Application of BEFORETHE DEPARTMENT OF TRANSPORTATION WASHINGTON, DC
) ) 

### Original

VIRGINAMERICA INC. ) DocketNo. DOT-OST-2011-0016 ) for waiverpursuantto Section 1-2 ofPart 241 )**=o~ft=h=e~D=e~p=a~rt=m=e=n~t'~s~R=e~g=u=la=ti=o=n~s**_____________)
MOTION OF VIRGIN AMERICAINC. FORLEAVETO FILE AND REPLY TOANSWER OF ALASKAAIRLINES, INC.
Communicationswithrespect to this document shouldbe sentto:

JohnVarley SeniorVice President &

General Counsel Virgin America Inc. 555 AirportBoulevard, Suite 500 Burlingame, CA 94010 (650) 762-7108 (650) 762-7001 (fax) john.varlevra)virginamerica.com

February 15,2011 JohnE. Gillick Jonathon H. Foglia Zuckert, Scoutt& RasenbergerL.L.P. 888 Seventeenth Street, N.W., Suite 700 Washington, DC 20006 Tel: (202) 973-7939 Fax: (202) 342-0683 jegillick@zsrlaw.com jhfoglia@zsrlaw.com Counsel for VirginAmericaInc.r

Application of VIRGIN AMERICA INC. BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, DC
) ) ) DocketNo. DOT-OST-2011-0016 ) for waiverpursuantto Section 1-2 ofPart 241 )**=of~th=e~D~ep~a=rt~m==e=n~t'=s~R=e~g=u=la=t=io=n=s~**_____________)
MOTION OFVIRGIN AMERICAINC. FOR LEAVE TOFILE AND REPLY TOANSWEROF ALASKAAIRLINES, INC.
On February 9, 2011, Alaskal filed an answer in opposition ("Alaska Answer") to a petition ofVirgin America ("Petition") to set aside a decision ofthe Director, Office ofAirline Information ("Decision") that denied Virgin America's request to include operating results for a handful of Mexico flights within reports for Domestic operations under 14 C.F.R. § 241(g). Virgin America now moves to file this Reply to the Alaska Answer and urges, for the reasons stated in the Petition and herein, that the Decision be reviewed and set aside and Virgin America'srequest for a waiverbe granted forthwith.
Motionfor Leave to File Reply Virgin America moves for leave to file this brief Reply to the Alaska Answer, which attempted to obfuscate the issues raised by Virgin America's Petition and overlooked clear Departmental precedent. The filing ofthis Reply will not delay this proceeding and will assure thatthe Departmentwill have a complete record upon which to decide this importantPetition.

I Common names ofair carriers are used throughoutthis pleading.

### Alaska'sArguments Are WithoutMerit


### It is unfortunate that Alaska has filed an answer hoping to muddy the waters in this proceeding and distract the Department from the very limited scope ofreliefsought by Virgin America. Try as Alaska might to mischaracterize Virgin America's waiver request, however, Virgin America does not seek special or unusual treatment under the data submission requirements of Part 241. Rather, Virgin America has asked that its request be processed in accordance with established Departmental precedent regarding the interim classification of operating results for a geographic entity that comprises an exceedingly small portion of the applicant's overall flying.
Alaska's argument that the Petition is a disguised effort to maintain confidentiality at the expense ofdata users' access is equally without merit. As the Department and other data users
are well aware, given that the waiver would only apply to a handful offlights, the underlying financial performance metrics for those flights, including passenger unit revenue and unit costs, could still be approximated with a high degree ofaccuracy by utilizing Virgin America's system wide financial filings. Thus, Alaska's claim that the relatively small size ofVirgin America's Mexico flying is "irrelevant" completely misses the point. To the contrary, it is because Virgin America'sMexico flights are so limited thatthe overall integrity ofthe system ofaccountsunder Part 241 will be maintained; such a finding was critical to the Department's grant ofa waiverto letBlue in 2004 and shouldbe no lesspersuasive today. Similarly, Alaska's contention that "advances and improvements in computerized data collection and aggregation," Alaska Answer at 2, since the letBlue request in 2004 compel a different outcome utterly strains credulity. Nothing in the interim period has changed in terms

