BEFORE THE

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

_____________________________________

)

2012 CHICAGO - CANCUN ) Docket DOT-OST-2012-0001

COMBINATION SERVICE PROCEEDING )

_____________________________________ )

_____________________________________

)

Applications of )

) 

 AIRTRAN AIRWAYS, INC ) Docket DOT-OST-2011-0225

 )

 FRONTIER AIRLINES, INC. ) Docket DOT-OST-2011-0214

)

For an exemption pursuant to )

49 U.S.C. § 40109 ) 

_____________________________________ )

ANSWER OF AIRTRAN AIRWAYS, INC.

Communications with respect to this document should be sent to:

Bob Jordan Robert W. Kneisley

 President Associate General Counsel

AIRTRAN AIRWAYS, INC. Leslie C. Abbott

9955 AirTran Boulevard Senior Attorney

Orlando, FL 32827 SOUTHWEST AIRLINES CO.

 1901 L Street, N.W., Suite 640

Washington, D.C. 20036

 bob.kneisley@wnco.com

(202) 263-6284

January 26, 2012
1

BEFORE THE 

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON D.C.

_____________________________________

)

2012 CHICAGO - CANCUN ) Docket DOT-OST-2012-0001

COMBINATION SERVICE PROCEEDING )

_____________________________________ )

_____________________________________

)

Applications of )

) 

 AIRTRAN AIRWAYS, INC ) Docket DOT-OST-2011-0225

 )

 FRONTIER AIRLINES, INC. ) Docket DOT-OST-2011-0214

)

For an exemption pursuant to )

49 U.S.C. § 40109 ) 

_____________________________________ )

ANSWER OF AIRTRAN AIRWAYS, INC.

Pursuant to the schedule set forth in Order 2012-1-4 establishing this 

proceeding, AirTran hereby submits this Answer in response to Frontier’s “Amendment 

and Supplement” filed January 19, 2012 in this docket.1 AirTran’s previous pleadings2

have described in detail the profound flaws in Frontier’s application for a scheduled U.S. 

carrier designation in the ORD-CUN market, and nothing in Frontier’s January 19 

submission cures those flaws. Stripped of its rhetoric and baseless claims, Frontier’s 

application involves nothing more than a dressed-up charter program masquerading as 

a scheduled service that would needlessly block AirTran/Southwest (and Chicago 

Midway Airport) from the CHI-CUN market. AirTran’s proposal to serve MDW-CUN, on 

 

1

Common names of the carriers are used.

2

Answer to Frontier, December 6, 2011; Reply to Frontier, December 22, 2011; and Supplement to Application, 

January 19, 2012.
2

the other hand, would generate sorely needed competition and enormous public 

benefits for the Chicago region, while still allowing Frontier to participate in the market.

I. FRONTIER’S PROPOSAL WOULD DISSERVE THE CHICAGO PUBLIC 

AND WASTE A VALUABLE U.S. SCHEDULED DESIGNATION.

Beginning with its initial application for exemption on November 21, 2011, 

Frontier made abundantly clear that its entire motivation in seeking ORD-CUN authority 

was to provide capacity for Apple Vacations, so that Apple would not suffer disruption 

due to USA 3000’s planned termination of service at the end of January 2012. As 

Frontier put it, “Frontier has entered into an agreement with Apple Vacations to replace 

[its] current allocation of seats on USA 3000’s flights...and ensure Apple Vacation’s 

customers a seamless transition from USA 3000’s service...”3 Accordingly, Frontier’s 

service proposal reflected its assumption of USA 3000’s contract with Apple, proposing 

to operate one round-trip charter between ORD and CUN approximately 321 days per 

year.4 Since then, Frontier has even acquired the USA 3000 aircraft to satisfy Apple’s 

requirement for 168 seats.5 

So, the transition from USA 3000 to Frontier is already well underway, and is 

confirmed by Frontier’s recent disclosure that it “will commence public charters with 

Apple Vacations on or about January 31, 2012...”6 In fact, everything Frontier proposed 

in its original application can be operated with charter authority, as the marketing of the 

seats by Apple does not require Frontier to hold scheduled authority. This is fully 

consistent with past practice, since neither Apple nor USA 3000 (despite holding 

 

3

Frontier Application for Exemption, November 21, 2011 at p. 2.

4

Id. and Frontier’s Reply and Answer, December 15, 2011. 

5

According to AeroTransport Data Bank, USA 3000’s A320 (N261AV) was delivered to Frontier on or about January 

 8, 2012. 

6

Frontier’s Amendment and Supplement to Application, January 19, 2012, at p. 11. 
3

scheduled authority) has historically sold scheduled seats directly to the public in the 

Chicago-Cancun market.

It was not until Frontier’s January 19 filing, more than eight weeks after its initial 

application, and six weeks after AirTran’s competing application was filed, that Frontier 

“amended” its service proposal to reveal a new-found interest in selling individual tickets 

to the public outside of providing lift for Apple charters. Further, Frontier has now 

increased its proposed frequency to year-round daily service, matching the schedule 

proposed by AirTran in its competing application. Frontier also claims that it will operate 

122,640 annual seats in its newly-expanded proposal.

