 13, 2011). 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 21

Conclusion 

The case presented by Southwest for HOU-DCA service is compelling. The new 

nonstop, low-fare, traffic-stimulating service linking the heart of the nation’s capital with 

the heart of one of the nation’s most vibrant cities and regions would generate by far the 

most extensive benefits and represents an unparalled opportunity for the Department to 

ensure optimal utilization of rarely available DCA slot exemptions in a manner that will 

“promote[] air transportation” consistent with 49 U.S.C. § 41718(b), best fulfill the 

specific statutory criteria, and also fulfill other important goals previously recognized by 

the Department. 

WHEREFORE, for the reasons stated in these comments – and in the letter from 

Houston Mayor Annise D. Parker that previously was submitted along with Southwest’s 

application, and the letters from the Greater Houston Partnership (see Exhibit HOU129), the Bay Area Houston Economic Partnership (see HOU-130), and the Governor of 

Texas, Rick Perry (see HOU-131), that are being filed concurrently with these 

comments – the Houston Parties urge the Department to promptly grant the pending 

application filed by Southwest for the available DCA slot exemptions, so that the carrier 

may commence nonstop service between Houston’s William P. Hobby Airport and 

Ronald Reagan Washington National Airport as soon as possible. 
Comments of the City of Houston and 

the Greater Houston Partnership 

Page 22

Respectfully submitted, 

 

Rachel B. Trinder 

Jol A. Silversmith 

ZUCKERT, SCOUTT & 

RASENBERGER, L.L.P. 

888 Seventeenth Street, N.W. 

Washington, D.C. 20006-3309 

(202) 973-7927 

(202) 342-0683 (fax) 

rbtrinder@zsrlaw.com

jasilversmith@zsrlaw.com

For the City of Houston 

 and the Greater Houston Partnership 

Dated: December 19, 2012 
(i) 

Houston Exhibits

HOU-101 – Recent Entry By Southwest Lowered Fares And Stimulated Traffic At Both 

Charleston, South Carolina (CHS) And Greenville-Spartanburg, South 

Carolina (GSP), Including For Passengers Traveling To/From Houston 

HOU-102 – Hobby Offers the Largest Number of Low-Cost Carrier Seats And Flights 

Among Texas Airports 

HOU-103 – Eleven Communities Behind/Beyond Hobby Would Benefit From A New 

Round-Trip Connecting Opportunity To/From DCA Via Hobby 

HOU-104 – Texas Overall Has Excelled In the Post-Recession Economic Recovery 

HOU-105 – Houston Is The Fifth Largest U.S. Metropolitan Area 

HOU-106 – The Population Of The Houston Metropolitan Area Far Exceeds That of The 

Other Metropolitan Areas To Which Service Has Been Proposed In This 

Proceeding – Jacksonville and Oklahoma City – And Houston Also Is 

Growing More Quickly 

HOU-107 – The Number Of Households In The Houston Metropolitan Area Far Exceeds 

That of The Other Metropolitan Areas To Which Service Has Been 

Proposed In This Proceeding – Jacksonville and Oklahoma City 

HOU-108 – Twenty-Five Fortune 500 Companies Are Headquartered in Houston 

HOU-109 – Houston Hosts The Third-Largest Concentration Of Fortune 500 

Headquarters in the U.S. 

HOU-110 – The Number of Fortune 500 Headquarters in Houston Exceeds By A Factor 

of Four The Number In Jacksonville And Oklahoma City Combined 

HOU-111 – Approximately Half Of The Houston-Based Fortune 500 Companies Have 

Operations In The Washington, D.C. Area And Thus Could Benefit From 

Southwest’s HOU-DCA Proposal 

HOU-112 – Three-Quarters Of The Washington, D.C.-Based Fortune 500 Companies 

Have Operations In The Houston Area And Thus Could Benefit From 

Southwest’s HOU-DCA Proposal 

HOU-113 – The Number Of Federal Employees In Houston Exceeds The Number In 

Both Jacksonville And Oklahoma City By A Significant Factor 

HOU-114 – The Number Of Federal Establishments In Houston Exceeds The Number 

In Both Jacksonville And Oklahoma City 
(ii) 

