/^sSX THE SECRETARY OF TRANSPORTATION • ;;;,3Il^ip^0^ 

a ^ M\ WASHINGTON DC 20590 '^-j-' vH'7-'r(\ij^jl' ,^ 

•"""'^'^ September 02. 2011 -" oCP ! b A iO^ 0 1 

The Honorable Charles E. Schumer 

United States Senate 

Washington, DC 20510 

Dear Senator Schumer: 

Thank you for your letter expressing your support for a revised proposed agreement by which 

Delta Air Lines would exchange certain slot interests at Reagan Washington National Airport for 

certain US Airways slot interests at LaGuardia Airport, 

You requested that we review this transaction quickly and thoroughly, citing potential benefits to 

the economy and residents of New York Stale, such as increased convenience and accessibility 

across New York State, improved quality of air service at LaGuardia, and reduced chronic delays 

and congestion along with greater overall capacity. 

On July 21, the Department proposed to approve this transaction with conditions, subject to a 

public comment period that expired on August 29,2011. Under the proposal, Delta would be 

allowed to exchange 42 slot pairs at Reagan National for 132 US Airways slot pairs at 

LaGuardia, on the condition that 8 slot pairs at Reagan National and 16 slot pairs at LaGuardia 

be sold to airlines that have little or no presence at those airports. In addition, Delta and US 

Airways would be required to phase in their new operations, so as to limit the competitive risk 

assumed by the carriers obtaining the divested slots. 1 have enclosed the Federal Register Notice 

tentatively approving the airlines' request, with conditions. 

The Department's proposed decision, public comments, and other documents are being 

administered through a public docket. Following our normal practice, I am placing a copy of 

your letter and this response in the docket. No. FA A 2010-0109. 

I appreciate your interest in this proceediu^Jn" 1 can provide further informj(§)n or assistance, 

please feel free to call me. 

Enclosure 
Federal Ragbter/Vol. 76. No. 145/Thur«day. July 28. 2011/Notices 45313 

DEPARTMENT OF TRAmPORTATION SUPPLEMENTARV MFOnMAIION: 

Ftderal Avittlon Admlntotnrtlon 

[DoeM Ns. PAA-M1(M»(M| 

PaUlion for Walvw and Other Relief 

AcnoN: Notice of a petition for waiver 

and aolidtatlon of oominents on grant of 

petition with conditions. 

SUHMARV: On Mav 23.2011. Delta Air 

Unas, Inc. (Delts) and US Airways. Inc. 

(US Airways) (tagether, the Joint 

Applicants or the cairiers) subndtted a 

Joint request tor the Department of 

Ttanipoitation (the Department) to 

waive a prohibition on purchasing 

opeiaUng authorizations (slots) at 

LaGuardia Airport (LGA). The carriers 

rsquested the vraiver to allow tham to 

consummate a transaction in which US 

Airways would transfsr to Delta 132 slot 

pairs (26S slots) at VGA. In exchange, 

Delta would transfer to US Airways 42 

slot pairs (84 slots) at Ronald Reagan 

Wasolngton National Airport (DCA). 

convey route authority to operate 

certain flights to Sao Paulo. Brazil, and 

make a cash payment to US Airways. 

The Dq>artment (the Office of die 

Secralaiy and the Federal Aviation 

Administration, or PAA) has evaluated 

the propoMd transaction and tentatively 

detennued that It afflDrds significant 

benefits to the public. At the same time, 

we reoogiizs that the transaction will 

result in an increase in market 

concentration that could negatively 

inqpact consumers. As a result, we have 

tentatively detennined that the 

divestiture of a number of slots by the 

carriers Is necessary for us to allow the 

transaction to proceed. We have 

tentatively oonduded that the 

divestiture of 32 slota at LGA and 16 

sbts at DCA wrill laduce adverse 

impacts on oonsumen at DCA and LGA 

to a degree sufficlwit for us to coiudude 

that the requested waiver is In the 

public interest This Notice prescribes 

rules and procedures for the divestiture 

of those slots by the carriers to new 

entrant md limited incumbent cairiers. 

DATES: Comments on the PAA's 

proposed giant of the petition fw waiver 

with conditions must clearly identify 

the docket number and must be received 

on or before August 29,2011. 

ADDRESSES: YOU may send comments 

identified by Docket Number PAA2010-0100 using any of the followbig 

methods: 

ran ruRTHm MPomiATioN CONTACT: 

Rflbeoca MacPhatson, Assistant Chief 

Counsel for Regulations, by telephone at 

(202) 267-3073 w by electronic mail at 

iisbsoca.macpft«raoiiCj/ba.gov. 

Introduction 

The FAA limits the number of 

scheduled end unKheduled operations 

during peak hours at LGA pursuant to 

an Older that was originally published 

in December 2006 and that has been 

extended several times since (the 

Order).' The Otdat allocates operating 

Buthorizatlona (commonly known as 

"slou") to carriiBrs and establishes rules 

for the use and operation of slots. The 

Order allows tamporaiy leases and 

trades of slots between carriers. 

grovided that they do not extend 

syond the duration of the Order.* Most 

Importantiy for purposes of this waiver 

request, the Order Joes not permit the 

purchase and sale of slots at LGA. The 

only way for a carrier to sell or ptuchase 

a slot at LGA is through a waiver of the 

Order. 

A different legal rmlme governing 

slots exists at DCA. llie liigb Density 

Rule (HDR)* limits schedutod and 

unscheduled operations there. The HDR 

permits carriers to sell or purchase slots 

at DCA with PAA confirmation of the 

transaction. 

On May 23.2011, Delta and US 

Airways submitted a joint request for a 

limited waiver from tne prohibition on 

purchasing slots at LGA. The carriers 

requested the welver to allow them to 

coiuummate a transaction In which US 

Airways would transfer to Delta 132 slot 

pairs (Z6S sloto) at LGA. and Delta 

would transtar to US Airways 42 pairs 

(84 slota) at DCA. together with route 

authoiity to operate certain flints to 

Sao Paulo. Brazil, and make a cash 

payment to US Airways. The proposed 

transaction is desalbed In more detail 

below. 

We tentatively conclude that a waiver 

of the Order is warranted because the 

potential benefits of the proposed 

transaction, as modified by the 

I Opsralliii UmiliUaas al Niw York UGiwidit 

Alipnt. 71 FR 77 JS4 (DR. 27.2006); 72 FR 83.224 

(Nov. 6,2007) (tnoibt. mliihmini iu«|i. and 

urtthdrawtl imndmaBM]: 72 FR4Sd42S (Aii|. 19. 

2008) (radudng t)M mwwUoiii «««ildilt far 

luuclMdulid epmUoM); 74 FR 84$ Out S. 200S) 

(•xuodlntdi* acplniion dt u thieiigli Oct 24, 

200B); 74 PR 2 J4 a On. 19.2008) (radndng Uw 

padi-how Etp OD lehwliilwl opuidaas to 71^ 74 

PR 91.853 (Oct. 7.2008) (Klindliis tin mpitalian 

daU tbioi^h Oct. 28k 2011); 7S FR 18.eie (Apr. 4, 

2011) ImOmibm <k» Mpkitien dale ttMl) tha 

aWactfaa data oftlw BB J nniMMtfaw Maaagamaot 

Rula Ibr LaGuardia Aifport. JUu P. Kagaadr 

lataniiliMi) Aiipea and NawraA Libarty 

iManalioail Aimort bM Mt latat lliaia Oct 16. 

2019X 

'The Order |waiitly axpliae upon IIM tfliMtlve 

due of Ilia final CaaiMtiee ktauaniinl Rule at 

UCuaidIa Alipatt. laka P. Keaacdy fatimatlonal 

Aiipoit. and Newark Liberty iMematiaaal Aliport, 

but not later than October 28,2013. 

> 14 CFR pen 83, nibpeiti K and 8. 

conditions discussed below, outweigh 

its potential harms. 

Standard of Review; Legal Authority 

Because the proposed transaction 

involves the purchase of slots at LGA, 

we must determine whether a limited 

waiver of the Order is warranted. "Hie 

FAA Administrator may grant an 

exemption from e rule (or an order) only 

"when the Administrator dediles die 

exemption is In die public interest." 49 

U.S.C 4010e(b). The AdmlnlstiatOT is 

also authorized to "modify or revoke an 

assignment (of the use of airqwcaj when 

required in the public interest." 40 

U.S.C. 40103(b)(1)- Our determinations 

on requests for vveivera or exemptions 

are bu«d on our "public Interest" 

findings. 75 PR 7.307 and 75 FR 26.328. 

Accordingly, in reviewing the caniers' 

petition for a waiver, tve will consider 

the impacts of the overall transaction w 

part of our "public Interest" analysis 

and determination. 

The term "public interest" 

encompesses. at a minimum, the policy 

obiectlves listed by Confess in Section 

40101 of Title 40 U.S. Code. Among 

other things, these include maximizing 

reliance on competitive market forces, 

avoiding unreasonable Industry 

concentration and excessive market 

domination, and encouraging entry Into 

air transportation markets by new 

carriera. 40 U.S.C. 40101(a)(4). (6). (9). 

(10). (1Z)-<13) end (d). These objectives 

are not exclusive; they ere iiutors to be 

considered ("among others") by the 

Secretory In carrying cmt his 

responsibilities and authcrities. 

Moreover, these objectives are Included 

in the policies embodied in tiia Airline 

Deregulation Act of 1978. Public Law 

No. 95-504 (92 Stat. 1705). The 

Administrator may take these factorsincluding the fostering of competition— 

Into account whan making his pubHc 

interest determination. 

In the context of our public interest 

analysis, we will balance the economic 

benefits of the transaction against any 

potential resulting adverse economic 

consequences. Our standard does not 

require that we detamolne that a 

transaction threatens no economic 

impairment, but rather that any 

resulting adverse consequences are 

outweighed, in our ]uil«nent. fay the 

transaction's promised oenefits. 

In granting a waiver or exemption, we 

may bnpose contUtlons to achieve our 

public interest objectives.'* Congress 

gave the FAA Administrttor broad 

powers to fiishion orders to cany out 

aviation programs. The Admlnistntor's 

* Sen «!«., Soutlk Oakata K iMK 483 U.& 203. 

208(1887). 
45314 Federal Register/Vol. 76. No. 14S/Thunday. July 28, 2011/Notices 

general authority empowers him to 

"take action (die Administrator! 

considers naoessaty to carry out this 

put |49 U.S.C chapters 401-601), 

including conducting Investigations, 

prescribing regulations, standards, and 

firooedures. and issuing orders." 40 I.S.a 40113(a). In furtherance of tills 

authority, Congress expressly allowed 

the Administrator to "amend, modify, or 

suspend an order" and to do so "In the 

WW* * * die Administrator decides." 

49 U.S.C 461l»(a). Accordingly, tiie 

Administrator may impose coniUUons 

on grants of waivers or exemptions. 

Additionally, the Seiaetary of 

Transportation may require 

conditions—such «s divestitures of slots 

and/or other assets. Including route 

authority—on the approval of certain 

transsctlons between ebllnes. 

The FAA has r^ularly relied on procompetitive polii» goals in carrying out 

its slot programs.* llie FAA oonsistentiy 

has coiuldered the pro-competitive 

features of the Airline Dermidation Act 

in exercising its slot alfocatUKi 

authority. Conditioning the grant of the 

petition upon divestitures of slots In 

order to aHeviate significant alrilne 

market concentration (at DCA for US 

Airways and at LGA for Delta) and 

dominance Is consistent with past FAA 

poll ' 

i009 Trattgaction and Waiver Request 

This petition for waiver and other 

relief follows s prior waiver request by 

the same carriers. ^ August 24,2000, 

US Airways and Delta requested a 

waiver of the Order to allow a similar 

transaction to proceed.^ As in this case, 

In the 2009 transaction. Delta and US 

Airways proposed to traiufor a 

substantial proportion of their 

respective slot niridings et DCA and 

LGA to the odier carrier. In 2009. Delta 

profnsed to transfiBr 84 slots at DCA to 

US Airways, fai exchange for which US 

Afaways proposed to transfer 250 slots 

•Ihe FAA implannwed a "revaree lotlary" to 

leallooBte eloti to new eDtraalt end lindled 

Ineunbeaii, hut elter enacting the Binr^ll Rule. 

SI FR8Jt32Pte, 12.1886). In lBS2.tti8FAA 

enended the Bay^ell Rule to amand piatecUou 

elbidedneweniianlandlii ' ' 

oaiiler*. S7 FR 37 J88 at 37,308 (Ai«. 18.1883]: in 

2000, In the coBlexl of phiiins out the HDR at LC A. 

the FAA tpedfleally IdnitlBed new entreni and 

limited laeumheiweairtaialo be eUglMe br a 

lotlacy te ceMahi dot examptlcm. 89 FR 79,765 

(Dec 4.28014. Hie FAA, In Ihe peat CHaro 

finaiietiM md Delay Reduction Rule, (panted 

pirfeienUal tieataent to new araiaat and limited 

Innimheiii airllnai In awlgnlm new CT wlthdmwn 

alali Inlaarti. 14 CFR part S3, eufapeil B; 71 FR 

SMao(Ani.2aL2ao8X 

•The 2008 wwlwr lequeil. our prapoeed 

teipeiiia. all fomniante on cur remonia, and our 

flail order with tatpaet to Ihil wetn r requeat are 

evallable to ReguUtlcM«ov, DodM PAA-2010-

0108. 

at ICA to Deha. as well as an option to 

acquire an additional 30 slots in 2015, 

As In the current proposed transaction, 

the 2009 proposal involved other, nonslot considerations—Including a transfer 

to US Airways of certain international 

route authorities as well as gate, 

ticketing, and operations facilities at 

LGA's Terminal C 

The Department carefolly evaluated 

the carriera' 2009 petition and 

rasponded on February 18,2010.' In our 

initial re^onse, we ralated the carriws' 

assertion that the transaction would 

facilitate Delta's establishment of a 

domestic hub at LGA and US Airways' 

enhancement of its network at DCA; 

produce mora efficiencies at LGA 

(including Delta's plans to upgauge from 

US Airways' turboprops to jet eircraft;* 

provide new and enhanced service to 

small communities: and benefit 

consumera through enhanced network 

connectivity. Despite the transaction's 

asserted benefits, we did not believe 

that the 2009 transaction should go 

forward unless the carriera made more 

slots available for new entrants. Without 

a divestitura of slots by the carriers at 

both airports, we found that the 

transaction could generate advene 

economic consequences—partlctdarly 

due to the resulting decrease In 

competition between Delta and US 

Airways and the batrien to entry that 

limited the penetration of low cost 

competition at the two airports. 