7

 However, for 321 days the 

seats will be contracted to and marketed by Apple. This represents 107,856 seats, or 

about 88% of the total capacity Frontier proposes to operate. All of these 107,856 seats 

will be sold not by Frontier or its GDS partners, but by Apple as a minor component of a 

bundled fare package that includes hundreds of dollars of ground services and 

accommodations the passenger must purchase. 

At most, therefore, Frontier would be able to sell the remaining 14,784 seats 

(only 12% of its total capacity) to the public. With such a miniscule presence in the 

“public” market, Frontier will have no meaningful impact on competition, and its claim to 

be the “low-fare” alternative in the market is absurd. AirTran/Southwest would exert 

significantly more pricing pressure on the incumbents United and American than 

Frontier, especially since most of its fares will be buried within an all-inclusive tour 

package price. 

 

7

168 seats x 2 x 365 days. 
4

In fact, even assuming Frontier’s 14,784 seats “public” seats materialize,

8

they

represent less than 15% of AirTran/Southwest’s initial schedule of 100,010 seats, and 

only 12.7% of the 116,038 seats Southwest could provide in the future using the B737-

800 (175 seats) during peak periods, along with the 143 seats in its reconfigured B737-

700’s (Exhibit FL-R-1). Of course 100% of the AirTran/Southwest seats will be available 

to the general public without any requirement to purchase an expensive ground 

package.

The expanded Frontier proposal presents the carrier with a new dilemma –

Frontier has no presence at ORD; no online ORD connecting routes; and little or no 

market awareness in Chicago. In a desperate attempt to plug this gaping hole Frontier 

now argues it will obtain interline connections at ORD from its direct competitors, 

namely United and American. It supports this claim by reference to interline 

agreements it has with several carriers (Frontier, Exhibit 11). However, Frontier makes 

no mention of code share or joint fare agreements with United and American. Indeed, 

why would UA or AA offer joint fares to a head-to-head competitor that would make 

interlining easier and less expensive? The answer is they wouldn’t. So, Frontier’s 

hypothetical interline connecting passenger would be charged the (more expensive) 

sum of the local fares, making it significantly cheaper for the passenger to travel the 

whole route entirely on UA or AA. 

AirTran does not recall another limited entry route case where an applicant 

alleged it will obtain interline traffic support from its incumbent direct competitors that 

operate in the same market that is at issue. Yet, in Exhibit 10 Frontier proudly touts the 

 

8

It is also possible that Frontier has negotiated an expanded contract with Apple and that none of these 

incremental seats will be available to the public. Frontier has hidden from view all details of its Apple contract. 
5

extensive scheduled service networks of United and American at O’Hare. Even apart 

from the expense and inconvenience of Frontier’s dubious interline concept, many of 

the routings shown are patently impractical. Frontier implies, for example, that a United 

passenger from Honolulu will fly to ORD on United and then connect to a Frontier flight 

to Cancun. Honolulu is already on the same latitude as Cancun. Why wouldn’t the 

passenger simply travel online United connecting at LAX? Similarly, why would a 

passenger from Miami, Atlanta, Houston, or Dallas fly to ORD (a virtual backhaul) to 

make an interline connection on Frontier to Cancun and pay the sum of the local fares 

to boot, when the same passenger could go nonstop to/from Cancun. Frontier’s 

interline connection theory is absurd on its face, and Exhibit 10 is replete with similarly 

preposterous passenger routings. 

Further, Frontier’s claim of robust interline traffic support in this case is 

contradicted by its own experience in other Mexico markets. At Denver, Frontier’s 

largest market, which would be expected to generate a relatively high number of 

interline connections, Frontier captures only a miniscule volume of interline bookings. In 

the DEN-CUN market, for example, only 0.7% of Frontier bookings represent interline 

connections to/from United. In DEN-PVR and DEN-SJD, United connecting passengers 

on Frontier were similarly minimal at 0.9% and 1.2% respectively (Exhibit FL-R-2). This 

volume of connecting traffic is so insignificant that it likely represents passengers 

transferred by United to Frontier due to cancellations or oversales on its own flights. 

In sum, Frontier’s hoped-for support from interline traffic simply is not credible, as 

logic combined with Frontier’s own experience at the Denver hub exposes the fallacy of 

this proposition. This underscores what AirTran has been saying for weeks – that 
6

Frontier has no legitimate need for scheduled authority in this market. Frontier’s 

application for ORD-CUN was predicated entirely on stepping into the shoes of USA

3000 to provide lift for Apple Vacations without disruption, and it has already 

accomplished that objective under the unrestricted charter provisions of the U.S.-Mexico 

agreement. 

Under the circumstances, Frontier’s demand for the only available scheduled 

carrier designation in the market is outrageous. Frontier’s proposal would not only 

squander a valuable authority for which the U.S. government strongly negotiated, it 

would unnecessarily block AirTran/Southwest from the market, and worst of all would 

preclude the new competition and public benefits that AirTran/Southwest would provide 

for Chicago consumers by serving Midway - Cancun. 