HOU-115 – The Employment Figures for Houston Exceed By A Factor of Four The 

Figures For Both Jacksonville And Oklahoma City 

HOU-116 – Houston’s Gross Regional Product (GRP) Exceeds By A Factor of Six The 

Figures For Both Jacksonville And Oklahoma City 

HOU-117 – Among U.S. Metropolitan Areas, Houston’s Recovery From The Recession 

Has Been The Fastest And Most Substantial 

HOU-118 – If Houston Were A Sovereign Nation, It Would Rank As The World’s 26th 

Largest Economy 

HOU-119 – Houston Has The Third-Largest Concentration Of Consulates And 

International Trade Offices In The U.S., Reflecting Its Role As An 

International Business Center 

HOU-120 – Houston’s Role As An International Business Center Is Also Demonstrated 

By The Significant Volume of International Trade – $268 Billion in CY 2011 

– Through the Houston Customs District 

HOU-121 – Houston Has a Highly Diverse Economic Base Which Is A Cornerstone Of 

Its Economic Success 

HOU-122 – Expansion Of The Panama Canal Will Stimulate Additional Economic 

Growth Through The Port of Houston, Which Is Located Close to Hobby 

HOU-123 – Hobby Plays A Key Role In the Houston Economy, And Is A Major Domestic 

And Future International Gateway For Southwest And Other Airlines 

HOU-124 – DCA-IAH Is The Third-Largest Ex-DCA O&D Market In Which A Single 

Carrier Has A Monopoly, And Competition Is Lacking 

HOU-125 – IAH-DCA Is The Fourth-Largest Ex-IAH O&D Market In Which A Single 

Carrier Has A Monopoly, And Competition Is Lacking 

HOU-126 – The DCA-IAH Market Is Today Dominated By A Single Carrier; Its Nonstop 

Flights Attract More Than 86% Of Total Passengers 

HOU-127 – The “Southwest Effect” Continues to Lower Fares and Stimulate Traffic: At 

Greenville-Spartanburg, South Carolina (GSP), After Entry By Southwest, 

The Overall Average Fares Fell By 14% While Passenger Traffic Increased 

By 38% 

HOU-128 – The Houston-DCA O&D Market Is More Than Twice As Large As The 

Jacksonville-DCA Market And More Than Eight Times As Large As The 

Oklahoma City-DCA Market; Hobby-DCA Alone Is A Larger Market Than 

Oklahoma City-DCA 
(iii) 

HOU-129 – Letter Of Support From The Greater Houston Partnership 

HOU-130 – Letter Of Support From The Bay Area Houston Economic Partnership 

HOU-131 – Letter Of Support From The Governor of Texas 
Exhibit HOU-101 

Recent Entry By Southwest Lowered Fares And Stimulated Traffic At Both 

Charleston, South Carolina (CHS) And Greenville-Spartanburg, South Carolina 

(GSP), Including For Passengers Traveling To/From Houston 

 

 Charleston (CHS) Greenville-Spartanburg (GSP) 

 Average Fare Passengers Average Fare Passengers 

 Nashville (BNA) 

 Before Southwest $261 13,093 $295 3,300 

 After Southwest $117 53,361 $111 29,961 

 Change -$144 +40,268 -$184 +26,661 

 % Change -55% +308% -63% +808% 

 

 Baltimore (BWI) 

 Before Southwest $201 32,304 $212 6,180 

 After Southwest $135 131,785 $119 74,509 

 Change -$66 +99,481 -$93 +68,328 

 % Change -33% +308% -44% +1106% 

 

 Chicago (MDW, ORD) 

 Before Southwest $212 68,791 $237 33,776 

 After Southwest $172 137,308 $154 112,001 

 Change -$40 +68,517 -$83 +78,225 

 % Change -19% +100% -35% +232% 

 

 Houston (HOU, IAH) 

 Before Southwest $223 39,605 $259 25,643 

 After Southwest $193 61,597 $193 64,726 

 Change -$29 +21,993 -$66 +39,083 

 % Change -13% +56% -25% +152% 

 

 Before Period = CY 2010; After Period = YE Q1 2012 

Note: Includes fared O&D passengers; fares exclude taxes and fees 

Source: U.S. DOT O&D Survey via Diio 

 
Exhibit HOU-102 (Page 1 of 2) 

Hobby Offers the Largest Number of Low-Cost Carrier Seats And Flights Among 

Texas Airports 

LCC Seats at Six Major Texas Airports - CY 2012

5.8

2.4

1.5 1.4

2.9

6.9

0

1

2

3

4

5

6

7

8

HOU DAL AUS SAT DFW ELP

Annual Seats (Millions)

Source: OAG via Diio
Exhibit HOU-102 (Page 2 of 2) 

