BEFORE THE 

### U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Application of SOUTHWEST AIRLINES CO. For exemptions from 14 C.F.R. Part 93, Subparts K and S, pursuant to 49 U.S.C. §41718(b) 

### ) ) 

### ) ) ) ) For service between Oklahoma City (OKC) and ) Ronald Reagan Washington National Airport (DCA) ) Docket DOT-OST-2000-7182

ANSWER OF OKLAHOMA CITY DEPARTMENT OF AIRPORTS IN SUPPORT OF THE APPLICATION OF SOUTHWEST AIRLINES TO SERVE RONALD REAGAN WASHINGTON NATIONAL AIRPORT FROM WILL ROGERS WORLD AIRPORT

Communications with respect to this document should be sent to: Mark Kranenburg Director of Airports Oklahoma City Department of Airports 7100 Terminal Drive Oklahoma City, OK 73159 Mark.kranenburg@okc.gov Direct phone: (405) 316-3200

March 20, 20121 

### BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

____________________________________________ Application of ) SOUTHWEST AIRLINES CO. ) For exemptions from 14 C.F.R. Part 93, ) Subparts K and S, pursuant to 49 U.S.C. ) Docket DOT-OST-2000-7182 §41718(b) ) ) For service between Oklahoma City (OKC) and ) Ronald Reagan Washington National Airport (DCA) )

____________________

________________________
INTRODUCTION On March 5, 2012, Southwest Airlines Co. (Southwest) applied for two slot exemptions at Ronald Reagan Washington National Airport (DCA) to initiate the only non

-stop service between DCA and Oklahoma City Will Rogers World Airport (OKC), a small hub airport as classified by the FAA. These slot exemptions authorize service to a small or medium hub airport within the 1,250

-mile perimeter established for civil operation at DCA, under Title 49 U.S.C.§ 49109. Details of Southwest’s service proposal are as follows:
ROUTE: DCA

-OKC, with continuing single

- plane service to Dallas Love Field (DAL) SCHEDULE: Eastbound: 09:00 DAL

– 09:50 OKC 10:15 OKC

– 14:05 DCA Westbound: 14:50 DCA

– 16:50 OKC

17:35 OKC

– 18:30 DAL START: Within 90 days of the Department’s Final Order AIRCRAFT: Stage III Boeing 737

-700 aircraft (137 seats)APPLICATION MEETS STATUTORY CRITERIA
As per its filing, Southwest's proposed service would significantly advance the statutory goals of AIR-21 and Vision 100 by fulfilling four of the five statutory criteria, the maximum number possible. Specifically, Southwest's proposal would:

• Provide service by a limited incumbent air carrier at Washington National Airport: Southwest is a limited incumbent at DCA following its acquisition of AirTran Airways;
• Offer DCA non-stop service to a community without such service: OKC has no non-stop service to DCA;
• Provide DCA service to a small community: OKC is classified as a "small hub" by the FAA; and
• Produce the maximum competitive benefits, including low fares: Southwest's proposed DCA-OKC-DAL service will generate over $8 million in consumer fare savings annually, and will stimulate approximately 55,000 new passengers. OKLAHOMA CITY- AN ECONOMIC SUCCESS STORY With a Metropolitan Statistical Area (MSA) population ofjust under 1.3 million people, the Oklahoma City region is the 44 1 h largest MSA in the United States. Population in the region grew at over 14% from 2000-2010, an above-average figure for the top 50 metropolitan areas. The Oklahoma City region extends into Canadian, Cleveland, Oklahoma and Pottawatomie counties, which include many small rural and suburban communities. Oklahoma City is a city that has invested in itself. Much ofits "above-average" growth is due to
a series of voter-approved sales tax initiatives called the Metropolitan Area Projects (MAPS), a visionary capital improvement program that revitalized the community along with its national 2Image. Over a period of nine years, MAPS has funded new and upgraded sports, recreation, entertainment, cultural and convention facilities, as well as infrastructure improvements for all Oklahoma City public schools. The citizens of Oklahoma City have voted three times in favor of the projects, providing an investment of $1.84 billion in community enhancements and spurring
over $5 billion in private-sector investments. Oklahoma City and MAPS has become a national model for other communities looking to grow and revitalize their cities. Oklahoma City is the primary economic engine for this region as well as the entire state of Oklahoma, producing over 50% of the state'sjob growth since 2009. Oklahoma City's economic profile is disproportionately strong when compared to the rest of the United States, in terms of total performance as well as recent growth. A partial list ofthe region's accomplishments includes:

• Listed among the top 20 strongest metropolitan areas (out of the top 100) for ten consecutive quarters by The Brookings Institute -based on unemployment rate, job creation, housing prices and the value of goods and services provided;
• Produced the lowest unemployment rate of any U.S. region of over 1 million people for each of the last twelve months

- and finished in the top three lowest for each month over the last three years;
• Generated an unemployment rate more than three percentage points lower than the national average in December, 2011 (5.7% vs. 8.9%); and
• Ranked first in real GDP growth (14.5%) among large metropolitan areas in 2008-09, the most recent year available from the Bureau of Economic Analysis.

3Many ofthe region's largest employers have significant ties to the Washington, DC area, driving enhanced economic benefit to the region from the proposed new service (an estimated 5% of total employment in the Oklahoma City region is driven by the federal government):

• As the state's capital, Oklahoma City has the greatest concentration of government agencies and offices located within the state;
• Tinker Air Force Base is Oklahoma's largest single site employer (27,000), with the largest group of civilian Air Force personnel in the United States; and
• The FAA's Mike Monroney Aeronautical Center is one ofthe Department of Transportation's largest facilities located outside of the Washington, DC area. In addition, energy, aviation/aerospace and bioscience each have a strong presence in the region, and are all growing at a rapid rate. Highlights include:

• Oklahoma is now one of the top ten states in traditional aerospace occupation employment, with more than 300 public and private-sector aviation and aerospace firms located here;
• Oklahoma ranks twelfth nationally in the number of aerospace engineers, fifth in aircraft mechanics and service technicians, and eighth in avionics technicians;
• The Boeing Company recently announced plans to relocate 1,500 high-level jobs to Oklahoma City, which will double their existing employee base; and

• Oklahoma City is home to the headquarters of two Fortune 500 energy companies. Oklahoma City has recently been lauded with several economic growth and quality of life-type headlines and honors, including: 4• "Oklahoma City ranked in the top ten in manufacturing growth"- U.S. Bureau of Labor Statistics, February 2012;
• "Only 13 oftop 100 metro areas have bounced back from the recession"- U.S. Bureau of Labor Statistics, February 2012;
• "10 Great Citiesfor Starting a Business"- Kiplinger, December 2011;
• "Fourth Best Cityfor a Job Search"- BenefitsPro, October 2011; and
• "Top 10 Best Places To Live"- RelocateAmerica, August 2011.
Numerous community leaders and representatives from the region's major employers have written letters of support for Southwest's application to serve the DCA-OKC market. These can be found in ExhibitA.
In summary, the economic profile and growth trajectory of the Oklahoma City market is perfectly positioned to take maximum advantage of the benefits from non-stop service to DCA.
WILL ROGERS WORLD AIRPORT OKC is Oklahoma City's commercial airport, and generated nearly 1.8 million enplanements in 2011, a 3% increase from 2010. OKC is an FAA-designated small-hub airport, and is the primary facility for a large portion of the state of Oklahoma. OKC is typically a high load factor airport, with nearly 80% of segments operating with load factors of 75% or higher for the year ended October 2011 (YE Oct11). As of March 2012, airlines serving OKC operate 68 daily departures to a total of 20 non-stop destinations (including Baltimore/Washington [BWI] and Washington/Dulles [lAD]). The largest carrier at OKC is Southwest, with approximately 20 daily departures to eight non-stop destinations (see Exhibit B).