Unlike Frontier, AirTran does not base its proposal on imaginary interline 

connections from direct competitors. Instead AirTran will rely on Southwest’s huge 

presence and demonstrable popularity in Chicago for the generation of local 

passengers in the MDW-CUN market, supported by numerous on-line connections from 

AirTran/Southwest’s extensive network that are based on actual flight schedules that 

mesh with AirTran’s proposed MDW-CUN flights. Also unlike Frontier, AirTran does not 

seek to block its competitor from the market. Awarding scheduled authority to AirTran 

in the MDW-CUN market will in no way inhibit Frontier from fully serving Apple 

Vacations in the ORD-CUN under its charter authority. 

Finally, Frontier’s attack on an alleged “lack of connectivity” between AirTran and 

Southwest is completely misguided. Southwest acquired AirTran precisely for the 

purpose of integrating that carrier’s services into Southwest’s system. The acquisition
7

closed in May 2011, and the integration of the two carriers’ operations is proceeding 

apace. Southwest and AirTran expect to receive a Single Operating Certificate from the 

FAA in the first quarter of 2012 (the quickest SOC issuance of any large airline merger), 

and expect to achieve full connectivity later this year. It is for that very reason that 

AirTran has focused so much attention in this case on the public benefits that will be 

achieved by a combined AirTran and Southwest. Frontier’s denial of this obvious fact is 

inexplicable and cannot be taken seriously.

II. HISTORY SHOWS THAT AIRTRAN/SOUTHWEST’S MIDWAYCANCUN SERVICE WILL COMPETE VIGOROUSLY WITH O’HARECANCUN SERVICE. 

Beginning in 1985, when Southwest entered its first nonstop Midway market 

(STL), until its present day service to 57 nonstop MDW routes, Southwest’s experience 

has shown consistently that air service at Midway competes vigorously with air service 

at O’Hare. Throughout this long history, whenever Southwest entered new markets 

from MDW, fares fell and traffic rose at both MDW and ORD. This phenomenon was 

demonstrated in our earlier Exhibits FL-120 through FL-122 for the MDW-LGA, MSP,

and BWI markets respectively. Several additional examples are provided in attached 

Exhibits FL-R-3 through FL-R-9 (involving Southwest’s entry into MDW-CLE, PVD, BDL, 

CMH, OMA, OAK, and SDF). 

Ignoring this obvious reality, Frontier boldly claims that “Midway is not an 

economic substitute for O’Hare and does not discipline fares at O’Hare, as reflected in 

significantly (22%) higher average fares at O’Hare in common markets.”9This is at best 

misleading. Fares are naturally higher at ORD for several reasons, including key 

 

9

See Frontier January 19 Amendment and Supplement, at p. 2. 
8

differences between the services and costs at ORD vs. MDW. These differences 

include, but are not limited to, the following:

There is a much different mix of traffic at ORD compared to MDW. The ORD 

airlines carry a higher share of business traffic than Southwest carries at 

MDW. ORD is a key hub in both AA’s and UA’s global alliance networks, 

which naturally leads to a disproportionate share of corporate accounts and 

higher-fare passengers. MDW, on the other hand, is known for its 

convenience and wide array of low-cost travel options.

Beyond this, the ORD carriers have always had a bias toward charging the 

maximum that the market will bear. Southwest and AirTran, on the other 

hand, have tended to price as low as possible consistent with their return on 

investment objectives. Southwest has historically viewed the automobile and 

other forms of surface transportation as its primary competitors, which requires 

its air fares to be kept low independent of airline competition.

At ORD, airport costs per enplaned passenger are approximately $10 to $15 

higher for a small operator like Frontier compared to AirTran/Southwest’s 

costs at MDW. Further, the disparity between ORD costs and MDW costs is 

increasing.

10

 

The massive network of commuter and RJ flights at ORD (but not at MDW) 

has the effect of raising local ORD fares to cover the much higher unit costs of 

 

10 During the FAA’s deliberations over federal funding for the now-underway O’Hare Modernization Program 

(OMP), evidence was presented that the cost per enplaned passenger at ORD would increase from approximately 

$9 in 2003 to nearly $30 after completion of the OMP. See A Critical Assessment of the Draft Environmental 

Impact Statement for the O’Hare Modernization Program (OMP), pp. 61-62, submitted to the Federal Aviation 

Administration on behalf of Bensenville and Elk Grove Village, Illinois, April 6, 2005.
9

the small aircraft, compared to much lower unit costs of 137-seat full-sized jets 

operated by AirTran/Southwest at MDW.

In addition, MDW’s fare discipline on ORD and the economic substitutability of 

services at the two airports is convincingly demonstrated by the high degree to which 

Southwest fares at MDW have caused the ORD carriers, especially United and 

American, to lower their fares in response. A summary of the individual route examples 

shown in the AirTran exhibits is presented in Exhibit FL-R-10. The ORD fare reductions 

in these examples ranged from 12% to 60%, and that measures only the short term fare 

impacts – from the year before AirTran/Southwest entered the market to the year after 

entry. Consequently, it is naïve and uninformed to argue that AirTran/Southwest pricing 

at MDW does not impact fares at ORD. It clearly does, and it has delivered billions of 

dollars in savings to Chicago consumers. 