Hobby Offers the Largest Number of Low-Cost Carrier Seats And Flights Among 

Texas Airports 

LCC Flights at Six Major Texas Airports - CY 2012

42.4

17.3

10.5 10.2

50.7

21.7

0

10

20

30

40

50

60

HOU DAL AUS SAT DFW ELP

Annual Flights (000)

Source: OAG via Diio
Exhibit HOU-103 (Page 1 of 2) 

Eleven Communities Behind/Beyond Hobby Would Benefit From A New RoundTrip Connecting Opportunity To/From DCA Via Hobby 

Behind Houston/Hobby – Washington National

1025 1420

HOU DCA

CRP 0800

MAF 0800

HRL 0840

MSY 0915

DAL 0930

AUS 0940

SAT 0940

ABQ 0950

ELP 0950

OKC 0950

TUL 0950

Source: December 2012 OAG
Exhibit HOU-103 (Page 2 of 2) 

Eleven Communities Behind/Beyond Hobby Would Benefit From A New RoundTrip Connecting Opportunity To/From DCA Via Hobby 

Washington National – Beyond Houston/Hobby

1720 1500

HOU DCA

ABQ 1755

AUS 1755

ELP 1755

OKC 1755

SAT 1755

TUL 1755

DAL 1800

MSY 1815

MAF 1835

CRP 1905

HRL 2030

Source: December 2012 OAG
Exhibit HOU-104 (Page 1 of 2) 

Texas Overall Has Excelled In the Post-Recession Economic Recovery 
Exhibit HOU-104 (Page 2 of 2) 

Texas Overall Has Excelled In the Post-Recession Economic Recovery 
Exhibit HOU-105 

Houston Is The Fifth Largest U.S. Metropolitan Area 
Exhibit HOU-106 

The Population Of The Houston Metropolitan Area Far Exceeds That of The Other 

Metropolitan Areas To Which Service Has Been Proposed In This Proceeding – 

Jacksonville and Oklahoma City – And Houston Also Is Growing More Quickly 

Houston's Population Dwarfs The Other Two Markets

1.4 1.3

6.1

0

1

2

3

4

5

6

7

Houston Jacksonville Oklahoma City

Population (Millions)

Source: U.S. Census Bureau (July 1, 2011 Estimate)

Houston’s 2010/2011 Growth of 2.35% was 

Larger Than Both Jacksonville (1.09%) 

and Oklahoma City (2.00%)
Exhibit HOU-107 

The Number Of Households In The Houston Metropolitan Area Far Exceeds That 

of The Other Metropolitan Areas To Which Service Has Been Proposed In This 

Proceeding – Jacksonville and Oklahoma City 

Houston's Households Dwarf The Other Two Markets

0.5 0.5

2.1

0.0

0.5

1.0

1.5

2.0

2.5

Houston Jacksonville Oklahoma City

Households (Millions)

Source: U.S. Census Bureau (July 1, 2011 Estimate)

Houston’s Household Total was More 

Than Four Times as Large as Both 

Jacksonville and Oklahoma City
Exhibit HOU-108 

Twenty-Five Fortune 500 Companies Are Headquartered in Houston 
Exhibit HOU-109 

Houston Hosts The Third-Largest Concentration Of Fortune 500 Headquarters in 

the U.S. 

Houston Has The 3rd Most Fortune 500 Headquarters

67 29 20 19 18 18 16 14 13 25

0

15

30

45

60

75

New York

Chicago

Houston

Washington

Los Angeles

Dallas

Minneapolis

San Francisco

San Jose

Atlanta

Source: Fortune Magazine (May 2012)

Over Half of the Fortune 500 Companies 

Headquartered in the Houston Metropolitan 

Area are Involved With The Energy Industry
Exhibit HOU-110 

The Number Of Fortune 500 Headquarters In Houston Exceeds By A Factor Of 

Four the Number In Jacksonville And Oklahoma City Combined 

Houston Has More Fortune 500 Headquarters

4

2

25

0

5

10

15

20

25

30

Houston Jacksonville Oklahoma City

Source: Fortune Magazine (May 2012)

Houston has More than Four Times the 

Number of Headquarters as Jacksonville 

and Oklahoma City Combined
Exhibit HOU-111 

Approximately Half Of The Houston-Based Fortune 500 Companies Have 

Operations In The Washington, D.C. Area And Thus Could Benefit From 

Southwest’s HOU-DCA Proposal 
Exhibit HOU-112 

Three-Quarters Of The Washington, D.C.-Based Fortune 500 Companies Have 

Operations In The Houston Area And Thus Could Benefit From Southwest’s HOUDCA Proposal 
Exhibit HOU-113 

