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Continental Airlines, Inc.

TWA will be abandoning its Washington Reagan-Los Angeles route as soon as it closes on its merger with American. Awarding Continental pendente lite slot exemptions to continue the daily nonstop service between Washington Reagan and Los Angeles TWA is discontinuing will avoid the sudden disruption to passengers, shippers and communities that would be caused by TWA’s sudden cessation of service on the route without a replacement. Only by awarding Continental interim authority can the Department ensure continued competition for Washington Reagan-Los Angeles traffic by an airline independent of the two airlines already dominating traffic on the Washington-Los Angeles route, American and United. Enabling Continental to institute its first nonstop service between Washington, D.C. and Los Angeles would enhance Continental’s ability to compete with the largest carriers at Washington Reagan (American/TWA, Delta and US Airways) and with the largest carriers at Los Angeles (American and United). American/TWA, Delta and US Airways together control nearly 70% of the slots at Washington Reagan today, and American and United together carry 80% of the Washington, D.C.-Los Angeles passengers. (Order 2000-7-1 at 23) Since Continental’s flights would operate at the same times TWA’s flights have operated, passenger schedules would be unchanged and disruption would be minimized.

Counsel:  Continental and Crowell Moring, Bruce Keiner, rbkeiner@cromor.com

Alaska Airlines, Inc.; America West Airlines, Inc.; Continental Airlines; TWA Airlines LLC; United Air Lines, Inc.

We have decided to grant the TWA LLC application at this time pending approval by the Federal Aviation Administration for the requisite operating authorities. We deny the applications of Continental, Alaska, United, and America West.

We agree with the parties supporting the application that the public interest is best served by granting TWA LLC's request. Without the requested relief, an abrupt service cessation is likely causing substantial inconvenience and confusion for DCA-Los Angeles passengers. While we agree that other applicants could also provide the interim service until a new carrier is selected, even in these circumstances the transition costs for passengers could be significant. For example, schedules might alter significantly, reservations would have to change, tickets reissued, and passengers informed of the changes.

We also agree with the commenters that the approval be very short-term in nature. In that regard the Department has set a very aggressive timetable: proposals are due April 16, answers are due April 30, and we fully expect to issue a final carrier selection decision in May. The authority granted here will expire 90 days after the issuance date of this order or when a replacement service is selected, whichever is earlier. Finally, we wish to make clear that our action here in no way gives American Airlines any advantage whatsoever in the long-term carrier selection decision.

By: Susan McDermott

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