BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

_____________________________________

In the Matter of the Petition of )

)

AIRTRAN AIRWAYS, INC. ) Docket No. FAA-2003-14563;

) Exemption No. 8112D

For exemption from 14 C.F.R. Section 93.123 )

_____________________________________ )

PETITION OF AIRTRAN AIRWAYS, INC.

FOR EXTENSION OF SLOT EXEMPTION

Communications with respect to this document should be sent to:

Bob Jordan Robert W. Kneisley

 President Associate General Counsel

AIRTRAN AIRWAYS, INC. Leslie C. Abbott

9955 AirTran Boulevard Senior Attorney

Orlando, FL 32827 SOUTHWEST AIRLINES CO.

 1901 L Street, N.W., Suite 640

Washington, D.C. 20036 

 bob.kneisley@wnco.com

(202) 263-6284

April 23, 2012
1

BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

WASHINGTON, D.C.

_____________________________________

In the Matter of the Petition of )

)

AIRTRAN AIRWAYS, INC. ) Docket No. FAA-2003-14563;

) Exemption No. 8112D

For exemption from 14 C.F.R. Section 93.123 )

_____________________________________ )

PETITION OF AIRTRAN AIRWAYS, INC.

FOR EXTENSION OF SLOT EXEMPTION

AirTran Airways, Inc. (“AirTran” or “the Company”)1hereby petitions the Federal 

Aviation Administration (“FAA”) for an extension of Exemption No. 8112, as amended, 

for an additional two-year period. Originally awarded in 2003, this exemption from 14 

C.F.R. § 93.123 grants AirTran the authority to conduct three scheduled insideperimeter operations at Ronald Reagan Washington National Airport (“DCA”). If not 

renewed the current exemption will expire on September 30, 2012.

2

Coupled with AirTran’s other modest slot holdings at DCA, these three slot

exemptions facilitate AirTran’s current level of service between DCA and Atlanta 

(“ATL”), Milwaukee (“MKE”) and Fort Myers (“RSW”) Airports. AirTran’s service in these 

markets has provided consumers with high-quality, low-cost travel options, and 

passenger traffic has increased in all three markets significantly since AirTran’s entry. 

Accordingly, AirTran seeks renewal of Exemption No. 8112 for a minimum of two years. 

 

1

AirTran Airways, Inc. is a wholly owned subsidiary of Southwest Airlines Co.

2

AirTran relies upon the automatic extension provisions of 5 U.S.C. § 558(c) to maintain the subject authorities in 

effect beyond the expiration date, pending FAA’s action on this petition. 
2

I. AirTran’s Operations Under Exemption 8112 Clearly Satisfy the 

FAA’s Public Interest Standard and Should Therefore Be Extended

As stated in the FAA’s 2003 decision originally awarding Exemption 8112 to 

AirTran, the FAA determines if an exemption should be granted or extended by 

evaluating “how [the exemption] would be in the public interest, that is, how it would 

benefit the public as a whole...,” quoting from 14 CFR §11.81.

3

 In this case, the FAA 

defines “public interest” as the term is stated in 49 U.S.C. § 40101(a)(1), which codifies

Section 102(a)(7) of the Federal Aviation Act of 1958: “avoiding unreasonable industry 

concentration, excessive market domination, monopoly powers, and other conditions 

that would tend to allow at least one air carrier or foreign air carrier unreasonably to 

increase prices, reduce services, or exclude competition in air transportation."4

In 2003, the FAA concluded that allocating the three slot exemptions to AirTran 

“would complement recent Department action under AIR-21 and provide [AirTran] with 

[a] meaningful opportunity to conduct service at DCA.”5 Moreover, Congress and the 

Department of Transportation (“DOT” or “the Department”) have consistently recognized 

the importance of enabling new entrant and limited incumbent carrier access to high 

fare slot-controlled airports such as DCA. For example, in the recent US/DL Slot Swap 

proceeding, the DOT/FAA stated:

“In considering what is in the public interest in this instance, the FAA is 

guided by the policy goals prescribed for the Secretary in 49 U.S.C. §§ 

40101(a)(4), (6), (10-13) and the pro-competition policies followed by 

Congress in adopting legislation on matters such as slot exemptions and 

airport grant programs....These pro-competitive policies derive from the 

Airline Deregulation Act of 1978 and direct the Secretary to consider, as in 

 

3

Exemption No. 8112, p. 5 (August 14, 2003) in this docket (quotations in original). 

4

Id. at 6, fn. 9 (quotations in original).

5

Id. at 7.
3

the public interest, placing maximum reliance on airline competition and 

opportunities for new entrant airlines.”6

Following the initial award of the exemption in 2003, FAA granted AirTran four 

consecutive extensions in 2005, 2007, 2009 and 2010. In each case the FAA found 

that “the justification for the issuance of exemption number 8112, as amended, remains 

valid and is in the public interest.”

