BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

_____________________________________

)

Application of )

) Docket DOT-OST-1999-6240

REPUBLIC AIRLINE INC. ) Docket DOT-OST-2013-0086

)

For an exemption from 14 CFR Part 93 )

under 49 U.S.C. § 41714(d) )

_____________________________________ )

JOINT ANSWER OF SOUTHWEST AIRLINES AND JETBLUE AIRWAYS

 Communications with respect to this document should be addressed to:

Ron Ricks James Hnat

 Executive Vice President -- Executive Vice President

 Chief Legal and Regulatory Officer JetBlue Airways Corporation

Mark Shaw 27-01 Queens Plaza North

 Vice President General Counsel & Long Island City, NY 11101

 Corporate Secretary

SOUTHWEST AIRLINES CO. Robert C. Land

2702 Love Field Drive Senior Vice President

Dallas, TX 75235-1611 JetBlue Airways Corporation

1212 New York Ave., N.W.

Robert W. Kneisley Suite 1212

 Associate General Counsel Washington, DC 20005

Leslie C. Abbott 

 Senior Attorney Jonathan B. Hill

SOUTHWEST AIRLINES CO. J. Parker Erkmann

919 18th Street, N.W. Cooley LLP

Suite 600 1299 Pennsylvania Ave., N.W.

Washington, DC 20006 Washington, DC 20004

bob.kneisley@wnco.com jhill@cooley.com

(202) 263-6284 perkmann@cooley.com

Counsel for JetBlue

Airways Corporation

January 15, 2014
1

 BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.

_____________________________________

)

Application of )

) Docket DOT-OST-1999-6240

REPUBLIC AIRLINE INC. ) Docket DOT-OST-2013-0086

)

For an exemption from 14 CFR Part 93 )

under 49 U.S.C. § 41714(d) )

_____________________________________ )

JOINT ANSWER OF SOUTHWEST AIRLINES AND JETBLUE AIRWAYS

Southwest Airlines and JetBlue Airways submit this Joint Answer to the ―Notice‖ 

filed January 6, 2014 by Republic Airline and its corporate affiliate Shuttle America and 

the Amendment to the Joint Notice filed January 8, 2014 (the ―Amendment‖) filed by 

Republic and its affiliated carriers including Chautauqua Airlines.

1

 The Notice states

that Republic plans to transfer three Ronald Reagan Washington National Airport 

(―DCA‖) slot slide exemptions to Shuttle America, and, pursuant to the Amendment to 

Chautauqua, to allow Chautauqua, for the period from February 1st through March 2nd, 

and thereafter, Shuttle America to provide service exclusively under the Delta 

Connection brand to Madison, Wisconsin (―MSN‖) and Omaha, Nebraska (―OMA‖). For 

the reasons given below, this proposed use of the slot slide exemptions is contrary to 

the governing statute and would reduce competition at DCA. It should not be permitted.

Under 49 U.S.C. § 41714(d), the Secretary may grant exemptions to carriers 

allowing them to move their allocated slot times from less desirable hours to more 

 

1 Common names of carriers are used.
2

commercially viable times during the day if certain criteria are met including a finding of 

―exceptional circumstances.‖ As the Department stated in describing its original grant of 

the exemptions in question to Midwest Express:

There the Department cited Congress’s intent that the pertinent 

exemption authority apply only to meet the specific needs of carriers 

holding a limited number of slots at Reagan National and to enhance 

competition. 

Order 99-11-4, November 4, 1999 at p. 2 (emphasis added).‖2 The congressional intent

of this unusual authority, as well as consistent DOT practice over two decades, clearly 

is to limit these exemptions to new entrants and limited incumbent carriers holding a 

small number of slots at DCA to facilitate their ability to compete effectively at the 

airport. The exemptions thereby benefit carriers that are at a competitive disadvantage 

because of their limited flexibility to move flight times given their small slot holdings and 

lack of access to additional slots. Granting small carriers the ability to move their flights 

to more preferred times enables them to provide more effective competition to larger 

incumbent carriers at this heavily concentrated and constrained airport. 

In this case, however, Republic and Shuttle America/Chautauqua are not

proposing to use the slot slide exemptions to provide more effective competition at 

DCA. To the contrary, the benefit of the slides would inure entirely to Delta Airlines, the 

largest airline in the world and the second largest DCA incumbent with a portfolio of 

more than 100 slots. Shuttle America/Chautauqua will not provide competition and 

options for consumers under its own brand or even Republic’s brand. Instead, the 

service would be marketed, priced, distributed, and otherwise wholly controlled by Delta 

Airlines. Shuttle America/Chautauqua will be invisible to consumers, and the slides will 

 

2 DOT Order 99-11-4 at 4 (Nov. 4, 1999). 
3

do nothing to enhance competition. Indeed, grant of this application would transfer 

these routes from a low cost to a legacy carrier. Delta would never qualify for the 

exemptions in its own right, yet will receive the benefit of the slides that were awarded 

to Midwest Express, then a limited incumbent at DCA, to enable it to more effectively 

compete with larger carriers. 