Finally, to further demonstrate the market power of AirTran/Southwest in 

disciplining competitive fares it is instructive to examine the fare history at Denver. 

Frontier challenged United at DEN before Southwest entered, and succeeded in 

lowering fares somewhat below United’s levels. However, after Southwest entered 

DEN markets that were already served by both United and Frontier, the average market 

fare declined by an additional 25% (Exhibit FL-R-11).

Further, Southwest’s prices to passengers at DEN are lower than Frontier’s in 

two-thirds of nonstop markets where they compete head-to-head (18 out of 27 such 

markets), once taking into account not just airfares but the checked baggage and 

reservation change fees that Frontier charges but Southwest does not (Exhibit FL-R-
10

12).11 Southwest’s average price over all 27 markets combined is 2.7% lower than 

Frontier’s. This comparison is conservative (i.e., biased in favor of Frontier) because 

the checked bag fees used are based on system averages even though travelers in 

leisure markets check more bags than the average of all routes in the carrier’s system. 

III. PASSENGER DEMAND FOR SERVICE AT MIDWAY IS EQUAL

TO THE DEMAND AT O’HARE.

Contrary to Frontier’s disparaging (and uninformed) description of Midway 

Airport, AirTran has already shown that Midway and O’Hare are equally effective in 

attracting traffic when the level of services offered at each airport is similar. Exhibit FL117, submitted with AirTran’s January 19 Supplement, shows that in large Chicago 

markets with similar nonstop service at both MDW and ORD, the volume of MDW 

passengers is 99.4% as great as the ORD volume. This is unsurprising since, as 

Exhibit FL-105 demonstrates, the population within a 60-minute drive of MDW is 94% as 

great as the population within 60 minutes of ORD. Beyond this, there is also evidence 

that MDW is more effective than ORD in attracting passengers when services are 

similar at both airports. For the 12 months ended September 30, 2011 Midway’s O&D 

traffic share exceeded its seat share in 26 of the top 30 markets where both MDW and 

ORD had nonstop service, demonstrating the strength of Midway relative to O’Hare

(Exhibit FL-R-13). 

In fact, Midway Airport is more convenient than O’Hare for major segments of the 

Chicago market, and in some respects is clearly preferred by Chicago travelers. First,

Midway is only 10 miles from downtown Chicago while O’Hare is 18 miles from 

 

11 The average of such fees per fared passenger is $8.80 for Frontier but only $0.38 for Southwest. These amounts 

have been included in the prices charged by both carriers and the percentage differences are shown in Exhibit FLR-12.
11

downtown.12 This 8 mile difference is highly significant to many passengers in this very 

large and congested urban market. 

Second, the experience of connecting passengers is much better at MDW than 

ORD. At ORD, domestic-to-domestic minimum connecting time is 50 minutes, but only 

25 minutes at MDW; domestic-to-international minimum connecting time is 75 minutes 

at ORD and 60 minutes at MDW; and international-to-domestic minimum connecting 

time is 90 minutes at ORD and 60 minutes at MDW.13 

Third, air traffic congestion creates a much higher incidence of delayed flights at 

ORD than MDW. According to DOT reports, the average percentage of arrivals delayed 

beyond 15 minutes was 28.4% at ORD and 19.1% at MDW for the 12 months ended 

November 30, 2011.14

So, Frontier’s insinuation that Chicago-Cancun passengers prefer ORD over 

MDW by a factor of 30 to 1 for Cancun service15 is self-serving and patently false. As 

AirTran/Southwest pointed out in its January 19 Supplemental filing, today’s CHI-CUN 

traffic is at ORD because that is where all the nonstop service is operated. Connecting 

service is obviously not a competitive substitute for nonstop flights (see Exhibit FL-116). 

As AirTran demonstrated previously, MDW’s share of Chicago traffic dramatically 

increases whenever Southwest inaugurates new service that competes with ORD. In 

the case of Chicago-Washington Dulles (IAD), for example, MDW passengers jumped 

from only 2.5% of ORD’s volume before Southwest’s entry to 122% after entry (Exhibit 

FL-118). In the MDW-BUF market, MDW traffic expanded from only 2.9% of ORD

 

12 Official Airline Guide, January 2012.

13 Id.

14 DOT Air Travel Consumer Report, latest 12 monthly issues.

15 See Frontier’s January 19 Amendment and Supplement, at pp. 2 and 4. 
12

traffic prior to Southwest’s entry to 73% after Southwest entered (Exhibit FL-119). For 

both markets the total Chicago traffic increased significantly due to Southwest’s new 

service at MDW – 65% in the case of Chicago – IAD, and 131% for Chicago-Buffalo. 

