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 MOTION OF SOUTHWEST AIRLINES AND JETBLUE AIRWAYS

FOR LEAVE TO FILE AND SUR-REPLY 

 Communications with respect to this document should be addressed to:

Ron Ricks

 Executive Vice President – Chief Legal 

and Regulatory Officer

Mark Shaw

 Vice President General Counsel & 

Corporate Secretary

SOUTHWEST AIRLINES CO.

2702 Love Field Drive

Dallas, TX 75235-1611

James Hnat

Executive Vice President

JetBlue Airways Corporation

27-01 Queens Plaza North

Long Island City, NY 11101

Robert C. Land

Senior Vice President

JetBlue Airways Corporation

1212 New York Ave, NW, Suite 1212

Washington, DC 20005

Robert W. Kneisley

 Associate General Counsel

Leslie C. Abbott

 Senior Attorney

SOUTHWEST AIRLINES CO.

919 18th Street, N.W.

Suite 600

Washington, DC 20006

bob.kneisley@wnco.com

(202) 263-6284

Jonathan B. Hill

J. Parker Erkmann

Benjamin M. Berlin

Cooley LLP

1299 Pennsylvania Ave, N.W.

Washington, DC 20004

jhill@cooley.com

perkmann@cooley.com

bberlin@cooley.com

(202) 776-2725

Counsel for JetBlue Airways Corporation

January 24, 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 MOTION OF SOUTHWEST AIRLINES AND JETBLUE AIRWAYS

FOR LEAVE TO FILE AND SUR-REPLY 

Southwest Airlines Co. (“Southwest”) and JetBlue Airways Corporation

(“JetBlue”) move to file this sur-reply submitted in response to the Reply of Republic 

Airline Inc. (“Republic”) and its corporate affiliates Shuttle America Corporation (“Shuttle 

America”) and Chautauqua Airlines, Inc. (“Chautaqua”) concerning the Department’s 

slot slide exemption authority at Ronald Reagan Washington National Airport (“DCA”). 

Despite unequivocal legislative history that Congress created the slot slide mechanism 

solely for the benefit of small slot holders to enhance competition at DCA and never 

intended the provision to benefit large incumbent slot holders like Delta,1 Republic 

asserts that its proposal constitutes an “exceptional circumstance” justifying a departure 

from nearly two decades of Department precedent limiting slot slides to carriers “holding 

a limited number of slots at” DCA.2

The fact is that Delta could serve Madison or Omaha today using its own large 

portfolio of slots, or for that matter Republic could hold out service in its own name or in 

 1 49 U.S.C. §41714(d).

2 Application of Midwest Express Airlines, Inc., DOT Docket 49741, Order 94-9-49, at 3 

(Sep. 30, 1994).
2

the name of one of its corporate affiliates using these slot slides. What Republic has 

failed to do, however, is provide any justification why a large DCA incumbent like Delta 

should be given the slot slides to serve either of these cities. 

Making the Republic/Delta proposal even more brazen, Delta has gone full steam 

ahead, by-passing the Department, its authority and decision, loaded fares for service to 

these two communities and begun selling the service without so much as awaiting the

Department’s action on the proposal. This sur-reply will inform the Department of the 

adverse consequences of allowing Republic and Delta to subvert the Congressional 

intent and Department policy concerning the grant of slot slides at DCA. 

I. Republic and Delta Already Have Affected the Transfer of the Slot 

Slides.

As shown below, Republic and Delta already have implemented their proposed 

transfer of three DCA slot slide exemptions to facilitate service to Madison and Omaha 

exclusively under the Delta Connection brand. On Friday the 18th of January, Delta 

loaded fares for the proposed service—fares that in Madison market are more than

100% greater than those in effect for the same service offered by Republic3

—and has

begun to sell tickets, as depicted in the screenshots below:

 3 Delta’s $253 fare represents an increase of approximately 220% from Republic’s 

DCA-MSN fares, which averaged $115. 
3

From a consumer’s perspective, Shuttle America is all but invisible. Delta 

controls the marketing, distribution, and pricing of these flights, and the service appears 

to be just two more flights in Delta’s already large portfolio. Republic’s de facto transfer 

of the slot slides to Delta in this manner is contrary to the intent of the governing statute, 

disrespectful of the Department, and should not be permitted.

