# BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY
WASHINGTON, D.C.

________________________ _____________ ) Application of ) )

SOUTHWEST AIRLINES CO. ) )

For Inside Perimeter Sl ot Exemptions ) Docket DOT-OST-2000-7182 pursuant to 49 U.S.C. § 41718(b) ) ) For service between William P. Hobby Airport ) (“HOU”) and Ronald Reagan Washington ) National Airport (“DCA”) )

________________________ _____________ )

APPLICATION OF

SOUTHWEST AIRLINES CO.

Communication with respect to this

document should be addressed to:

Ron Ricks Robert W. Kneisley

Executive Vice President -- Associate General Counsel Chief Legal and Regulatory Officer Leslie C. Abbott Madeleine Johnson Senior Attorney

Vice President General C ounsel SOUTHWEST AIRLINES CO.
SOUTHWEST AIRLINES CO. 1901 L Street, NW

2702 Love Field Drive Suite 640 Dallas, TX 75235-1611 Washington, DC 20036 bob.kneisley@wnco.com
(202) 263-6284

December 5, 2012

# 1 BEFORE THE

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY
WASHINGTON, D.C.

________________________ _____________ ) Application of ) )

SOUTHWEST AIRLINES CO. ) )

For Inside Perimeter Sl ot Exemptions ) Docket DOT-OST-2000-7182 pursuant to 49 U.S.C. § 41718(b) ) ) For service between William P. Hobby Airport ) (“HOU”) and Ronald Reagan Washington ) National Airport (“DCA”) )

________________________ _____________ )

APPLICATION OF

SOUTHWEST AIRLINES CO.

On November 13, 2012, the Departm ent of Transportation (“DOT” or

“Department”) established a slot exempt ion proceeding pursuant to 49 U.S.C.

§ 41718(b) to request applications from carriers using Stage 3 aircraft for two AIR-21

slot exemptions previously held by Spirit Airlines. These slot exemptions authorize

service to a medium hub or smaller airport within the 1,250-mile per imeter established

for civil operations at Ronald Reagan Washi ngton National Airport (“DCA”) under Title

49 U.S.C. § 49109.

Southwest Airlines Co. (“Southwest”), a limited incumbent carri er at DCA, hereby

applies for the two slot exemptions available in this proceeding in order to provide largejet, low-fare service between DCA and Houston, one of the largest and most over-priced

monopoly routes at DCA. As shown below, Southwest’s application is not only

consistent with the AIR-21 decisional cr iteria but will generate enormous public and

# 2 competitive benefits for DCA and Houston travelers. A letter from the Honorable Annise

D. Parker, Mayor of Houston in support of S outhwest’s Application is attached hereto.

Houston has long been served by two ai rports, George Bush Intercontinental

Airport (“IAH”) and William P. Hobby Airport (“HOU”). 1 

# United Air Lines, Inc. (“United”)

currently has a monopoly on nonstop service in the DCA-Houston market by virtue of its

service between DCA and its hub at IAH. Consumers will benefit enormously if

Southwest is granted authorit y to provide low-fare competition in the DCA-Houston

market with nonstop servic e between DCA and HOU.

DETAILS OF SOUTHWEST’S SERVICE PROPOSAL

ROUTE: HOU-DCA-HOU

SCHEDULE: HOU – DCA (1025 – 1420) (All times are local) DCA – HOU (1500 – 1720)

FREQUENCY: Daily service

START DATE: Within 90 days of the Department’s Final Order

AIRCRAFT TYPE: Stage 3 Boeing 737-700 aircraft

SEATING CAPACITY: 143 seat s, all coach configuration

PROJECTED AVERAGE FARE: $207 each-way 2



# PROJECTED TRAFFIC STIMULATION: 105,382 annual new passengers

PROJECTED CONSUMER FARE SAVI NGS: $19.1 million annually

1 

## IAH and HOU are both owned by t he City of Houston and operated by the Houston Airport System

(“HAS”). The U.S. government has l ong recognized that the two airports jointly serve the greater Houston

area. For example, the U.S.-Mexic o Bilateral Aviation Agreement, as amended, designates Houston as a

single point, which can be served by either airport.

2 

## Fares referred to in this Application and exhibi ts exclude all taxes and other government charges but include average per-person checked baggage and re booking/change fees based on DOT Form-41 data.

# 3 I. Southwest’s Service Proposal is Consistent with the AIR-21
Decisional Criteria, and Will Maxi mize Consumer Benefits from Expanded Low-Fare Competition at DCA.