7

There have been no material changes in 

circumstances that would affect the FAA’s public interest findings that were the basis for 

granting the original exemption and the four subsequent extensions. Accordingly, 

AirTran respectfully requests that FAA, consistent with past practice and precedent, 

renew Exemption No. 8112 for a minimum of two years to September 30, 2014. 

II. The Three Slot Exemptions at Issue Here are Essential to AirTran’s 

Limited Service at DCA 

AirTran is a “limited incumbent” at DCA and currently operates only 25 slots, or 

2.9% of the airport total.

8

 With an average of only 12 daily flights to four destinations, 

AirTran’s DCA slot holdings are miniscule in comparison to those of the dominant 

carrier, US Airways, which controls 460 DCA slots, 54% of the airport total, and 

operates 237 daily departures to 67 destinations.

9

 To state the obvious, it is extremely 

difficult for a limited incumbent like AirTran to mount an effective competitive response 

to US Airways, restrain DCA fares, and produce meaningful consumer benefits. The 

loss of three slot exemptions would make that challenge much more difficult.

The three operations at issue here account for 12% of AirTran’s DCA flights and 

are therefore critical to its ability to provide effective low-fare competition at DCA. 

 

6

Petition for Waiver of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, 75 Fed. Reg. 

7306, 7307 (Feb. 18, 2010)(internal citations omitted). 

7

See, e.g., Exemption No. 8112D, p. 2, issued June 14, 2010. 

8

See 14 C.F.R. § 93.213(a)(5) as amended by 49 U.S.C. § 41714(h)(5).

9

Official Airline Guide (OAG), July 2012 , Weekday Average.
4

Consistent with FAA’s public interest findings in its original 2003 grant, extending 

Exemption 8112 will “allow[ ] a carrier to maintain or achieve access to the airport.”10 

Moreover, as FAA acknowledged in 2003, and as confirmed more recently, “successful 

entry at DCA requires more than a few operations.”11 Therefore, continuing to allow 

AirTran use of these slot exemptions is in the public interest because it will enable a 

limited incumbent carrier to maintain a viable minimum presence, continue to produce 

effective competition, and provide consumers with valuable, low-fare service options. 

It is also in the public interest to maximize the utilization of the scarce public 

resources these slot exemptions represent. AirTran’s service at DCA is provided with 

large, mainline Boeing 737-700 and 717 aircraft, configured for 137 and 117 seats 

respectively. AirTran’s average number of seats per departure is 120, compared to only 

78 for US Airways.

12

 AirTran’s use of larger aircraft makes a much greater number of 

seats and low fares available to the traveling public per slot, thereby increasing access 

to DCA and making better use of these valuable public assets. 

III. AirTran Uses the Three Slots at Issue to Provide Critical Low-Fare 

Service and Public Benefits in Three Distinct DCA Markets

Relying in part on the three slot exemptions authorized by Exemption 8112, 

AirTran operates nonstop service in the DCA-ATL market, competing with Delta Air 

Lines; in the DCA-MKE market, competing with Frontier Airlines; and in the DCA-RSW 

market, competing with US Airways (see Exhibit FL-1).

13 AirTran’s participation in these 

 

10 Exemption 8112, p. 7.

11 See, e.g., 76 Fed. Reg. 63702, 63708 (Oct. 13, 2011) (US/DL Slot Swap) (larger slot bundles will provide “a 

sufficient array of slots to operate and maintain competitive service throughout the day” and “is the best approach to 

optimize competitive discipline.”

12 Official Airline Guide (OAG), July 2012.

13 US Airways has announced that it will terminate nonstop DCA-RSW service in May 2012, after which AirTran will 

provide the only nonstop service in the market.
5

markets has restrained fares and grown passenger traffic. Continuation of these 

services is clearly in the public interest.

DCA – Atlanta

AirTran entered the DCA-ATL market in 2003, and one year later the average 

market fare dropped 28% and O&D passengers increased 89% (Exhibit FL-2). From 

2003 to the most recent 12 month period (YE Q3, 2011) the average fare in the DCAATL market declined 15% and total passengers increased 126% (Exhibit FL-3). AirTran 

disciplines pricing in this market by offering a viable schedule for both business and 

leisure travelers. Continuation of this service is in the public interest.

DCA – Milwaukee

When AirTran entered the DCA-MKE market in 2009 the average fare declined 

by $30, or 22%, and O&D passengers increased 17% (Exhibit FL-4). From the time of 

AirTran’s entry in 2009 until the most recent 12 month period, traffic in the DCA-MKE 

local market increased 67% while the average market fare declined 18% (Exhibit FL-5). 

AirTran’s service in this market is critical to the continued provision of low fares and 

significant consumer savings. 

DCA – Ft. Myers

AirTran entered the DCA-RSW market in 2003 and its low-fare service has been

well received by passengers. AirTran’s service resulted in a remarkable 106% increase 

in local DCA-RSW passengers in the year after AirTran entered the market (Exhibit FL6), and a 129% increase since AirTran began service in 2003 (Exhibit FL-7). The traffic 
6

response in the DCA-RSW market significantly exceeded the U.S. national and total 

DCA benchmark comparisons.14

For the foregoing reasons, AirTran Airways respectfully requests that FAA, 

consistent with past practice and precedent, renew Exemption No. 8112 for a minimum 

of two years to September 30, 2014. To facilitate a timely decision without uncertainty 

or interruption to current scheduled service at DCA, AirTran respectfully requests that 

this petition be processed expeditiously.

