UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, D.C.  





ESTABLISHMENT OF SLOT EXEMPTION PROCEEDING 

PURSUANT TO 49 U.S.C. § 41718(b) 

Docket OST-2000-7182

Docket OST-2000-7187

Docket OST-2000-7155

NOTICE  

On July 5, 2000, pursuant to the provisions of the Wendell H. Ford
Aviation Investment and Reform Act for the 21st Century (AIR-21), the
Department issued Order 2000-7-2, which granted a total of 12 slot
exemptions at Ronald Reagan Washington National Airport (DCA) for
services inside the 1,250-mile perimeter to the following carriers:
American Trans Air, Inc., Midwest Express Airlines, Inc., Spirit
Airlines, Inc., and Midway Airlines Corporation.  

Under the provisions of that order, Midwest Express (now Midwest
Airlines) ay was granted two DCA slot exemptions to provide nonstop
service to Raleigh/Durham International Airport, North Carolina Des
Moines, Iowa,.  and Spirit was granted two slot exemptions to serve
either Melbourne, Florida, or Myrtle Beach, South Carolina, and two
other slot exemptions to serve any of the airports in Florida or South
Carolina that Spirit had proposed.  Those included Fort
Lauderdale/Hollywood International Airport (FLL); Southwest Florida
International Airport (RSW) in Fort Myers; Melbourne Regional Airport
(MLB); Palm Beach International Airport (PBI) in West Palm Beach; and
Myrtle Beach International Airport (MYR).  

Midway Airlines

By Order 2002-10-33, issued October 25, 2002, the Department withdrew
the two DCA slot exemptions granted to Midway, after finding that the
terms of a Regional Jet Service Agreement between Midway and US Airways
would transfer effective control of those two DCA slot exemptions to US
Airways, an action prohibited by 49 U.S.C. 41714(j).  

Spirit Airlines

In order to optimize utilization of valuable slots and slot exemptions,,
under  Federal Aviation Administration (FAA) regulations, slots or slot
exemptions not used at least 80% of the time over a two-month period are
subject to recall by the FAA for non-use.  In the aftermath of
September 11, the FAA suspended the minimum slot usage requirement to
give airlines an opportunity to adjust to changes in the aviation
operating environment and passenger demand  without airlines’ losing
slots or slot exemptions during this period.  On February XX28, 2002,
the FAA extended the suspension of the use-or-lose requirement until 
October 27.  Given this extension and that, as of November 1,

 Spirit operated no DCA service, Spirit would have needed to have
initiated full service with its four AIR-21 DCA slot exemptions by
November 14, 2002, in order to meet FAA’s 80 percent minimum slot
useage requirement.  Spirit has not yet instituted any DCA service

On October 17, 2002, by letter to the Department, Spirit requested a
three-and-a-half month extension of the FAA suspension of the
use-it-or-lose-it requirement at DCA.  By letter dated October 24, the
FAA denied Spirit’s request and restated that the usage requirement
would become effective October 27.  In a November 4 response, Spirit
failed to assure the Department, as requested, that it would institute
DCA service in a timely fashion.  Rather, Spirit said that it would like
either to retain the four DCA slot exemptions it holds or to reapply for
these slot exemptions that it has been holding until the FAA had denied
its request for an extension of the use-or-lose requirement.  We
interpret this response to mean that Spirit could not ensure that it
would reinstitute its DCA slot exemptions so as to comply with the
use-or lose requirement and would not object to a withdrawal of the
exemptions so long as it is given the opportunity to reapply for them. 
These letters have been placed in Docket OST-2000-7182.  

By letter dated May 14, 2004, Midwest informed the Department that due
to recent losses in the market, it planned to discontinue nonstop
service between Des Moines and DCA on June 30, 2004.  It stated that it
was so advising the Department so that we would be able to promptly
reallocate the slot exemptions to another qualifying carrier.  

Proceeding

Proceeding  

Given theseis developments, the Department will now consider, using the
criteria set forth in 49 U.S.C. § 41718(b), applications from air
carriers using Stage 3 aircraft for the sixtwo slot exemptions formerly
granted to Midway and Spirit Midwest.  Applicants must propose , to
provide nonstop service to DCA from airports that were designated as
small hub or nonhub airports in 19971medium or smaller airports  within
the 1,250-mile perimeter established for civil operations at DCA under
49 U.S.C. § 49109.  Applications should be filed in Docket OST
2000-7182.2  

Section 41718(b) of Title 49 U.S.C. establishes certain requirements for
award of these exemptions.  As concerns the small hub or nonhub category
for within-perimeter exemptions, it directs the Secretary to distribute
them in a manner that promotes air transportation: (1) to communities
without existing nonstop air transportation to DCA; (2) to small
communities; (3) that will provide competitive nonstop air
transportation on a monopoly nonstop route to DCA; or (4) that will
produce the maximum competitive benefits, including low fares.3

Completed applications must be submitted by June 24, and comments with
respect to any timely filed request for slot exemptions must be filed by
July 1.  