2ofthe manner in which carriers establish and maintain separate systems ofaccounts, including categorizing operating results by geographic entity. Finally, Alaska has not provided any substantiation for its claimthat a grant ofthe waiver would place Alaska at a competitive disadvantage. That Alaska did not request the same temporary waiver previously granted by the Department and sought by Virgin America today is ofno consequence to the matterpresentlybefore the Departmentonreview.
The letBlueWaiverDecision Is Directly Applicable To Virgin America's Request
As discussed in the Petition, the most serious deficiency in the Decision is the failure to
even acknowledge, much less discuss, the Department's JetBlue waiver decision granting that carrier precisely the same relief sought by Virgin America in circumstances that were less compelling than those presented by the Virgin America waiver request. Alaska's efforts to discountthe relevance and applicability ofthat decision are unavailing.
The facts and circumstances concernmg letBlue's request for a WaIver and the Department's 2004 decision granting that request are directly applicable to, and provide a virtually identical precedent for, Virgin America's waiver request. As the Office of Airline Information is fully aware, letBlue filed its waiver request on May 25, 2004, indicating that it
was aboutto commence service between the United States and the Dominican Republic with two daily roundtrip flights between New York and Santiago and one daily roundtrip flight between New York and Santo Domingo, or 21 weekly roundtrip flights estimated to be 1.5% ofletBlue's system capacity. Since these flights represented such a small percentage ofthe letBlue system

3

### capacity, letBlue requested a Waiver of the requirement that these operations be reported separately as a LatinAmerican entity.
In response, the Assistant Director of the Office of Airline Information granted the letBlue request on luly 29, 2004, permitting it "to report its two daily New York-Santiago, Dominican Republic flights and its one daily New York-Santo Domingo flight in the Domestic Entity." In support of the Department's decision to grant the waiver request under Section 38S.19(c) 

### ofthe Department's regulations, the Assistant Director stated that the "reason for the grant ofthe waiver is the very limited scope ofletBlue's LatinAmericaoperations." Finally, the Assistant Director indicated that the "waiver will remain effective until letBlue increases service to the Latin Americaentity."
As Virgin Americapointed out in its Petition and contrary to the assertions in the Alaska Answer, Virgin America's waiverrequest was even more compelling than the letBlue request as the scope of Virgin America's Latin American operations (a total of only 13 weekly flights operated to Mexico versus the 21 weekly flights operated by letBlueto the Dominican Republic) is far more limited than that ofletBlue. And, as was the case with the Department's letBlue decision, Virgin America fully understood that its requested waiver would last only until its "Latin American operations had grown to the point that it was in the public interest to report that information as a separate Latin American entity." Petition at Exhibit A. 

### Thus, rather than attempting to seek "special dispensation" or "attempting to shield its data" to "gain an unfair competitive advantage" as suggested by Alaska, Virgin America is simply requesting the very
same relief as was granted by the Department to letBlue until such time as Virgin America "increases service to the Latin American entity."

4Under these compelling circumstances, the Department must, based upon its JetBlue precedent review and reverse the Decision in the manner specified in Part 385 ofthe agency's
ownregulations. WHEREFORE, for the foregoing reasons, Virgin America Inc. urges the Department to review the Decision and grant Virgin America's request for a waiver as more fully described in its January 7, 2011, letter and January 3L 201 L petitionfor review ofstaffaction.

February 15,2011 Respectfully submitted,

John E. Gillick Jonathon H. Foglia Zuckert, Scoutt & RasenbergerL.L.P. 888 Seventeenth Street, N.W., Suite 700 Washington, DC 20006 Tel: (202) 973-7939 Fax: (202) 342-0683 jegillick(a)zsrlaw.com jhfoglia@zsrlaw.com Counsel for VirginAmericaInc.

5CERTIFICATE OF SERVICE I hereby certify that a copy ofthe foregoing Reply and Motion ofVirgin America Inc. was served this 15thday ofFebruary2011, by electronic transmission, on: anne.suissa{Cl{dot. gOY steven.k.smitMv.dot.gov marshall.sinick@ssd.com charles.donlev@ssd.com jeffrev.manley(cVunited.col11 hershel.kal11en@coair.com dan.weissW1coair.com sascha.vanderbellenW1delta.col11 sametta.c.barnett@delta.col11 jeff.morgan0:ldelta.com efabermanW1wrf.com howard kass@usairways.col11 benjamin.slocum@usairways.com dkirstein@vklaw.com jhiIl(eV,dowlohnes.com mcmiIIinW1woa.com pmurphvW1Iolmurphy.com carl.nelson@aa.com

Washington, DC