ost995030

OST-99-5030

America West Airlines, Inc.

OST-99-5030	January 21, 1999	Application for an Exemption	High Density Rule - Reno/Las Vegas-O'Hare	HTML
		Exhibit 1: Proposed Chicago-Las Vegas-Reno Schedule
		Exhibit 2: Las Vegas is the second most capacity constrained market fron Chicago, carrying five times as many passengers as Reno
		Exhibit 3: Demand for Chicago O'Hare-Las Vegas Service far Exceeds that of Reno
		Exhibit 4: Reno operates one non-slotted flight between Reno and O'Hare
		Exhibit 5: 45% of America West's O'Hare operations are outside slotted time periods
		Exhibit 6: America West's additional Phoenix-O'Hare flying provided immediate consumer benefit

The acquisition of Reno Air by American, provides the Department with a unique opportunity to help America West establish a viable competitive presence in the O'Hare - Las Vegas market and to enter the Reno market. The presence of America West will promote competition in these under-served markets. Whether American chooses to continue to serve the Reno-O'Hare market, Section 41714 precludes its retention of the Reno Air exemption slots -withdrawal of the slots is required by law. America West desires to serve Reno from O'Hare even if American remains in the market. Reallocation of five of those slots to America West will serve the public interest. As already found by the Department, use of those slots for service from O'Hare to Reno and Las Vegas constitutes an exceptional circumstance. Although America West believes the law requires the reallocation of the Reno slots, at a minimum the Department should immediately rc allocate the two slots which are not being used by Reno Air to enable America West to provide a much needed competitive roundtrip in the O'Hare - Las Vegas market.

Counsel: Baker Hostetler, Joanne Young

America West Airlines, Inc.

OST-99-5030	February 5, 1999	Answer of American Airlines	Reno, Nevada-Las Vegas, Nevada-Chicago O'Hare Intl Airport	HTML
		Exhibit 1: Letter from Nevada Congressmen to Secy Slater
		Exhibit 2: Slot Management System Listing of AWE O'Hare Slots
		Exhibit 3: United Air Lines Press Release Statement on America West

We also note that on January 19, 1999, the Department sent a letter to Reno Air advising that two of its seven O'Hare exemption slots were being rescinded as dormant. The Department should consider allocating the two dormant slots for service from O'Hare to a city such as Greenville/Spartanburg, South Carolina, for which American Eagle has an application pending in OST-98-4647. The Department should not use those slots for a market such as Chicago-Las Vegas, which already enjoys an abundance of nonstop service operated by four carriers.

Counsel: American, Carl Nelson, 202-496-5647, carl_nelson@amrcorp.com

OST-99-5030

February 5, 1999

Answer of Atlantic Coast Airlines

Reno, Nevada-Las Vegas, Nevada-Chicago O'Hare Intl Airport

HTML

This ACA filing would not have been necessary had America West clearly stated in its application the precise relief it is seeking. But America West's request lacks sufficient precision such that ADA had no alternative but to file in opposition to its unclear application. If America West were to clarify its application and renounce any interest in the two O'Hare slots recently withdrawn by the Department from Reno Airlines and, at the same time, clarify that it is seeking only the five O'Hare slots previously awarded by the Department to Reno Airlines, then ACA would withdraw its opposition.

Counsel: Bagileo Silverberg, Robert Silverberg, 202.944.3300

OST-99-5030

February 5, 1999

Answer of Reno Air in Opposition

Reno, Nevada-Las Vegas, Nevada-Chicago O'Hare Intl Airport

HTML

Rather than serve Reno nonstop, America West proposes to add to existing nonstop service between Chicago O'Hare and Las Vegas (where there already are 11 daily round trips, including 2 by America West) with tag-on one stop service to Reno. As a result, Reno would lose all nonstop service in the Chicago market and the important economic benefits that have accrued in the past four years from that service. Such a result violates the express findings of the Department concerning the need of the Reno market for nonstop Chicago service and the specific restriction placed on the grant of slots limiting their use to the Reno market. The potential public benefits offered by the incremental increase in O'Hare-Las Vegas service at the expense of Reno do not support the withdrawal and reallocation of slots to another market.