Section 41718(c)(3) requires that all 12 inside-perimeter slot
exemptions be for air transportation to medium hub airports and smaller
and that at least four of the 12 slot exemptions be for air
transportation to small hub airports and nonhub airports.  Since
American Trans Air currently uses four slot exemptions for service to
Chicago’s Midway Airport, a medium hub airport, and Midwest Express
uses two slot exemptions for service to Des Moines, a small hub airport,
at least two of the slot exemptions to be distributed here must be for
service to a small hub or nonhub airport.  The other twofour may be to a
medium hub, a small hub, or a nonhub airport.  

Section 41718(b) directs the Secretary to distribute the 12 inside
-perimeter slot exemptions in a manner that promotes air transportation:
(1) by new entrant air carriers and limited incumbent air carriers; (2)
to communities without existing nonstop air transportation to DCA; (3)
to small communities; (4) that will provide competitive nonstop air
transportation on a monopoly nonstop route to DCA; or (5) that will
produce the maximum competitive benefits, including low fares.  A new
entrant air carrier or limited incumbent air carrier is defined as an
air carrier or commuter operator that holds or operates (or held or
operated, since December 16, 1985) fewer than 20 slots and slot
exemptions at DCA.  

Completed applications must be submitted by November 27 December 20, and
comments with respect to any timely filed request for slot exemptions
must be filed by  December 11January 6.  

As a final matter, we note that Midway’est’s currently allocated
slot times for its nonstop DCA-Raleigh/DurhamDes Moines service are in
the 18000 and 19700 hour periods.  Spirit’s currently allocated slot
times for its DCA service are in the 0900, 1000, 1400, and 1500 hour
periods.  Since 49 U.S.C. §Section 41718(c)(2) does not allow us to
assign more than twothree slot exemptions per one hour period,.  Almost
and most one hour periods all time periods were fully subscribed by the
Department’s Notice dated August May 23, 20004, and, thus, we may not
be able to accommodate carrier requests for alternative slot exemption
times.  

We shall serve a copy of this notice on all certificated air carriers,
the Metropolitan Washington Airports Authority, and the Federal Aviation
Administration’s Slot Administration office.  

By:

READ C. VAN de WATER KARAN K. BHATIA

Assistant Secretary for Aviation 				       Assistant Secretary for
Aviation

      and International Affairs

Dated:  June 3, 2004December 3, 2002

(SEAL)

An electronic version of this document will be available on the World
Wide Web at:

  HYPERLINK "http://dms.dot.gov/"  http://dms.dot.gov/ 



 On October 17, 2002, by letter to the Department, Spirit requested a
three-and-a-half month extension of the FAA suspension of the
use-it-or-lose-it requirement at DCA.  By letter dated October 24, the
FAA denied Spirit’s request and restated that the usage requirement
would become effective October 27.  In a November 4 response, Spirit
failed to assure the Department, as requested, that it would institute
DCA service in a timely fashion.  These letters have been placed in
Docket OST-2000-7182.  In any event, in order to meet FAA’s useage
requirement, Spirit would need to have initiated full service with these
exemptions by November 14, 2002.  Spirit has not yet instituted this
service.  

1 Definitions of nonhub, small hub, and medium hub airports are provided
under 49 U.S.C. § 41714 (h)(7), (8), and (9).

 Hub or airport definitions are provided under 49 U.S.C. § 41714(h)(7),
(8), and (9).

2 Title 49, U.S.C. § 41718(c)(3), incorporating amendments made by P.L.
108-176 (the Vision 100 – Century of Aviation Reauthorization Act,
“Vision 100”), authorizes the Department to award a total of 20
within-perimeter slot exemptions.  Of these, at least six must be for
air transportation to small hub and nonhub airports. (See section
41718(c)(3)(a)).  At present, these six were awarded and allocated as
follows:  two to Midwest for service to Des Moines in Order 2000-7-2;
two to Comair, Inc. for either Jackson, MS, or Lexington, KY, in Order
2004-4-2; and two to US Airways, Inc. for Asheville, NC, Chattanooga,
TN, or Wilmington, NC, also in Order 2004-4-2. With the impending return
of Midwest’s Des Moines exemptions, the only available category within
which they may be re-awarded is that for small hub or nonhub service.

3 Prior to the amendments made by Vision 100, section 41718(b) had also
included as a criterion for all awards the promotion of air
transportation by new entrant air carriers and limited incumbent air
carriers.  Vision 100 struck that as a criterion for the small hub and
nonhub service category only; it remains in effect for the medium hub
and smaller category, and the “without regard to size” category. 
Therefore, the Department will evaluate applications for these two
available slot exemptions without regard to the new entrant/limited
incumbent status of the applicant.

 49 U.S.C. § 41714(h).  In addition, under 49 U.S.C. § 41714(k)
“…an air carrier that operates under the same designator code, or
has or enters into a code-share agreement, with any other air carrier
shall not qualify for a new slot or slot exemption as a new entrant or
limited incumbent air carrier at an airport if the total number of slots
and slot exemptions held by the 2 carriers at the airport exceed 20
slots and slot exemptions.”

 PAGE   

 PAGE   3 

 PAGE   

Served: June 8, 2004  December 6, 2002

