BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C.

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1 BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. ) Applications of ) ) AIR CANADA ) ALASKA AIRLINES, INC. ) FRONTIER AIRLINES, INC. ) JETBLUE AIRWAYS CORPORATION ) SOUTHWEST AIRLINES CO. ) Docket No. OST SUN COUNTRY AIRLINES ) VIRGIN AMERICA INC. ) ) For exemptions from 14 C.F.R. Part 93, Subparts ) K and S, pursuant to 49 U.S.C ) (BEYOND-PERIMETER SLOT EXEMPTIONS) ) ) CONSOLIDATED ANSWER OF SOUTHWEST AIRLINES CO. Communication with respect to this document should be addressed to: Ron Ricks Robert W. Kneisley Executive Vice President -- Associate General Counsel Chief Legal and Regulatory Officer Leslie C. Abbott Madeleine Johnson Senior Attorney Vice President General Counsel SOUTHWEST AIRLINES CO. SOUTHWEST AIRLINES CO L Street, NW 2702 Love Field Drive Suite 640 Dallas, TX Washington, DC bob.kneisley@wnco.com (202) March 27, 2012

2 BEFORE THE DEPARTMENT OF TRANSPORTATION OFFICE OF THE SECRETARY WASHINGTON, D.C. ) Applications of ) ) AIR CANADA ) ALASKA AIRLINES, INC. ) FRONTIER AIRLINES, INC. ) JETBLUE AIRWAYS CORPORATION ) SOUTHWEST AIRLINES CO. ) Docket No. OST SUN COUNTRY AIRLINES ) VIRGIN AMERICA INC. ) ) For exemptions from 14 C.F.R. Part 93, Subparts ) K and S, pursuant to 49 U.S.C ) (BEYOND-PERIMETER SLOT EXEMPTIONS) ) ) CONSOLIDATED ANSWER OF SOUTHWEST AIRLINES CO. Pursuant to Order establishing this proceeding, Southwest files this Consolidated Answer to the Applications filed by the six other participating carriers for the eight beyond-perimeter slot exemptions created by the recently enacted FAA Modernization and Reform Act of 2012 ( FAA Act ). 1 As is detailed below, a review of the competing Applications filed in this proceeding makes clear that Southwest s proposal is materially superior to the other proposals. When scored against the seven decisional criteria specified in the FAA Act, as well as considered side-by-side for substance and public benefits, there is no doubt that Southwest s proposal is by far the strongest and most beneficial to the public in this case. 1 Common names of airlines are used. 1

3 Overview Southwest is requesting two of the eight available beyond-perimeter slot exemptions to provide nonstop service between Ronald Reagan Washington National Airport (DCA) and Austin, Texas (AUS) with single-plane service beyond Austin to San Diego, California (SAN). In Order the Department clearly articulated the statutory criteria required for a grant of slot exemptions in this case. Southwest s Application explained in detail how Southwest s DCA-AUS-SAN proposal met all seven decisional criteria set forth in that order (Application at pp. 3-6). In fact, a close review of all the applications filed in this case demonstrates that Southwest is the only applicant to fully satisfy all seven carrier selection criteria. Every other applicant does not meet one or more of the selection criteria, either by failing to offer significant network benefits and/or competition in beyond-perimeter markets, or by failing to present credible evidence of public benefits that would result from their proposals. In fact, no carrier other than Southwest has offered a fully explained and documented estimate of consumer fare savings that would be created by the proposed beyondperimeter service, along with a transparent calculation of the additional passengers that would benefit from the new low fares to be offered. Table I below summarizes the seven carrier applications in this case as measured against the statutory selection criteria: 2

4 Table I Only Southwest Airlines Fully Satisfies All Selection Criteria in This Case WN B6 AS VX F9 SY AC DOT Carrier Selection Criteria AUS AUS SJU PDX SAN SFO COS LAS YVR A. Domestic network benefits beyond the perimeter Y M Y Y M M M N N B. Increase competition in multiple markets Y N Y Y M M Y N N C. Not reduce travel options for small and medium hub communities inside the perimeter D. Not result in meaningful delays E. Enhance options for nonstop travel to/from the beyond perimeter airports F. Positive impact on overall competition G. Product public benefits, including lower fares, higher capacity and variety of service options. Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y M Y Y M M M M N Y M M M M M M M M TOTAL YES COUNT Scoring Code Y = Yes N = No M= Minimal effect or insufficient data given in Application Beyond the above tabulation, the superiority of Southwest s Application becomes clear from the detailed carrier-by-carrier evaluations that are provided below. First, however, a few general observations: 3