Balancing the benefits of the proposed 

transaction agaiiut its potential advene 

Impact on competition, we proposed to 

approve the transaction subject to the 

condition that the carriera dispose of 20 

slot pain (40 slots) at LGA and 14 pain 

(28 slots) at DCA. We proposed that the 

slots be transferred to carriera whose 

access to DCA and LGA was otherwise 

limited. We established a procedure that 

would allow eligible carriera to compete 

to purchase the slots being sold by US 

Airways and Delta and permit the 

carriera to retain the cash proceeds of 

the disposition. 

We published our February 2010 

notice for public comment. We received 

extensive comments from Delta. US 

Airways, other carriera, air carrier labor 

unions, airport authorities, public 

ofiicials, and memben of the public. 

After reviewing those comments, we 

published our final notice regerding the 

prior transaction on May 11,2010 (May 

2010 Notice)." 

In our May 2010 Notice, we granted 

the waiver request, aubject to a nundier 

of conditions, as set forth in our initial 

notice from February of that year. 

Principally, we found that the public 

interest required that the cerriera divest 

themselves of 20 slot paira (40 slots) at 

LGA and 14 pain (28 sloto) at DO . 

Moreover, we laid out a basic set of 

requirements that should charactnize 

any effective remedy involving a 

disposition of sloto at the tvro airports. 

We sold that an effective remedy must: 

(1) Provide a sufficient number of sloto 

to allow other carrien to mount an 

effective competitive response: (2) 

define the pool of eligible carrien to 

include those with the greatest 

economic incentive to use the sloto as 

intensively as possible and exert 

competitive discipline; (3) ensure that 

the bundles of divested sloto are suitable 

for e commerdelly vieble service 

pattern and structured proportionate to 

the sloto that are part ot the slot swap; 

and (4) not cede slot distribution 

decisions to the parties Uiemselves, who 

would minimize the competitive impect 

on themselves and therel^ reduce 

consumer benefits. Our proposed order 

today follows these same principles. 

Delta and US Airways did not dioose 

to go forward with the transaction 

subiect to our proposed conditions. 

Instead, In a July 2,2010 filing, tiie 

carriera notified the Department of their 

intention to appeal our decision to the 

DC Cirouit Court of Appeals. They later 

did SO.I0 

iOI I Transaction: Otanged Economic 

and Industry Cottditiont 

The transaction u now proposed bv 

the carriera Is structurally similar to ma 

transaction pnmosed In 2009. Under the 

transaction, Delta would acquire 132 

slot pain (265 sloto) at LGA from US 

Airways and US Airways would acquire 

42 slot paira (84 sloto) at DCA from 

Delta and the righto to operate 

additional daily service to Sao Paulo, 

Brazil in 2015. Delta would also make 

a cash payment of S6S million to US 

Airways. 

In their waiver petition, the carrien 

have presented the Department with an 

analysis of the transaction's benefits. As 

outlined below, many of the benefito 

they assert will accrue from the 

transaction are the same es those that 

' Notice of e PiUtiaB lor Waiver of die Term* of 

the Older Umldnt Scheduled Opaialiena at 

LaCuaidla. 79 FR 7306 (Fahi 18.2010). 

* Such upgauglni could mult In a eigniflcant 

increaw in pawansef Ihniuhpul wllhout 

Incraailng congeitTea and delay. 

•Nolico on Palilloa fo Wahrar cTlhe Tn n of Iha 

Oidar UwHIng Scheduled OpawUana et LeCnadto 

Aiiporl. 75 FR 28J23 (May II. 2010X 

••Deltt Air Lbua. iaft and US Alrwayi, tab T. 

FManI AviaHoQ AdMniatralloa and ILS. 

Dapaitmanl ntTtanapoitatlai.CMe tlO-IlSS IDC 

Qr. lllodIuL2.2010]. 
Federal Register/Vol. 76, No. 145/'niursday, July 28, 2Dll/NoUce8 45315 

we analyzed in 2000 and 2010. The 

ceirienhave also claimed that chaiiges 

in die economy and atructura of the 

aviation Imlustry at DCA and LGA, 

since 2010. diainatically reduce the 

eoonmnic harms that we viewed as 

potential adverse consequences of the 

transaction. 

The carrien assert that the transaction 

will benefit consumen. At LGA. they 

deim, it will enable Delta to create e 

new domestic hub by consolidating its 

operations Into an expanded main 

terminal fodlity, Increasing ito LGA 

destinations, shiftlna short-haul service 

from John P. Keimedy International 

Airport (JFK) to LGA, and improving 

connectivity there. Delta states that it 

would add nonstop service and replace 

US Airways' turboprop operations at 

LGA with largn aircraft, which it argues 

would significantly exiMnd output and 

increase eCBden^. At DCA, the carriera 

assert, the transaction %rould enable US 

Airways to commence dally nonstop 

service to at least 15 new destinations, 

improve ooonectlvlty, and utilize larger 

aircraft. AddlttoiMlly. the transadion 

would reUeve US Airways of ito 

improfitable flying obligations at LGA 

and allow it to transfer Ito LGA facilities 

to Delta, restdting in a more effident use 

of the terndnal fisdiities at LGA. 

The carrien also highlight the fact 

that since the time of our review of 

their last ^mosad transadion, low-cost 

carrien (LCC9 have significantly 

Increased their market penetretlon at 

both DCA and LGA. The carrien state 

that JetBlue, AlrTran. and Frontier have 

inateased the number of LOC sloto at 

DCA by 46. thereby increasing the ICC 

slot share percental at that airport 

They maintain that these holdings 

inccsase the slot share of LOCs m m 

3.3% to 8.6% at DCA. exceeding the 

6.5% LCC slot share that would have 

obtained under the divestiture terms of 

our May 2010 Notice. At LGA, tiie 

carrien point out that Frontier. AlrTnn, 

and Southwest recentiy acquired slots, 

for a net increase of 18 LCC sloto. They 

maintain that these holdings increase 

the slot share of LCCs from 0.8% to 

8.5% at LGA. doser to the 10.3% LGC 

slot share soiight In our May 2010 

Notice. The carrien assert that an 

economic analysis demonstrates that the 

proposed remedy, coupled with the 

increased number of LCC slot holdings, 

would exceed the competitive effecto of 

tiie Department's May 2010 proposed 

divestihuvs of 20 LGA slot pain and 14 

DCA slot pairs. They say that the 

Soudiwest/AitTran merger will 

intensify conuietition in the 

Washington. DC, and New York Qty 

Furthermore, the carrien essert. the 

United/Continental merger, 

consummated on Septeinber 30,2010. 

enhanced United's competitive profile 

at both Newark Liberty Intemetional 

Afrport (EWR) and Washington Dulles 

International Airport, as well as at LGA 

and DCA. Moreover. Delta states that 

this transaction would enable it to 

establish a domestic hub at LGA, secure 

corporate accounts, shift short-haul JFK 

service to international service, end 

theraby address the competitive 

advantage securad by Ainerican 

Airlines/British Airways through their 

antitrust immunity alliance. 

Summoiy of Proposed Findings and 

Conditions 

As described in more detail below, we 

tentetively find that the proposed 

transadion. like the prior 2000 

transactton, oifen important benefito to 

the public.^* At the same time, as 

before, we believe that the pressed 

transaction could have an advene 

impact on competftion, because of the 

redudion in competition between the 

two carrien and uielr increased market 

share at the two airports, among other 

things. In evaluating the public interest 

in this transaction, we have cerefiilly 

weighed and balanced the benefito and 

possible advene consequences of the 

transaction. While we remain concerned 

about those possible consequences, as 

laid out In our 2010 notices, we believe 

the transedion's promised benefito for 

the public—particularly in light of the 

increased penetration of low cost 

carrien at the airporto since the time of 

our last review—are sufficient for us to 

conclude that the rsquested waiver is in 

the public interest. Accordingly, we 

have tentatively found that the 

transadion should be approved, subject 

to the conditions sd forth below, 

including raquiremento diet the carrien 

dispose of 16 pain (32 sloto) at LGA and 

8 pain (16 sloto) al IX^ punuant to the 

sale mechanisms dMcribed in detail 

below and that they transfer the 265 

LGA slots and 84 DCA sloto In two 

phases so as to attenuate the impacto of 

their new operations on their smallersized competiton at the aiiporto. 

We note that tiie Department Is 

evaluating this transaction under ito 

statutory authority alone. As described 

above, we are required to determine 

whether or not. on balance, welvlng the 

terms of the LGA Order to allow the 

proposed transaction to proceed Is in 

the public Interest. Our standard of 

review in this transadion is 

substantively different from that of the 

Department of Justice, which acto under 

a cfifTarant atatutory and regulatory 

framework. Our tentative conclusions 

presented here are not binding on die 

Department of Justice, which must 

evaluate the transadion tmder ito own 

statutory authority. 

Discussion 

Developments at DCA 

Since the Department last evaluated 

carrier slot holdings In connection with 

the Issuance of the May 2010 Ndtce, 

various service tdianges have occurred 

at DCA, soma of whldi Involved an 

expenslon of service by low-cost 

carrien. 

• Low-cost carrier AliTren. whldi 

held 16 sloto and slot exemptions at 

DCA at the time of our earlier analysis, 

received 6 sloto from Continental es part 

of an exchange for operating 

authorizations at EWR. The transfiar was 

designated as tempwary In nature, to 

expire October 29.2011, and 

Continental remains tiie slot holder of 

record. It added a pair of off-peak sloto 

allocated by the FAA ** and now 

operates a total of 24 weekday sfoto from 

DCA. AiiTran utilized the additional 

sloto from Cbntinentai to add 

firequendes to ito Atlenta and Oriando 

services. 

a On March 31,2010, JetBlue and 

American Airlines announced an 

agreement frir commerdal collaboration 

that Involved, inter alia, a transfer of 16 

sloto at DCA from American to JetBlue. 

The transfer was desi^Mted es 

temporary in nature, to expire October 

20,2011. and American remabis the slot 

holder of record.** JetBlue also was 

allocated one slot eadi In die 0600 and 

2200 hour periods by FAA (whidi 

periods a n not fully subscribed and so 

still available to new entry). Begbming 

November 1,2010. JetBlue initiated 

service from DCA with tiiese sloto, with 

seven dolly nonstops to Boston Li^an 

International Airport (BOS) and one 

dailv nonstop each to Fort LaudsrdaleHollywood International Airport (FLL) 

and Orlando International Afrport 

(M(X)).>4 JetBlue's new service 

•• Addltlooelly. the FAA finds that the gnat of 

Ihe waivsr would not advartaly albct aalely. 14 

CFRpaittl. 

•> AliTlan abo received two sbti from Ihe FAA 

lor Selurday only opantlena. 

"Th e arrangement aholndudad a tmneler, by 

JetBlue to Amarlean, of 34 slolt al IFK. The PAA 

llmita the number of adieduled opeieHom at IFK 

and, under en Order, permiteaiily leemctiadmor 

iranitut Uueugh tha duiaUon o( the Oid«. See 76 

FK 18.620, extending Ihe duraUoa o( the Ordw fiom 

October 28,2011 to the eSecUve dale efa final 

congeelton management rule et Ihe three New Yak 

a t y alrpoita OFK. ICA. and Newarit LIbaity 

iDtamaHou) Airport), or October 28.2013. 

M-The Mqr 2010 Notice noted Ihe pending 

ADie(iee»|etBlae apaaawil, HaUag thai. If 
45316 Federal Register/Vol. 76, No. 14S/Thursday, July 28, 2011/Notlces 

compotes primarily against US Airways 

and Delta on the DCA-BOS and DCAMOO routes, and against US Airways 

and Spirit on the DCA-FLL route. 

a Another transaction affeding LCC 

presence at DCA came In the wake of 

die 2009 acquisition of botii Midwest 

Airiines end LCC Frontier Airlines by 

Republic Airways Holdings Inc. 

SuDieiiuent to the Final Notice, 

Republic assigned 16 of Midwest's 18 

sloto to operations marketed by FWmtier 

(althou^ Republic remains the holder 

of record of me sloto)." Phintier utilizes 

diese sloto to provide service from DCA 

to Milwaukee, Kansas City, and 

Omaha.** The other two, which were 

slot exemptions, were reallocated to 

LOC Sun Country Airlines by DOT, 

when they are used to provide service 

to Lansing. Ml.'' 

a In anodiar development at DCA, on 

September 27,2010, Southwest Airiines 

and AiiThn Airways announced their 

intention to merge uelr operations 

through Southwest's scquisition of 

AliTtan in a stock and cash transadion. 

As noted above, at the time the 

Department was analyzing the prior 

application. AiiTran held and operated 

16 sloto and slot exemptions at DCA. 

which it used to provide service to 

Atlanta. Orlando, Milwaukee, and Ft. 

Myan. PL. Soudiwest is an LOC that has 

grown dramatically since 1090 to 

become die largest U.S. domestic carrier 

when measured by DOT Form 41 

segment tnnsported passeitgen. The 

acquisition of AlrTran will bring to DCA 

Southwest's brand recognition, 

passennr loyalty, and access to ito route 

network, wfaidi together should have a 

strong positive and tangible effed on 

overall compdition at DCA. Although 

entry hito AirTran's Atianta hub 

bnplemenled, LOC'e wiMild biciaefe their interetu 

to 12% of the DCA atoll. 63 FR al 36,333. We aleo 

noted thel Ihe tianaectiaa did not aibcl the 

eeaeanttallan lavri of US Airway* at DCA, tt dio 

•laK warn balm tmuiaiad to JetBlue not by i;S 

Abwuyi but ky Ametfeaa, which vrauld be Iti 

noireil live! et the airport if lb* UanMCIion ware 

appwead. 79 FRat 26 J38i 

*• a dwuld abe be noted that. 00 lone 13.2011. 

