THE SECRETARY OF TRANSPORTATION 

WASHINGTON, DC 20590 

Mr. Andrew Harrison 

Executive Vice President 

and Chief Commercial Officer 

Alaska Airlines, Inc. 

P.O. Box 68900 

Seattle, W A 98168 

Dear Mr. Harrison: 

December 18 , 2015 

Thank you for your letter regarding the U.S. Department ofTranspot1ation's potential reform of 

the slot management regime at three New York City Airports (John F. Kennedy International, 

LaGuardia, and Newark Liberty International). 

As this topic is the subj ect of an ongoing rulemaking, I cannot comment on the merits of the 

points in your letter. I assure you, however, that the Department will give careful consideration 

to all the comments received on this matter. Following our normal practice, I am placing a copy 

of your letter a long with my response in docket F AA-20 14-1073. 

I have sent a similar response to each cosigner of your letter. 

Anthony R. Foxx 
THE SECRETARY OF TRANSPORTATION 

WASHINGTON, DC 20590 

Decembe r 18 , 2015 

Mr. Maurice J. Gallagher. Jr. 

Chairman and Chief Executive Officer 

Allegiant Air, LLC 

8360 South Durango Dri ve 

Las Vegas, NV 8911 3 

Dear Mr. Gall agher: 

Thank you for your letter regarding the U.S. Department of Transportation's potential reform o f 

the slot management regime at three New York City Airports (John F. Kennedy International, 

LaGuardia, and Newark Liberty International). 

As this topic is the subject of an ongoing ru lemaking, I cannot comment on the merits of the 

points in your letter. I assure you, however, that the Department will give careful consideration 

to all the comments received on this matter. Following our norma l practice, I am placing a copy 

of your letter along with my response in docket F AA-20 14- 1073. 

I have sent a similar response to each cosigner of your letter. 

Anthony R. Foxx 
Mr. Barry Biffle 

President 

Frontier Airlines, Inc. 

P.O. Box 492085 

Denver, CO 80249 

Dear Mr. Biffle: 

THE SECRETARY OF TRANSPORTATION 

WASHINGTON, DC 20590 

December 18, 2015 

Thank you for your letter regarding the U.S. Department of Transportation· s potential reform of 

the slot management regime at three New York City Airports (John F. Kennedy International, 

LaGuardia, and Newark Liberty International). 

As this topic is the subject of an ongoing rulemaking, I cannot comment on the merits of the 

points in your letter. I assure you, however, that the Department will give careful consideration 

to all the comments rece ived on this matter. Following our normal practice, I am plac ing a copy 

of your letter along with my response in docket F AA-20 14-1073. 

I have sent a similar response to each cosigner o f your letter. 

Sincerely, 

Anthony R. Foxx 
Mr. B. Ben Baldanza 

THE SECRETARY OF TRANSPORTATION 

WASHINGTON, DC 20590 

December 18, 20 15 

President and Chief Executive Officer 

Spirit Airlines, Inc. 

2800 Executive Way 

Miramar, FL 33025 

Dear Mr. Baldanza: 

Thank you for your letter regarding the U.S. Department of Transportation's potential reform of 

the slot management regime at three New York City Airports (John F. Kennedy International, 

LaGuardia, and Newark Liberty International). 

As this topic is the subject of an ongoing ru lemaking, I cannot comment on the merits of the 

points in your Jetter. I assure you, however, that the Department will give careful consideration 

to all the comments received on this matter. Following our normal practice, I am placing a copy 

of your Jetter along with my response in docket F AA-20 14- 1073. 

I have sent a similar response to each cosigner of your letter. 

Sincerely, 

Anthony R. F oxx 
Mr. David Cush 

THE SECRETA RY OF TRANSPORTATION 

WASHINGTON, DC 20590 

Decembe r 18, 20 15 

President and Chief Executive Offi cer 

Virgin America, Inc. 

555 Airport Boulevard 

Burlingame, CA 940 I 0 

Dear Mr. Cush: 

Thank you for your letter regarding the U.S. Department o f Transportation· s potential re form of 

the slot management regime at three New York City Airports (John F. Kennedy International, 

LaGuardia, and Newark Liberty International). 