5 DCA-AUS is the most over-priced market in this case (Exhibit WN-R-102) and is most in need of Southwest s low-fare service to provide relief to overcharged travelers. Southwest s forecast of traffic stimulation (146,082 annual passengers) dwarfs the next largest estimate (JetBlue San Juan (SJU)) by a factor of 3.5 to 1 (Exhibit WN-R-103). Alaska, Frontier, Virgin America, Sun Country and Air Canada make no estimate of newly generated traffic. In some cases their costs and likely fares would not provide a basis for any price stimulation. With its new 175-seat B aircraft Southwest proposes the largest aircraft in the case (Exhibit WN-R-104). Some carriers are proposing aircraft as small as 120 seats (Air Canada), 119 seats (Virgin America), and even the 100-seat E190 regional jet (JetBlue). DCA-AUS is the second largest un-served market in this case (Exhibit WN-R- 105). At the opposite end of the spectrum is DCA-Colorado Springs (COS), which is less than 40% the size of DCA-AUS, and is the smallest O&D market being proposed. 2 Among the competing markets in this case, DCA-AUS has no current nonstop service, and the Dulles service is only two daily round trips. Austin s current service and capacity pales in comparison to other contending markets, including several that already have, or shortly will have, DCA nonstop service (Exhibits WN-R-106 and WN-R-107). 2 DCA-COS reported 29,435 fared O&D passengers for YE Q3 2011, compared to 76,995 for DCA-AUS in the same period. 4

6 The limited incumbents as a group have 111 DCA slots, or 13.0% of the airport total (Exhibit WN-R-108). Southwest has 25 DCA slots, all by virtue of its acquisition of AirTran Airways, now Southwest s wholly-owned subsidiary. When examined on a size-adjusted basis, however, Southwest has by far the smallest pool of slots of any limited incumbent in this case relative to its presence in the domestic market (Exhibit WN-R-109). On this relative scale JetBlue and Frontier have more than seven and eight times respectively, the slots of Southwest. Southwest is only one of only three applicants offering single-plane one-stop beyond service (between DCA and SAN in Southwest s case), which is the best and strongest way to increase competition in multiple markets beyond the perimeter, and to provide maximum network benefits. Detailed carrier-by-carrier evaluations of each proposal are given below and in the attached exhibits. A brief summary follows. I. JetBlue s Two-Route Application Is Seriously Flawed JetBlue s first choice is for two slot exemptions to serve DCA-SJU. If and only if the Department grants that request (Application at p. 29), JetBlue wants two more slot exemptions to provide regional jet ( RJ ) service between DCA and AUS (Exhibit WN-R- 202). JetBlue s AUS proposal is far inferior to Southwest s AUS proposal, and even its DCA-SJU proposal is seriously flawed. Regarding its conditional DCA-AUS proposal, JetBlue would utilize only small 100-seat E-190 RJ aircraft to serve this important market. Southwest s 175-seat B service and consumer benefits would 5

7 dwarf anything JetBlue could generate. Southwest would offer DCA-AUS passengers 75% more annual seats than JetBlue (Exhibit WN-R-203), and assuming an 85% load factor for both carriers, Southwest would carry 45,000 more annual passengers than JetBlue (Exhibit WN-R-204). Moreover, the unit cost of JetBlue s E-190 aircraft is almost five cents per mile more, or 88% higher, than Southwest s per-mile unit cost (Exhibit WN-R-206). This dramatically lower operating cost will allow Southwest to serve the DCA-AUS market profitably at much lower fares than JetBlue. By several standard metrics Southwest is six to seven times larger than JetBlue at Austin (Exhibit WN-R-205). In fact, Southwest has over 700,000 Rapid Rewards members in Austin and nearby San Antonio. Southwest s much larger presence in the AUS area will unquestionably enable it to attract many more passengers on the DCA-AUS route than JetBlue, leading to a stronger service with greater consumer savings. Southwest s detailed and transparent forecasts indicate that total consumer savings from its proposal will be approximately $23 million per year (Exhibit WN-120). JetBlue provides no analysis, no evidence, and no corroboration to support its alleged forecasts, which it relegates to an unexplained footnote on page 27. JetBlue makes no attempt to evaluate consumer savings generated by its proposal. So, its claim of 36,500 farestimulated passengers is unsupported by any empirical evidence or analysis and should be rejected. 6

