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OST-99-5085

New Air Corporation

New Air is a unique start-up carrier, unlike any other airline in U.S. aviation history. It intends to fill the low fare, nonstop jet service void that is prevalent between the entire New York market, especially JFK, and so many cities across the United States. New Air has several characteristics that make it unique as a new entrant and portend the likelihood of success where so many other new entrant carriers have failed. New Air will base its operations in the center of the world's largest air travel market, New York City. In New York City, New Air will create its base at a high density rule airport, something no other low fare, domestic new entrant carrier has ever done.

Counsel:  Dow Lohnes, Jonathan Hill, 202.776.2725

New Air Corporation

Assuming arguendo, that the DOT denies the IAM's motion to dismiss and processes New Air's application, New Air is incapable of satisfying the DOT' s guidelines regarding the granting of exemptions to the HDR rule or providing the degree of specificity the Department has required in other such applications. New Air cannot identify with any certainty either the routes, the frequencies, or the type of aircraft it will operate should the DOT grant its application. Moreover, although New Air expects the DOT to provide it with twenty-five slots at JFK in each of the next three years, its application does not specify a single date when it intends to initiate service on a particular route during that three year period.

By:  Guerrieri Edmond, Robert Clayman, 202-624-7400

As a new entrant airline itself, The Coast welcomes the announcement of New Air's imminent certificate application because it will help to underscore the demand for new and innovative competition in the domestic U.S. air transportation market. While The Coast takes no position on whether New Air's application for slot exemptions satisfies the Department's substantive criteria, it strongly supports the application in at least two respects.

Counsel:  Wilmer Cutler, Jeffrey Shane, 202-663-6000

To a remarkable degree, however, New Air's application presents an exemption request of unprecedented scope, urging the DOT to create, and then allocate to New Air, a total of 75 new daily peak-period operating slots at JFK. Delta submits that New Air's application would seriously erode both the legal limitations and policy objectives of the High-Density Airport rules and the Department's HDR exemption authority. Grant of New Air's application for the creation of 75 new JFK slots would vitiate the Department's carefully-reasoned precedents in prior cases addressing new-entrant carrier applications for limited exemptions from the HDR slot regulation, and could seriously disrupt the present array of peak-period long-haul international services at JFK.

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-496-5647

Accordingly, the Department should require New Air to submit documentary information setting forth the terms of any offers that it has made to purchase or lease slots, as well as the responses to those requests. New Air concedes that it is willing to purchase underutilized slots from TWA, although New Air does not produce either evidence that it attempted to purchase such slots or reasons why the slots were not available. With full documentation, The Department will then be able to determine the impact of the cost of a slot, amortized over a ten-year period, on the fares that would be charged by the applicant. If New Air cannot or refuses to provide this information, then its application must be denied.

Counsel:  Michael Rogovin, 718.286.2888

OST-99-5085

February 22, 1999

Answer of Trans World Airlines HTML

Exemption to Allow Nonstop Service to and from JFK

By an application, dated February 5, 1999, an embryo airline has requested 75 slots at John F. Kennedy International Airport for operations during the four-hour period of controlled operation under the high density rules. Although it has allegedly raised about $125 million, the airline has not ordered aircraft, has not applied to the DOT for a certificate, and has not developed definite plans to serve specific cities. TWA hereby answers and requests that the application be dismissed as premature.

Counsel:  TWA and Richard Fahy, 703-684-4422, rfahy@ibm.net

New Air Corporation

Spirit takes no position on the New Air application per se. In principle, we would not oppose it, since we view the High Density Rule as an anachronism whose costs significantly outweigh its benefits. However, as a low-fare airline with a large and growing presence at both HDR and non-HDR airports in the New York Metropolitan area, Spirit believes that the broad relief sought in the New Air application must be carefully tailored to ensure that a single exemption from the Rule does not foreclose other approaches to the problem. Moreover, to the extent to which the Department chooses to break new ground and to grant New Air the relief it requests, the Department should do so on behalf of all carriers wishing to inject low-fare competition in the New York market.  Spirit perhaps should be heartened by the fact that the regulatory climate has changed to such a degree that new entrants such as New Air believe that major improvements in access to slot-controlled airports are achievable. Spirit wishes to emphasize that it, too, has thus far been encouraged by the clear signals it has seen that the Department wishes to take decisive steps to ensure that competition takes place on a level playing field. Although Spirit would interpret regulatory receptiveness to New Air's application as a further positive signal, this would not be the case if DOT were to conclude its efforts there, thereby according New Air somewhat unique status under the slot rules.

Counsel:  GKMG, Anita Mosner, 202-342-5201

New Air Corporation

Interestingly, TWA argues that the Department will be unable to perform the public interest and exceptional circumstances analyses in New Air's proposed markets, specifically citing the New York-Boston market. As New Air detailed in its Application, this market has seventy daily flights in each direction. More than half of these flights operate from LaGuardia and Newark none of which are on low fare carriers. At JFK, while there are twenty-nine daily flights in each direction to and from Boston, only four are operated with jet aircraft and all twenty-nine charge unrestricted one-way fares in excess of $197.00. New Air clearly stated its intent to offer up to six daily roundtrips in this market with one way fares between JFK and Boston ranging from approximately $39.00 to $89.00.