II. Republic’s Proposal Violates the Language and Intent of Section 41714.

Republic’s contention that its proposal is not a prohibited “transfer” contravenes 

the language and intent of the statute. 4 The statute broadly prohibits exemption 

holders from making any form of transfer and gives the Department the discretion to 

determine whether slot slide exemptions should be granted. Section 41714(j) provides:

No exemption from the requirements of subparts K and S of part 93 of title 

14, Code of Federal Regulations, granted under this section or section 

41716, 41717, or 41718 may be bought, sold, leased, or otherwise 

transferred by the carrier to which it is granted.

49 U.S.C. § 41714(j) (emphasis added). Moreover, the statute reserves to the 

Department the discretion to determine if a slot exemption meets the prescribed 

statutory criteria for granting a slot slide.

5

 As applied, the Department has consistently 

interpreted the statute and the Congressional intent behind it as authorizing slot slide 

 4 See Application of Republic Airline Inc., Reply of Republic Airline, et al., Docket DOTOST-1999-6240 & 2013-0086, at 7-8 (Jan. 22, 2014) (“Reply”). 5 49 U.S.C. § 41714(d) (authorizing exemptions “only under circumstances determined 

by the Secretary to be exceptional”).
4

exemptions when necessary to assist carriers holding small numbers of slots to 

enhance competition at DCA. 6 Despite this framework established to make the 

Department the gatekeeper for slot slide exemptions, Republic/Delta has cut the 

Department out of the process altogether. That has had the perverse result of allowing 

these limited slot slide exemptions to be used for the benefit of Delta, the second largest 

slot holder at DCA. If permitted, Republic’s strategy would undermine the Department’s 

own authority to ensure that these limited slot slide exemptions fulfill their original 

purpose—to allow carriers with limited slot portfolios to offer competitive, commercially 

viable services.

III. The Republic Proposal Does Not Satisfy the Exceptional Circumstances 

Standard in Section 41714(d).

By transferring the commercial benefit of the slot slide exemptions to an 

incumbent airline with a significant DCA slot portfolio, Republic’s proposal fails to satisfy 

the Department’s very high bar for exceptional circumstances. The Department has 

previously discussed how difficult it is to satisfy this standard in circumstances when the 

carrier has a robust slot portfolio: 

In determining what circumstances qualify as “exceptional,” the 

Department must be guided by the usual meaning of that term. 

“Exceptional” means “forming an exception; rare...” In order for 

circumstances to be “exceptional” according to the usual meaning of the 

term, we must find that they are ones not generally encountered, ones 

clearly different from most other circumstances. 

. . .

 6 Order 94-9-49, at 3 (“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.”); 

Application of Midwest Express Airlines, Inc., DOT Docket OST-99-6240, Order 99-11-

4, at 2 (Nov. 4, 1999) (“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.”).
5

Accordingly, the usual meaning of “exceptional circumstances,” as 

informed by the legislative history, would suggest that there is a very high 

bar to finding such circumstances exist where a carrier has sufficient slot 

holdings to be able to adjust its schedules and operations.

7

In that case, the Department denied American’s slot slide applications because, as a 

holder of a significant slot portfolio, it had the tools to reconfigure its schedule, including 

making adjustments with existing slot holdings or trading slots. 8 The Department 

concluded: “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.”9

 

The Department must reach the same conclusion with respect to the 

Republic/Delta proposal. It is indisputable both that Delta will be the beneficiary of 

these slot slides exemptions and that Delta has a robust DCA slot portfolio with which it 

can serve both Omaha and Madison. 10 Given these facts, the Department cannot 

conclude that these circumstances are “exceptional”.11 If the Department were to allow 

the Republic/Delta plan to go forward, the governing statute would for all practical 

purposes be gutted, as there would no longer be a prohibition on the transfer of slot 

slides for the commercial benefit of any carrier, no matter how large its slot portfolio. 

 7 Applications of American Airlines, Inc. and American Eagle Airlines, Inc., DOT Docket 

OST-2003-16349, Order 2004-5-6, at 2 (May 4, 2004) (emphasis added) (footnotes 

omitted). 8

 See id. at 5.

9

 Id.

10 The Reply asserts that Republic, Shuttle America and Chautauqua have relatively 

few slots available with which to fund the proposed Delta services. Reply at 6. This 

argument is of no moment. The Republic proposal will benefit Delta, so it is Delta’s 

ample slot portfolio that is relevant here.

11 The Reply argues that American’s recent decision to terminate DCA-OMA service 

makes the exceptional services for OMA “even greater” than before (Reply at 2). In fact 

the opposite is true, since American’s cessation of service enables Delta to serve OMA 

with its own slots on a monopoly basis rather than having to offer only competitive 

service. 

CERTIFICATE OF SERVICE

I hereby certify that on January 24, 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

reese.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

__________/s/________________

Deborah Kunkle