8 JetBlue has made no commitment to proposed fares in the markets it wishes to serve. It only states, without any explanation or support, that its fares will range from $125 to $665 in the DCA-AUS market (Application at p. 24). But based on JetBlue s fares in markets of similar distance, its average DCA-AUS fare would have to be least $30 or 18% higher than Southwest s (Exhibit WN-R-207). Southwest s fares would be significantly lower than JetBlue s in the DCA- AUS market. As shown in Exhibit WN-121, Southwest s system average fare for the DCA-AUS distance is $169, which would be a 36% discount below current DCA-AUS connecting fares. As for SJU, this is a 50% smaller and leisure-oriented market that already has low fares. In fact, DCA-SJU fares on a distance-adjusted basis are currently 22% lower than DCA-AUS fares (Exhibit WN-R-208). Although JetBlue does not make any effort to calculate fare savings from its proposal, any such savings would be minimal in light of the low-fare nature of the SJU market to begin with (see Exhibit WN-R-210). Once again JetBlue has avoided any commitment to DCA-SJU fares in its proposal to the Department. It side-stepped this critical decisional issue by stating that its low fares would range from $127 to $667 (Application at p. 21), and that in some unexplained fashion these fares would stimulate 41,610 new passengers in the market (Application at p. 29, footnote 28). This claim is unsupported by any analysis and has no credibility. 7

9 In sum, JetBlue offers no traffic forecast, no concrete fare proposal, and does not even attempt to claim any fare savings for consumers. For these and other reasons, JetBlue s application -- with respect to both SJU and its distant second choice AUS -- is far inferior to Southwest s application. Given that only four new beyond-perimeter routes are available in this case, JetBlue certainly does not warrant two routes, and even its first choice of DCA-SJU is weak. II. Alaska Does Not Deserve An Allocation Of Four Slots, and Its DCA-SAN Proposal Has Been Mooted By US Airways Selection Of San Diego Alaska Airlines has requested two slot exemptions to serve DCA-PDX service (its clearly stated first choice), and two more to serve DCA-SAN as a second choice. To ask for 50% of the total slot exemptions available is an extraordinary request for a carrier that does not have low costs or low fares. While PDX is a market that would benefit from nonstop service to DCA, Alaska s proposal will likely generate no fare savings for PDX-DCA passengers. The same is true for Alaska s second choice SAN- DCA proposal, but that proposal is effectively mooted by US Airways March 21 announcement of DCA-SAN as its beyond-perimeter nonstop market selection. Alaska s DCA-SAN request would simply double-track the US Airways operation without meaningful price competition. Southwest, in contrast, will offer substantial price competition to US Airways with its proposed single plane SAN-AUS-DCA service. The US fare between DCA and SAN will average approximately $395 assuming it tracks US Airways pricing in its DCA-PHX market. Southwest s one-stop fare between SAN and DCA will average $196, or 50% less (Exhibits WN-122 and WN-R-308 through -311). There is therefore no question 8

10 that Southwest will carry its conservative forecast of 10,000 DCA-SAN annual passengers (Exhibit WN-202). Alaska s application suffers from a number of additional flaws: Alaska is not a low-fare carrier compared to Southwest. In the domestic system its fares are typically 20% to 25% higher than Southwest s for the same distance (Exhibit WN-R-301). Southwest s service proposal is superior to Alaska s with respect to both capacity and fares. With 18 more seats per departure, Southwest would provide 13,140 more seats per year (Exhibit WN-R-304), and would carry nearly 11,000 more annual passengers than Alaska would under either of its proposals (Exhibit WN-R-305). Southwest s AUS-DCA service will do much more to impact current DCA fares than Alaska s proposal. As shown in Exhibit WN-R-306, current DCA-AUS yields are significantly higher than both DCA-PDX and DCA- SAN on a distance-adjusted basis. Except for temporary introductory fares, 3 Alaska does not make any commitment to proposed fares for either PDX or SAN. Using Alaska s current DCA-SEA and DCA-LAX fares as a benchmark, however, Alaska s proposal is unlikely to deliver any fare savings to consumers since its average fares in both PDX and SAN would likely be higher than the prevailing DCA one-stop fares (Exhibits WN-R-307 and R-308). In fact, 3 Alaska s Application at p. 2 refers to initial fares as low as $149 for DCA-PDX and $159 for DCA-SAN. But these are introductory fares that Alaska commits to only for one year and only so long as fuel costs do not rise. Such temporary fares have little relevance. The real question is what will Alaska s average fares be in the longer term (i.e., in the first normalized year of operations), a question which Alaska s application does not answer. 9