Counsel: Dow Lohnes, Jonathan Hill, 202.776.2725

New Air Corporation

New Air also erroneously persists in relying on the statutory new entrant provision for its request for more than 12 JFK slots. Once New Air has Obtained 12 slots from any source (including the new entrant exemption provision) it would no longer be a "new entrant" as that term is defined by the statute and the regulation and would no longer be entitled to additional new entrant slots. To the extent that New Air seeks an award of HDR slots in excess of the new-entrant limit expressly contained in the statute, any such slot application would be inconsistent with the statutory exemption provision. If there are additional slots available at JFK, Delta and other carriers must be afforded a fair and equal opportunity to obtain such slots.

Counsel:  Delta and Shaw Pittman, Robert Cohn, 202-663-8060

New Air Corporation

Delta alleges that New Air submitted an "erroneous statement of fact" in its Reply regarding Delta's utilization of its existing slots at John F. Kennedy International Airport. The New Air statement that Delta has taken issue with read: "Delta . . . doesn't even utilize all of the slots it currently holds." (New Air Reply at 8). New Air submits again that this statement is correct. Delta holds fifty-eight domestic air carrier slots at JFK. As Delta itself stated: "Delta operates 48 slots with its own aircraft. Delta's remaining ten JFK air carrier slots are utilized by two other airlines under code share arrangements. At the time New Air filed its Reply, Atlantic Southeast Airlines was, as it remains today, a separate commuter airlines Further, Trans States Airlines which utilizes some of Delta's air carrier slots at JFK, is also a separate commuter airline which has a new code share agreement with Delta for operations to and from JFK. At JFK, Trans States also operates as a code share partner for TWA. Throughout the nation, Trans States serves as a commuter partner for a total of six major airlines at six major hub airports. Thus, New Air's statement that Delta "doesn't even utilize the slots it currently holds' is not an erroneous statement and is in fact correct. While Delta elects to lease or otherwise allow commuter carriers to utilize its air carrier slots at JFK, albeit "for the benefit" of Delta's domestic and international operations at JFK, the slots are not being utilized by Delta as New Air stated in its Reply.

Counsel:  Dow Lohnes, Jonathan Hill, 202-776-2725

New Air Corporation

Counsel:  Ungaretti & Harris, Edward P. Faberman, 202.639.7501

New Air Corporation

While New Air supports increased low fare service to communities like Akron/Canton and is interested in providing this service to such underserved communities, New Air strongly believes that, in order to thrive, new entrant airlines must be able to compete on a level playing field with established carriers. As such, any restrictions like those proposed by Akron-Canton, as a matter of policy, should not be adopted in lieu of granting New Air's Application for an Exemption to the High Density Rule.

New Air Corporation
90 Park Avenue
New York, New York  10016
(212) 557-6565

Counsel:  New Air and Dow Lohnes, Jonathan Hill, 202-776-2725

New Air Corporation

With AirTran operating at the Newport News Airport, the residents of the community and surrounding communities are now using this airport instead of driving hours to find lower fares. Just as business and leisure travelers from around the state are now driving hours to fly AirTran out of Newport News/Williamsburg, these travelers will also travel to utilize the services proposed by New Air. While the Communities of the Virginia Peninsula fully support New Air and its application, the slots requested herein should be awarded to the community for the reasons that follow. The parties hope that New Air completes its economic and safety certification processes within a short time frame. The parties also support the number of slots requested by New Air (25 per year). If four additional slots were allocated to the community, New Air or another carrier could accumulate a significant number of slots to operate a successful hub. This petition is consistent with the high density regulations, which allow the Department to award slots to communities and is also consistent with Order No. 99-3-12.

Counsel:  Ungaretti Harris, Edward Faberman, 202-639-7501

JetBlue Airways Corporation

As indicated in New Air's recent letter, dated July 14, 1999, to the Department, the corporate name of the company has changed. As of July 28, 1999, the documents necessary to change the corporate name have been filed with the State of Delaware and the company's name has been changed to JetBlue Airways Corporation. (Exhibit I attached hereto).  JetBlue Airways Corporation requests that the caption for this proceeding be changed to reflect the company's new name and that all Orders relatives to this docket be issued in the name of JetBlue Airways Corporation.

Counsel:  JetBlue and Dow Lohnes, Jonathan Hill, 202-776-2725

JetBlue Airways Corporation

Counsel:  Lohnes Albertson, Jonathan Hill

JetBlue Airways Corporation

Order 99-9-11 granting JetBlue Airways Corporation (formerly New Air Corporation) a total of 75 slot exemptions at New York's John F. Kennedy International Airport (JFK), for nonstop, low-fare jet air service to and from JFK, and finds that the significant transportation benefits that would be experienced under JetBlue's proposed low-fare operating plan constitute exceptional circumstances, as required by statute, and that grant of the exemptions is in the public interest.

By:  Bradley Mims

By:  John V. Coleman

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