Southwest’s proposed DCA-HOU-DCA serv ice would significantly advance the

statutory goals of AIR-21 by fulfilling three out of the f our possible carrier selection

criteria. Applicants in this proceeding are on ly able to satisfy a maximum of four of the

AIR-21 decisional criteria because providing “competitive nonstop air transportation on

a monopoly nonstop route to DCA,” is mutua lly exclusive with providing nonstop DCA

service to a community “without existing nonst op air transportation to DCA.” In addition,

Houston Hobby is eligible for service in this proceeding because it was classified as a

medium hub airport by the F AA in 1997 and thus meets the r equirement of 49 U.S.C. §

41714(h), as referenced in the Department’s No vember 13 Notice. In contrast, Houston

Intercontinental Airport is a large hub and t herefore ineligible for service in this

proceeding.

Specifically, Southwest’s proposal would me et the following thr ee AIR-21 criteria:

• provide service by a limited incumbent ai r carrier at Washingt on National Airport ; Southwest is a limited incumbent at DCA;

• offer competitive nonstop air transporta tion on a monopoly nonstop route to DCA ; DCA-Houston is currently a hi gh-fare, monopoly route; and

• produce the maximum competitiv e benefits, including low fares ; Southwest’s proposed HOU-DCA-HOU service will stimulat e more than 105,000 new passengers in the market and generate over $19 million in consumer fare savings annually.

Southwest is a recent new entrant at DCA and after m any attempts was only able

to initiate service through its 2011 acquisition of AirTran Airways. Southwest/AirTran is

a limited incumbent carrier, fulfilling the first AI R-21 criterion with a to tal of 30 slots and

slot exemptions (15 daily flights) used for service on six nonstop DCA routes. In total,

# 4 Southwest operates only 3.5% of DCA slot s, in stark contrast to the dominant

incumbent carrier US Airways that controls 472 DCA slots, over 54% of the airport’s

total. See Exhibit WN-100.

The Department has recognized in past proc eedings that effect ive competition at

DCA requires a critical mass of slots. 3 

# An award of the slot exemptions at issue here

would help Southwest provide more effectiv e and expansive compet ition with incumbent

DCA carriers, and generate enormous benefits fo r the traveling public in doing so. In

this way, selecting Southwest’s proposal in this proceeding would not only meet the

AIR-21 criteria but would be st advance the broader public in terest by expanding lowfare service and competition at DCA.

II. Houston is One of the Larg est DCA Monopoly Routes and Suffers from Some of the Highest Fares, Making it an Especially Deserving

Market for Selection in this Case.

Southwest’s proposed service would prov ide sorely needed low-fare competition

on one of the highest fare monopoly routes at DCA. Currently United offers the only

nonstop service between DCA and Houston. Due to its monopoly position, United’s

average one-way nonstop fare in the DCA-IAH market is a stunning $334, 43% above

average DCA fare levels for that distance (E xhibit WN-101). In fact, Houston is the

fourth most overpriced of all DCA nonstop markets (Exhibit WN-102).

By way of comparison, Southwest’s average BWI-HOU nonstop fare is only

$207, a full $127 – or 38% – less than United’s DCA-IAH nons top fare (Exhibit WN103). Putting it another way, United’s DC A-IAH nonstop fare is 61% higher than

Southwest’s BWI-HOU fare. At BWI, where United’s nonstop IAH service competes with

3 

## See , e.g. , DL/US Slot Swap Proceeding (Docket No. FAA-2010-0109); Final Order, 76 Fed. Reg. 63702, 63708 (Oct 13, 2011).

# 5 Southwest’s nonstop HOU serv ice, United’s average one-way nonstop fare is $240,

almost 30% less than its DCA fare to IA H. See Exhibit WN-104. Clearly, Southwest

places significant downward pressure on Unit ed’s pricing when Southwest is able to

compete head-to-head with Unit ed in a nonstop market.

III. Southwest’s Proposed Service Will Save Consumers Millions of Dollars Annually and Enable Tens of Thousands of New Passengers to Travel on This Important Route.

Southwest’s proposed low-fare compet ition against United’s high-fare monopoly

in the DCA-Houston market will stimulate a huge amount of new traffic to and from DCA

and generate enormous consumer fare savi ngs. An analysis by the Campbell-Hill

Aviation Group of Southwest’s service propos al assumes that Southwest will charge an

average one-way fare of $207 for its nonstop DCA-HOU service, equal to Southwest’s

average BWI-HOU nonstop fare. 4 

# See Exhibit WN-103. This projected $207 fare is

$127, or 38%, below United’s current monopol y fare in the DCA-H ouston market.