11 Alaska s likely fare in the DCA-SAN market would be 37% higher ($73 one-way) than Southwest s single-plane one-stop fare (Exhibit WN-R- 308). Alaska s claims of consumer savings are thus a myth, contrary to the experience of Alaska s existing beyond-perimeter services. As with JetBlue, Alaska certainly does not deserve an award of two routes in this proceeding, 50% of the beyond-perimeter slot pool available. Its second choice proposal for SAN is especially weak, both by its own terms and in light of US Airways announcement of nonstop SAN-DCA service. Even Alaska s first choice proposal of PDX-DCA is inferior to Southwest s AUS-DCA proposal, given that Alaska would operate smaller aircraft at higher fares and will deliver minimal or no fare savings to consumers. III. Virgin America s Request for Four slots in One Market is Unjustified Virgin America s request for four slot exemptions, or 50% of the total available for seven applicants, is not justified on the face of Virgin s application. This is particularly true given that United has selected its San Francisco (SFO) hub for nonstop service to DCA in the Incumbent Carrier proceeding. The Washington DC area enjoys another 15 round-trips per day between IAD and SFO. Among the serious flaws in Virgin America s proposal are the following: As noted above, WAS-SFO is abundantly well-served already, and United will now provide nonstop service between its SFO hub and DCA. Virgin America offers the smallest mainline aircraft in the case (119 seats). Southwest s 175-seat B will provide 47%, or 41,000 more seats 10

12 per year and carry 34,000 more annual passengers than Virgin America (Exhibits WN-R-402 and R-403). The current DCA-SFO fare is actually 12% below the DCA-AUS fare in absolute terms even though the SFO route is nearly twice the distance of the AUS route (Exhibits WN-R-405 and R-406). Thus there is little opportunity for fare savings on the SFO route, and certainly minimal compared to the AUS route. Despite its claims about disciplining pricing in the DCA-SFO market, Virgin America has had little to no effect on United s fares in both the IAD-SFO and IAD-LAX markets (Exhibits WN-R-407 and R-408). There is no reason to expect a materially different result in the DCA market. Virgin America s IAD-SFO fare is actually $10 more than the current average fare in the connecting DCA-SFO market (Exhibit WN-R-409). The Department should therefore expect no price stimulation under Virgin s proposal. Virgin America provided no traffic forecast, no fare proposal, and no estimates of traffic stimulation or consumer fare savings. In addition, United has already selected SFO for daily nonstop service to DCA. Virgin s proposal to provide two SFO-DCA daily round-trips on top of United s nonstop is not justified. IV. Frontier Has Given No Public Interest or Evidentiary Basis to Justify an Award of Slots for the Small DCA-COS Market Frontier s application to serve DCA-COS is especially weak and undeserving of an award of the limited slot exemptions available. In fact, Frontier has a serious dilemma defending its application. DCA-COS by itself is by far the smallest market in 11

