U.S. Department of Transportation

Office of the Secretory ofTransportation



### The Honorable Leland Y. Yee, Ph.D. California State Senator Sacramento, CA 95814

Dear Dr. Yee: Assistant Secretary
April 12, 2012

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Thank you for your letter to Secretary ofTransportation Ray LaHood, supporting the application ofVirgin America, Inc. for four beyond-perimeter slot exemptions at Ronald Reagan Washington National Airport (DCA). If awarded those exemptions, Virgin America would provide two daily round-trip flights from DCA to San Francisco. Secretary LaHood has asked that I respond to your letter.

Under authority granted in the FAA Modernization and Reform Act of2012, the U.S. Department ofTransportation will be awarding to new entrant or limited incumbent carriers a total ofeight slot exemptions at DCA, which would support four daily round trips.

We received Virgin America's application on March 12, 2012. Other timely applications were received from Air Canada, proposing one round trip to Vancouver, British Columbia; Alaska Airlines, one round-trip to Portland, Oregon, and one round-trip to San Diego; Frontier Airlines,

one round trip to Colorado Springs and beyond to San Diego; JetBlue Airways, one round trip to San Juan, Puerto Rico, and one round trip to Austin, Texas; Southwest Airlines, one round trip to Austin and San Diego beyond; and Sun Country Airlines, one round trip to Las Vegas.

As the matter is still pending, we cannot comment on the merits ofthe points raised in your letter. However, I can assure you that all applications the Department received will be given full and fair consideration and will be evaluated against the selection criteria specified in the statute.

The Department's action on this matter is being administered through a public docket, which allows all interested parties the opportunity to comment. Following our normal practice, I am placing a copy ofyour letter and this response in docket number DOT-2012-0029.

We appreciate your interest in this matter.
Sincerely yours,

Susan L. Kurland Assistant Secretary for Aviation and International AffairsSTAT!:: CAPITOL. IMCRA'ME:Nto, cA 95&\4

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Re: Docket No•. OST.:.2012-0029, Application ofVirghi Anterica 

### Inc. for"Bevond

..**Perinl@t'er'~** SIQ$S

Dear: Secretary LaHood:

I am writing to express my strong .support :for Virgin America's proposal to provide two**n~mstop** flights between San FraneiscQJnternationalAirport (SFO) and Reagan National Airport**(DCA)~** With no current service 

## at DCA and 

## as the ordy airline headquaftered in California, Virgin America is uniquely suited to bring meaningful low-fare competition to the largest p:lark:et intl\einationprev;tously»'ithm.\tinonstop;f}ight.ser:vice to; DCA: the San rrancisco Bay Area.

, ·:·'.A\§:8:**.tesultofthe.work.~y** .you,**·your~dep~enh\llfl.Congre~s/theJ~r~ident recel}~ly;;:SiSJ1eQ.~e** **f:AA·Moderni~~titin.** and**E.~foJTti.Act>of20.12, whi~h**  included ·apro'!'isiop .authorizing**y.ou:t~Laward·ne~,flights** between DCA:.and ;domestic airports located beyond the current**1~250** mile perimeter limit. Historically; the Bay· Area 

### has**b~** shut dtitftom. DCA rtonst()p**s~Mce,** with all "beyond-perimeter" flight awards ,be.ing made to non-California airports

- with the exception ofa daily flight at Los Angeles, :Previous DCA awards have been madetosmallermarkets, including; Denver (four roundtrip frequencies) and Phoenix (three roundtrip. frequencies). In terms. ofpassenger traffic,.San Francisco dwarf's these and all other beyond..perhnenlr markets. Because SFO has been the largest beyond-perimeter: market Without nonstop flights to DCA, local consumers have suffered with higher fares and limited options

- either .travel to. Washington Dulles or a .one-stop connecting flight when traveling to downtown Washington, D.C. W}len making this critical decision, I urge you to consider the positive impact of improving the conMction betWeen 

### ;;}+'W!t\Sh\t:!gton·.,D.€:• and•Si}ico.n,Valley?s po.Werful**innovaticm~ba.sl;'!d** economy..**j.~Hocation** ofJwo tound,.trlP 

### :flights to Virgin America ;.: our hometown carrier

- will provide assurance that the Bay Area will finally nave efficient, modem tartd .low-fare nonstop flight service to DCA. It will also guarantee that local consumers and busineSses reap the benefit that only real competition can provide. Since its la.urrch in2(l07, Virgin America has lowered fares and provided a unique·new serv:ice option; According to the airline, when it ertters long-haul markets from SFO it typically sees fares drop by one-third. The 

### Wall Stree'!Journal went
so far as to describe the low-fare airline's impact

## on fares 

### a5 "the Virgin effect." In addition, the ca:tr:ier•s decision to headquarter in the Bay Area has created thousands oflocal jobs. The airline has grown to over: 2,500 employees, with plans to aqd 500 new. jobs on an annual basis over**th~ .nextJhr~e**  to five ye,ars. , · ,**:Wh~n;more airli~~** **~ompete,** consumers**an~ loc~l·econ** **:00i$s** W!n :...with Jower**fares~** irnproyed service and localjob**groWtht:.VJrginA:merlcErh~,been** a case. study**fo~** the**po~it~veJmpacts** ,ofcom,p.etition ip:the**ijay.A~~a,~,**The**~:tward** ·oftwo .roundtrip: flights**Jorth~ ~ca.trier** >Vjll both $p:Ur·Jl'Qlitinued**loca.\.:e.~.ontimi.c·grow,!h~~!ld** :epsure th;at :SFO-**~CA. t{~veJeys**  wi 11, finally**ben~fit fto;tp::reat<mmpetiti'on;:·T~apk**  you .for**yo~,~;r b,onsideratis:>n~~'<~**  ., · · :**~,** ".. · .... , .

# ,~~r~ Senator Lebtnd Y. Yee, Ph.D. California State Senate 

# s 10-120305-009