JetBlue Airways® | 27-01 Queens Plaza North | Long Island City, NY 11101 | 718-286-7900 January 24, 2014

VIA HAND DELIVERY & OVERNIGHT

Mr. Marc L. Warren , Esq. Acting Chief Counsel

Federal Aviation Administration 800 Independence Avenue, S.W. Washington, D.C. 20591

Re: Request of JetBlue Airways for a Waiver

Dear Mr. Warren:

JetBlue Airways Corporation (“JetBl ue”) requests a waiver from certain restrictions in the JFK Order Limiting Scheduled Operations at John F. Kennedy International Airport, 1 so that it can permanently transfer, via a mutual slot purchase agreement, 24 JFK operating author izations (“slots”) to American Airlines, Inc. (“American”) in exc hange for the permanent transfer of 16 DCA

slots from American to JetBlue. Grant ing the waiver will make permanent an arrangement that has been in place si nce 2010 (“2010 Slot Exchange”), will assure the continued presence of JetBlue, a low cost carrier, at DCA, and will allow American to comply with the te rms of a proposed settlement announced by United States Department of Just ice (“DOJ”) on November 12, 2013. 2 The slots

are listed in an attachment to this letter.

The transfer of these slots is requi red under the terms of a proposed final judgment (“PFJ”) between DOJ and the Stat es of Arizona, Florida, Tennessee, and Michigan, the Commonwealths of Pennsyl vania and Virginia, the District of Columbia, American and US Airways requiri ng that American offer to divest the 16 DCA slots currently operated by JetB lue by making permanent the 2010 Slot Exchange. 3 See PFJ at IV.F.1, United States, et al. v. US Airways Group, Inc., et

1 73 Fed. Reg. 3510 (January 18, 2008), as amended; hereinafter, “JFK Order”.

2 The proposed settlement specifically refers to, and requires American to divest, the slots currently operated at DCA by JetBlue. See Proposed Final Judgment, United States, et al. v. US Airways Group, Inc., et al. , No. 1:13-cv-01236 (D.D.C. Nov. 12, 2013), ¶¶ II.E, II.F & IV.F.1.

3 While JetBlue has the option of re fusing to make the 2010 Slot Exchange permanent, American is required to offer the permanent transfer of slots and, if rejected by JetBlue, must then include the slots in the larger pool of slots to be divested on the open market. While JetB lue could refuse to exchange its JFK slots for DCA slots and instead try to negot iate a cash transaction, it could onlyMr. Marc L. Warren, Esq. January 9, 2014 Page 2

al. , No. 1:13-cv-01236 (D.D.C. Nov. 12, 2013), ECF No. 147-2. The DOJ believes that this divestiture, along with the others required by the terms of the settlement agreement, will “allow [LCCs and other carriers] to provide greatly expanded service on numer ous routes, including new nonstop and connecting service to points throughout the country .” Competitive Impact Statement United States, et al. v. US Ai rways Group, Inc., et al. , No. 1:13-cv-01236 (D.D.C. Nov. 12, 2013), ECF No. 148 (“CIS”), at 9.

The JFK Order was issued in 2008 as a temporary measure to address the growing congestion at JFK ai rport that was, in part, a result of the January 1, 2007 expiration of the High Density Rule 4 at JFK under the Wendell H. Ford

Aviation Investment a nd Reform Act for the 21 st Century. 5 The JFK Order was initially scheduled to expire October 24, 2009 6 and specifically pr ohibited the sale of slots, instead permitting only the leas e of slots, and then only through the end

of the term of the JFK Order. 7 However, on May 21, 2008, the FAA published a notice of proposed rulemaking that wa s intended to replace the JFK Order. 8
Both the High Density Rule and the NPRM contemplated the sale of slots, and

there is no reason to believe that the FAA intended to restri ct the sale of slots at JFK over the long-term. The JFK Order has been ext ended without change several times, and the final rule addressing operations at JFK is unlikely to be issued in time to address the proposed se ttlement’s requirement that American offer to make permanent the 2010 Slot Exchange by offering JetBlue 16 DCA slots in exchange for the 24 slots currently held by JetBlue at JFK. 9

The FAA has the statut ory authority to grant the requested waiver.