5OKC sits on 8,100 acres with three active runways, and is home to sixty tenants and more than 10,000 employees. In 2006, the airport completed a $110 million terminal expansion/renovation project, transforming the 1967 terminal building into a modern, passenger-friendly facility. Two significant projects are currently in the design and engineering phase which will further enhance the passenger and security experience at OKC. The first project is a new $40 million consolidated rental car facility, which will provide much needed capacity and smoother operations for inbound travelers. The second is a new $25 million baggage inspection system, which will more efficiently and effectively screen passenger bags.


### THE OKLAHOMA CITY (OKC)- WASHINGTON (DCA) MARKET Oklahoma City currently generates more traffic to DCA than any other market located inside of the 1,250-mile DCA perimeter lacking non-stop service there (see Exhibit C). Despite this lack of non-stop service, and also despite daily non-stop flights from OKC to both BWI and lAD, the OKC-DCA market generated 33,664 fared passengers during the year ended September 30, 2011 (YE 3011). Given that all of these passengers traveled on connecting itineraries, choosing to bypass non-stop service to BWI and lAD, it is obvious that DCA is a key destination for the Oklahoma City community.
In addition, note that the figures above reflect only passengers traveling to/from OKC. As this will be the only current non-stop service to DCA from the state of Oklahoma, it will likely stimulate and carry traffic from a broader catchment area spanning other parts of the state. This will include smaller outlying communities with significant connections to Washington, DC, such
as Norman (home to the University of Oklahoma), Stillwater (home of Oklahoma State University), and Enid (home of Vance Air Force Base).

6Many ofOklahoma City's peer regions (as defined by MSA population) located inside of the DCA perimeter currently support service to BWI, lAD and DCA- including Raleigh/Durham (RDU), New Orleans (MSY), Nashville (BNA), and Indianapolis (IND) (see Exhibit D). Given the OKC-DCA passenger numbers in the absence of non-stop service and the surrounding small community traffic stimulation potential (both cited above), we believe that Oklahoma City can easilyjoin this distinguished group of cities. SOUTHWEST IS THE PERFECT CARRIER TO MAXIMIZE THE POTENTIAL OF THIS SERVICE In addition to the fact that Oklahoma City is an ideal market for new DCA non-stop service, Southwest is the optimal carrier to maximize the associated economic and community benefits. Key reasons include: Large existing local traffic base Southwest carried the largest number of O&D passengers from OKC in the most recent twelve month period for which data is available (YE 3011), with an O&D market share of over 38% (see Exhibit E). This extensive local traffic base should allow Southwest to ramp up new DCA service quickly, as local passengers are familiar with the airline and are comfortable flying with them.
Lowfare carrier in a highfare O&D market Current fares in the DCA-OKC marketplace are very high, making existing traffic counts in the market all that more impressive. For the YE 3011, the average DCA-OKC O&D fare was $271, the highest among the top ten inside-the-perimeter markets from DCA without non-stop service (see Exhibit C). Based on Southwest's existing passenger yield profile, the airline estimates that

7the introduction of their service in the market will drop the O&D fare to $163, a reduction of 40%. This substantial projected drop in the local fare level will stimulate an additional subset of passengers, on top of those already stimulated by the introduction of non-stop service.
Mainline aircraft
Southwest will operate its proposed OKC-DCA nonstop service with 137-seat B737-700 aircraft, providing for sufficient capacity to maximize the traffic stimulation and economic benefit to the regwn. Analysis of projected benefits
Southwest included in their application the projected economic benefits to the Oklahoma City region from this proposed new non-stop service. Their findings included:

• 46,220 annual incremental passengers will be generated in the local DCA-OKC O&D market (first run-rate year, includes all carriers), and an additional 8,614 beyond passengers will also be generated;
• $6.1 million in fare savings will accrue to passengers in the local DCA-OKC O&D market (including existing and new passengers), while an additional $2.1 million in savings will accrue to beyond passengers; and
• The average DCA-OKC O&D fare will drop from $271 to $163, a decline of 40%. CONCLUSION Southwest Airlines' proposed non-stop DCA-OKC service fulfills four of the five possible statutory criteria for DCA slot exemptions set out in AIR-21 and Vision 100, but we think that