Using standard traffic forecasting tec hniques, Campbell-Hill projects that

Southwest’s service proposal will stimul ate over 105,000 new annual passengers in the

DCA-Houston market . See Exhibit WN-105. Southwes t will carry many of the new

passengers itself of course, but others will be carried by United, which historically

lowers its fares in response to direct S outhwest competition. As a result, the DCAHouston market as a whole wi ll grow significantly, and passengers will benefit both

directly by flying on Southwest’s new service and indirectly by patronizing the competing

carrier that is forced to reduce its high monopoly fares in response to Southwest’s

competition.

4 

## This assumption is in fact conservative. Southwes t’s recent experience in the DCA-AUS market shows
that Southwest’s average DCA -AUS fare is almost 5% lower than its average BWI-AUS fare (for the August-October 2012 time period; based on internal Southwest analysis).

# 6 Based on Southwest’s new low-fare competition and the resulting traffic

stimulation, Campbe ll-Hill projects that Southwest’s proposed HOU-DCA service will

generate over $19 million annually in consumer fare savings (Exhibit WN-106). While

this is a very large amount, Campbell-Hill’s projection is conservative in several

respects. Among other things, (1) it assu mes that United will only partially match

Southwest’s fares, consistent with United’s practice in competing against Southwest in

the BWI-Houston market, and (2) no consumer fare savings in connecting markets

beyond Houston are included, although thos e markets will also experience fare

reductions and savings in DCA service due to Southwest’s new low-fare competition.

Details of the above-described traffic fo recast and fare benefits calculations,

including a full explanation of the methodol ogy and assumptions used by Campbell-Hill,

are set forth in Appendi x 1 attached hereto.

IV. Houston Hobby, the Close-in H ouston Airport, Has No Nonstop DCA Service Today; Southwest’s Service Would Provide Inter-Airline and Inter-Airport Options and Competition for Consumers.

Southwest Airlines has served Houston fo r more than 41 years, and by next

summer will operate 1,055 weekly departures to/f rom 42 nonstop cities. Southwest is

continuing to grow at Houston and recent ly received approval to construct an

international facility that will allow it to operate 20-25 daily Latin America/Caribbean

flights starting in 2015. 5 

# The DCA-HOU route will integrate well with Southwest’s

network, not only providing enormous benefits to consumers traveling nonstop between

DCA and Houston, but also convenient on e-stop or connecting opportunities between

5 

## For information on the Houston Hobby international expansion see www.freehobbyairport.com

.

# 7 DCA and several other cities that lack nonstop DCA service today. 6 

# The benefits of

Southwest’s new service and competition will t herefore be felt far beyond Houston, to

other points in Texas as well as nearby states.

Houston has a vibrant and gro wing economy. It is the fi fth largest metro area in

the U.S. with 6.1 million residents. Of Hous ton’s two major airports, Hobby is more

convenient to the city center than Housto n Intercontinental, as HOU is only 12 miles

from downtown compared to 22 miles for IAH. See Exhibit WN-107. Additionally, there

are more people living within 30 minutes and 60 minutes of HOU t han IAH (Exhibit WN108). Not surprisingly, most large Houston markets have nonstop service from both

airports, and in those markets HOU passenger s total 96% of IAH passengers (Exhibit

WN-109). Clearly, the demand for se rvice to HOU is as strong as it is to IAH. Yet DCA

is one of only three top 20 Houston market s that does not have nonstop service from

HOU. 7 

# Southwest’s proposal would rectify this conspicuous absence of needed air

service. In fact, Southwest’s Houston Hobb y to DCA service will provide a critical link

between the most convenient airport in H ouston with the prefer red Washington, DC

airport, and it will offer consumers fares t hat are 38% below the prevailing average

nonstop fare in the market today.

6 

## Southwest’s DCA-HOU service will offer on-line co nnections to SAT, ABQ, ELP and OKC, among other points. None of these cities have nonstop access to DCA today.

7 

## U.S. DOT O&D Survey and Schedule data, YE Q2 2012.

# 8 CONCLUSION

For the reasons stated above, Southwest urges the Department to award it the

two slot exemptions at issue in this procee ding to enable it to initiate competitive lowfare service between Houston Hobby and DCA.