Section 40109 of the Trans portation code authorizes the FAA to grant an exemption when the Administrator “deci des the exemption is in the public interest.” 49 U.S.C. § 40109(b). The FAA will grant waivers when they are consistent with the public interest and wil l provide an equivalent or greater level

do so at great risk to its continued operations because the settlement agreement only gives JetBlue priori ty with respect to making the existing agreement permanent and provides no preference for JetBlue in the event that the DCA slots are offered to multiple carriers.

4 14 C.F.R. 93.221.

5 49 U.S.C. 41715(a)(2)(2000).

6 The FAA has continued to extend The JFK Order, which is now set to expire October 24, 2014. 78 Fed. Reg. 28,276 (May 14, 2013).

7 73 Fed. Reg. 3510, 3516.

8 73 Fed. Reg. 29,626 (May 21, 2008), finalized on October 10, 2008 (73 Fed. Reg. 60,544) and rescinded October 9, 2009 (74 Fed. Reg. 52,134).

9 A notice of proposed rulemaking has been pending review at the Office of Management and Budget since March 9, 2013 http://reginfo.gov/public/do/eAgendaV iewRule?pubId=201304&R IN=2120-AJ89.Mr. Marc L. Warren, Esq. January 9, 2014 Page 3

of safety. 10 Indeed, the FAA has previously granted a waiver of the analogous Operating Limitations at New York LaGuar dia Airport in connec tion with the 2011 slot swap transaction between Delta Air Lines and US Airways 11 and in

connection with similar divest itures required by the PFJ. 12 As explained more fully below, we believe a waiver from the JFK Order’s restriction on the sale of

slots is warranted in this instance. Here, the FAA’s objective of safely and efficiently managing air traffic at JFK is preserved, and the public policy goal of promoting competition in air commerce and improved service to the traveling public continues to be enhanced. In addi tion, DOJ has calle d for the permanent exchange of the JetBlue slots at JFK and the American sl ots at DCA, noting that

JetBlue offers service on a limited number of routes at DCA “t hrough use of slots

leased from American on terms that c ould be renegotiated or cancelled by the New American. Through the remedy...JetB lue will have the opportunity to obtain permanent access to the slots [it is] curr ently leasing from American, and ... will have the opportunity to acquire more slot s at DCA... as well.” CIS at 8-9.

By approving this waiver, the F AA will allow American to fulfill a requirement under the PFJ that settles the litigation bet ween the DOJ and American. More significantly for JetBl ue, the waiver will al low it to make permanent an existing slot ex change that allows it to serve DCA. The 2010 Slot Exchange has resulted in considerable consumer benefits. Indeed, in the Complaint that initiated the litigation to enjoin the US Airways/American merger, the DOJ alleged that JetBlue’s entry into DCA “generated stiff price competition” and fares on the “Reagan National to Boston . . . route [in pa rticular] have dropped dramatically.” 13 Moreover, in granting a prio r waiver, the FAA recognized

10 The slot rules were adopted to impr ove efficiency and not for reasons of aviation safety. Thus, there is no need in this instance to demonstrate an equivalent or greater level of safety. In any case, it is clear t hat transferring slots from one scheduled air carrier to another, both of which are regulated under the same operational rules in 14 CFR part 121, will not have an adverse effect on safety.

11 Petition for Waiver of the Terms of the Order Limiting Scheduled Operations at LaGuardia Airport, 76 Fed. Reg. 63, 702 (Oct. 13, 2011) (“granting the joint waiver request of Delta Air Lines, Inc. (D elta) and US Airways, Inc. (US Airways) (together, the Joint Applicants or the carri ers) from the prohibition on purchasing operating authorizations (slots) at LaGuardia Air port (LGA).”).