It we* reported thel Republic we* >eeking to ehrlnk 

lit holdlat* to Ftantiar Alitinee to a mtaerity etaka 

by the end of 2014, beaed on a lattalivo apaananl 

with Ftantler pilol*. A«*ed*tad Ptaae. RepoMfc 

Ak wuft Smm t Ntw hwwtew/br ftontwr. A/m* 

forhlliiarilySui»bySitdcf30t4. WatUntfonPotl. 

June 13. MIL 

**Thioogb analyeli of 2010 DOT Pom 41 Origin 

and DaMlnelion DMa, w* ha*e oooflimed that 

MIdwaM paneagv treflb: deeiinad end that 

Ftanller tiaflk oetiaapondlngly increieed In theta 

mukel* iidtetiag lid* raaatvuaant from Midweet/ 

Rapublie to Ftantiet. Mbieovar. we have cenOimod 

that Fkontlerhae maikated theee flight* at average 

yialda that era conaiatatt with LCC operation*. 

Accotdtavly. lb* 16 *lel* reeiiignad to Ftantiar 

beve beeniaoanied by the Depeitment e* (lot* 

flown by ijOOk 

•'DOT Ordtr 2010-12-16 (Oecanber 10.2010). 

appeara to be Southwest's main 

objective in punning the deal, the 

acquisition also expands Southwest's 

ndwork in one consolidated move, 

adding a number of additional 

unconnected dty pair markets into 

which it coidd expand its presence. The 

combined carrier therefore provicles an 

expanded LCC capability at DCA to 

provide passengers with additional 

trevel opportunities on new online 

routes through a laiger overall network. 

• The Joint Applicanto also argue that 

the merger between United and 

Continental, as well as the immunized 

American Airlines/British Airways 

alliance, will intensify competition.** 

Considering fint the UA/CO merger and 

ito impacto at DCA. it should be noted 

that the merged carrier has only a 5% 

shara of Ort^n & Destination ("O&D") 

passengen at that airport, which, with 

a legacy cost strudure, gives it limited 

ability to seriously imped competition 

there.** Moreover, while there is limited 

data from which to reedi conclusions at 

this point, our review of departures and 

average seato at DCA since the UA/CO 

merger shows a decline in the carrier's 

overall depertures, while ito yields 

dropped very slightly between 2009 and 

2010. We do not see from these 

indicatora that the merger has been as 

relevant to the slot swap competition 

issues before us as the other 

developments noted above. Similarly, 

we do not see the AA/BA alliance as 

significantly impacting competition at 

DCA. which of course is essentially 

domestic in character. As sho%vn in 

Table 3. American's shsre of departures 

at DCA dedined from 15.2% to 12.2% 

percent from fint quarter 2010 to fint 

quarter 2011. and ito seats from 15.5% 

to 13.9%. figures diat do not suggest 

increuing compditlveness. 

Developmento at LGA 

As at DCA, various service chaiiges 

have recentiy occurred at LGA, some of 

which involved an expansion of service 

by low-cost carrien. However, these 

cfianges were not es significant as those 

at DCA. 

• Late in 2009. AlrTran Airwaya 

began offering LGA-Indlanepolis and 

increased LGA-Orlando nignto widi 4 

LGA sloto it acquired from Continental, 

although it now only operates LGAMCO on Saturdays and Sundays. This 

acquisition was another part of the 

agreement, also noted above, by which 

it transferred to Continental 13 slots at 

EWR. as well as ito lone gate et that 

oPaUUon far Waiver and Other Relief. Mey 23. 

2011 el 13. 

••DOT Form 41 Origin and Oartlnalion Survay 

doto. 

airport. The Indtanapolis and Orlando 

fllghto compete with ofierings from 

Delta; JdBlue also has LGA-MCO 

flighto. 

• The Compass Lexicon study, 

attached to the Petition for Waiver as 

Appendbc A, notes that "Southwest 

aciquired one slot from the FAA."** 

They appear to be referring to tiie 

allocation by FAA. in mid-2000, of one 

0600 LGA departure slot, whidi 

increased Southwest's operating 

authorizations there from 14 to 15. 

Southwest had acquired the original 14 

sloto et LGA in Ito acquisition of ATA 

Airlines, and with the 0600 departure 

and an arrivel in die 2200 hour thd 

does not require a slot, it Is able to ofEw 

a total of 8 roundtrips from IJGA. 

Southwest utilizes tnese sloto to provide 

service to Midway and BWI airporto. 

• As part of an arrangement eiready 

described above. In November 2000 

Republic Airways acquired Midvrest 

and began operating Midwest's slots. In 

2010. Frontier. anoUiar RepubUc 

Airways Holdings LOC. bsgan operating 

13 sloto at LGA tliat had formerfy been 

operated by Midwest. Wdi tiiese 13 

slots, Frontier marfcato flights to 

Milwaukee end Kansas City. We have 

confirmed that Midwest passenger 

trafiic declined in thoee markato and 

that Frontier trafiic correspondingly 

increased during the fourui quarter of 

2010. and that PkonUer has markded 

those flighto at average yields diet are 

consistent with LCC operations. 

Accordingly, the 13 sloto reesslgned to 

Frontier era being treated by the 

Department as sloto flown ^y LCC^ 

• The Southwest-AirTran merger 

should also, as the Joint applicanto 

claim. Intensify competition at LGA. 

Prior to the merger. AirTkan had a 5.7% 

LGA seat share and Southwest a 2.6% 

shore. As et DCA, the meigar will bring 

to LGA Southwest's brandrecoenition, 

passenger loyalfy, and access to ito route 

network, which together should have a 

positive and tangible effect on overall 

competition at the airport. Also, If 

Southwest chooses to upgauge to Its B737s in some markets, it can increase 

seat capadty per flight by 15 seato over 

AirTran's average aircnn saatbig. 

• As noted above, the Joint 

Applicanto claimed that the UA/OO 

merger and the immunized AA/BA 

alliance will strengthen competition at 

New York as well as in Washington. 

Again, there is not much yield data 

available to support this contention, and 

whatever Impede there a n In New York 

will be felt more at EWR and JFK than 

at LGA. A review of American, United, 

••Peiittoa for Waiver and Qlhar Relief, May 23, 

2011. Appendix A eti a 
Federal Register/Vol. 76. No. 145/Thur8day, July 26. 2011/Notices 45317 

end Delta departures at LGA indicate these indlcaton that these depicting "original" and "current" 

that over the last two yean It to Delta developmento have been as relevant to competitive positions in both sloto and 

that has most expanded depertures at the slot swap competition issues at LGA number of departures, seeto. and 

LGA. while American'a departures have before us as the other fadon noted passengen for the carrien serving IXIA 

risen to a much lesser tlagiae and above. and LGA:** 

United's have remained essentially the The tables below capture the changed B&IMO ooea 4*t»-i>^ 

same. As shove, we do not see from drcumstanoes described above, by 

>• RepebUe Airwqr* Holding* bold* 113 total 

*lot( at DCA. a* the i**uh of a *aI«/)loan*iag 

tian*KtiaD with US Aiiwqr*. tl* *abddiarie* 

laigaly opanu from tbeeo *lol* undar pay-fa^ 

lervioe eireagMumt* with US Airway*. All 113 are 

oenmuler elM*. lather then air ceoier elol*. 

R*pihllo'*apentioii* fcom theee are inchidad 

wIlUn US Airway*'laantt* la tlM uUa* for DCA. 
45318 Federal Register/Vol. 76, No. 145/Thuwday, July 28. 2011/Notices 

Table 1 

DCA Slots - Previous and Current 

AIR CANADA 

AIRTRAN AIRWAYS 2/ 

ALASKA AIRLINES 

AMERICAN AIRUNES 

UNITED/ CONTINENTAL AIRUNES 

DELTA AIRUNES 3/ 

FRONTIER AIRUNES 4 / 

JETBLUE AIRWAYS CORP. 5/ 

MIDWEST AIRUNES 

REPUBUC AIRWAYS HOLDINGS, INC. 6/ 

SPIRIT AIRUNES 

SUN COUNTRY AIRUNES, INC. 

US AIRWAYS 7/ 

Total 

Slots 

•OriRlnal-l, 

16 

16 

6 

121 

83 

193 

6 

0 

18 

113 

6 

0 

254 

832 

Share 

1.9K 

1.9% 

0.7% 

14.5% 

10.0% 

23.2% 

0.7% 

0.0% 

2.2% 

13.6% 

0.7% 

0.0% 

30.5% 

100%" 

Slots 

VV20H 

16 

24 

6 

105 

76 

200 

22 

18 

0 

113 

6 

2 

263 

851 

Shara 

1.9% 

2.8% 

0.7% 

12.3% 

&9% 

23.5% 

2.6% 

2.1% 

0.0% 

13.3% 

0.7% 

0.2% 

30.9% 

100.0% 

367 

193 

28 

44.1% 

23.2% 

3.3% 

376 

200 

72 

44.2% 

23.5% 

8.5% 

Slots Slots 

US Airways ^ 

Delta 

LCC Share 9 / 

1 / Distribution of sloto as considered in the Department's May 2010 Notice. 

2/ Continental traded six sloto to AlrTran; AlrTran operates the sloto 

but CO remains the holder 

3/The Increase from "Originar to 4/1/2011 Is due to Delta acquiring additional 

off-peak sloto from the FAA 

4/After acquisition of Midwest by Republic, 16 of Midwest's 18 sloto were reassigned to 

Frontier and 2 were reallocated to Sun Country 

5/ American traded 16 sloto to JetBlue; JetBlueoperates the sloto but AA remains the holder 

6/ Republic hdds 113 conunuter sloto but operates them under agreement with US Airways 

7/1he Increase from "Originar to 4/1/2011 is due to US Airways acquiring 

off-peak sloto from the FAA 

8/Includes 113 commuter sloto held by Republic Airways Holdings 

9/AlrTran, Frontier, JetBlue. Spirit; Sun Country 

Source: Typical weekday (Thursday), FAA Holder Report status date 4/1/2011 
Federal Regbler/Vol. 76. No. 145/Thursday. July 28, 2011/Notices 45319 

Table 2 

LGA Slots - Previous and Current 

AIRTRAN AIRWAYS 2/ 

AMERICAN AIRUNES 

AIR CANADA 

UNITED/CONTINENTAL AIRUNES 

DELTA AIRUNES 

FRONTIER AIRUNES 3/ 

JETBLUE AIRWAYS CORP. 

MIDWEST AIRUNES 

SPIRIT AIRUNES 

SOUTtlWEST AIRUNES 4 / 

US AIRWAYS 

Total 

Delta 

US Airways 

LCC Shares 5/ 

Slots 

•OriBlnal"li 

22 

236 

43 

94 

278 

5 

15 

18 

22 

15 

399 

1147 

278 

399 

79 

Shiirt. 

1.9% 

20.6% 

3.7% 

8.2% 

24.2% 

0.4% 

1.3% 

1.6% 

1.9% 

1.3% 

34.8% 

100% 

24.2% 

34.8% 

6.9% 

Slots 

4/1/Wl 

23 

236 

43 

94 

278 

19 

15 

0 

22 

15 

399 

1144 

278 

399 

94 

aars 

2.0% 

20.6% 

3.8% 

8.2% 

24.3% 

1.7% 

1.3% 

0.0% 

1.9% 

1.3% 

34.9% 

" ^ 100% 

24.3% 

34.9% 

&2% 

1/ Distribution of sloto as considered In the Department's May 2010 Notice. 

2/ Continental traded four sloto to AlrTran; Al rTran operates the sloto 

but CO remains the holder 

3/ After Midwest's acquisition by Republic, Republic reassigned 15 of Ito sloto to Frontier 

4/ Southwest and /UrTran are merging their operations 

5/ Frontier, JetBlue, AirTran, Spirit, Southwest 

Source: Typical weekday (Thursday), FAA Holder Report status date 4/1/2011 
4S320 Federal Register/Vql. 76, No. 145/Thuisday, July 28. 2011/Notlces 

Tabk3 

Reagan Washington National Airport 

T-lOO Segment First Quarter 2010 vs. 2011 

AlrCnrHar^ 

Air Canada 

Air Canada Regional 

Air Wisconsin Airlines Corp 

AlrTran Airways Corporation 

Alaska Airiines Inc. 

American Airlines Inc. 

American Eagle Airlines Inc 

AtianticSoutheast Airlines 

Chautauqua Airiines Inc. 

ColganAIr 

Comalrinc 

Compass Airiines 

United/Continental Air Unes Inc 

Delta Air Unes Inc. 

ExpressJet Airiines Inc. 

Frontier Airiines inc 

JetBlue Airways 

Mesaba Airiines 

Piedmont Airiines 

Pinnacle Airiines Inc 

PSA Airiines Inc 

Republic Airiines 

Shuttie America Corp. 

SkyWest Airiines Inc 

Spirit Air Unes 

US Airways Inc 

BymfawtoHnygnrriT 

US Airways Inc 

American Airlines Inc. 

United Air Unes Inc 

Delta Air Unes Inc 

Air Canada 

Alaska Airiines Inc 

LCC 

Total 

DCA Departures 

2010 

0.9S 

1.3X 

10.9K 

3.0K 

0.8K 

7.5K 

7.7H 

0.0K 

3.7K 

t.4S 

5.SK 

O.S% 

5.8X 

7.a% 

1.SX 

0.8X 

0.0K 

0.4K 

0.1% 

0.2K 

4.1% 

14.7H 

3.3% 

0.0K 

0.8K 

17.0>t 

100.0K 

S1.2K 

15.2K 

8.eK 

17.2»t 

2.2N 

0.8% 

±23k 

ioao% 

2SS1 

0.9K 

1.4K 

&9K 

3.0K 

asK 

7.4% 

4.7M 

3.7K 

3.2H 

asN 

3.4N 

a4X 

4.9X 

9.4% 

2.0X 

1.2% 

Z2K 

asK 

asx 

1.7% 

4.5K 

13.SK 

3.5K 

ai% 

a7x 

16.3K 

iro.0K 

47.3H 

12.2X 

&0K 

22.4K 

2.3% 

asx 

20% 

100.0K 

OCA Seato 

y i Q 

0.7H 

0.7X 

S.9K 

4.0K 

1.4K 

1V1% 

3.8K 

0.0K 

2.0K 

o.e% 

3.2M 

0.4K 

8.5K 

11.4K 

0.8K 

1.596 

0.0K 

0,3K 

aoK 

aiN 

2.2N 

12.8K 

2.7% 

0.0X 

1.3N 

32JSi. 