13 this case, too small to support Frontier s proposed 168-seat aircraft, and too small to justify an award of slot exemptions. Nor can Frontier rely on traffic from BWI or IAD to support its DCA-COS proposal. 4 On the other hand, if COS is viewed as part of the Denver market, Frontier s application is also deficient since Frontier already provides three daily nonstops, and United provides one, in the DCA-DEN market (the most DCA nonstops of any beyond-perimeter destination). In total, DEN has 16 daily nonstop round trips to DCA and IAD combined (Exhibit WN-R-501). There are many additional reasons to reject Frontier s application in favor of Southwest s: The DCA-AUS market is 162% larger than DCA-COS (Exhibit WN-R-503). In fact, COS is only the 14 th largest beyond-perimeter market without nonstop service to DCA (Exhibit WN-R-506). In Exhibit F9-6 Frontier alleges that the Washington Metro Region is the largest O&D market for COS, at 126 PDEW. However, when the irrelevant BWI and IAD traffic is stripped away, the DCA-COS market is left with only 40 PDEW and it ranks 10 th (not first) in market size for COS (Exhibit WN-R-507). Southwest serves 20 destinations from AUS; Frontier serves only 5 markets from COS (Exhibit WN-R-503a). 4 See, e.g., DOT/FAA Notice Granting Petition With Conditions (DL/US slot swap), where the Department explains at length why the three Washington area airports are not interchangeable and are not economic substitutes. 75 Fed. Reg , (May 11, 2010). 12

14 Like Southwest, Frontier proposes one-stop service to San Diego; however, unlike Southwest, Frontier has almost no presence in San Diego and will have difficulty generating local traffic against US Airways nonstop and Southwest s single-plane one-stop to DCA. Southwest is the largest carrier at SAN, accounting for 41% of all SAN point of sale passenger, while Frontier carries only 2% of SAN passengers (Exhibit WN-R-509). Frontier s alleged connecting markets at COS do not actually connect to Frontier s proposed DCA flight, so it will gain no traffic support from any of them (Exhibit WN-R-510). Only Denver connects at all, but just in the eastbound direction (Exhibit WN-R-510). Frontier claims its proposal will generate over $12 million in total annual savings (Exhibit F9-4), but provides no evidence or analysis to support these alleged savings. Frontier does not even disclose its expected fares in the markets it proposes to serve. Further, Its claimed traffic and savings are not even broken out by market, so it is impossible to discern what if any benefits would accrue to DCA-COS passengers. (Exhibit WN- R-511). On a size-adjusted basis Frontier has 8 times as many DCA slots as Southwest (Exhibit WN-R-502). In sum, DCA-COS is too small, DCA-DEN is too well served, and Frontier has not proven any public benefits to support its request. Frontier also has failed to offer a credible consumer savings estimate, or even to disclose its proposed fares to the 13

15 Department. Frontier has not met a reasonable burden of proof for an allocation of slot exemptions in this case. Its application is far inferior to Southwest s. V. Sun Country s Application Lacks Any Economic Support and Will Produce Little Consumer Benefit Sun Country has provided no evidentiary support for its request to double-track US Airways nonstop in the DCA-Las Vegas (LAS) market (Exhibit WN-R-601), and the nature of this market makes it unlikely that Sun Country would generate any significant consumer benefits in any event. DCA-LAS is already a low-fare market, and Sun Country has made no showing that its service would produce meaningful competitive benefits (Exhibit WN-R-602). In addition: Sun Country has not provided any forecast of traffic or consumer benefits in this proceeding. Sun Country does not disclose the fares it would charge DCA-LAS passengers, nor does it offer any analysis of traffic or prospective fare savings. Sun Country bets the credibility of its DCA-LAS application on its success in developing the DCA-Lansing (LAN) market with AIR-21 slot exemptions. Yet Sun Country has under-performed in that market and missed its traffic forecast by 31% (Exhibit WN-R-606). Moreover, Sun Country s DCA-LAN service has only marginally affected Delta s pricing (Exhibit WN-R-606). Southwest would make superior use of DCA slots by providing 36% more seats than Sun Country (Exhibit WN-R-603). While Sun Country provided no estimate of fare savings, Southwest has estimated that it will generate more than $23 million annually in consumer 14