Respectfully submitted,

______ ____________________ Robert W. Kneisley

December 5, 2012

# CERTIFICATE OF SERVICE

I hereby certify that on Dece mber 5, 2012, a copy of the foregoing was served

via e-mail on the following persons:

msinick@ssd.com (Alaska Airlines)

francis.heil@aa.com (American Airlines)

sascha.vanderbellen@delta.com (Delta Air Lines) robert.cohn@hoganlovells.com (Frontier Airlines & Republic Airline) patrick.rizzi@hoganlovells.com (Frontier Airlines & Republic Airline robert.land@jetblue.com (JetBlue Airways) jhill@dowlohnes.com (JetBlue Airways) dkirstein@yklaw.com (Spirit Airlines) jyoung@yklaw.com (Spirit Airlines) John.Fredericksen@suncountry.com (Sun Country Airlines)

dan.weiss@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) jegillick@zsrlaw.com (Virgin America)

susan.kurland@dot.gov todd.homan@dot.gov

Mario C. Diaz

Director of Aviation Houston Airport System

16930 JFK Boulevard

Houston, Texas 77032

John Potter

President and CEO
Metropolitan Washington Airports Authority

1 Aviation Circle Washington, DC 20001

info@airlineinfo.com

__________________________ Leslie C. AbbottSouthwest Has Only 3.5% of DCA SlotsWhile US Airways Controls Over 54% of All DCA SlotsDCA SlotsDocket OST-2000-7182Exhibit WN-100472400450500Total Slots = 8703003504002002501041027636305010015020836301822050US DL AA UA AC AS B6 WN F9 VX SYPercent ofAirport Total 54.3% 12.0% 11.7% 8.7% 2.3% 0.9%4.1% 3.5% 2.1% 0.2% 0.2%Source: FAA Slot Reports, Current and Future, dated 10-25-2012and Innovata Schedule data.Legacy/Foreign Flag CarriersLow Cost CarriersTotalDomestic O&DPassengers(Millions) 42.0 79.1 46.1 62.7 N/A 15.721.8 100.2 10.1 5.3 1.1United’s Monopoly DCA-Houston FareDocket OST-2000-7182Exhibit WN-101Is 43% Above Normal DCA Fare LevelsYE Q2 2012Fares forNonstop Passengers/1UnitedDCA-IAH$300$350Average Fare($334)+43%$150$200$250$50$100$0500 750 1000 1250 1500 1750 2000 2250 2500Nonstop Miles1/ Curve derived from all nonstop passengers in DCA nonstop markets with 50 or more fared passengers per day each way.Fares are derived from a yield curve with the following equation: Yield (cents) = 5,760.9 (miles)-.803, R2=0.81.Note: Fared passengers only. Excludes all taxes and government charges. Includes estimatedchecked baggage andrebooking/changefees.Source: U.S. DOT, O&D Survey and Schedule data, YE Q2 2012, via Diio, LLC.DCA-Houston is One of the Most Overpriced DCA Nonstop MarketsDocket OST-2000-7182Exhibit WN-102Top 10 DCA Nonstop Markets Ranked ByPercentage Average Fare Above DCA Market Fare Curve55%60%50%45%43%39%35%40%50%33%31%30%26%30%10%20%0%CLE CVG PHX IAH LGA MEM HPN HSV SLC DFWCurrent NSPaxDCAFare $277 $284 $374 $334 $230 $288 $225$268 $329 $2941/ Fare derived from the yield curve function shown in footnote 1 of Exhibit WN-101.Source: US DOT O&D Survey YE Q2 2012, via Diio, LLC.PaxDCAFare$277$284$374$334$230$288$225$268$329$294Nonstop FareCurve Fare1$178 $189 $257 $233 $166 $213 $169 $204$254 $233Southwest’s Projected DCA-HOU Fare WouldB $127 (38%) lTh U i d’ C DCAIAH FDocket OST-2000-7182Exhibit WN-103$400Average Fare1Be$127(38%)lessThanUnited’sCurrentDCA-IAHFare$334$300$350$40038%$207$200$250-- $127$100$150$0$50UA DCA-Houston FareWN BWI-HOU Fare andAssumed WN DCA-HOU Fare21/ Fared passengers only. Excludes alltaxes and government charges.Includes estimated checkedbaggageand rebooking/change fees.2/ DCA-HOU fare projection based on WN BWI-HOU average nonstop fare.Source: US DOT O&D Survey YE Q2 2012; US DOT Form 41, via Diio, LLC.United Charges Nearly $100 More Per One-Way PassengerWhen Sheltered From Southwest Competition at DCADocket OST-2000-7182Exhibit WN-104$350Average Fare1p$334$327$240$250$300$350+$94$207$240$200$250+$33$100$150$0$50UA DCA-Houston UA BWI-Houston WN BWI-Houston UA IAD-HoustonN C titiC titiNo Competition1/ Fared passengers only. Excludes alltaxes and government charges.Includes estimated checkedbaggageand rebooking/change fees.Source: US DOT O&D Survey YE Q2 2012; US DOT Form 41, via Diio, LLC.NoCompetitionfrom SouthwestCompetitionfrom SouthwestNoCompetitionfrom SouthwestSouthwest’s Proposal Will Generate Over 105,000 Additional DCA-HoustonPassengers; Southwest Will Carry Over 80,000 PassengersDocket OST-2000-7182Exhibit WN-105Fared Onboard Passengers2Carried by SouthwestPassengers;SouthwestWillCarryOver80,000PassengersDCA-Houston Fared PassengersStimulated With Southwest