100.0% 

47.0% 

15.5% 

10.2K 

17.7* 

1.4X 

1.4% 

ssa 

ioo.0% 

2011 

0.7% 

0.7K 

4.7H 

3.8K 

1.3% 

11.6% 

2.3% 

2.5% 

1.7% 

0.4% 

2.0% 

0.3% 

7.0% 

14.0% 

1.0% 

1.8% 

2.3% 

ae% 

a2% 

0.9% 

2.3% 

11.7% 

2.8% 

0.1% 

1.3% 

21.9% 

ioao% 

42.7% 

13.9% 

8.8% 

22.8% 

1.4% 

1.3% 

9.2% 

100.0% 

DCA PAX 

2010 

a7% 

a6% 

5.3% 

4.2% 

1.6% 

12.8% 

3.8% 

ao% 

1.9% 

ae% 

2.7% 

as% 

9.3% 

U.4% 

a6% 

1.8% 

0.0% 

0.4% 

0.0% 

ai% 

2.0% 

12.2% 

1.3% 

ao% 

1.6% 

23.6% 

ioao% 

45.2% 

16.6% 

10.5% 

17.3% 

1.2% 

1.6% 

7.W 

ioao% 

2BU 

0.6% 

a5% 

4.2% 

4.0% 

1.8% 

13.0% 

2.3% 

1.9% 

1.5% 

a3% 

1.7% 

a3% 

7.2% 

14.6% 

a8% 

2.2% 

2.4% 

ae% 

a2% 

a8% 

2.2% 

11.4% 

1.4% 

ai% 

1.6% 

22.6% 

100.0% 

42.0% 

15.2% 

&5% 

21.1% 

1.2% 

1.8% 

10.3% 

100.0% 

Note: The MerlceHng Carrier dele Includes tteir •fflllated cifriars; where operating carriers 

operate on behalf of muNple martiating carriers their data are appoitlonetf a* shown. 

US Airways* Ptedmoni: PSA: Chsuiauqua 89%: Coigan 73%: Republic: Mt WIsconsbi 

Amertean and American Eagle 

UhKad> ConOnantal; EiprassJel: Skywast; Chautauqua 11 %: Coigan 27%: StuiOie America 149 

Dallaa ManSc Southeast MMaba: Pinnacle: Shutta Anarica Se%: Comair 

Air Canada and Air Canada Regional 

ICO* AiiTran: Frontier. JetBlue: Spirit 
Federal Register/Vol. 76. No. 145/Thursday. July 28. 2011/Notlces 45321 

Tabb4 

New Yortc UOuardIa Airport 

T-100 Segment Rrat Quartar 2010 va. 2011 

AlcCanlen 

Air Canada 

Air Canada Regional 

Air Wisconsin Airiines Corp 

AlrTran Airways Corporation 

American Airiines Inc 

American Eagle Airlines Inc. 

Atlantic Southeast Airiines 

Chautauqua Airlines Inc. 

Comalrinc 

Compass Airiines 

United/Continental Airiines Inc 

DeltaAIr Unes Inc 

ExpressJet Airiines Inc 

Frontier Airlines Inc 

JetBlue Airways 

Mesa Airiines inc. 

Mesaba Airiines 

Piedmont Airiines 

PInnade Airiines Inc 

PSA Airiines Inc 

Republic Airiines 

Shuttie America Corp. 

Southwest Airlines CO. 

Spirit Air Unes 

Trans States Airiines 

US Airways Inc 

By M.H»M»« carrier 

US Airways inc 

American Airiines inc 

united Air Unes Inc 

Delta Air Unes Inc 

Air Canada 

ICC 

Total 

USA Departuras 

2010 

3.0% 

0.7% 

9.3% 

3.8% 

9.2% 

9.5% 

0.4% 

6.9% 

3.3% 

0.0% 

4.4% 

14.0% 

a4% 

a4% 

1.9% 

a6% 

a5% 

10.3% 

a7% 

1.0% 

2.5% 

6.0% 

1.6% 

2.3% 

0.0% 

7.1% 

ioao% 

33.3% 

ia8% 

7.4% 

26.8% 

3.8% 

a,a& 

ioao% 

2011 

3.0% 

a8% 

&3% 

3.5% 

8.9% 

11.2% 

0.5% 

4.7% 

4.4% 

ae% 

S2% 

13.8% 

a4% 

a9% 

1.8% 

a2% 

a9% 

ia8% 

a5% 

0.7% 

1.2% 

6.6% 

1.6% 

2.2% 

0.1% 

2J3k 

100.0% 

3a8% 

2ai% 

7.7% 

27.6% 

3.8% 

;io.o% 

100.0% 

LGA Seato 

2010 

2.8% 

0.4% 

5.1% 

5.1% 

15.1% 

4.1% 

0.2% 

3.8% 

2.4% 

ao% 

6.7% 

21.6% 

a2% 

a7% 

3.1% 

a3% 

0.4% 

4.2% 

0.4% 

0.6% 

2.2% 

4.9% 

2.4% 

4.0% 

0.0% 

9.4%, 

100.0% 

23.2% 

19.2% 

8.4% 

30.7% 

3.3% 

15.2% 

100.0% 

2011 

2.7% 

as% 

4.4% 

4.5% 

IA.2% 

6.3% 

0.3% 

2.5% 

3.2% 

0.5% 

7.7% 

21.3% 

0.2% 

1.5% 

2.9% 

0.1% 

0.4% 

4.3% 

0.3% 

a4% 

1.1% 

5.3% 

2.3% 

3.7% 

ao% 

9.5% 

ioao% 

21.0% 

2as% 

9.2% 

31.3% 

3.1% 

i4.im. 

ioao% 

USA Pax 

2010 

2.6% 

a3% 

4.4% 

5.0% 

17.4% 

3.6% 

a2% 

3.5% 

2.3% 

0.0% 

7.7% 

21.5% 

0.2% 

0.9% 

3.8% 

0.4% 

0.3% 

2.9% 

a3% 

ae% 

2.5% 

3.6% 

2.6% 

4.7% 

ao% 

9,m 

ioao% 

2a4% 

21.1% 

9.4% 

29.2% 

2.9% 

JZSBk 

ioao% 

2011 

2.6% 

a4% 

4.1% 

4.8% 

IS.7% 

5.0% 

a3% 

2.3% 

2.9% 

0.4% 

8.9% 

21.7% 

0.3% 

1.8% 

3.8% 

ai% 

0.3% 

3.2% 

0.2% 

a4% 

1.1% 

3.5% 

2.7% 

5.0% 

ao% 

&22i 

ioao% 

18.4% 

20.7% 

10.2% 

29.5% 

3.1% 

18.2% 

ioao% 

Note: The MaricaHng Canter dale indudea tiair afflllaled caniers: when operaSng carriera 

operata on behalf of mutsple mariceling canlora their dale era apporSenad as ahown. 

US Mrwayss Piedmont: PSA; Repine: TranStalaa: Chautauqua 37%: ktosaba 85% 

Amertean and American Eagle 

UnKeil" ConSnantal: EiqirassJat; ASanSe SouSiaasl: Mesa: Chautauqua 16%: 

Shune An erica B% 

DaltaB Shutde America 92%; Mssaba 1 S%; Plnnacto; Chautauqua 47%: Comair; Compaas 

Air Canada and Air Canade Reglonel 

Ifi ^ AhTran; Frontier: JetBlue; Spirit end Southwest 
45322 Federal Register/Vol. 76, No. 145/Thursday, July 28, 2011/Notices 

The Effects of the Proposed Swap: US 

AIxymysatDCA 

If the plaimed tranaactiim is approved 

without change (/.e., the additional 16 

slot divestitures offered by the carrien 

are not required as a condition for 

approval), US Airways' sloto at DCA 

would Increese from the 254 held at the 

time of the Depeitment's earlier analysis 

to 347. An additional 113 sloto are held 

by Republic Airweys Holdings under a 

finanans deal with US Airways and 

opsrateoby it for US Airways on a feeforservioeoasis. US Airways slates that 

vritii the new sloto at DCA it will 

provide service to at least IB 

destinations it currently does not serve, 

some of wUch cunently have no 

nonstop service from that airport " It 

*>lii • 200S jn u nlMM tddrMalng lbs Intwidad 

• n r nrvloi aadtr th* pravlaiu pMilloiii u s 

Airwty* IdmlUtod IB naw dMUnitloiu at 

tSnduiti. OM MalnM, Gmid Ripliii, MwUMm 

fWI), MenliMl, Mimil, ind Ottawa (all of wblcfa 

also plans to increese the nimiber of 

seato offend et DCA by filling the new 

capacity with larger regional feto and 

mainline ieto, claiming that it can gain 

over 1 million new seats without adding 

to congestion at the airpori. Delta slates 

tiiat with tiie sloto it ratains It will 

continue to serve ito seven hubs.*'' 

maintain Ito shuttle service to IJGA, and 

continue service on ito AIR-21 slot 

exemption routes.'* 

than had dailv nemiop aaivica fcom DCA), and 

Biraiingham (AIJ. iillp(NY). Ilhaea (NY). Uttla 

Rode. Mjntla Baach (SCI, Paaaaoola, Savannah, and 

Tallahauaa (all of which at thai tla* bad no daily 

nonilop tarviea fiam DCA). "US Airvraya 

announcai slot Iraniaclton with Dalta Air Linai," 

Aagusl 12,2009. Ilia pranal patttion nttatataa Iha 

conunilinant to aarva at laatf 19 naw dactiiMiliaaf, 

but doaa not apadfy whathar thoaa will ba tlta lanw 

at Iha onat IdaaliDad la 2000. 

*>Dalta*a tavan hubi ara Naw Yoik/|F1C Adania, 

Mampbi*. Datralt, Minaaapella/Sl ftul, CindnnaU. 

and Sah Laka City. 

** Dd u Mataa it wnuU aaiva iu "AIR-21 leutaa." 

Dalta waa awwdad 2 ilot axamplloni undor AIXUS Airways would increase ito 

dominence at DCA in terms of slot 

holdings with die addition of die 84 

sloto. Table 5 below shows compantive 

slot interesto of the carrien serving 

DCA. were DOT to grant tiie petition 

without requiring eny additional 

divestitures. In thto scenariOi the slot 

holdings of US Airways would increase 

to 40.8% (54.1% if tiiose held by 

Republic Airways Holdings but 

operated for US Airways ara included), 

while those held by Delto (plus 

conunuter afRliates) would decline to 

13.8% and those held by LXX^ would 

stay at 8.5%. 

21 Cor aarviea to Salt Laka CHy: in addidoa, 

bowgvar, AOaatic Sonlhaail fliaa aa Dalta 

CaanacUonlo iackaon. MS. with 2IXM alat 

(Dnaplion* awardad undar AHMl. and Coaaair 

fliaa aa Dalta CennacdMi to Lndngtan, KY, wUb 2 

Vitton-100 alot •xampllMM. 
Federal H^ter/Vol. 76, No. 145/Thursday, July 28. 2011/Notices 45323 

Tables 

DCA Slots - Previous, Current, and as Proposed 

AIR CANADA 

AIRTRAN AIRWAYS 2/ 

ALASKA AIRLINES 

AMERICAN AIRLINES 

UNITED/CONTINENTAL AIRUNES 

DELTA AIR LINES 3/ 

FRONTER AIRLINES 4/ 

JE1BLUE AIRWAYS CORP. 5/ 

MIDWEST AIRLINES 

REPUBLIC AIRWAYS HOLDINGS, INC. 6/ 

SPIRIT AIRLINES 

SUN COUNTRY AIRLINES. INC. 

US AIRWAYS 

USAiiwaysZ/ 

Delta 

LOC Share 8/ 

Slots 

•Originar 1/ 

16 

16 

6 

121 

83 

193 

6 

0 

18 

C. 6/ 113 

6 

0 

254 

Total 832 

Slots 

367 

193 

28 

Share 

1.9% 

1.9% 

0.7% 

14.5% 

10.0% 

23.2% 

0.7% 

0.0% 

2.2% 

13.6% 

0.7% 

0.0% 

30.5% 

100% 

44.1% 

23.2% 

3.3% 

Slots 

4/1/2011 

16 

24 

6 

105 

76 

200 

22 

18 

0 

113 

6 

2 

263 

851 

Slots. 

378 

200 

72 

Post 

Shsre Transaction 

1.0% 

2.8% 

0.7% 

12.3% 

8.9% 

23.5% 

2.6% 

Z 1% 

0.0% 

13.3% 

0.7% 

0.2% 

30.9% 

100%' 

44.2% 

23.5% 

8.5% 

16 

24 

6 

105 

76 

116 

22 

18 

0 

113 

6 

2 

347 

851 

?tot8 

460 

116 

72 

§h,are. 

1.9% 

2.8% 

0.7% 

12.3% 

8.9% 

13.6% 

2.6% 

^ 1 % 

0.0% 

13.3% 

0.7% 

0.2% 

40.8% 

100% 

54.1% 

13.6% 

8.5% 

1/ Distribution of sloto as considered in die Department's Final Notice of May 4,2010 

2/ Continental traded six sloto to AlrTran; AirTran operates the sloto 

but CO retrains the holder 

3/Thelncreasefrom "Originar to 4/1/2011 Is duetoOelta acquiring additional 

off-peak sloto from the F/\A 

4/After acquisition by Republic, of Midwest's 18 sloto, 16 were raasslgned to 

Frontier anil 2 were reallocated to Sun Country 

5/American traded 16 slots to JetBlue JetBlue operates the sloto but AA remains die holder 

8/ Republic holds 113 commuter sloto but operates them under agreement with US AInvays. 