16 savings from its DCA-AUS-SAN proposal, based on detailed and transparent economic analysis for the Department and all parties to see. In sum, Sun Country has failed to support its application with reasonable evidentiary analysis. Sun Country s chosen market of LAS is already a low-fare market from both DCA and IAD, and any consumer savings from Sun Country service will be minimal. Its application is inferior to Southwest s under all relevant decisional criteria. VI. Air Canada s Vancouver Proposal Does Not Merit An Award of Scarce Slot Exemptions Air Canada s application for DCA-Vancouver (YVR) does not deserve an award of scarce beyond-perimeter slot exemptions for several reasons. On five separate occasions between 2000 and 2008 Air Canada and United attempted nonstop IAD-YVR service with A319 aircraft. As Star Alliance partners it appeared to be an ideal market Air Canada s hub at Vancouver connected to United s hub at Washington Dulles. But all five efforts (three by Air Canada and two by United) failed miserably -- Air Canada s load factor averaged only 52% to 62% during its attempts (Exhibit WN-R-701A). A significant reason for these repeated failures is that Air Canada and United charged very high fares (Exhibit WN-R-700). 5 Simply moving this transcontinental flight 28 miles from IAD to DCA will not change the outcome. With all the on-line connecting markets at both ends of the unsuccessful IAD-YVR route it is difficult to imagine how a route from Vancouver to DCA could succeed (Exhibit WN-R-702). Air Canada s application suffers from several additional flaws: Air Canada has provided no traffic analysis, no proposed fares, and no estimates of consumer benefits in support of its proposal. 5 Campbell-Hill s analysis of historical fare data showed that the Air Canada and United fares were well over 50% higher than Southwest fares for the same nonstop distance. 15

17 Air Canada would operate a small 120-seat airplane with schedule times keyed to its transpacific bank at YVR, and not for the convenience of local DCA-YVR travelers. Air Canada s high fares would stimulate no new traffic. Traditionally Air Canada s unit costs in transborder operations have at least equaled the costs of U.S. legacy carriers, and have been well above Southwest s costs. It is clear from Air Canada s Application that it views this case as an opportunity to tap into fifth freedom traffic between Washington and Asia. In fact, Air Canada s proposed schedule is not timed for the convenience of the local Washington-Vancouver markets but instead is timed to ensure that Washington, DC area travelers will be able to access Air Canada s wide array of services to Asia and the Pacific that it operates from Vancouver (Application at p. 7). The specific on-line YVR connecting markets cited by Air Canada are Hong Kong, Seoul, Shanghai, Beijing, Sydney and Tokyo. But, as shown in Exhibit WN-R-703, United s hub at SFO already serves all of these Asian markets, and in May United will begin DCA-SFO nonstop service. An award to Air Canada in this proceeding would give United, its closely aligned Star Alliance partner, access to another transpacific gateway (YVR), and effectively bestow on United a Large Incumbent carrier - two DCA beyond-perimeter routes, contrary to the expressed purpose of this proceeding. United and Air Canada would naturally code share on the 16

18 DCA-YVR segment for both transborder traffic as well as Washington-Asia passengers. As a foreign flag carrier, Air Canada has been treated well at DCA. It has 18 slots in its own name, and it enjoys much more access to the DCA market through United s 76 slots (Exhibit WN-R-108). For all the reasons stated above, Air Canada s application for slot exemptions to serve DCA-Vancouver should be denied. CONCLUSION For the reasons given above and in its Application, Southwest s proposal for DCA-AUS-SAN service is superior to the competing applications in this proceeding with respect to its overall public benefits, as well as satisfying the seven carrier selection criteria specified in the Department s Instituting Order. Accordingly, Southwest urges the Department to grant it two beyond-perimeter DCA slot exemptions to provide nonstop service between DCA and AUS, with single-plane beyond service to SAN. Respectfully submitted, Robert W. Kneisely March 27,

19 CERTIFICATE OF SERVICE I hereby certify that on March 27, 2012, a copy of the foregoing was served via on the following persons: anita.mosner@hklaw.com (Air Canada) megan.lawrence@alaskaair.com (Alaska Airlines) Marshall.Sinick@squiresanders.com (Alaska Airlines) Edward.Saucer@squiresanders.com (Alaska Airlines robert.cohn@hoganlovells.com (Frontier Airlines) patrick.rizzi@hoganlovells.com (Frontier Airlines robert.land@jetblue.com (JetBlue Airways) jhill@dowlohnes.com (JetBlue Airways) perkmann@dowlohnes.com (JetBlue Airways) John.Fredericksen@suncountry.com (Sun Country Airlines) barbara.russell@virginamerica.com (Virgin America) john.varley@virginamerica.com (Virgin America) jegillick@zsrlaw.com (Virgin America) susan.kurland@dot.gov todd.homan@dot.gov brian.ctr.meehan@faa.gov Jim Smith Director of Aviation Austin-Bergstrom International Airport jimsmith@ci.austin.tx.us John E. Potter President and Chief Executive Officer Metropolitan Washington Airports Authority john.potter@mwaa.com info@airlineinfo.com Leslie C. Abbott