The Number Of Federal Employees In Houston Exceeds The Number In Both 

Jacksonville And Oklahoma City By A Significant Factor 
Exhibit HOU-114 

The Number Of Federal Establishments In Houston Exceeds The Number In Both 

Jacksonville And Oklahoma City 
Exhibit HOU-115 

The Employment Figures for Houston Exceed By A Factor of Four The Figures 

For Both Jacksonville And Oklahoma City 

Houston's Employment Dwarfs The Other Two Markets

0.6 0.6

2.8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Houston Jacksonville Oklahoma City

Employment (Millions)

Source: U.S. Census Bureau (July 1, 2011 Estimate)

Houston’s Employment was More 

Than Four Times as Large as Both 

Jacksonville and Oklahoma City
Exhibit HOU-116 

Houston’s Gross Regional Product (GRP) Exceeds By A Factor of Six The Figures 

For Both Jacksonville And Oklahoma City 

Houston's Gross Regional Product Is The Largest

$60.3 $58.3

$384.6

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Houston Jacksonville Oklahoma City

GRP (Billions)

Source: U.S. Department of Commerce, Bureau of Economic Analysis(2010)

Houston’s GRP in 2010 was More Than 

Six Times Larger Than Those of Both 

Jacksonville and Oklahoma City
Exhibit HOU-117 (Page 1 of 2) 

Among U.S. Metropolitan Areas, Houston’s Recovery From The Recession Has 

Been The Fastest And Most Substantial 
Exhibit HOU-117 (Page 2 of 2) 

Among U.S. Metropolitan Areas, Houston’s Recovery From The Recession Has 

Been The Fastest And Most Substantial 
Exhibit HOU-118 

If Houston Were A Sovereign Nation, It Would Rank As The World’s 26th Largest 

Economy 
Exhibit HOU-119 

Houston Has The Third-Largest Concentration Of Consulates And International 

Trade Offices In The U.S., Reflecting Its Role As An International Business Center 
Exhibit HOU-120 

Houston’s Role As An International Business Center Is Also Demonstrated By 

The Significant Volume of International Trade – $268 Billion in CY 2011 – Through 

the Houston Customs District 

Houston Was The 3rd Largest Trade District In CY 2011

$388 $268 $387 $244 $234 $216 $177 $128 $126 $120

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

New York

Los Angeles

Houston

Detroit

New Orleans

Laredo

Chicago

Seattle

Savannah

San Francisco

International Trade value (Billions)

Source: Wiser LLC

Houston had the Highest Year-Over-Year 

Growth Rate of International Trade Among 

the 20 Largest U.S. Trade Districts 
Exhibit HOU-121 (Page 1 of 2) 

Houston Has A Highly Diverse Economic Base Which Is A Cornerstone Of Its 

Economic Success 
Exhibit HOU-121 (Page 2 of 2) 

Houston Has A Highly Diverse Economic Base Which Is A Cornerstone Of Its 

Economic Success 
Exhibit HOU-122 

Expansion Of The Panama Canal Will Stimulate Additional Economic Growth 

Through The Port of Houston, Which Is Located Close to Hobby 
Exhibit HOU-123 

Hobby Plays A Key Role In the Houston Economy, And Is A Major Domestic And 

Future International Gateway For Southwest And Other Airlines 
Exhibit HOU-124 

DCA-IAH Is The Third-Largest Ex-DCA O&D Market In Which A Single Carrier Has 

A Monopoly, And Competition Is Lacking 

IAH Is DCA's 3rd Largest Monopoly Market

0.0

0.2

0.4

0.6

0.8

1.0

1.2

BOSORD

ATL

MCO

FLL

MIA

DFW

LGADEN

MSP

IAH

TPA

MKE

SEA

LAX

MCI

DTW

LAS

MSY

STL

PHX

SFO

IND

JAX

OMA

Annual O&D Passengers (Millions)

Source: U.S. DOT OD1B (YE 2Q 2012) and December 2012 OAG

DCA Competitive Market

DCA Monopoly Market
Exhibit HOU-125 

IAH-DCA Is The Fourth-Largest Ex-IAH O&D Market In Which A Single Carrier Has 

A Monopoly, And Competition Is Lacking 

DCA Is IAH's 4th Largest Monopoly Market

0

100

200

300

400

500

600

ORD

LAX

LGA

EWR

DEN

LAS

SFO

ATL

SEA

PHL

DCA

BOS

MCO

DFWMSY

MIA

PHX

DTW

SAN

MSP

PIT

BWIFLL

SLCSNA

Annual O&D Passengers (000)