Further evidence of the fact that MDW and ORD effectively serve the same 

Chicago market is found in a comparison of airline schedules in the multi-airport 

metropolitan areas of Chicago, New York/Newark, and Baltimore/Washington (see

Exhibit FL-R-14). In New York/Newark, there are 49 destinations that are served by the 

same carrier at more than one New York area airport (Exhibit FL-R-15). For example, 

Delta serves Atlanta from all three New York area airports – JFK, EWR and LGA. This 

is just one of the total 49 carrier-destination combinations in New York/Newark. Why 

does this occur? Because the carriers serving the New York/Newark area know that 

JFK, LGA and EWR serve different portions of the region and no single airport serves 

the entire area.

The same phenomenon occurs in the Baltimore/Washington area. Exhibit FL-R16 shows that there are 31 destinations where a carrier serves more than one of the 

three Baltimore/Washington airports. Again, the carriers serving that area know that 

BWI, DCA, and IAD primarily serve different parts of region, and it is necessary to serve 

more than one of those airports to effectively access the entire market. 

However, in the case of Chicago, there are only three carrier-destination 

combinations where the same carrier serves the market from both Chicago airports 

(Exhibit FL-R-17). This is because major Chicago airlines like United, American and 

Southwest know they can access the same domestic traveler population at either MDW 
13

or ORD, and there is no need to duplicate services at two airports and incur 

unnecessary costs. 

IV. AIRTRAN/SOUTHWEST’S CUSTOMER SERVICE, CONVENIENCE,

AND VALUE ARE FAR SUPERIOR TO FRONTIER’S.

Despite Frontier’s claims that it provides a better product with “substantially more 

amenities,” a look at objective industry rankings and onboard product offerings shows

conclusively that AirTran/Southwest provide far superior customer service and value 

than Frontier. For example, the 2011 Airline Quality Rating (“AQR”) study ranked 

AirTran and Southwest first and fifth respectively for Overall Quality, while Frontier 

placed a distant ninth. Similarly, this same study revealed that Frontier had 1.23 

consumer complaints per 100,000 passengers, five times the number for Southwest 

(0.27).16

Further, regarding onboard “amenities,” Frontier fails to mention that it requires 

customers to pay additional fees for all of its so-called “enhanced” products. For 

example, Frontier charges $6 to watch TV,17 $8 to watch a movie,18 and up to $14 for 

food and beverage items.19 Similarly, its so called “STRETCH” seating and advanced 

seat assignments come at an additional cost to the consumer based on fare class.20 

These features and other inflight sales options should be considered sources of 

supplemental fare revenue rather than disguised as consumer “benefits.”

Moreover, the value of any of these product offerings decreases significantly 

when airfare is bundled into packaged vacations. In this context, consumers focus less 

 

16 See http://www.airlineinfo.com/public/2011aqr.pdf

17 See “Frontier Airlines – Inflight Entertainment”, www.frontierairlines.com/flight-info/inflight-entertainment

18 Id.

19 See “Frontier Airlines – Inflight Catering”, www.frontierairlines.com/flight-info/inflight-catering

20 See “Frontier Airlines – STRETCH Seating”, www.frontierairlines.com/flight-info/stretch-seating
14

on the airline experience and more on the entirety of the vacation package when 

making purchasing decisions. One wonders what the actual value of Frontier’s 

“competitively attractive service product” is when Frontier intends to sell 88% of its seats 

via Apple Vacations and not directly to the public (Exhibit FL-R-1, p. 2). 

By comparison, Southwest provides an array of benefits to passengers at no 

additional charge. Southwest’s policy is to provide a high-value, no-hassle, product 

delivered with exceptional customer service and without “nickel-and-diming” customers. 

Significantly, Southwest does not charge passengers for their first or second checked 

bag, a benefit that is particularly important to international travelers who have a high 

proportion of luggage to check. Southwest also does not impose a reservation change 

fee, affording travelers flexibility and confidence in making and adjusting their travel 

plans. Frontier, on the other hand, charges $20 for the first checked bag, another $20 

for the second checked bag, and $50 for changing a reservation.21

Finally, Frontier’s claims about the superiority of its distribution channels are 

flawed on several levels. For starters, to suggest that Southwest - the largest and most 

successful low fare airline in the country - has an ineffective distribution system is 

laughable. Southwest’s ability to connect directly with Chicago consumers is 

unsurpassed, via its website, www.southwest.com (the most popular U.S. airline 

website by a large margin),22 as well as telephone reservation centers and awardwinning advertising and marketing efforts. Furthermore, despite Frontier’s claim to the 

contrary, Southwest also distributes its fares through two of the largest GDSs, Sabre

 

21 See http://www.frontierairlines.com/

22 Nielsen, YE Nov 2011.
15

and Travelport (which itself includes Apollo and Worldspan). Collectively, these GDSs 

account for 90% of both the U.S. and Mexico GDS markets. 

Frontier, on the other hand, needs to rely heavily on expensive GDS’s for 

bookings since it has such a limited presence in many of the cities that it serves -

especially Chicago. This is not so much a consumer benefit as it is a carrier weakness. 

Only about 45% of Frontier’s passengers traveling system-wide book directly on 

frontierairlines.com,

23 indicating that Frontier’s GDS booking ratio to/from Mexico is 

simply in line with how it chooses to distribute its product. With Southwest’s long history 

and enormous presence in Chicago, customers are thoroughly experienced in booking 

travel directly with the airline and will undoubtedly do so for its future MDW-Cancun 

service. 