I. Congressional Intent and Department Precedent are Clear that Only 

Carriers with Small Slot Portfolios are Eligible for Slot Slide Exemptions

When Congress enacted 49 U.S.C. § 41714(d) authorizing slot slide exemptions 

at DCA, it did so with the express intent of providing flexibility to carriers with limited slot 

portfolios. In referring to the provision, the Conference Managers stated that 

[T]his section should be used in limited circumstances to meet the needs 

of carriers holding a limited number of slots. Carriers holding numerous 

slots should be able to adjust their schedules, and thus the flexibility 

permitted by this section should not be available to such carriers.3

Clearly, allowing Delta Airlines, the carrier with the second largest slot portfolio at DCA

to control and benefit from Republic’s slot slides would be contrary to the intent of the 

statute.4

The Department’s actions under this statute over the past two decades have 

been faithful to this congressional intent. In the original order that granted Midwest 

Express the slot slides for service to Omaha that are at issue here, DOT affirmed its

understanding of the congressional intent behind the limited exemption authority:

We find that Midwest Express’s particular circumstances meet the 

exceptional-circumstances criterion of the Act and that granting the 

exemption will not violate any of the provisions of the Act. In this regard, 

we note the accompanying language of the Conference Report which 

 

3 H.R. Conf. Rep. 103-677 at p. 49.

4

See, e.g., DOT Order 2004-5-6 at 5 (May 4, 2004), denying American Airlines’ application to retime various slots 

―Nothing we have found in our review indicates that American, as an incumbent with numerous DCA slots, satisfies 

the very high bar required to show exceptional circumstances.‖
4

provided additional information regarding the intent of the legislation. 

Specifically, it is clear that the Secretary’s authority to grant exemptions 

under this provision would apply only in limited circumstances to meet the 

specific needs of carriers holding a limited number of slots at Washington 

National.

5

Likewise, the Department’s orders granting slot slides have made clear that the purpose 

and value of these exemptions is to enable the recipients to compete more effectively at 

DCA. In the case of Midwest Express, the carrier argued that the slides would address 

a ―competitive disadvantage because its lack of well-timed slots prevents it from 

meeting demand between its principal hub [Milwaukee] and Reagan National.‖ 6 In 

granting slot slide exemptions to Spirit Airlines in 2003, the Department noted that 

applicant proposed to ―offer DCA passengers new, low fare service‖ and ―argued that 

due to its limited DCA slot holdings it operates at a significant competitive disadvantage 

at DCA...‖7 Similarly, in granting slide exemptions to Southwest Airlines in 2012, the 

Department found that ―Southwest is a limited incumbent at DCA with a constrained 

ability to trade slots within its own portfolio to create a viable schedule between DCA 

and STL.‖8 

Republic argues that the limited size requirement of the statute will be met 

because the exemptions in question will be used by Shuttle America/Chautauqua, 

themselves limited incumbents at DCA. But this elevates form over substance. The 

substance, and indeed the entire purpose, of Republic’s plan is to cede to Delta Airlines 

the marketing and control of the DCA flights in question as a Delta Connection service. 

This will in no way promote competition by Shuttle America/Chautauqua at DCA since 

 

5 DOT Order 94-9-49 at 3 (Sept. 30, 1994)(emphasis added).

6 DOT Order 99-11-4 at 1-2 (Nov. 4, 1999).

7 DOT Order 2006-3-9 at 2 (March 9, 2006).

8 DOT Order 2012-7-29 at 3 (July 25, 2012).
5

either airline would be acting entirely under contract as a Delta Connection carrier, not 

an independent competitor. This renders the original purpose of the slot slides 

meaningless.9 

While Republic claims that this arrangement would enable Delta to serve MSN 

and OMA, the reality is that Delta can easily serve those markets using its own large 

portfolio of slots if it wishes to do so.

10

 If fact, Delta did serve DCA - MSN until it 

terminated that service in January 2012 following Delta’s ―slot swap‖ with US Airways.

Delta can reinstate that service at any time with its own slots. It should not, however, be 

given the benefit of slot slides that the Department granted under ―exceptional 

circumstances‖ to a small carrier for the purpose of enhancing competition with large 

incumbents - like Delta.

Republic’s proposal would also have the perverse effect of increasing the 

concentration of DCA slots among legacy carriers. The Department has long 

recognized that the competitiveness of DCA increases as the percentage of slots held 

by low cost carriers increases. Indeed, the Department pointed to the increasing share 

of DCA slots held by low cost carriers as justification for approving Delta’s own slot 

swap with US Airways.11 The Republic proposal reverses this positive trend.

 

9 While Republic suggests at the end of its filing that there is DOT precedent allowing slot slides to be used to fly 

contract service for mainline carriers (Notice at p. 8), the Department did not specifically discuss contract service in 

the Order that was cited. Instead the Department based its approval of the slot slides for the four applicant carriers 

primarily on the uniqueness of the FAA lottery. DOT Order 2003-9-30 at 6 (Sept. 30, 2003). Furthermore, contract 

service was not mentioned in the 2013 Notice cited by Republic. 