7/ Includes 113 commuter slos held by Republic Airways Holdings 

8/ Proposed divested sloto not Induded 

Source: Typical weekday (Thursday), FAA Holder Report status date 4/1/2011 

77i0 ^fects of the Proposed Swap: Delta 

atLGA 

Delto stotes that, with 2BS new sloto. 

It wotdd almost double Ito nonstop 

diesUnations from LGA to more then 70 

dties. Further. It would creete a 

domestic hub at that airport, and 

increase the number of customers 

served without increasing congestion by 

using larger capacity aircraft than US 

Airways currentiy uses with the sloto. It 

would achieve this through use of an 

all-jet fleet, replacing the turboprops 

that ara currently utilized by US 

Airways. With the slot swap Delta wil l 

likely focus on expanding ito domestic 

network out of the enhaiioed LGA hub 

and concentrate ito JFK operations on 

international and long-haul domestic 

service. 
45324 Federal Register/Vol. 76, No. 14S/Thur8day, July 28. 2011/Notices 

Delta states that it would also offer 

service to many destinations that are not 

currently served nonstop by either Delta 

or US Airways. US Airwaya will retain 

ito shuttie service to Boston's Logan 

AbrpOTt and DCA and continue flighto to 

Charlotte, Philadelphia, and Pittoburgh. 

US Air%ray8 claims that its smaller 

aircnft operations at LGA have been 

tmprofitaole. It contends thet swapping 

aaseto from there to enhance ito 

sucoessfid operations at DCA will 

improve ito profitability by more than 

$75 million. 

Delta would operate e total of 18 of 20 

gates in US Airways' Terminal C, and 

add one additional gate to ito existing 

ten at Delta's Terminal D, for a total of 

29 gates in the two terminels. Delta 

would then btdid a 600-fbot connector 

between the two terminals so that it can 

operate as a single terminal from a 

passengerperspective. A "significant 

numberotconstrucUon jobs would be 

created in connection with this work. 

Delta wUl take over the current US 

Airways Club In Terminal C and convert 

it Into a Sky Club to complement the 

existing club in Termlnaf D. 

US Airways on the other hand, will 

have 8 gates once the terminal is 

reconfigured to add more ramp 

positions, plus 3 parking positions for 

regional jeto. US Airways would 

continue to offer high-frequency 

schedules from LaGuardia to ito 

Charlotte. NC, and Philadelphia hubs 

and Pittoburgh with more than 60 

weekday flights. All US Airways flighto 

from LaGuardta would continue to 

arrive and depart from nine gates and 

parking positions in Terminal C US 

Airways will build a new, 5,000-square 

foot US Airways Oub. " Delto and US 

Airways will continue to compete with 

Shuttle Services to Boston and DCA 

"Dalu , US Aliwaya Aanaimca Naw AB»emei 

to TMntftr FMng Rlghls in Naw York and 

Wathin(tan, DC, Dalta, and US Alrwayi Piaa* 

italaaia,May23,20U. 

(Deha at ito 6 gates in the Merine Air 

Terminal). Finally, subject to 

Government approvals and to other 

conditions, Delta will convey to US 

Airways, fbr purposes of intended US 

Airways flighto to Brazil beginning in 

2019. certain Bnziltan route authorities 

and slota at Sao Paulo. Brazil. 

Delta would accede to e dominant 

position in terms of slot holdings at 

LGA, wiUi die addition of tiie 269 sloto 

(even were the 32 sloto reqidred by the 

Department to be divMted). Table 6 

below shows comparative slot holdbigs 

of the carriers serving LGA. without any 

additional divestitures. As can be seen, 

under the proposal Delte's slot shara 

would almost double, from 24.2% to 

47.9%. American would remain second, 

at 20.6%. US Airways' share would 

decrease from 34.8% to 11.7%. The 

table also reflecta the Increase In LOG 

share, due to the developmento noted 

above, from 6.0% to 8.2%. 
Federal Register/Vol. 76. No. 14S/Thur8day. July 28, 2011/Notices 45325 

Tabk6 

L G A Slot s - Previous , Current and as Proposed 

AMERICAN AIRUNES 

AIR CANADA 

UNITED/CONnNENTAL AIRUNES 

DELTA AIR LINES 

FRONTER AIRLINES 2^ 

JETBLUE AIRWAYS CORP. 

MIDWEST AIRUNES 

SPIRIT AIRLINES 

SOUTHWEST AIRLINES 

ABHRAN AIRWAYS 

US AIRWAYS 

Slots 

-Oriolnar 1/ 

236 

43 

94 

278 

5 

15 

18 

22 

15 

22 

399 

Share 

20.6% 

a7% 

a2% 

24.2% 

0.4% 

1.3% 

1.6% 

1.9% 

1.3% 

1.9% 

34.8% 

Slots 

4/1/2011 

236 

43 

94 

278 

19 

15 

0 

22 

15 

23 

389 

Post-8k)ts 

Share TransacHon 

20.6% 

3.6% 

8.2% 

24.3% 

1.7% 

1.3% 

0.0% 

1.9% 

1.3% 

2.0% 

34.9% 

236 

43 

94 

543 

19 

15 

0 

22 

15 

23 

134 

Share 

20.6% 

3.8% 

6.2% 

47.5% 

1.7% 

1.3% 

0.0% 

1.9% 

1.3% 

2.0% 

11.7% 

Total 

Detta 

US Airways 

U X Shares 3/ 

1147 

Slots 

278 

399 

79 

100% 

24.2% 

34.8% 

6.9% 

1144 

Slots 

278 

399 

94 

100% 

24.3% 

34.9% 

8.2% 

1144 

Stots 

543 

134 

94 

100% 

47.5% 

11.7% 

8.2% 

1/ DIstiibiitlon of slots as considered in the Depattment^ Initial Final Notice. 

21 IS Republic slots are being operated as Frontier 

21 PrapoMd dvested stols not included 

Source: Typical weekday (Thursday). FAA Holder Report status date 4/1/2011 

•usio con 4sto-ti-c 

Description of die Ctalmad Benefito of 

theSn ^ 

As noted above, the Joint Applicanto 

contend dial approval of the slot swap 

would enable both carriera to more 

efficiently operate at the airporto and 

permit mora passengen ancl 

destinations to be served. They argue 

that efficiencies will occur tiirou^ 

upgan^ng of aircrafi size et both LGA 

end DCA. theraby incraasing throughput 

and competition while redtidng 

congestion and delay. In addition, they 

contend that die facilities trensfer will 

enabk Delta to creete a seamless hub at 

LGA and fKlUtato enhanced 

competition end preserve end enhence 

small community access at both LGA 

and DCA. 

For the reasoiu staled below, we 

tentatively agree with the Joint 

Applicanto' claimed benefito discussed 

below, and find that these claimed 

benefito likely would be reelized if the 

transaction were implemented as 

remedied. Our tentative view derives In 

large part from concerns that some of 

the sloto at issue in this transaction are 

currently being used sub-optimelly and 

inetficientiy, both from the perapective 

of the carriera holding them as well as 

from the perapective of Ihe public 

Interest 

Benefito at DCA: 

• Expanded US Airways Set^rice— 

With the addition of 84 sloto. US 

Airways will be able to Initiate daily 

nonstop service to at least IS new 

destinaUona from fX ^ Some o^ tiiese 

routes ara currently served by other 

carriera from other Wuhlngton area 

aiiporto and some of these routes do not 

currently have any daily nonstop 

service. These destinations hicltide 

several small, medium-sized, and laiger 

communities.** The alrilne antldpatM 

an increase of approximatoly 20 to 29 

percent In pasaenger mplanemento at 

DCA as a rasuh ofnew flighto and 

schedule improvements. This projected 

service would not be effected by the 

>• Wblla Dalu and u s Alnrayi hava aada public 

•ooM oT Ihair now intandad Hnleaa, ineludiiv 

•arvlca to tmall caanmnlttaa. Iha eMtaii hava Ml 

nlaoaad all iMandad aandea efaanfaa and a n aot 

obiiialad la iniplamant or lalain one Iha larar. 

toim any of Iho propond aaivleaa In naw aurkats. 
45326 Federal Register/VoL 76. No. 145/Thursday. July 28, 2011/Notices 

proposed divestitures if they come from 

Delta's complement. 

• JmpnmwconnectiWty—US 

Airtwajw contends that it will afford 

DCA originating passengen mora 

nonstop destination service and provide 

additional oonnectiiu passenger service 

through an expanded network. 

• (/p^ugi ^ and up-grading 

savic»—VS Airways plans to up-gauge 

aircraft and ofbr customera mora dual 

class service. It will use lerger aircraft, 

including mora large regional and 

maiidine aircraft with first-class service 

on large regional jeto. on many routes by 

2012. 

Benefito et LGA: 

a New domestic hub at LGA—V/ilh 

tite additional sloto and facilities it will 

acquire under the proposaL Delta will 

establish e new domestic hub al LGA. A 

hub presence will allow Increased 

connecting opportunities, improving 

travel options for passengen across 

Delta's network. It will euo permit 

increasad operations to smaUer 

commimities. which ara often only able 

to sustain service through hub-andspoke operations. Delta subndtted a 

study by Cooqpass Lexecon that asserted 

that Delta's expansion at LGA would 

produce mora than 6.000 new 

connecting opportunities for their 

passengen at tnat airport. 

• Consolidation tuLGA operations In 

one main termliml fiicUtty—A» noted 

above. Delta will lirdt Ito Terminal C and 

Tenmliial D {Vtes with a 600 foot 

oonnedor. 'niis will provide added 

convenience to many passengen. 

particularly ones with connecting 

flighto, ami allow shorter connecting 

Ibnes on some flights, 

• improved OmpetiUon against US 

Airways at Philadelphia and United/ 

Continental at NewaHt—The carrien 

daim that Delta's development of a hub 

at LCA will create "imptntant" new 

competition against US Airways' hub at 

Philadelphia and United/Continental's 

at Newark. Philadelphia International 

Airport to approxbnately 100 miles from 

LGA and constitutes a distinct market. 

However, the operation of a stronger 

bub for Delta at LGA will provide 

additional opdoru Ibr travelen in the 

greater New York area, and should 

provide some oompeUtlve 

oountenwelgbt to the strong UA-GO hub 

alNatwark. 

• Delia Will Expand Service at LGA— 

Delta will approximately double the 

number of tindiin perimeter nonstop 

destbiatlons served from LGA and shift 

short haul service from JFK to LGA, 

freehtg up JFK fi>r longer-haul flights." 

• Delta Will Increase Ihe Available 

Seat Capacity of New York Airports— 

US Airways currantly operates 39% of 

ito flighto with turboprop eircraft 

configurad with 37 or fewer seato. DeUa 

plans to utilize an all-jet fleet et LGA. 

Replacing US Airways' ttuAwjato with 

larger jeto will increase available 

capacity, estimated to equate to a 2% 

overall increase In New York seat 

capacity. 

The Joint Applicanto' Compass 

Lexecon study estimates the magnitude 

of capacity benefito in terms of 

roundtrip seat capacity increases of 2.5 

million at DCA and 4.4 million at 

LGA.SB The study further estimates that 

the consumer benefits from the 

increased flying generated by improved 

network connectivity and service at 

approximately $120 million annually 

for passengen flying to and from LGA 

andat approximator $27 million for 

passengen flying to and from DCA, for 

a total of approximately $193 million et 

both airporto combined. They cite 

another $33 million in estimated 

benefito to consiunen flowing from 

increased airport operational efficiency 

resulting from umauging from 

turboprop aircraft to jet aircraft at LGA. 

In addUion, the Joint Applicento argue 

that the facilities transfer will eneble 

Delta to create a seamless hub at LGA 

and vrill facilitate eidianced competition 

and praserve and enhance small 

community access at botit LGA and 

DCA. While these estimates ara of 

course subject to customary 

assumptions and estimations, we do not 

believe they ara unreasonable for the 

purposes here. 

Pmxtved Costs and Risks of the 

Transaction 

Although there are clearly consumer 

benefito that would result from the 

roposed transaction, as we pointed out 

n the Final Notice then are also aspects 

that could pose economic risks to 

consumer interesto. In particular, the 

Department must remabi mindftil of 

concerns regarding die potenttal for 

higher fares due to increased market 

s 

"tMdIa II la tnia that DaUa I* pmpaaing to 

•cpand It! apanilloHi ilgnlfieMiuy at LGA, many of 

Iha naw fllgfali would laptaiant baekfllla In maricata 

baiog vacatad by US Aliwaya at II movad 

oparalkiaf lo DCA. Iliua. whila it mi(bl ba "naw" 

aaivice on Delta, it may not ba "naw" axvioa fiv 

Iha rnmninnltiiw alfccted. 

"Th a baaafila data and analyiat lafciaiicad in 

Iha Walvar Appllcalien aia daiivad from Iha ttudy 

prapaiad by COnpau Laxacon in Novambai 2009 

and aubmlttad to Iho Dapaitmanl oa Match 22, 

2010. Sae Conavmat Banaflli from tha PtopoaaJ US 

Airwaya Dalta Slot Tiantactlon. Ineludad in Mot 

Appandlx lo Commmla of Dalta Air Unas, toe. and 

US Alrwayi. Inc. Dackat No. FAA-2at0-O109. 

dalad March 22,2010. Ihat atudy waa band on 

Dalta and US Airway* KhaduIn irom a paak day 

(Thutaday) in Summw 2000. 

concentration of the dominant carrien 

at botii DCA and LGA. 