12 Grant of Waiver at 3, In re the Petition of American Airlines, Inc. for a Waiver from the Order Limiting Oper ations at LaGuardia Airport, No. FAA-2013-1011- 0002 (December 2, 2013).

13 Amended Complaint at ¶88 United States, et al. v. US Airways Group, Inc., et

al. , No. 1:13-cv-01236 (D.D.C. Sep. 5, 2013), ECF No. 73.Mr. Marc L. Warren, Esq. January 9, 2014 Page 4

the competitive benefits and pr icing discipline resulting from low cost carrier competition—and competition from JetBlue specifically—at DCA. 14

At JFK, American uses the JetBlue slots for a combination of domestic and international routes, competing with other large domestic and international carriers serving global mark ets. By expandi ng its international outreach at JFK with large, wide-body aircraft, American has been able to increase passenger throughput internationally without increasing the burden on air traffic control.

Likewise, JetBlue anticipates that t he impact to the trav eling public at DCA will be positive. After execution of the 2010 Slot Ex change, American significantly reduced the number of flights at DCA using smaller, regional aircraft. By removing those regional aircraft and r eplacing them with larger E-190 and A320 aircraft, 15 JetBlue increased the average seats per arrival and departure at

DCA.

The permanent exchange of these sl ots does not pose any operational concerns at JFK or DCA, having been impl emented at both airports in 2010. The aircraft do not require any special handling by air traffic control that would require additional spacing or otherwise in troduce delay at the airports.

Nor does the requested waiver prejudice any long-term FAA policy decisions relating to congestion management at DCA or JFK. Transfer of the JFK slots to American in exchange for the DCA slots held by American but used by JetBlue will give JetBlue and Americ an the same rights that each carrier currently has as the slot holder at the respec tive airports – no more and no less.

A waiver is needed as soon as possibl e so that American can satisfy its obligations under the terms of the PFJ. The public policy considerations have been well explored by all parties to the litigation, includi ng DOJ. In addition, granting the waiver will have no practical impact on the current operational makeup of the respective airports; rather, it will merely finaliz e an agreement that is currently temporary by virtue of t he JFK Order. As such, JetBlue believes there is good cause to forgo a no tice and comment period.

14 76 Fed. Reg. at 63,705 (“We believe t he transaction’s prom ised benefits for the public—particularly in light of the increas ed penetration of low co st carriers at the airports since the time of our last review—are sufficient for us to conclude that grant of the requested waiver with specified remedies is in the public interest.”).

15 JetBlue’s E-190 aircraft seat 100 passeng ers, and its A-320 aircraft seat 150

passengers.Mr. Marc L. Warren, Esq. January 9, 2014 Page 5

In conclusion, the waiver is well justif ied and in the public interest. JetBlue respectfully urges the FAA to grant the requested relief as soon as possible, so that the parties can close their transaction.

Sincerely,

Robert C. Land

Senior Vice President for Government Affairs & Associate General Counsel, JetBlue Airways Corporation

cc: Howard Kass, Vice President of Regulatory A ffairs, American AirlinesTransferred DCA Slots

Slot Time Slot Number

0700 1284

0900 1040

1000 1018

1100 1012

1200 1025

1200 1200

1300 1034

1300 1334

1400 1013

1500 1058

1500 1172

1700 1221

1800 1014

1900 1217

2000 1097

2000 1174Transferred JFK Slots

Slot Time Slot Number Arrival (A) / Departure (D)

0630 21315 D

0630 21235 D

0700 21091 D

0730 21394 D

0800 21331 A

0900 21417 A

0900 21401 D

1100 21385 D

1230 21355 A

1300 20915 A

1400 21408 A

1430 21137 A

1500 21354 D

1600 21148 A

1700 21154 D

1800 21115 D

1900 21259 A

1900 20132 D

2000 21273 A

2030 21359 D

2100 21079 D

2130 21360 A

2200 21366 A

2230 21361 A