Source: U.S. DOT OD1B (YE 2Q 2012) and December 2012 OAG

IAH Competitive Market

IAH Monopoly Market
Exhibit HOU-126 

The DCA-IAH Market Is Today Dominated By A Single Carrier; Its Nonstop Flights 

Attract More Than 86% Of Total Passengers 

United Dominates The DCA - IAH Market

86.2%

8.1%

3.4% 2.2%

0%

20%

40%

60%

80%

100%

United US Airways American Delta

Source: U.S. DOT OD1B (YE 2Q 2012)

United Offers The Only 

Nonstop DCA-IAH Service
Exhibit HOU-127 (Page 1 of 3) 

The “Southwest Effect” Continues to Lower Fares and Stimulate Traffic: At 

Greenville-Spartanburg, South Carolina (GSP), After Entry By Southwest, The 

Overall Average Fares Fell By 14% While Passenger Traffic Increased By 38% 
Exhibit HOU-127 (Page 2 of 3) 

The “Southwest Effect” Continues to Lower Fares and Stimulate Traffic: At 

Greenville-Spartanburg, South Carolina (GSP), After Entry By Southwest, The 

Overall Average Fares Fell By 14% While Passenger Traffic Increased By 38% 
Exhibit HOU-127 (Page 3 of 3) 

The “Southwest Effect” Continues to Lower Fares and Stimulate Traffic: At 

Greenville-Spartanburg, South Carolina (GSP), After Entry By Southwest, The 

Overall Average Fares Fell By 14% While Passenger Traffic Increased By 38% 
Exhibit HOU-128 

The Houston-DCA O&D Market Is More Than Twice As Large As The JacksonvilleDCA Market And More Than Eight Times As Large As The Oklahoma City-DCA 

Market; Hobby-DCA Alone Is A Larger Market Than Oklahoma City-DCA 

Houston - DCA Dwarfs The Other Two Markets

145.6

39.7

323.3

0

50

100

150

200

250

300

350

Houston Jacksonville Oklahoma City

Annual O&D Passengers (000)

Source: U.S. DOT OD1B (YE 2Q 2012)

HOU-DCA Alone (46,290 Passengers) 

Is Larger Than OKC-DCA
Exhibit HOU-129 (Page 1 of 2) 

Letter Of Support From The Greater Houston Partnership 
Exhibit HOU-129 (Page 2 of 2) 

Letter Of Support From The Greater Houston Partnership 
Exhibit HOU-130 

Letter Of Support From The Bay Area Houston Economic Partnership 
Exhibit HOU-131 

Letter Of Support From The Governor of Texas 
CERTIFICATE OF SERVICE

I certify that on this 19th day of December 2012, a copy of the foregoing was 

served on the parties named below in accordance with the Department’s Rules of 

Practice. 

Jol A. Silversmith 

Robert W. Kneisley 

 Executive Vice President – Associate 

 General Counsel 

Leslie Abbott 

 Senior Attorney 

Southwest Airlines Co. 

bob.kneisley@wnco.com

leslie.abbott@wnco.com

Howard Kass 

 Vice President, Legal and 

 Government Affairs 

Benjamin Slocum 

 Director, Legal and Government 

 Affairs 

US Airways, Inc.

howard.kass@usairways.com

benjamin.slocum@usairways.com

Jonathan B. Hill 

J. Parker Erkmann 

Counsel for JetBlue Airways 

 Corporation 

jhill@dowlohnes.com

perkmann@dowlohnes.com

Dan Weiss 

Managing Director, International and 

 Regulatory Affairs 

United Continental Holdings, Inc. 

dan.weiss@united.com

John E. Potter 

 President and Chief Executive Officer 

Quince Brinkley 

 Vice President and Secretary 

Metropolitan Washington Airports 

 Authority 

john.potter@mwaa.com

quince.brinkley@mwaa.com

Steve Grossman 

 Executive Director-Chief Executive 

 Officer 

Jacksonville Aviation Authority 

steve.grossman@flyjacksonville.com

Mark Kranenburg 

 Director 

Oklahoma City Department of 

 Airports

mark.kranenburg@okc.gov

todd.homan@dot.gov

susan.kurland@dot.gov

esta.rosenberg@dot.gov

info@airlineinfo.com