In their filings. US Airways and Delta 

have not challenged the calculations 

stated in tiie May 2010 Notice tiwt. If 

the transaction were approved as now 

proposed, the proportion of US 

Airways' share of sloto and depertures et 

DCA, and Delta's shara of aloto and 

departiues at LGA, woiUd significantiy 

increase. 

in the Department's earlier analysis, 

we determined that there wera 

increased levels of airport 

concentration, which together with [1] 

An increase in the number of monopoly 

or dominant marketo In which increasM 

pricing power could be exerdsed.'* (2) 

the prospect for higher fares in some 

marketo. and (3) tha potential for use of 

transferred slot interesto in an anticompetitive manner .M warranted e 

condftloidng of approval on the carrien' 

agreement to divest s number of sloto. 

Given all of these concerns, we asserted 

that limited divestitures at both airporto 

would cause an Injection of addftlonal 

competition from other carrien. which 

could be effective in mitigating diese 

prospective harms. 

Our analysis also noted the very low 

levels of LCC operations then praivaillrig 

at DCA and LGA. calculating Uut LOCs 

had only a 3.3 percent shara of slot 

interest noldings et DCA and a 6.9 

percent share of slot interest holdings at 

LGA. Becaiue LCCs creeled the most 

competitive impact at the airporto,** we 

required that, in order to minimize Ihe 

overall number of divestitures required 

while maxunizing tiiie competitive 

impect of those dTvestittues, die carrien 

n Our nalyali found thai US Airways tad Daha 

londad to di«| a highar ralattva bn a whan diay 

oponla noDopoly or deninani loiiua ften airpialt 

whan thay ha«a ttfong ptaaansa. WhUa Daka 

taadad to pcica mo n cempaillivaly at USA (whan 

Ito poaiUonwat law dominant than US Ainanyt at 

DCA), l » Alrwayi, boldina Iha highaat amaot 

ahan of dot Intaioitt and diqwituiat II OCA. 

chaigad on avacai* 124paroaal of Iha Standard 

Induilry Ffera Laval (Sin.), a coil-buad Indw that 

Iha Dapanmant hat uttd hinotiedly lo tttlM In ill 

•valuation of pildn^ Howavar. to anrkalt wbM* 

It bald a OS lo 100 paioani tha n of noottop 

daparluraa. US Airwaya chaifad tubttwtiaUy man. 

n PR al 7^00-7.310. 

"Unda r IbaIr pnipoial. Odii and US Ainniyi a n 

not coBunittlni to any particular markatt itar 

daBnad pBiodt. Aa wo naiad aarlitr. Ihty wouM 

ba baa. at It any otiMt caiilar, lo diteoalfaHia nutaa 

thai a n baing propond and to iniUria naw lonlaa 

olaawhan. With thai fMadam.thay could, IfllMy 

ao chon. uaa additional tloU lo tup t •mller 

compalltoM. Wa axprouad coneam that 

corapallton. atpaelally km.aitl cairlan at OCA 

that a n Uad to tpacUlo nurkauthroiigb dot 

oxemplion awarda, might ba nnaUa lo anoonalkilly 

» Our analyalt cllad tludin of Iha doomlie US. 

aiillna Indnttiy damonatntias <t e "O f Iv IMTb n caniam dramalicaily hiwii* iuat tnd lactn m 

Iha voiuma of pauangna caitlad to a OMllM. Sn , 

7SFR at 7,300. 
Federal Re^ter/Vol . 76, No. 145/Thunday. July 28. 2011/NoUces 45327 

divest sloto to qualified new entrants 

and limited incombento. which a n 

largely LOGS. Through thto medienism. 

we Deliaved the economic efficiency of 

die slot utUization at both airporto 

would be maximized through the 

operation of man seats at lower fores 

per slot than by Delta or US Airways, 

and %rould also minimize the total 

number of slot divestitures required to 

remedy die anticompetitive effocto of 

the transaction. 

Accordingly, in die May 2010 Notice, 

we approved the prior waiver 

application subject to the condition that 

40 LGA and 28 DCA sloto be divested 

vta a OOT-epproved process. 

Changed Conditions Since the May 2010 

Notka Was Issued Have Not Eliminated 

Competitive Concerns 

Aa discussed above, the Johit 

Applicanto have claimed ti»t die 

Department's earlier competitive 

concerns have already been addressed 

as a resuU of significant increeses In 

LCC penetration that have occurred et 

bodi airports sinoa die May 2010 Notice 

was issued, (NotwitiutaniUng dial 

claim, they have offered to divest up to 

32 sloto at LGA and 16 sloto at DCA 

through a DOT process if necessary to 

allavtale any "lingering" competit ve 

issues.) 

LGC entry end increased presence at 

both airporto have not addressed all of 

our competitive concerns. While we 

have found evidence that faicreased LCC 

presence at bodi airporto has a positive 

impact on die competitive atructura at 

these airporto, additional remedies, 

Includbig divestiture of sloto end the 

Implementation of the slot transfer 

between die applicants in tranches, ere 

necessary to further address competitive 

concerns. 

We agree tiiat. at DCA, recent 

developmento have added 44 sloto to the 

U3C listings, increasing tiielr percentage 

of slot operations from 3.3% to 8.5%. 

Similariy. racent developmento at LGA 

have added IS sloto to LCC listing*. 

8.2%. LOC departures, seato. and 

passengen have, with one exception, all 

increased as wall at DCA and LGA. At 

DCA, LOO deparhires from first quarter 

2010 to first quarter 2011 inoeaMd from 

4.7% of UM total to 7.1%: seato over die 

same period increased from 6.8% to 

a2%; and passeiuen over the same 

period Increased from 7.6% to 10.3%. 

At LGA, die comparable statistics a n 

departures, 0.0% hicraasbig to 10.0%; 

seato, 15.2% declinhig to 14.9%: and 

passengen, 17.0% increasing to 18.2%. 

SeeT£lee3and4. 

In addition, wa looked at die 

competitive impact of the added LCC 

services, particularly at DCA. There, the 

entry of JetBlue into the DCA-Boston 

market in the fourth querter of 2010 was 

especially helpfol in gauging the impact 

of new LOC entry into a major market 

in which US Airways was by far the 

dominant carrier." 

During the fint three quartan of 2010. 

the average passenger weighted yields 

in DCA ^O S were 62 cento, 59 cento, 

and S3 cento respectively, with US 

Airways' averages being 68 cento, 63 

cento, and 55 cento. With an averege 

weighted yield overall DCA marketo for 

these quarten at 22 cento, tills was 

clearly a lucrative market for carriera, 

and especially so for US Airways. 

JetBlue entered the market aggnssively 

in October 2010, carrying over 48,000 

passengen dut quarter widi highly 

competitive feres duit yielded only 24 

cento per mile. US Airways' yield dial 

same quarter—the last for which we 

have data—dropped from 55 cento to 44 

cento, witii overall average passenger 

weighted yields in die market falling 

from 52 to 38 cents. Removing 

seesonality concerns, US Airways' 

passenger weighted yield fell 37% from 

4tii quarter 2009 to 4di quarter 2010— 

from 70 cento to 44 cents. This data 

demonstrates JetBlue's entry enhanced 

competition and significantly reduced 

fares. Its presence continues to hava a 

disciplining effect on feres: our check of 

available one-mondi advance purchase 

economy fares showed JetBlue charging 

$60 one-way, with US Airways, Delta, 

and United all matching.'* 

A similar, aldiou^less significant, 

demonstration of LOC competitive 

influence appean in the LGA-IND 

market. In 2000, US Airways carried 

epproximately 39% of passengen in thU 

market at an average yield of 27 cento, 

while Oeltamorthwest carried 47% of 

passengen at an average yield of 28 

cento. AiiTran initiated service on 

November 4,2009 followiiig ito 

acquisition of 6 sloto from Continental, 

four of which wera utilized in the LGAIND market. After AirTran's entry into 

the market, die average passenger 

weighted yield dropped ftom 20 cento to 

22 cents and remained at approximately 

19 cento durough 2010. AirTran's 

passenger share rose from 8% In 2009 

to 35% in 2010 while Delta/Northwesf s 

yields declined from 28 cento to 19 

cento, and US Afrway's yields declined 

from 27 cento In 2009 to 20 cento la 

2010. Overell, with die entry of AirTran 

in die LGA-IND market die average 

n For Bximpla. in dia taeand quartar of 2010. u s 

Airwaya eanitd almoat 70% of tha patnngan in 

thla maikal. Uallad fay Dahaat 1S«. 

u DCA-BOS ttonitcp too for tnval on JalT 29. 

2011. par OimrrZ W^ilt e tobimilUm It ol luna 

2», 2011. 

passenger weighted yield in the market 

declined 29% between 2000 and 2010. 

These two impacto illustrate die 

potential benefickl effects U>at otiier 

LOCs may be able to bring to DCA and 

LGA markets It efforded entry by sloto 

belin divested in Ihe prHont case. 

While the Department considera diese 

developments very encouraging, diey do 

not persuade us that our original 

concerns regarding the transaction a n 

no longer velld or dial additional 

ramedies a n no longer nppropriate or 

necessery. Pint, many of the 

incramentel LCC sloto a n being 

operated under temporary or potentially 

ravenlble clnumstanoes. At DCA, the 

slots noted as being transferred from 

legacy carrier American to LOO JetBlue 

remain technically held by American on 

FAA's luting, ancl dieir agreement could 

expire as early as this fell. The same is 

true for the sloto transferrad between 

AirTran end Contbiental. The fbrmer 

Midwest sloto at bodi airports diet wera 

"reassigned" by Republic lo Frontier 

marketed flighto can presumably be 

"reassigned" back to Republic if 

appropriate conditions presented 

themselves. In addition, some of the 

other sloto shown as transfisnred to LOCs 

a n during the early or late houra when 

slots a n not ftilly subscribed and so 

their use by LCCs does not present as 

much a competitive diacipllne as better 

timed sloto might. Moreover, die 

Department's objective hen to not to 

simply Increase the shares of LOCs. but. 

as we set out at various polnto In the 

May 2010 Notice, also to protect agah»t 

the use of market power ^y dominant 

carrien in a potentially antioompetitlve 

manner, 

dalms That Nearby MetropoHtan 

Airports Have a Disciplining Effect 

Remain Unpersuaslve 

In addition to polnthig to LOC growdi 

at DCA and LGA, die Joint Applicento 

raassart thet competition among Ihe 

three eirporto In Uie Washington area 

and die three In die New Yoric Qty area 

exerts a disciplining influence on die 

respective fares at DCA and LGA.>« 

Thus, in die New York Qly fflaricet, diey 

argued dial, while flighto at LCA ara 

generally closer substitutes for one 

anodier than ara flighto at EWR or JFK, 

flighto from EWR and JFK "ara slill 

nievant" to a discussion of competition 

at LGA. In an effort to address the 

specific situations at hand, diey offered 

a modified veraion of the earlier study 

they presented to attempt to measure 

the impact of competition from 

»Dalt8 and US Airwaya* CommtnU of Much 22. 

2010, Appandix B, Analy^ tflUtraa t MtpoH 

CWtip/agt. Oockat No. FAA-3010-0100. 
45328 Federal Register/Vol. 76, No. 145/Thursday, July 28, 2011/Notices 

Soudiwest and odter LCCs at DCA/LGA 

and at adjacent airporto. Normalizing 

the "competitive effect" of Southwest at 

die same elrport to a value of l.O. the 

modified venion went on to speciiy the 

relative cimipetttive effect of service by 

other LOCs at the same airpmt. as well 

as the effecto of South%vest end of the 

LCCs from adjacent eirports. A summary 

table Indicated that, for example, the 

competitive effect of an AirTran flight at 

die same airport was 0.247, while Uiat 

of JetBlue at an adjacent airport was 

0.091. 

In our May 2010 Notice, we addressed 

the findings of the earlier study, 

expressing concerns thet ito 

methodology was flawed in a number of 

fundamental respecto. The modified 

venion put ibrwiud he n does not 

appeer to have ooncected these ffews. 

Moraover. not only ere the statistical 

bases for the new conclusions not 

presented, but the resulto show 

anomalies that ara not explained.*" In 

sum. as with the eariier presentation, we 

ara not prepared to accept the 

conclusions as submitted and to agree 

with the Joint Applicanto that existing 

or potential compMltion from adjacent 

eirporto would satisfectorily address the 

need for ramedies in this case.** 

Evaluation of Risks and Benefits 

As discussed above, the proposed 

trsnsBction, like the prior 2009 

proposal, offen important benefito to 

M Wlqr, for taompla. would JalBiua hava a much 

moagir eoanalithra oflacl Ihin Air Tian at IIM 

nma alipM (a OMS beter va. a 0.247 fodor), but 

a tlgnlllcanlly lowat afhct than AliTtan ftom an 

adjaoant aiipailT (04M1 vi. atea). 

**That tdd, wa can Hv M wa did in tlia May 

2010 Nedca that ylaUa (l.*, lavaoua par patttogir 

Bdla) rwnln aubttantlally dlSkitnt amoqt ihan 

airportt, tad that iflba anpoilt w m tfibctlva 

acoooadc tnbriitniM for aU pattangtn. Ihan weuM 

iaaitltB||BBIntilfoqaaU*iaS«iyl«>4taadlha 

yMd apmadt woaU nol difbr to tlpiiBctntly. Wa 

' ilballhindoaiagditalowlavalof 

eompatllum among dw WMhii^ilen and Naw York 

a i y a m aiipem, but al an intuneiaady low bval 

MOi that aaa airpori can aiwrt aaoniih eempallllva 

toflwaca on Iha font at anothar airpofi to 

tabrtuUaliy raduea yMd dltparMat among tha 

tirpailt and conitilula a Iraa tubatltule for IL Wa 

onoltoiM to haUava dial it tha oua. 

Ihe public. Nonetheless, we fimnd 

earlier that the potentUl for lurm was 

substantial, particulariy in the increased 

levels of concentration at the two 

airports. Accordingly, we placed 

conditions for approval on the 

divestiture of 40 sloto al LGA and 28 

sloto at DCA. The primary issue before 

us to wdielher, because of the increesed 

penetration by LCCs at the airporto since 

the time of our last review, the public 

interest can be adequately protected al 

thto time with no or fewer divestitures 

beii^ required. 