Respectfully submitted,

____________________

Robert W. Kneisley

April 23, 2012

 

14 Over the same period in which DCA-RSW traffic increased 129%, U.S. domestic traffic increased 11% and DCA 

traffic increased 29%. Source: U.S. DOT, O&D Survey and Schedule data, via Diio, LLC, YE Q3 2003 to YE Q3 

2011.
7

CERTIFICATE OF SERVICE

I hereby certify that on April 23, 2012, a copy of the foregoing was served via email on the following persons:

Louis Miller

Aviation General Manager

City of Atlanta Department of Aviation

 Hartsfield-Jackson Atlanta International Airport

Louis.Miller@atlanta-airport.com

Barry Bateman

Airport Director

General Mitchell International Airport

bbateman@mitchellairport.com

Robert M. Ball

Executive Director

Lee County Port Authority

 Southwest Florida International Airport

rmball@swfia.com

John E. Potter

President and Chief Executive Officer 

Metropolitan Washington Airports Authority

john.potter@mwaa.com

Kathryn B. Thomson, FAA Chief Counsel

kathryn.thomson@faa.gov

Marc L. Warren, FAA Deputy Chief Counsel

marc.warren@faa.gov

Rebecca MacPherson, FAA Assistant Chief Counsel, Regulations Division

rebecca.macpherson@faa.gov

Brian Meehan, Director FAA Office of Slot Administration

brian.ctr.meehan@faa.gov

__________________________

Leslie C. Abbott
DCA

ATL

MCO

MKE

RSW

AirTran Requires the Slot Exemptions at Issue 

for Three of Its Four DCA Routes

Exhibit FL-1

Source: OAG Schedules for the week of June 11th through the 17th, 2012

Routes with slots at Issue

Other DCA route 

FL Weekly FL Weekly

Departures Seat-Departures

ATL 42 4,954

MKE 27 3,159

RSW 7 819
313,157

592,612

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

When AirTran Entered the DCA-ATL Market Fares Dropped 

28% and O&D Passengers Increased 89%

$183

$131

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

DCA-ATL Market 

O&D Passengers

Year Before

FL Nonstop

(YE Q3 2003)

Year After

FL Nonstop

(CY 2004)

DCA-ATL Market

Average Fares

Exhibit FL-2

+89%

-28%

Year Before

FL Nonstop

(YE Q3 2003)

Year After

FL Nonstop

(CY 2004)

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
126%

-15%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

DCA-ATL Passengers Increased 126% and Fares

Declined 15% Since AirTran Began Nonstop Service in 2003

% Change Since AirTran Began 

DCA-ATL Nonstop Service1

O&D Passenger 

Change Fare Change

1/ Compares YE Q3 2003 to YE Q3 2011.

Exhibit FL-3

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
158,950

185,915

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

When AirTran Entered the DCA-MKE Market Fares Dropped 

22% and O&D Passengers Increased 17%

$134

$104

$0

$20

$40

$60

$80

$100

$120

$140

$160

DCA-MKE Market 

O&D Passengers

Year Before

FL Nonstop

(YE Q1 2009)

Year After

FL Nonstop

(YE Q2 2010)

DCA-MKE Market

Average Fares

Exhibit FL-4

+17%

-22%

Year Before

FL Nonstop

(YE Q1 2009)

Year After

FL Nonstop

(YE Q2 2010)

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
67%

-18%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

DCA-MKE Passengers Increased 67% and Fares

Declined 18% Since AirTran Began Nonstop Service in 2009

% Change Since AirTran Began 

DCA-MKE Nonstop Service1

O&D Passenger 

Change Fare Change

1/ Compares YE Q1 2009 to YE Q3 2011.

Exhibit FL-5

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
57,690

118,967

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

When AirTran Entered the DCA-RSW Market 

O&D Passengers Increased 106%

$120 $118

$0

$20

$40

$60

$80

$100

$120

$140

DCA-RSW Market 

O&D Passengers

Year Before

FL Nonstop

(YE Q3 2003)

Year After

FL Nonstop

(CY 2004)

DCA-RSW Market

Average Fares

Exhibit FL-6

+106%

Year Before

FL Nonstop

(YE Q3 2003)

Year After

FL Nonstop

(CY 2004)

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.
129%

9 %

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

130%

140%

DCA-RSW Passengers Increased 129% 

Since AirTran Began Nonstop Service in 2003

% Change Since AirTran Began 

DCA-RSW Nonstop Service1

O&D Passenger 

Change Fare Change

1/ Compares YE Q3 2003 to YE Q3 2011.

Exhibit FL-7

Note: Fared passengers only. Excludes all taxes and government charges.

Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.