Service190,000100,000110,00081,317105,38290 000100,000110,00024,45260,00070,00080,000,60,00070,00080,00090,00056,86530,00040,00050,00030,00040,00050,000,010,00020,000DCAHOULocal010,00020,000Note: Represents first normalized year.1/ Includes stimulation created byWN low cost service. Includes passengers that will be carried on WN and other airlines thatlower their fares as a result of WN service.2/ Includes fared onboard passengers only. Including estimated zero-fared passengers would total 88,392 onboard passengers (86% load factor).3/ Beyond Houston passengers estimatedbased on Southwest’s EWR-HOU experience.DCA-HOULocalDCA-Connecting Pax Beyond HOU3Docket OST-2000-7182Exhibit WN-106Southwest’s DCA-HOU Service Will Generate More Than $19 MillionAnnually in Consumer Fare Savings to Local PassengersAnnuallyinConsumerFareSavingstoLocalPassengers(First Normalized Year)DCA-HOUConsumer FareS i (Milli )$16$18$20$16.1MillionSavings(Millions)$19.1Million$10$12$14$4$6$8$3.0Million$0$2Savings to ExistingPassengersSavings to NewPassengersTotal PassengerSavingsSource: Appendix 1. Excludes savings to passengers connecting at HOU.HOU is Ten Miles CloserTo/From Downtown Houston Than IAHDocket OST-2000-7182Exhibit WN-107Distance(miles)HOU–Downtown12Source: Google Maps.HOUDowntown12IAH – Downtown 22Houston Hobby is the Most Convenient Airport for Houston ResidentsDocket OST-2000-7182Exhibit WN-10830 Min. DrivefIAH1 Hour Driverom1 Hour Drive30 Min. Drivefrom HOUIAH1HourDrivefrom IAH1HourDrivefrom HOUHOU30 1Mins. HourHouston Hobby(HOU)1.84 5.24Population (Millions) WithinNote: 1 dot = 100 residents.Source: Census 2010 estimates and TargetPro for drive times.y ()Houston Intercon. (IAH) 1.37 5.18In Domestic Houston Markets With Nonstop Service FromBoth HOU and IAH HOU Has 96% as Many Local Passengers as IAHDocket OST-2000-7182Exhibit WN-109BothHOUandIAH,HOUHas96%asManyLocalPassengersasIAHAnnual Fared O&DPassengers in Marketswith NonstopServicefrom Both IAH and HOU(Millions)5.15.35.05.596%3.54.04.52.02.53.00.51.01.50.0HOU IAHSource: US DOT O&D Survey YE Q2 2012.Summary of Consumer Surplus Benefits FromSouthwest’s Proposed DCA – HOU Nonstop ServiceAppendix 1(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) (L) (M) (N) (O)Passengers Predicted Projected WN Fare Passengers After New Total ConsumerO&D Market Miles Before Stimulation Service Stimulation Base Fare Fees Total Fare Absolute % Stimulation Stimulation Passengers Existing Passengers New Passengers SurplusFare StimulationAverage Fare Before WN Fare ChangeConsumer SurplusMarketDCA-HOU/IAH 1218284,1045.7% $276.29 $15.56 $291.84 $235.00 -$56.84 -19% 29.7% 389,486105,382$16,149,346 $2,995,119 $19,144,465(A) Nonstop Miles(B)DCA fared passengers for YE Q2 2012DCAfaredpassengersforYEQ22012(C) Predicted Service stimulation fromCampbell-Hill Aviation Group, QSI model.(D) Average Fare for Fared Passengers (excludes passengers using frequent flier miles). Includes nonstop and connecting passengers. Uses YE Q2 2012U.S. DOT Origin-Destination Passenger Survey data via Diio, LLC.(E) Average checked baggage and rebooking/cancellation fees per passenger derived byCampbell-Hill Aviation Group using DOT Form-41 and DOT data (YEQ1 2012). YE Q1 2012 Fee data was used because WN discontinued reporting FL separately in Q2 2012 Form 41 data.(F) Column D + Column E(G) DCA-HOU fare calculated at the weighted averageof Southwest’s BWI-HOU fare and United’s BWI-HOU fare(14.6% WN share at $207 and 85.4% share other airlines at $240). Both fares includechecked baggage and rebooking/cancellation fees.(H) Column G – Column F(I) Column H / Column F(J) Calculated using a price elasticity coefficient of -1.2. -1.2is a standard price elasticitycoefficient. See FAA AirportBenefit-Cost Analysis Guidance”,Office of Aviation Policy and Planning, Federal Aviation Administration, December 15, 1999.The arc elasticity formula is: Arc Ep = [(Q2-Q1)/((Q1+Q2)/2)] / [(P2-P1)/((P1+P2)/2)] , where Q1 = passengers before WN service,Q2 = Passengers after WN service, P1=Fare Before WN service, P2 = Fare After WN service.(K) Column B x (1+ Column C) x (1+ Column J)(L) Column K – Column B(M) Column H x -1 x Column B(N) Column H x Column L x 0.5 x -1. This follows the consumer surplus method outlined by the FAA in “FAA Airport Benefit-Cost Analysis Guidance”, Officeof Aviation Policy and Planning, Federal Aviation Administration, December 15, 1999.(O) Column M + Column N