8the story is much more powerful than that. Key factors in support of this application -which are not present in the competing applications

- include:

• The service will be operated by the largest carrier in the local marketplace (Southwest at OKC);

• Other than Richmond, VA, situated only 94 miles (and less than two hours driving time) from DCA, Oklahoma City is the largest MSA within the DCA perimeter currently without non-stop DCA service; and
• The service will be operated by the nation's largest low fare carrier, further enhancing benefits to the traveling public.
In addition, the potential for significant traffic stimulation in this market is evident, given the heavy existing traffic counts despite very high current fares. Southwest's use of 137-seat mainline aircraft will help maximize this impact. On behalf of the Oklahoma City community,
we urge the Department to grant Southwest's request to provide non-stop service in the DCAOKC market.

Respectfully Submitted,

urg Director of Airports Oklahoma City Department of Airports

March 20, 2012
Attachments
9EXHIBIT A
The following parties submitted letters ofsupport for this application:
1. Governor Mary Fallin, Governor of the State of Oklahoma 2. Dave Lopez, Oklahoma Secretary of Commerce & Tourism 3. Mick Cornett, Mayor of the City of Oklahoma City 4. Peter Delaney, Chairman, President & CEO, OGE 5. President David Boren, University of Oklahoma & former US Senator 6. Larry Nichols, Executive Chairman, Devon Energy Corporation 7. Kirk Humphreys, Chairman, The Humphreys Company; Vice Chairman, Oklahoma City Airport Trust; Former Mayor of Oklahoma City (1998-2003) 8. Oklahoma US Congressional Delegation: Senator James Inhofe, Senator Tom Coburn, Congressman Dan Boren, Congressman Frank Lucas, Congressman James Lankford, Congressman Tom Cole, Congressman John Sullivan 9. LeAnn Jenkins, Executive Director, Oklahoma Federal Executive Board 10. David Rainbolt, Chief Executive Officer, BancFirst Corporation 11. C. Bruce Lawrence, President & CEO, Integris Health 12. Michael C. Turpen, Attorney, Riggs, Abney, Neal, Turpen, Orbison & Lewis 13. David Walters, President, Walters Power International; Former Governor of the State of Oklahoma 14. Rhonda Hooper, President & CEO, Jordan Advertising 15. Roy H. Williams, President, Greater Oklahoma City Chamber of Commerce 16. Fred S. Morgan, President & CEO, The State Chamber of Oklahoma 17. Victor Bird, Director, Oklahoma Aeronautics Commission 18. Mark Kranenburg, Director of Airports, City of Oklahoma City Department of Airports 19. Ed Sanchez, Chairman/CEO, Lopez Foods, Inc. 20. Charles Lamb, Mayor, City of Edmond 21. Cindy Rosenthal, Mayor, City of Norman 22. Roscoe Hill, Mayor, City of Woodward 23. Dan Galloway, City Manager, City of Stillwater
10EXHIBITB Departures by Airline at Will Rogers World Airport (OKC)- March 2012 Marketin2 Carrier Dailv Deuartures Destinations Baltimore/Washington, Dallas Love, Denver, Houston Hobby, Las Vegas, Southwest Airlines 19.8 Kansas Ci!Y, Phoenix, St. Louis Denver, Newark, Washington Dulles, Houston Intercontinental, Los Angeles, United Airlines* 19.1 Chica_g_o O'Hare, San Francisco Atlanta, Detroit, Memphis, Delta Airlines 15.2 Minneapolis/St. Paul, Salt Lake City Dallas/Fort Worth, Los Angeles, American Airlines 12.9 Chic'!£_o O'Hare

Frontier Airlines 1.4 Denver TOTAL 68.4
Source: OAG schedules, March 2012 

### * includes service by ContinentalAirlines

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### EXHIBIT C Top 10 markets inside the DCA perimeter without non-stop service to DCA