As this topic is the subject of an ongoing rulemaking, I cannot comment on the merits of the 

points in your letter. I assure you, however, that the Department will give care ful consideration 

to all the comments received on this matter. Following our normal practice, I am placing a copy 

of your letter along with my response in docket FAA-20 14-1073. 

I have sent a similar response to each cosigner of your letter. 

Anthony R. Foxx 
 

November 3, 2015 

The Honorable Anthony R. Foxx The Honorable Michael P. Huerta 

Secretary Administrator 

U.S. Department of Transportation Federal Aviation Administration 

1200 New Jersey Avenue, SE 800 Independence Avenue, SW 

Washington, DC 20590 Washington, DC 20591

Dear Secretary Foxx and Administrator Huerta: 

The undersigned U.S. airlines jointly submit this letter to underscore their strong support 

for the efforts of the Federal Aviation Administration (“FAA”)/U.S. Department of 

Transportation (“DOT”) to reform the existing “slot management” regulatory regime at 

LaGuardia Airport, John F. Kennedy International Airport, and Newark Liberty International 

Airport (collectively, the “NYC Airports”). 

New York City is the largest and most important air travel market in the United States, 

and has a significant influence on air traffic and airfares in the rest of the country. Today, 

because the number of permitted takeoffs and landings at the NYC Airports – each of which 

requires an assigned slot – is tightly regulated and dominated by three large incumbent airlines, 

consumer airfares at the NYC Airports consistently feature among the highest for major U.S. 

airports. Indeed for many travelers, including tourists, families and groups, and small 

businesses, traveling to or from New York is a financial hardship or even prohibitively 

expensive. 

This letter highlights the consensus among the undersigned in support of key elements of 

the pending FAA/DOT notice of proposed rulemaking (“NPRM1

”) and focuses on the urgent 

need to ensure that slots are made available to “new entrant” air carriers. Each of the 

undersigned is a “new entrant” air carrier (as that term is defined in the NPRM2

) at one or more 

of the NYC Airports. We urge the FAA/DOT to move forward with the proposed rule and, in 

finalizing the NPRM, focus on specific measures that will maximize opportunities for new entry. 

Only this will restore competition and create the lower fare options needed by the traveling 

public. 

 

1

 Slot Management and Transparency for LaGuardia Airport, John F. Kennedy International Airport, and Newark 

Liberty International Airport, Proposed Rule, Docket FAA-2014-1073, 80 Fed. Reg. 1274 (Jan. 8, 2015). Each of 

the undersigned carriers has submitted separate comments in response to the NPRM. 

2

 The NPRM defines a “new entrant” air carrier as one that holds or operates fewer than 20 slots on any day of the 

week at a given NYC Airport. NPRM at 1300. 
 2 

The undersigned carriers have been frustrated in their attempts to obtain slots at 

commercially viable times of the day to provide this needed new service and competition at the 

NYC Airports. Not surprisingly, the large incumbent slot holders strenuously oppose the 

FAA/DOT proposal and insist there are no competition or access problems at the NYC Airports, 

despite numerous government and private studies to the contrary. They would have the 

FAA/DOT cement the status quo by making permanent the FAA temporary orders limiting 

operations at these airports.3

 

Such an outcome would lock in the large incumbents’ vast holdings of slots, most of 

which they received free of charge from the U.S. government, and resurrect the same buy/sell 

mechanism which was in place when the High Density Rule applied at these airports. This 

mechanism stymied, rather than enabled, new carrier access. The incumbents’ defense of the 

status quo predictably serves their commercial interests at the expense of competition and 

consumers. 

Importantly, the use-or-lose aspect of the status quo permits the large incumbent airlines 

to underutilize their assigned slots, and even not use some of their slots at all, by allowing them 

to aggregate their slot usage over multiple slots, thereby masking the total level of slot 

underutilization. The large incumbents also significantly underutilize slots by operating inflated 

schedules in dense markets using small aircraft. This increases congestion while serving fewer 

passengers and results in high airfares. 

When the large incumbents cannot maintain nominally compliant utilization levels even 

under today’s highly forgiving slot utilization rule, they “babysit” slots for each other under 

cooperative arrangements that promote their mutual interest in keeping slots out of the hands of 

new entrants, thereby foreclosing competition. These practices have established an impenetrable 

barrier to new entry at the all-important NYC Airports. 