V. CONCLUSION

For the reasons stated above and in its prior submissions, AirTran requests that 

the Department grant its Application for Exemption and designate AirTran to provide 

scheduled foreign air transportation of persons, property and mail between MDW and 

CUN. 

Respectfully submitted,

______________________

Robert W. Kneisley

January 26, 2012

 

23 From Republic’s 3Q 2011 Earnings Call.
16

CERTIFICATE OF SERVICE

I hereby certify that on January 26, 2012, a copy of the foregoing was served via 

e-mail on the following persons:

robert.cohn@hoganlovells.com (Frontier Airlines)

patrick.rizzi@hoganlovells.com (Frontier Airlines

susan.kurland@dot.gov

paul.gretch@dot.gov

brian.hedberg@dot.gov

brett.kruger@dot.gov

todd.homan@dot.gov

esta.rosenberg@dot.gov

john.allen@faa.gov 

ursk@dos.gov

Rosemarie S. Andolino

Commissioner

City of Chicago Department of Aviation

rosemarie.sandolino@cityofchicago.org

Erin O’Donnell

Managing Deputy Commissioner 

City of Chicago Department of Aviation, Midway Airport

Erin@cityofchicago.org

info@airlineinfo.com

__________________________

Leslie C. Abbott
Frontier2

1/ In the future Southwest will have the ability to upguage to the B737-800 during the peak season and on peak days of the week. This estimate 

of annual seats assumes 50% of all flights are operated with the B737-800 (175 seats) and 50% with the re-configured B737-700 (143 seats).

2/ See page 2 

107,856 

Seats

AirTran/Southwest Would Offer Far 

More Seats to the Public Than Frontier

14,784 

Seats

AirTran/Southwest

Proposed Schedule

100,010

Seats

116,038

Seats

AirTran/Southwest 

(Future Up-gauged Schedule)1

Seats Offered to the Public

Seats Contracted to Apple Vacations

Docket DOT-OST-2012-0001

Exhibit FL-R-1

Page 1 of 2
45,696

35,280

18,144

8,736

107,856

136

123

76

30

365

1/ Reply and Answer of Frontier Airlines, Inc., December 15, 2011, Page 7.

2/ [Column (1) ÷ 7] x Column (2).

3/ Column (3) x 168 x 2.

AirTran/Southwest Would Offer Far 

More Seats to the Public Than Frontier

A. Frontier Schedule for Apple Vacations

Docket DOT-OST-2012-0001

Exhibit FL-R-1

Page 2 of 2

Period of the Year1

Mid Dec. thru April

May thru August

Sept. thru early Nov.

Mid Nov. thru Mid Dec.

 Total

B. Public Seats

Frontier Schedule Revised to “Daily”

(Assumed to be Outside the Apple Contract)

No. of

Days

Weekly

Freq.

No. of

Days Served2

One-Way

Seats3

7

6

5

6

136

105

54

26

321

44

365

14,784

122,640

(1) (2) (3) (4)
Frontier Obtains Virtually No Interline Traffic From United on 

Mexico Service from Denver

0.7% 0.9% 1.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

DEN-CUN DEN-PVR DEN-SJD

UA Passengers Connecting to/from F9 as a Percentage of Annual F9 Seats

Source: Adjusted Marketing Information Data Tapes (MIDT), YE Q3 2011; OAG Schedules YE Q3 2011

Docket DOT-OST-2012-0001

Exhibit FL-R-2
Southwest’s Entry in MDW-CLE Stimulated Traffic And 

Lowered Fares at Both ORD and MDW

$122

$41

$70

$142

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

$150

$160

$170

$180

Before 

WN

Nonstop

ORD

.

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

79,930

315,200

397,070

343,450

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-3
$147

$93

$136

$208

$0

$50

$100

$150

$200

$250

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

1,150

93,350

166,420

108,010

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-4

Southwest’s Entry in MDW-PVD Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
$202

$47

$144

$242

$0

$50

$100

$150

$200

$250

$300

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

3,800

73,440

333,460

221,820

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-5

Southwest’s Entry in MDW-BDL Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
$102

$40

$122

$140

$0

$20

$40

$60

$80

$100

$120

$140

$160

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

41,390

287,450

161,810

220,650

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-6

Southwest’s Entry in MDW-CMH Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
$78

$49

$65

$120

$0

$20

$40

$60

$80

$100

$120

$140

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

24,180

119,450

199,630

134,200

0

50,000

100,000

150,000

200,000

250,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-7

Southwest’s Entry in MDW-OMA Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
$131

$95

$176

$270

$0

$50

$100

$150

$200

$250

$300

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

36,280

148,780

98,570

88,490

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-8

Southwest’s Entry in MDW-OAK Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
$125

$33

$135

$153

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Before 

WN

Nonstop

ORD

Source: DOT, Origin-Destination Passenger Survey.