In evaluating the public interest in 

thto trensaction. we nave carefully 

weighed the benefito and possible 

adverse consequences of Uie transaction. 

We do not believe thet the transaction 

can be approved without divestitures 

being required. The transaction iiuiy 

give rise to very differant levels of 

competitive harm at etdh airport, and 

the post-transaction market snsra levels 

a n high, particularly at DCA.*' 

Accordingly, we have tentatively found 

that conditions for approval nmain 

necessary. These include a raquirement 

that the cerrien not only dispose of 32 

sloto at LGA and 16 slots at DCA 

pursuant to the sale medutnisms 

described in detail below, but diat they 

begin operations of the transferrad sloto 

in two phases so as to atienuate die 

impacto of their new operations on their 

smaller-sized competiton at the 

airports. 

Remed/0s 

Dhmstiture 

For these reesons, notwidistanding 

the fevorable impacts of incraased LOO 

competition at both airporto. we 

tentatively condition the grant of the 

requested waiver on the divestitura of 

the sloto as set out below. These total 32 

sloto at LGA (16 arrival and 16 

departure) and 16 sloto at DCA. 

We propose that the sloto be sold liy 

the cerrien end that the proceeds of the 

soles be collected and reteinad by the 

caniers. We tentatively select thto 

method, rather than one whereby the 

FAA would vrithdraw die sloto end 

reallocate them by lottery (or similar 

meens) to new entrent and limited 

incumbent carriers. A sale would 

facilitate the Joint Applicanto' 

intentions to maximize the value of 

their sloto es they initially intended and 

conforms to the High Density Rule 

provisions at DCA, which permit sloto 

to be purchased or sold. 14 CFR 

93.221(a). 

These slots would be divested, in 

eccordence with Ihe procedures 

proposed below, to limited incumbent 

and new enlnnl carrion having fewer 

Ihan five percent of dw total slot 

holdings at DCA and LGA respectively, 

and that do not code share to or from 

DCA or LGA widi any carrier dial has 

five percent or mon slot holdings. We 

also propose that carrien eligible to 

participate in the puichase of divested 

shans not be subsidieries, either 

partially or wholly owned, of a 

company whose combined slot holdings 

a n equal to or greater than 5 percent al 

IXIA or LGA. respectively.** The effecto 

of these additional divestitures e n as set 

forth below: 

•ua n cooa aeto-ts-p 

» With Rapnbllc't faoldion indudad, US 

Airwaya would hold S4% ^th a ilott, wlUi lit 

dotttl oompatilor. Amarlean. holding 12.3%. Al 

LGA. (MU't thi n wonU ba 47.$% without furthar 

divatUturaa. vrllh lit doaaH compatlter (alio 

Amtrlean) at 2aB%. Saa Tabia a. 

lagwdappaaat 

FranU«r.whlebU wholly owaad by RapubUc bat 

yat h a a ditcnlaly difforam LOC baiMMt plan. Al 

wa diaeuttad abova. Ftandat't opanUont at DCA 

and LGA hava baan oonaliMil wMfa LOC ylalda. and 

have had uaafUl eeatpatiUva iinpacla at both 

aiipcrtt. Moiaovar. with dm aonilaldon at AliTMa 

by Southwait. UM numbar of l£Ci hai dtodnlihad. 

and FToatiar hai baeoma UM ddid largiM LOC iStr 

SoadiwBit and JatBliMi D0T*i Fbim 41 Origto tad 

DiaUnailoB Fattangaa tor 2n a ihowt Soadnmt/ 

Aiil^an with a told vturjOUMO donntto 

pataangara. latBhm vridi l8MS.aso. and Flondtr 

wiOi S,317.18a Anticlpadng dwt Pmotiar't 

pieianaa u an allglbla biddar wilt balp lo lUmohta 

and matolaln eonvaUdon at than dipeiti, wa will 

tanlallvoly axaaipl Fkoatiaa ftom Iha "no 

tubildiarin** ramilramaot. laliicl to taw tloli It 

night purdiaia aaiag hald and opaialad by Ftandm 

and ftontlir ratainiag lit LOC botlnan plan. 
Federal Register/Vol, 76, No. 14S/Thur8day, July 28. 2011/NotlGes 45329 

Table7 

D C A Slot s showin g effect o f Propose d DIvesliUires 

AIR CANADA 

ABHRA N AIRWAYS 2/ 

ALASKA AIRUNES 

AMERICAN AIFOJNES 

UNIlEiVOONTVCNTAL AIRLMES 

DELTA AIR LINES 3/ 

FRONTIER AIRLINES 4/ 

JE1BLUE AIRWAYS CORP. 61 

MIDWEST AIRUNES 

SPBOT AIRUNES 

SUN COUNTRY AIRLINES, INC 

\JS AIRWAYS/REPUBLIC 91 

Divested Slots 

USAIiways 7/ 

Delta 

LCC Sham 

Total 

Sloto 

•xmomrv 

16 

18 

6 

121 

83 

193 

6 

0 

18 

6 

0 

367 

832 

Slots 

367 

193 

28 

Share ' 

1.9% 

1.9% 

0.7% 

14.5% 

10.0% 

23.2% 

0.7% 

0.0% 

2.2% 

0.7% 

0.0% 

44.1% 

100%" 

44.1% 

23.2% 

3.3% 

SkMS 

W1/2011 

16 

24 

6 

105 

76 

200 

22 

18 

0 

6 

2 

376 

851 

Slota 

378 

200 

72 

Share 

1.9% 

2.8% 

0.7% 

1^3% 

8.9% 

23.5% 

2.6% 

2.1% 

0.0% 

0.7% 

a2% 

44.2% 

100%" 

44.2% 

23.5% 

6.5% 

Poet 

DIvBStRure 

16 

24 

6 

105 

76 

100 

22 

18 

0 

6 

2 

460 

16 

851 

Slota. 

460 

100 

88 

Share 

1.9% 

2,8% 

0.7% 

12.3% 

8.9% 

11.8% 

2.6% 

2.1% 

0.0% 

0.7% 

a2% 

54.1% 

1.9% 

100% 

54.1% 

11.8% 

10.3% 

1 / Distribution of sloto as considered in tfia Oepartment's Rnal NoUce of May 4,2010 

2/Contlnentol traded six slots to AlrTran; AlrTran operates theslots 

but CO remains the holder 

3/1hs Increase from "Original'' to 4/1/2011 Is due to Oelto acquiring additional 

off-peak sloto from the FAA 

3/AfteraequltltloM by Republic, of MldwetCi U tlou, 16 were rtsstignsd to 

FrenUeraad 2 wtie resllocatod w Sun Counby 

5/Arosrlcanb«ded 16 sloto to JetBlue: JetBlueoperates die sloto but AA remains die holder 

6f Aitor acquisition by Republic, of Midwait's 18 slots, 16 were reassigned to 

Frontier and 2 were reallocated to Sun Country. Republic holds 113 commuter 

sloto and US Airways holds 2S4 slots 

7/ Include 113 commuttr sloto held by Republic 

Source: typical weekday (Thursday), FAA Holder Report status data 4/1/2011 

Hie hnpacto of the divestitures at 

LGA am mown in Table 8: 
45330 Federal Register/Vol. 76, No. 145/Thursday. July 28. 2011/Notices 

Tables 

L GA Slots stiowlng effect o f Proposed Divastlturos 

Slota 

AMERICAN AIRLMES 

AIR CANADA 

UNnEO/CONTINENTAL AIRUNES 

DELTA AIR LINES 

FRONTIER AIRUNES 2^ 

JETBLUE AIRWAYS CORP. 

MltJWEST AIRUNES 

SPIRIT AIRLINES 

SOUTHWEST AIRLINES 

AIRTRAN AIRWAYS 

US AIRWAYS 

•Oriolnar 1/ 

236 

43 

94 

278 

5 

15 

18 

22 

15 

22 

399 

Share 

20.6% 

3.7% 

&2% 

24.2% 

0.4% 

1.3% 

1.6% 

1.0% 

1.3% 

1.9% 

34.8% 

Skrts 

4/1/2011 

236 

43 

94 

278 

19 

15 

0 

22 

15 

23 

399 

Share 

20.6% 

3.8% 

8.2% 

24.3% 

1.7% 

1.3% 

0.0% 

1.9% 

1.3% 

2.0% 

34.9% 

Post 

Dhwettture 

236 

43 

94 

611 

19 

15 

0 

22 

15 

23 

134 

Share 

20.6% 

3.8% 

8.2% 

44.7% 

1.7% 

1.3% 

0.0% 

1.9% 

1.3% 

2.0% 

11.7% 

Dhnsted Slota 32 2.6% 

Total TMT 100% 1144 100% 1144 100% 

Delta 

US/Unmys 

LCC Shares 

Slota 

278 

399 

79 

24.2% 

34.0% 

6.9% 

Slots 

278 24.3% 

399 34.9% 

94 6.2% 

Slota 

511 

134 

126 

44.7% 

11.7% 

11.0% 

1/ Distribution of slota as consldefed In ttts Departments Initial Final Notice. 

2/15 l^epubHc sloto ara being operated as Frontier 

Souce: Typical weekday (Thursday), FAA Htrider Report status date 4/1/2011 

Bttxna eooe 48ie-is< 

/mp/emenfat/on in Tranches 

We e n concerned that, we n US 

Airways and Dalta to Immedtately 

conunence service with the fiill 

complement of the newly transfemd 

sloto at OCA and LGA, respectively, the 

sncoessliil start-up or expended snvice 

ofEsied by the new entrant or Untiled 

incumbent receiving the divested slota 

could be placed at competitive risk. 

We believe dial die ability of diese 

new services to establish a market 

foothold on any new routes that the 

carriers receiving the divested sloto 

choose to serve from either DCA or LGA 

would be facilitated by a requimment 

that the sloto beuig bansfened between 

the applicanto be npread over e period 

of time followbig the completion of Ihe 

mandated slot divestura. 

As a result, we a n proposirig to 

further condition our approval of the 

transaction on the Joint Applicanto' 

agreement that the tnnsferee Joint 

Applicant will operate '* none of the 

nemy acquirad slots Included In their 

Agreement during the first 00 days after 

Ihe closing date for die sale of die 

divested sloto. FUithermon, no mon 

than SO percent of Ihe total number of 

sloto included in the Agreement could 

be operated by the transferee Joint 

Applicant between the 91st and the 

210th day following die closing date for 

tha sale of the divested sloto, after 

which time the translaree would be hoe 

to operate the ramainder of the sloto. 

We believe dial diese restrictions will 

afford the services that result from the 

sale of the divested sloto a limited, but 

reasonable, period of time to advertise 

theh: presence in eny new markets in 

which they e n planning to offer service, 

begin selllne tiweto, and commence 

operations. Limiting the resources by 

which the applicanto could immedtately 

challenge any service using divested 

sloto during the Initial months of the 

traitoition will, in our view, provide 

gnater assurance that the ramedial 

competitive services that wo aought to 

encourage by requhing the alot 

divesUtun in the first place will prove 

to be successful. 

BligiUe "Bidders" for Ovested Slots 

We tentatively find that die eligible 

bidden for the divested slota must be 

cairimt having fetwer than five percent 

of total slot holdings ot DCA and/or 

LGA. do not code ue m to or from DCA 

or LGA with any carrier that has five 

percent or mo n slot holdiius or a n 

involved in a code-^un nbtlonsbip at 

DCA/LGA with carrieKs) that also 

would not qualify as eligible bidders, 

and a n not subsidiaries, either partially 

or wholly-owned, of a company whose 

combined slot interest holdings a n 

equal to or greato- Ihan five percent at 

LGA and/or DCA.4a Based on FAA slot 

holding data, incumbent carilen at DCA 

that would qualify under these 

limitations a n AiiTran. Spirit. Sim 

**1haM UmitaUou apply lo Iha opaiation of dm 

aloli by tha aoquiiing eairlar or by any othar oanlar 

on bahilf of tha aoqulting cairiar. 

«> At notad abova. Ptonliar quallBat m an aUglMa 

biddar dua lo Iti unlqoa bwinan pl«i and 

mlationthlp in tha Rapubllc ttrudura. 
Federal Regiater/VoL 76. No. 14S/Thunday, July 26. 2011/Notices 45331 

Cotmtry. JetBlue and nontier. At ICA, 

Incumbent cerrien that wrould qualify 

ara AhTran. Southwest, Frontier, 

JetBlue, and Spirit. In addition, of 

course, eny carrier not currentiy holding 

slot interesto at die respective airports 

and odwrwiae meeting the criteria 

would be eligible under our proposal. 

Bundles for Divested Slots 

We tentatively find dial bundlina die 

packues of sloto for sale will enable an 

eligible curier to purchase sufficient 

sloto to operate competitive snvice. 

with times spread across the day. 

Bundling assisto a purchasing carrier to 

initiate or increese service In a way that 

meeto ito operational needs and 

eidiances competition.*^ 

Because the number of overall 

divested sloto to now fewer then we 

orighully proposed in the Final Notice 

and competitive concerns nmain. wa 

bdieve it appnprtata to mexlndae the 

potenttal competitive discipline of the 

sloto by packaging mon sloto in fewer 

bundles, rather than fiswer sloto in mo n 

bundles, as compared to the bundles vm 

adopted In die May 2010 Notice.'** We 

pn^ose to bundle for sale 8 slot pain 

at eadi airport, meanirig that there 

would be one bundle at IXIA and two 

bundles at LGA. In addition to 

maintaining high competitive discipline 

levels, we tentatively believe this 

airangement would bo pnferable to 

dividing the sloto into smaller peclcages 

that coiud causa underatilizatioiu or 

inelliciendes—al gates and terminal 

bcilities, frith aircraft and in staffing. 

We seek comment on this approach. 

Mora specifically, at DCA u e single 

bundle would include the following 

sloto: 0700.0800.0800.0000,1000. 

lOCn. 1100.1200,1300.1400,1800. 

1700,1800.1800.2000. end 2100. 

At LGA. Bundle A would oonstot of: 

0600D. 0630D, 0730A. 0830D. 0830A. 

0030D. IIOOA. 1230D. 1300A. 1400D. 