In short, large incumbent carriers consciously seek to maintain their vise grip on 

hundreds of slots while new entrants with specific plans to introduce new service at these 

airports struggle to obtain (through allocation or purchase) even one or two slot pairs. That it 

took three extraordinary large transactions between legacy carriers in recent years – two mergers 

and a slot swap – coupled with government intervention to provide even modest opportunities for 

new entrants to purchase slots (albeit at windfall prices) underscores that the existing slot 

management rules are antithetical to new competitive entry and thus the public interest. It is 

only to prevent entry and new competition that the large incumbent slot holders so vigorously 

urge that the current temporary orders (and regime) be made permanent. Doing so would, of 

course, kill the FAA/DOT effort to facilitate competitive new entry at these airports. 

New entry at the NYC Airports is particularly essential in the wake of recent megamergers among the nation’s largest carriers. These mega-mergers have transformed the airline 

industry, resulting in extraordinary concentration of the U.S. domestic market – and slots at NYC 

Airports – in the hands of just three airlines, namely, American, Delta, and United. Those three 

carriers account for 91% of all slots operated by U.S. passenger carriers at Newark, 88% of such 

slots at LGA, and 63% of such slots at JFK.4

 By contrast, new entrants operate less than 1% of 

 

3

 These “temporary” orders have now been in effect for more than seven years. 

4

 See Comments of Alaska Airlines, May 8, 2015 (Docket FAA-2014-1073), Exhibit B. 
 3 

slots held by U.S. passenger carriers at JFK, less than 2% of such slots at EWR and about 1% of 

such slots at LGA.5

 

Even on a level playing field, competing with such dominant and resourceful incumbents 

would be a significant challenge. Today, with new entrants largely excluded from the playing 

field at the NYC Airports, competition is severely limited. The government’s task – indeed its 

statutory responsibility – is to fix this problem by ensuring that new entrants gain meaningful 

access to these vital airports. Ample authority exists to address this issue, including authority to 

reallocate a modest number of slots at each airport from large incumbents to new entrants and 

limited incumbents.6

 

New entrant carriers are not alone in criticizing the highly anti-competitive and anticonsumer status quo at the NYC Airports. The Port Authority of New York and New Jersey and 

such objective and authoritative sources as the Government Accountability Office and the U.S. 

Department of Justice have voiced the same concerns. The FAA/DOT, recognizing these 

problems could not be ignored (as the large incumbents would prefer), issued a proposed 

rulemaking in January 2015. The NPRM’s very modest package of proposals would slightly 

reform the existing slot regulatory system at the NYC Airports by (among other things) 

increasing transparency, requiring more efficient slot usage, promoting reallocation of unused 

and underutilized slots, and fostering a secondary market for slots. These proposals are 

welcomed and might incrementally improve the situation if finalized, but they will not fix the 

fundamental competition and consequent high airfare problems caused by essentially closed 

access to new entrants. 

Accordingly, the undersigned new entrant carriers urge that the following key elements be 

included in the final rule: 

• Tightening the Slot Utilization Rule. Adopting the tested approach used by other 

airports operating under IATA’s Worldwide Slot Guidelines, the NPRM proposes to 

amend the existing slot utilization rule to prevent aggregating slots to meet the minimum 

usage requirement and require carriers to maintain at least 80% usage of each slot based 

on “the same flight or series of flights.” We support this proposal and urge the FAA/DOT 

to enforce it rigorously in order to prevent slot hoarding by the large incumbent carriers 

and increase opportunities for new entrants to obtain slots at these airports. 

• Aggressive Action to Allocate Slots to New Entrants. The FAA should revoke any 

individual slot that is not actually used 80% of the time and reallocate it to a new entrant 

air carrier. In addition, new entrants should receive priority in the distribution of any new 

or unallocated slots. New entrants should be afforded a 180-day exemption from the slot 

 

5

 See id., Exhibit A. 

6

 The FAA has the legal authority to reallocate slots to new entrants and limited incumbents. 49 U.S.C. § 40103(b) 

grants the FAA broad authority to “develop plans and policy for the use of the navigable airspace and assign by 

regulation or order the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace.” 