– YE 3Q11 Annual Fared Passengers and O&D Fare

Market DCA Fared Passengers Average O&D Fare Oklahoma City (OKC) 33,664 $271 Tulsa (TUL) 30,257 $212 Wichita (ICT) 25,665 $187 Moline (MLI) 20,695 $187 Key West (EYW) 18,716 $200 Cedar Rapids (CID) 18,340 $257 Gulfport (GPT) 18,161 $208 Baton Rouge (BTR) 18,060 $222 Northwest Arkansas (XNA) 18,028 $234 Montgomery (MGM) 16,458 $245 Source: Southwest Airlines filing/US DOT O&D Survey, YE 3Q11/US DOT Form 41 Note: O&D fare data includes fared passengers only, excludes all taxes and government charges, and includes estimated checked baggage and rebooking fees (per Southwest filing)

### EXHIBITD Oklahoma City "Peer MSAs"- service to Washington area airports Only markets inside the DCAperimeter are listed MSA MSA* MSA Primary rank nonulation airnort**[000~**

22 Pittsburgh, PA 2,357.9 PIT 25 Orlando-Kissimmee-Sanford, FL 2,188.6 MCO 27 Cincinnati-Middletown, OH-KY-IN 2,147.6 CVG 28 Cleveland-Elyria-Mentor, OH 2,077.9 CLE 29 Kansas City, MO-KS 2,063.0 MCI 31 Columbus, OH 1,864.6 CMH 33 Charlotte-Gastonia-Rock Hill, SC 1,804.6 CLT 34 Indianapolis-Carmel, IN 1,780.0 IND 36 Virginia Beach-Norfolk-Newport News, 1,691.6 ORF VA-NC 37 Nashville-Davidson-Murfreesboro- 1,633.1 BNA Franklin, TN 38 Providence-New Bedford-Fall River, RI- 1,608.2 PVD MA 39 Milwaukee-Waukesha-West Allis, WI 1,563.7 MKE 40 Jacksonville, FL 1,370.6 JAX 41 Memphis, TN 1,329.9 MEM 42 Louisville-Jefferson County, KY-IN 1,292.8 SDF 43 Richmond, VA* 1,283.5 RIC lAD non-ston

service

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes No Yes Yes 

### 44 Oklahoma City, OK**l,Z74•I::ii~'/>** ;:?;\ :oKG'L,,'•**··;f;;~**

# 3.tves· ,> 45 Hartford-West Hartford-East Hartford, CT 1,219.8 BDL Yes 46 New Orleans-Metairie-Kenner, LA 1,179.3 MSY Yes 47 Raleigh-Cary, NC 1,171.1 RDU Yes 48 Birmingham-Hoover, AL 1,141.2 BHM No 50 Buffalo-Niagara Falls, NY 1,135.4 BUF Yes 51 Rochester, NY 1,055.6 ROC Yes *Note that the stage lengthfrom RIC to DCA is 94 miles. Source: U.S. Census and OAG Schedules data

13 DCA BWI non-ston non-ston

service service

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No No No, Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

### EXHIBIT E O&D passengers by 

### airline at Will Rogers World Airport (OKC)- YE 3Qll Carrier Annual uassen2ers (000s) Passen2er share Southwest_{_WN} 1,180.4 38% American(AA) 610.4 20% Delta (DL) 528.2 17% United (UA) 367.7 12% Continental (CO) 215.4 7% Frontier (F9) 144.7 5%
Source: US DOT O&D Survey, YE 3Qll

14CERTIFICATE OF SERVICE
I hereby certify that on March 20, 2012, a copy of the foregoing was served via e-mail on the following persons: leslie.abbott @wnco
.com (Southwest Airlines) bob.kneisley @ wnco .com (Southwest Airlines) robert.cohn @ hoganlovells .com (Frontier Airlines) patrick
.rizzi@hoganlovells.com (Frontier Airlines) howard kass @ usairways.com (US Airways) benjamin.slocum @ usairways.com (US Airways)
amoore @bakerdonelson.com (JAN Airport) dvanderleest@jmaa.com (JAN Airport) tom.tyra @ flylouisville
.com (SDF Airport) phil.sunderland@mwaa.com (DCA Airport) susan.kurland @ dot .gov todd
.homan @ dot.gov

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