1500A. 1600D. 1700A. 1830D. 2000A. 

and2100A 

LGA's Bundle B would be: 

0630D. 0700D. 0800A. 0e30D, lOOOA. 

1030D. 1230A. 1330D. 1430A. 1600D. 

1630A. 1730D, 1830A, 1030D. 2030A. 

and 2130A. 

Procedures fbr Transferrirtg Divested 

Slots 

We propose that the slots be sold to 

the new entrant/limited Incumbent 

cairien, which have neoessaiy DOT and 

FAA operating authorities, on a cash* 

only basto, dirough a Web site roaiuged 

fay the PAA. Undar dds proposal, the 

«>Swa(M, 7S FRal 7,)ll and 7B FRal 2SJ37. 

<* Sat 7SFR at 20,337. 

FAA would specify a bid closing date 

and time and the bidder's identities 

would not be revealed. 

We also propose thet an eligible 

carrier may purchase oidy one slot 

bundle at each airport, except et the 

seller's option as discussed later. Thto 

lindtetion would balantx the 

Department's interest in maximizing the 

competitive discipline of the slots with 

creating an opporiunlty for al least two 

carriera to omain the sloto. We propose 

to permit an eligible carrier to register 

for each slot Interest bundle diet It 

wishes to buy. and assign it a random 

number for each rMlstration so no 

information identifying the bidder is 

available to the seller or public. A 

bidder would be allowed to indicate its 

E

nference ranking for each slot intenst 

undle es part of ito offer. Finally, the 

FAA would review the offera for eech 

bundle in order. 

We propose to requin all offera to 

purchase slot bundles to be sent to the 

PAA electronically. The ofier would 

have to include the prospective 

purchaser's assigned number, the 

monetary amount, and the pnfennce 

ranking for that slot interest bundle. The 

FAA would post ell offera on the Web 

site as soon as practicable after they a n 

received. Each purchaser would be able 

to submit multiple oflen until the 

closing date and time. 

Once die sales period closes, we 

propose dial die FAA would determine 

the highest offer for eadi bundle. If each 

bundle had only a single offer, the FAA 

would notify tiie seller by forwarding 

the purchaser's identification. If one 

eligible carrier had made the highest 

purchase ofiisr on multiple bundles, the 

FAA would determine which offer will 

be valid based on pnforence ranking 

and bundle order. The FAA would 

Identify the next-highest offer from a 

carrier that ramalns sligible to purchese 

the bundle as the successful offer on the 

other bimdies. Thto Information twould 

be forwarded to the respective seller. 

The FAA would also provide 

information about the amount of the 

highest offer, and the selling carrier may 

choose to accept the highest offer 

instead of the offer identified by the 

FAA. Upon acceptance, the FAA would 

notify the selling and purchasing 

carriera to allow them to cerry out the 

transaction, including any gate and 

ground facilities enangements. The full 

emount of Ihe proceeds could be 

ntalned by Ihe selling carrier, llie seller 

and purchaser would oe required to 

notify die FAA diat die transaction has 

been completed and certify that oidy 

monetary consideration will be or lias 

been exchanged for the slot interest 

bundles. 

In the uidikely event that then ere no 

oflera for a slot Interest, we propose that 

those slot interesta will revert 

automatically to the FAA. If neoeeseiy. 

we would announce at a later date a 

maana for dtoposlng of or retiring a slot 

interest that attracta no puichase offer. 

We do not expect that thto need will 

arise. 

We propose the option of a cash-only, 

FAA ''blind" Web site, because it has 

the capability of maximizing the 

competitive potential of the divestitura 

padcages beosuse that sale mediod 

wouldtarget the potential competiton 

with Ihe greatest economic incentive lo 

use sloto es intensively and efficiently 

as possible. We seek commento on tiiis 

proposal. 

Other Considerations 

We also tentatively find dial eligible 

carrien may be unabfe to use the uoto 

If they cannot obtain access to gales, 

ticket countera. baggage handling 

services, loading brldgas, and other 

ground bcilities at either DCA or LGA. 

Accordingly, we propose to requira the 

selling carrier to make diese available to 

the purchaser under reasonabla tarms 

and rates If the purchasing carrier leeks 

access to gates and ground fedlities and 

is unable lo obtain such ecoess from 

eidier Ihe Port Audiority of New Yoric 

and New Jersey, the opwator of LGA. or 

from the Metropolitan Waahiiigton 

Airporta Authorify. the operator of DCA. 

We propose to subject the slots to die 

same minimum usage requiremento as 

provided in the LGA Order and HDR. 

However, we propose lo waive the 

respective use or lose provisions of the 

LGA Order and HDR for 6 months 

following purchase to allow the 

purehaser to begin service in new 

marketo or odd service to existing 

marketo. The purchaser must inlltate 

service no later than 6 months followhig 

purchase. We seek comment on tlte 

oonditlons described above. 

We further propose that die purchaser 

may lease the acquired sloto to the seller 

until the puiduMor is ready to billlata 

service to maxindze operations at the 

airports. However, we tentativefy would 

nqui n that the sloto not be sold or 

leased to other carriera during the 12 

months follotving purchese because the 

purchaser must hold end use the 

acquirad sloto, 

PuTchaaen could engrae hi one-fo^ 

Mie trades of these sloto for oparatlimal 

needs. The limitations would attach lo 

die slot acquired by die eligibfe cairier 

in a one-for-one trade. Any one-forHme 

trades would be subject to the FAA 

notice requinmenta in the LGA Order 

and HDR We hnihet propose dut die 

duration of any trades or leases of LGA 
45332 Federal Register/Vol. 76, No. 145/Thursday, July 28. 2011/Notlces 

slota mey not exceed Ihe duration of the 

LGA Order. 

We additionally propose that, after 

tha Initial 12 months, and fbr four yean 

thereafter, the sloto may be sold, traded, 

or loosed (as audiorized by the HDR al 

DCA and odierwise as authorized at 

LGA) to any carrier thet el the lime of 

the sale, trade, or loose vrould have met 

the eligibility requinmento to make an 

offer undnr oils proposed waiver for the 

divested slot interests. These proposed 

restrictions wrould increese the 

probebilify that the divested slote a n 

used and operated by cerrien that wil l 

enhance competition at LGA end DCA. 

lower fares, and benefit the traveling 

public. We racognlze, however, that 

restrictions on alienation of these sloto 

may depress their value for the carriera 

holding them. In order lo balance the 

need and desin of those carriera to 

maximize the value of the divested sloto 

with the Department's desin to afford 

the traveling public a broad array of 

competitive service, we propose that the 

alierution restrictions on the divested 

sloto terminate after a total of five yeare 

followiiig initial sale. 

Tentative Findings 

We have canhdly evaluated the risks 

and potential benefito of the proposed 

transaction, focusing our public Interest 

analysto on the eSiscto arising from that 

transaction as a whole. We tentatively 

conclude that, on balance, the potential 

benefito of the proposed transaction, as 

modified by the requUed slot 

divestitures lo new entrant and limited 

incumbent cairien and by 

implementation in tranches, outweigh 

ito potenttal harms. Thto tentative 

dactolon would also allow us to 

pieseive the other important benefito 

resulting from the tnnsaction. such as a 

mon effident use of sloto et both 

eirporto and a potenttal for enhanced 

ssrvica benefito to pessengen. 

Invitation for Comment 

The agency hes ptaoed e cray of the 

weiver request in tha docket. T m FAA 

invites all interasted memben of the 

pubUc to comment on the welver 

request, proposed grant of the waiver, 

proposed conditioiu to the waiver, and 

proposed divestitura remedy. Several 

commenlera, Including JetBlue Airweys 

Corporation, Spirit Airlines. Inc.. and 

the Air Carrier Assoclstion of America, 

have filed commento In the Docket to 

the waiver request. We wil l nview all 

previously-filed commento (unless 

withdrawn), with all commento 

submitted within dito comment period, 

in meking our final determination on 

the waiver request 

Ittued In Waahinglon, DC on luly 21, 

2011. 

RayLaHood, 

SKtetary. 

l Randolph BabUtt. 

Admlnlstratar, FAA. 

IFR Doc. 2011-10030 Rlad 7-27-11:0:45 ami 

BBJMa coos mo-y>* 

DEPARTMENT OP TnANSPORTATION 

Pipeline and Hazardous Maieriale 

Safety AdmlnlttraUon 

Offioe of Hazardoua Materials Safaty; 

Notica of AppncaUona fbr Modification 

ot Special Permit 

AGENCY: Pipeline and Hazardous 

Materials Safety Admintotratlon 

(PHMSAJ.DOT. 

ACTION: List of Applications for 

Modification of Special Permita. 

SUMMARY: In accordance widi die 

procedures governing the application 

for, and the processing of, spedal 

permits iirom die Department of 

Transportation's Hazardous Matertal 

Regulations (40 CFR part 107. subpart 

B). notice is heraby given tiul the Office 

of Hazardous Materiels Safefy has 

received die applications described 

henln. Thto noUoe to ebbrevtaled to 

expedite docketing and public notice. 

Because the sections affected, moilee of 

transportation, and Iha natun of 

application hava twen ahown in earlier 

Fedenl Register publications, they a n 

not npeeted hen. Requesto for 

modification of spedal peimito (e^g. to 

provide for edditioital hazardous 

nuterials, packaging design changes, 

additional mode of transportation, etc.) 

are described in footnotee to the 

epplication number. Application 

numbera with die suffix "M " denote a 

modification request These 

applicatioito have been seperated from 

the new application fbr spedel permlto 

to fadlitate processing. 

DATES: Commento must be received on 

or befon August 12,2011. 

A00RESSE8: Record Center. Pipeline end 

Hazardous Materials Safety 

Admuiistration. U.S. Department of 

IVansportation. Washington, DC 20500. 

Commento should nfer to the 

application number and be submitted in 

triplicate. If confirmation of receipt of 

comments is desind. indude a selfaddressed stamped postcard showing 

the special permit number. 

FOR FURTHai INFORMATION CONTACT: 

Copies of the applications a n available 

for Inspection in the Records Canter. 

East Building. PHH-30.1200 New 

Jeney Ave.. SE. Washington. DC or at 

http://regulatlons.gov. 

'This notice of receipt of applications 

for modification of spedal peimU is 

published In eccordence mt h part 107 

of the Federal hazardous materials 

transportation law (40 U.S.C S117(b): 

49CFRl.S3(b)). 

Issued in Washington. DC on July 21. 

2011. 

Donald Burgar, 

Chief. General Approvals and l^raUis. 

ApfillraOan Docket Na AppOcanlRegutoUons airocled Nature of special peraitts 

iherool 

MOOtRCATION SPECIAL PERMITS 

9166-M 

120e2-M .-.. 

14743-M .... 

AB-Pak Oangaroua Goods, a 

Bedbi Paiaiagino (Former 

Grantee AD-nk. Ina), 

BridgevOle, PA. 

KMR induslrtoe, LLC, Cohanbta,MD. 

TIER EiwIroniRental Servtees, 

Inc. (Fbfinar Gianlee TIER 

OE. Ina), Gap, PA. 

49 CFR Pan 172: Subpart 

E: 173.118:173.244; 

173.345:173.346; 

173.3S9:173.370; 

173.377:176.3:175,33; 

172.504; 173.3. 

49 CFR 173.34(e) 

48 CFR 173.24b and 

173.244. 

To modHy the apeoW permit lo audndza an 

addUonal mode of banspoitalion (cargo veaael.) 

To modHy Ihe spedel pernitt to atiOiorin addlUonal modea of transportaHon (ral and cargo 

vessel). 

To motSfy the special pemA to aulhodn onetime, one-way transportaHon ki oommoioe of 

en addWonal non-OOT spedBcaSon meial 

tank contakikig appmdntalely 1320 lbs. of 

sodhjm by motor voMde. 
20236636/6 Lino OSTW86 310 01 2« ^6 P "' 

CHARLES E. SCHUMER CHMMIRK: 

. NEWVOnC — — 

BANKING 

DEMOCRATIC P0UCY&C0MMUNICAT10NS 

RNANCE 

JUDICiARy 

WASHINGTON, DC 20510 nui^ s 

United States Senate 

iSHINGTON,OC 

July 5,2011 

llie Honorable Ray LaHood 

Secteiaiy 

Dqnrtment of Tiasspoitation 

1200 Mew Jersey Avenue SE 

Washington, DC 20590 

Dear Secretary LaHood: 

I write to express my support for the revised proposed LaGuardia (LGA)rWashinjg[ton 

Reagan National (DCA) slot exehange between Ddta Air Lines and US Airways; this proposed 

tfansition could help to improve ahr service and reduce aviadon congestion, while also efisUiing 

continued access to air service across all of New York State. I tfaerefbie respectfully request that 

the Department of Transportation OOOT) oqpeditiously ecunplete its review of the propofed 

transactioiL 

Access to frequent and convenient air service is vital to the continued economic viability 

of aiQr region, especially oommunities both laige and small In New York State. This pn^iQsed 

transacdoA. whidi is snpixnted by GovenMkr Cuomo, Mayor Michael Bloomberg, and the Port 

Audiority of>iew York and New Jersey, could provide access to LGA for more Ihan two million 

ihore people per year than are currently served, without increasing the number of flights at the 

airfield. 

Another potential benefit of the transaction mcludes replacement of US Airways* 

tmboprop and small regional jet fleet curiently servicing LGA with Delta's larger regional jets 

and mainline idrcraft Such a change could help to reduce the duonic delay and congestion 

problems that plague New York's airspace. 

I understand that the parties would reqinie a significant amount of time to make jbdlities 

cbaogies, publish new schedules, and teassign airctiaft and crews before the services can be 

launched. For these reasons, 1 ask that POT ocmiplete a thorough yet expeditious ieview so dud 

bodi airiines may adopt the apprc^ate changes fbr peak travel periods. 

Thank you tot your attention to this important matter. If you have any questions or need 

additional infotination, please contact my WaisMngton, DC ofiBce. 

Sincerely, 

Charles E. Sdnimer 

United States Seoator 

Cc. Attorney General Eric Holder