10 In fact, Delta significantly underutilizes its slots at DCA. It flies commuter aircraft on a third of its air carrier slots, 

and 75% of its commuter flights go to large hub airports that could justify full-sized aircraft. Delta could easily upgauge its equipment in some of the large markets that it currently serves with regional jets, such as LGA, to keep the 

same number of seats in the market while freeing up slots for MSN and OMA service. 

11 FAA, Petition for Waiver and Other Relief, 76 Fed. Reg. 45313, (Jul. 28, 2011)―(―While we remain concerned about 

those possible consequences, as laid out in our 2010 notices, we believe the transaction’s promised benefits for the 

public—particularly in light of the increased penetration of low cost carriers at the airports since the time of our last 

review–are sufficient for us to conclude that the requested waiver is in the public interest.‖).
6

II. Republic’s Attempt to Transfer the Benefit and Control of its Slot Slides to 

Delta Would Create a Terrible Precedent that will Diminish Competition at 

DCA

Allowing Republic to use its slide exemptions for the benefit of Delta Airlines not 

only contravenes the purpose of a statute designed to benefit small airlines and thereby 

enhance competition at DCA, but it would also create a negative precedent that will 

reduce competition at DCA. Republic’s proposal would increase the domination of the 

airport by large legacy airlines. If Republic and Delta are permitted to use these slides 

in this fashion, there will be no effective limit on the use of slot slides for any DCA 

incumbent, no matter how large. The statute, along with its ―exceptional circumstances‖ 

limitation, would then be gutted as a vehicle for enabling smaller carriers to compete 

more effectively at the airport. 

As the Department made clear in the original grant, the slot slides held by 

Republic are explicitly non-transferable.

12

 Thus, Republic is prohibited from transferring 

the slides to Delta Airlines. Yet, the arrangement described in Republic’s Notice would 

accomplish virtually the same end result, by transferring control and benefit of the slides 

to Delta while nominally keeping them in the names of Shuttle America and Chatauqua. 

The Department should not tolerate such a transparent attempt to evade the transfer 

prohibition and thereby nullify the pro-competitive purpose of these slides. 

Within the context of the highly restrictive slot regime at DCA that caps the 

number of arriving and departing flights every hour, limited eligibility for slot slide 

exemptions is essential. Allowing DCA’s largest slot holders to reassign slots 

throughout the day under the cover of ―exceptional circumstances‖ would remove all 

 

12

 See DOT Order 99-11-4 at 5 (Nov. 4, 1999)(―These slots are temporarily allocated to Midwest Express subject to 

recall by the FAA and are not transferable‖ (emphasis added).
7

value of the current slide process and risk violating the hourly limits. Large slot holders 

such as Delta have the ability to make internal slot trades, as well as trades with other 

carriers (often involving slots at other airports as well), to obtain desirable slot times for 

their flights. Carriers with limited portfolios have little flexibility or options for self-help, 

however. The Department should ensure that the slot slides are used for their intended 

purpose to benefit only small slot holders and thereby enhance competition. 

Accordingly, DOT should deny Republic’s proposal and withdraw the slot slide

exemptions at issue here if Republic is unable to operate them in its own name as an 

independent competitor. 

. Respectfully submitted,

__________________ __________________

Robert W. Kneisley Jonathan B. Hill

Leslie C. Abbott J. Parker Erkmann

Southwest Airlines Co. Counsel for JetBlue 

Airways Corporation

January 15, 2014
8

CERTIFICATE OF SERVICE

I hereby certify that on January 15, 2014, a copy of the foregoing was served via 

e-mail on the following persons:

marshall.sinick@squiresanders.com (Alaska Airlines)

robert.wirick@aa.com (American Airlines)

francis.heil@aa.com (American Airlines)

sascha.vanderbellen@delta.com (Delta Air Lines)

robert.cohn@hoganlovells.com (Republic Airlines)

patrick.rizzi@hoganlovells.com (Republic Airlines)

dkirstein@yklaw.com (Spirit Airlines)

jyoung@yklaw.com (Spirit Airlines)

John.Fredericksen@suncountry.com (Sun Country Airlines)

steve.morrissey@united.com (United Air Lines)

howard_kass@usairways.com (US Airways)

benjamin.slocum@usairways.com (US Airways)

pmurphy@lopmurphy.com (USA3000)

barbara.russell@virginamerica.com (Virgin America)

susan.kurland@dot.gov

todd.homan@dot.gov

reece.davidson@dot.gov

cindy.baraban@dot.gov

Kevin.schlemmer@dot.gov

Dennis.DeVany@dot.gov

Rob.hawks@faa.gov

brian.ctr.meehan@faa.gov

info@airlineinfo.com

__________________________

Leslie C. Abbott