MDW

Average Fare

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

3,950

266,630

54,210

100,800

0

50,000

100,000

150,000

200,000

250,000

300,000

Before 

WN

Nonstop

MDW ORD

O&D Passengers

After 

WN

Nonstop

Before 

WN

Nonstop

After 

WN

Nonstop

Docket DOT-OST-2012-0001

Exhibit FL-R-9

Southwest’s Entry in MDW-SDF Stimulated Traffic And 

Lowered Fares at Both ORD and MDW
O’Hare Fares Declined Significantly After Southwest 

Entered New Markets at Midway

ORD Fare Decrease

(Year Over Year)

51%

46% 45%

40%

35% 35%

16%

13% 12%

60%

0%

10%

20%

30%

40%

50%

60%

70%

BWI CLE OMA MSP BDL OAK PVD LGA CMH SDF

$165

$66

$142

$70

$120

$65

$159

$87

$242

$144

$270

$176

$208

$136

$154

$129

$140

$122

$153

$135

Year Before WN 

Entry at MDW:

Year After WN 

Entry at MDW:

MDW Market 

ORD Average Fare

Source: DOT, Origin-Destination Passenger Survey.

Docket DOT-OST-2012-0001

Exhibit FL-R-10

Examples
$143

$107

$0

$20

$40

$60

$80

$100

$120

$140

$160

Market Fare Average For 12 Mos. Before WN Nonstop Market Fare Average For 12 Mos. After WN Nonstop

Weighted Average Fare (All Carriers)

Southwest’s Entry Into Frontier/United Denver Markets 

Lowered Prices by an Average of 25%

-25%

Note: Includes markets where United & Frontier both had nonstop service before Southwest entered. Markets included are Albuquerque, Austin, Nashville, 

Chicago, Houston, Las Vegas, Kansas City, Orlando, Oklahoma City, Phoenix, San Diego, Seattle, Salt Lake City, Tampa. Data include the last 12 months 

directly prior to, and after, Southwest service initiation as weighted by O&D volume. Includes fared passengers only.

Source: U.S. DOT Origin & Destination Survey & U.S. DOT T-100 Onboard data.

Docket DOT-OST-2012-0001

Exhibit FL-R-11
Southwest Charges Lower Prices in 18 of the 27 Nonstop

DEN Markets Where It Competes Against Frontier

WN Lower than F9

1

Includes average fares plus baggage and reservation change fees per fared O&D passenger ($0.38 per Southwest passenger, and $8.80 per Frontier passenger). 

Both fees and fares are calculated using YE Q3 2011 data. Includes all DEN markets with nonstop service from both F9 and WN for the entire 12 month period. Includes fared passengers only. 

Source: OAG Schedules, YE Q3 2011; US DOT O&D Survey YE Q3 2011, Form 41, YE Q3 2011 for average baggage and change fees per passenger.

F9 Price 

Charged1 % WN Lower than F9

 139

101

160

122

108

166

132

107

111

112

134

131

85

113

107

94

128

121

181

91

105

89

149

127

108

137

111

 151

110

174

131

115

177

140

113

116

118

140

137

89

117

110

97

130

123

181

91

102

85

142

121

100

127

102

-8.4%

-8.2%

-7.6%

-7.2%

-6.4%

-6.2%

-5.9%

-5.7%

-4.9%

-4.6%

-4.5%

-4.5%

-4.3%

-3.3%

-2.5%

-2.4%

-1.8%

-1.5%

0.1%

0.3%

2.1%

4.5%

4.9%

4.9%

7.8%

8.3%

8.6%

WN Price 

Charged1

 Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

No

No

No

No

No

No

No

No

Market

DTW

LAS

FLL

PDX

LAX

MCO

IND

MSP

SAN

SNA

SEA

SFO

TUS

SAT

AUS

OMA

SMF

GEG

PHL

SLC

PHX

ABQ

BNA

STL

OKC

MDW

MCI

Docket DOT-OST-2012-0001

Exhibit FL-R-12

Weighted by market O&D, Southwest’s price charged across 

all 27 markets is 2.7% lower than Frontier’s price charged. 
ORD Seats Total CHI Seats MDW Share