# C ITY OF 

# H OUSTON

Office of the Mayor 

## Annise D. Parker

Mayor

P.O. Box 1562

Houston, Texas 77251-1562

Telephone – Dial 311 www.houstontx.gov



## December 4, 2012

The Honorable Raymond H. LaHood
Secretary of Transportation
U.S. Department of Transportation
1200 New Jersey Avenue, S.E. Washington, DC 20590

Re: Docket DOT-OST-2000-7182

Dear Secretary LaHood:

I understand that the U.S. Department of Transportation (DOT) will be awarding slots at Washington Reagan
(DCA) for new air service as a result of Spirit Airlines cancelling all its operations at DCA. On behalf of the
City of Houston, I write to express my strong support that DOT award slots for any new nonstop service that is
proposed to the William P. Hobby Airport (HOU) in Houston.

HOU is one of the largest airports located within DCA’s 1,250-mile perimeter that does not have existing
nonstop flights to/from DCA. HOU offers Houstonians the convenience of being located only eight miles
from downtown Houston, as well as having a strong airline tenant (Southwest) that provides 143 daily
departures to 38 cities. This makes HOU a major part of Houston’s air transportati on network and a critical
economic engine, providing thousands of jobs and bill ions of dollars in economic benefits for Greater
Houston. Southwest Airlines has advised me that it will apply for daily, nonstop service on this route.

As Mayor of the fourth largest city in the United States, I have made it a priority to increase airline competition
for the benefit of Houston-based consumers. Today, only one airline serves the DCA-Houston market and that
airline operates from George Bush Intercontinental Airport. History has shown that competition in air service
brings down fares and provides consumers with additional travel options.

As one of the most vibrant and fastest growing cities in the United States, and as the energy capital of the
world, Houston is deserving of competitive air transpor tation to the Nation’s Capital. Southwest’s business
model is well-matched to Houston’s needs and its proposed additional access to DCA would well serve the
public interest.

For these reasons, I respectfully request DOT to approve Southwest’s application for daily nonstop service
between DCA and HOU. Thank you for your attention to this important matter.

Regards,

Annise D. Parker

Mayor

Council Members: Helena Brown Jerry Davis Ellen R. Cohen Wanda Adams Mike Sullivan Al Hoang Oliver Pennin gton Edward Gonzalez
James G. Rodriguez Mike Laster Larry V. Green Stephen C. Costello Andrew C. Burks, Jr. Melissa Noriega C.O. “Brad” Bra dford

Jack Christie Controller: Ronald C. Green