The large incumbent carriers’ comments on the NPRM ignore both Congressional intent set forth in the Airline 

Deregulation Act to promote competition and low fares and decades of agency and judicial precedent. See, e.g., 

Northwest Airlines, Inc. v. Goldschmidt, 645 F.2d 1309, 1316 (8th Cir. 1981) (upholding DOT’s reliance on procompetition objectives to reallocate slots to new entrants under 49 U.S.C. § 1348(a), the predecessor to 49 U.S.C. § 

40103(b)). 
 4 

utilization rules to afford them time to obtain gates, ticket counters and other facilities and 

establish their new services at the airport. 

• Establishing a Robust Secondary Market That Affords New Entrants a Fair and 

Reasonable Opportunity to Acquire Slots. The FAA/DOT proposed five alternative 

secondary market structures. Each of the undersigned carriers has its own specific views 

as to the optimal secondary market structure. Fundamentally, however, we agree that the 

development of a robust secondary market is an essential element in improving 

opportunities for new entrants to gain access to the NYC Airports. We note, however, that 

an improved secondary market mechanism is unlikely to produce meaningful benefits 

until new entrants have gained a modicum of scale at the NYC Airports. A secondary 

market will not work effectively while a very high percentage of slots operated by 

incumbents are held off the market. 

• Rigorous Review of Standalone Slot Transactions That Raise Competitive or Public 

Interest Issues. The FAA/DOT have exercised, and should exercise, their statutory 

authority to review slot transactions that raise competitive or public interest issues. The 

undersigned carriers agree that such reviews should be undertaken for any slot transaction 

involving eight or more slots, as proposed in the NPRM. With reference to smaller slot 

transactions, DOT retains discretion under 49 U.S.C. § 41712(a) to investigate and 

prohibit any unfair method of competition raised by a transaction, including the division 

of transfers into smaller pieces in order to circumvent the agencies’ oversight. 

• Evaluate Proposals for a Minimum Average Seat Requirement. As noted above, the 

legacy incumbents underutilize a significant number of slots by operating a large 

percentage of small aircraft even in big city markets. This phenomenon does not exist to 

the same degree at non-slot controlled large U.S. airports, where there is less incentive to 

“cover” capacity through the use of smaller aircraft (i.e., small aircraft are used only for 

their optimal purpose – to serve smaller end markets). Several commenters have argued 

that the FAA/DOT should restrain the artificially high usage of smaller aircraft, which 

they submit wastes valuable slots, either by imposing limits on the percentage of 

operations that can be conducted with small aircraft or providing for a minimum average 

seats per aircraft requirement. The FAA/DOT should give serious consideration to these 

proposed remedies. 

• Allocate Slots to New Entrants Via Statutory Exemption. The Secretary of 

Transportation should use his authority under 49 U.S.C. § 41714(c) to allocate slot 

exemptions to new entrant carriers to promote competition. 

 In conclusion, we urge the FAA/DOT to finalize new and effective slot rules for the NYC 

Airports as soon as possible. In considering each element of the proposal, the FAA/DOT should 

prioritize new entry in order to maximize competition, increase service options, and ensure more 

efficient use of slots. This will fulfill the agencies’ mandate to serve the interests of the traveling 

 
 5 

public, not only at the NYC Airports, but in the myriad cities and communities throughout the 

United States for which competitive air service to New York is of vital importance. 

 Respectfully submitted, 

Andrew Harrison

Executive Vice President and 

 Chief Commercial Officer 

Alaska Airlines, Inc. 

Maurice J. Gallagher, Jr. 

Chairman and CEO 

Allegiant Air, LLC 

Barry Biffle 

President 

Frontier Airlines, Inc. 

B. Ben Baldanza 

President and CEO

Spirit Airlines, Inc. 

David Cush 

President and CEO 

Virgin America Inc. 

cc: Ms. Valerie Jarrett Mr. Shaun Donovan 

Senior Advisor to the President Director 

The White House Office of Management & Budget 

Washington, DC 20500 725 17th Street, NW 

 Washington, DC 20503 

Ms. Cecilia Muñoz Mr. William J. Baer 

Director, Domestic Policy Council Assistant Attorney General for the 

The White House Antitrust Division 

Washington, DC 20500 U.S. Department of Justice 

 950 Pennsylvania Avenue, NW 

Washington DC 20530 

 Docket FAA-2014-1073