MDW’s O&D Traffic Share Exceeds Its Seat Share in 26 of the Top 30 Markets 

Where Both MDW and ORD Have Nonstop Service 

Source: OAG Schedules, YE Q3 2011; US DOT O&D Survey YE Q3 2011

11%

23%

56%

39%

18%

39%

13%

50%

40%

38%

26%

37%

40%

50%

50%

19%

54%

37%

55%

36%

46%

44%

64%

47%

50%

45%

35%

15%

30%

29%

MDW O&D

CHI Rank 

by O&D Total CHI O&D MDW Share

 1,761,867 

1,265,537 

484,897 

718,837 

1,035,694 

848,289 

1,098,344 

795,385 

991,559 

723,744 

847,580 

799,954

353,155 

218,785 

317,947 

767,392 

327,719 

490,728 

442,672 

569,952 

676,177 

393,936 

218,134 

384,000 

345,714 

317,321 

314,649 

334,792 

281,178 

299,165 

2,005,453 

1,551,593 

927,216 

1,164,772 

1,275,970 

1,452,413 

1,233,289 

1,399,630 

1,563,382 

1,058,435 

1,131,201 

1,081,974

550,572 

424,835 

545,758 

904,940 

645,730 

676,500 

894,563 

958,901 

1,114,129 

702,169 

560,046 

669,773 

652,666 

571,294 

473,830 

384,660 

377,743 

388,763 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

 936,981 

552,049 

268,629 

362,087 

458,048 

335,350 

479,138 

265,451 

313,275 

310,285 

330,411 

256,180

240,946 

167,316 

168,105 

244,699 

131,940 

172,141 

119,230 

167,092 

138,352 

125,784 

74,872 

109,682 

101,136 

104,793 

122,394 

155,344 

114,158 

106,947 

117,823 

166,706 

342,363 

231,567 

100,956 

218,225 

69,205 

260,779 

206,663 

189,656 

115,253 

152,714

158,099 

170,206 

169,254 

57,430 

153,648 

103,253 

147,193 

94,164 

115,728 

98,898 

133,831 

95,732 

102,113 

85,961 

66,225 

26,758 

48,701 

43,455 

12%

18%

48%

38%

19%

42%

11%

43%

37%

32%

25%

26%

36%

49%

42%

15%

49%

27%

51%

41%

39%

44%

61%

43%

47%

44%

34%

13%

26%

23%

1,054,804

718,755

610,992

593,654

559,004

553,575

548,343

526,230

519,938

499,941

445,664

408,894

399,045

337,522

337,360

302,129

285,588

275,394

266,423

261,255

254,080

224,682

208,703

205,414

203,250

190,754

188,618

182,102

162,860

150,402

ORD O&D

 243,586 

286,056 

442,319 

445,935 

240,276 

604,124 

134,945 

604,245 

571,823 

334,691 

283,621 

282,020

197,417 

206,050 

227,811 

137,548 

318,011 

185,772 

451,891 

388,949 

437,952 

308,233 

341,912 

285,773 

306,952 

253,973 

159,181 

49,868 

96,565 

89,598 

Docket DOT-OST-2012-0001

Exhibit FL-R-13

Market MDW Seats

LGA

LAX

MCO

LAS

BOS

ATL

SFO

DEN

MSP

PHX

PHL

IAH/HOU

FLL

RSW

TPA

SEA

BWI

SAN

MCI

DTW

STL

CLE

BNA

IAD

CMH

PIT

RDU

SNA

AUS

PDX

MDW Traffic Share MDW Nonstop Seat Share
Many Airlines Use Multiple Airports in the New York 

And Washington Areas to Serve the Same Destination Because

They Regard Each Airport as a Separate Market

Carrier-Destination

Combinations

31

3

49

0

10

20

30

40

50

60

New York/Newark Washington/Baltimore Chicago

Example:

Delta serves Atlanta from LGA, JFK and EWR. 

The Delta-Atlanta market is counted as 1 of 49

carrier-destination combinations in New York/Newark.

Note: Includes only domestic and Canada routes

Source: Official Airline Guide Schedules for the week of January 15 - 21, 2012.

Docket DOT-OST-2012-0001

Exhibit FL-R-14
MDW

BW I

DCA

BOS

YUL

MIA

JFK

LGA

EW R

MEM

LAX

RSW

TPA

IAD

SLC

MKE

PBI

DEN

SFO

CVG

PHX

DFW

MSP

FLL

MCO

PHL

DTW

CLE

YYZ

ORD

ATL

CLT

IAH

BNA

EGE

CMH IND

STL

RDU

Forty-Nine Destinations Are Served by the Same Carrier 

Via More Than One New York Area Airport

 Service from 3 NYC Airports (12 carrier-destinations)

 Service from 2 NYC Airports (37 carrier-destinations)

Note: Includes only domestic and transborder Canada routes

Source: Official Airline Guide schedules for the week of January 15 - 21, 2012.

Docket DOT-OST-2012-0001

Exhibit FL-R-15
YYZ

BOS

JFK

LGA MDW

MIA

DCA

BW I IAD

DFW

ORD

CLE

EW R

IAH

ATL

CVG

DTW

MSP

SLC

MCO

MKE

RSW

DEN

LAX

SFO

CLT

PHL

PHX

FLL

Thirty-One Destinations Are Served by the Same Carrier 

Via More Than One Washington Area Airport

 Service from 3 WAS Airports (17 carrier-destinations)

 Service from 2 WAS Airports (14 carrier-destinations)

Docket DOT-OST-2012-0001

Exhibit FL-R-16

Note: Includes only domestic and transborder Canada routes

Source: Official Airline Guide schedules for the week of January 15 - 21, 2012.
MDW

ORD

ATL

DTW

MSP

Only Three Destinations Are Served by the Same Carrier 

Via Both MDW and ORD

Service from both MDW and ORD (3 carrier-destinations)

Docket DOT-OST-2012-0001

Exhibit FL-R-17

Note: Includes only domestic and transborder Canada routes

Source: Official Airline Guide schedules for the week of January 15 - 21, 2012.