Counsel: Stephen Lachter for Reno Air, 202.862.4321

OST-99-5030	February 5, 1999	Answer of Reno/Tahoe Parties Opposition	Reno, Nevada-Las Vegas, Nevada-Chicago O'Hare Intl Airport	HTML
		Exhbit 1: Current Nonstop Service for Chicago O'Hare-Las Vegas and Chicago O'Hare-Reno
		Exhbit 2: Current Nonstop Seats Available for Chicago O'Hare-Las Vegas and Chicago O'Hare-Reno
		Exhbit 3: Current One-Stop Seats Available for Chicago O'Hare-Las Vegas and Chicago O'Hare-Reno

By acquiring Reno Air, American has not violated the condition against the sale, trade or transfer of the exemption slots. It is clear from a reading of Order 94-9-30 that the Department intended only to prohibit Reno Air from engaging in traditional slot transactions whereby an air carrier acquires slots from the Department or the FAA and then sells or trades them for valuable consideration. In this case, the Department was concerned with the maintenance of service in the Chicago O'Hare-Reno market and allocated the slots for that specific purpose. Restrictions on the sale, trade or transfer, like the restriction requiring use in the Reno market only, were designed to eliminate Trafficking" in slots, not acquisitions or mergers. After the acquisition of Reno Air is completed, American should be able to retain the slots, subject to the requirement that they only be used to serve the Reno-Chicago O'Hare market.

Counsel: Stephen Lachter for Reno/Tahoe Parties, 202.862.4321

OST-99-5030

February 5, 1999

Answer of United Air Lines

Reno, Nevada-Las Vegas, Nevada-Chicago O'Hare Intl Airport

HTML

AWA offers the same analysis as that previously submitted by United relating to the impact on Reno Air's slot exemption of that carrier's acquisition by American Airlines, Inc. AWA and United each concur that the exemption slots can no longer be held by Reno Air now that it has been acquired by American. AWA's proposed service does not qualify because it is routed via the already well-served and highly competitive Chicago-Las Vegas city pair. In the event no qualifying new entrant carrier proposes to use these five slots to operate the Chicago-Reno services for which they were originally awarded, they should be returned to DOT for reallocation to another qualifying Chicago O'Hare city pair. Chicago-Las Vegas does not qualify.

Counsel: United and Kirkland Ellis, Jeffrey Manley

America West Airlines, Inc.

OST-99-5030

February 12, 1999

Consolidated Reply of America West

High Density Rule - Chicago O'Hare

HTML

The answering parties, primarily entrenched incumbents and their corporate affiliates, object to America West's application, making several arguments, but never challenging the key points that service by America West advances the public interest by providing low-fare service to Las Vegas and Reno, Nevada from O'Hare and constitutes exceptional circumstances by providing much needed competition at O'Hare. Instead of addressing these key points, the answers seek to shift the focus away from the fundamental competition and public interest issues identified by the Department, GAO and the Congress, that strongly support America West's application. None of the arguments raised by the incumbents and their affiliates stands the test of reason and should be rejected by the Department. The answering parties' arguments, if accepted by the Department, would simply result in giving more O'Hare slots to American and United, which is not in the public interest.

Counsel: America West and Baker Hostetler, Joanne Young, 202-851-1532

Reno Air, Inc. / America West Airlines, Inc.

Order 99-2-26
OST-97-2771
OST-99-5030

Issued and Served February 23, 1999

Order on Motion to Reopen the Record

High Density Rule - Chicago O'Hare

HTML

By this Order, we are denying the motion of United Air Lines to reopen the record in Docket OST-97-2771 and reallocate to another qualified airline the slot exemptions now held by Reno Air. We dismiss the America West Airlines' application for slot exemptions in the Reno-Chicago-O'Hare market. Whether the Department exercises its discretion to rescind an award of slot exemptions depends on public interest considerations. Our public interest assessment of this case weighs in favor of allowing Reno Air to continue these operations. Among other things, the record indicates that withdrawal of these services by the Department would have a severe and adverse impact on the economy of Reno/Tahoe and the State of Nevada.

By: Charles Hunnicutt