20 Summary Section

21 Southwest Airlines Would Generate More Consumer Savings Than Any Other Applicant Docket OST Exhibit WN-R-101 Annual Fare Savings (Millions) $25 $23.1 $20 $15 $10 $12.4 1/ $10.6 $5 $5.5 Did Not Address Consumer Savings $0 $0.0 $0.0 $0.0 $0.0 WN F9 AS AS B6 VX SY AC (PDX) (SAN) 1/ It is unclear from Frontier s exhibits whether this estimate includes savings claimed for COS-SAN local O&D passengers. This market is irrelevant to this case and should not be included in any estimate of benefits. Source Exhibit WN-120, Exhibit F9-4 and AS-D-10.

22 DCA AUS is the Most Overpriced of All Markets Proposed in This Case Docket OST Exhibit WN-R-102 Page 1 of 2 YE Q Market Yield 25.0 AUS 20.0 COS 15.0 SJU SAN PDX 10.0 Yield Curve for DCA Beyond Perimeter Markets 1 LAS SFO 5.0 y = 10,244x Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

23 DCA AUS is the Most Overpriced of All Markets Proposed in This Case Docket OST Exhibit WN-R-102 Page 2 of 2 Percentage Market Yield Above DCA Market Yield Curve 15% 11% 10% 5% 5% 4% 2% 0% -5% -3% -10% -9% -11% -15% AUS COS PDX SAN LAS SFO SJU Current DCA Yield Market Yield Curve Yield / Regression curve shown on page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

24 Docket OST Exhibit WN-R-103 Southwest is One of Only Two Applicants That Estimated Traffic Stimulation New Passengers (000) 160, , , , ,000 80,000 60,000 40,000 41,610 1/ 36,500 1/ Did Not Address Stimulation 20,000 Applicant: WN B6 B6 AS F9 VX SY AC (SJU) (AUS) A320 E190 1/ JetBlue provided no evidence or analysis to support its claims of traffic stimulation (Application Page 27, footnotes 28 and 29). Source: Exhibit WN-124, JetBlue Application, page 27.

25 Docket OST Exhibit WN-R-104 Southwest Proposes to Operate the Largest Aircraft Among All Applicants Seats Applicant: WN F9 AS AS B6 B6 VX SY AC DCA Market: AUS COS PDX SAN SJU AUS SFO LAS YVR Aircraft Type: B A320 B B A320 E190 A319 B A319

26 Fared O&D Passengers YE Q , , , ,000 DCA-AUS Is the Second Largest Un-Served Market In This Case 117,143 Docket OST Exhibit WN-R , , ,000 80,000 76,995 85,294 60,000 51,061 40,000 20,000 Current DCA Nonstops: Carrier 0 Daily Frequency 29,435 NA AUS SJU PDX COS YVR SAN SFO LAS US UA US / Frontier operates 3 DCA-DEN round trips per day and United has one per day. 2/ Notice of US Airways of Beyond-Perimeter Service, March 21, / Notice of Intent of United Air Lines, February 27, Source: US DOT O&D Survey, YE Q3 2011, via Diio, LLC.

27 Weekly Roundtrips Current Nonstop Frequencies Between Washington and Applicants Beyond-Perimeter Market Choices 111 Docket OST Exhibit WN-R DCA 28 IAD Market: AUS DEN COS SFO LAS SAN PDX SJU YVR DCA : F9-21 UA-7 US-7 US-7 UA-7 IAD: UA-14 UA-62 UA-7 UA-75 UA-14 UA-21 UA-7 UA-7 WN-14 VX-27 Source: OAG Schedules for the week of June 11 th through 17 th, Includes US Airways recently announced choice to serve DCA-SAN.

28 1/ In its Answer filed March 20, 2012 in the inside-perimeter case (Docket DOT-OST ) Frontier advances the theory that it only has 12 slots because 8 of its 20 are actually held by its sister company Republic Airlines. Consistent with Frontier s theory, while Southwest has 25 slots it is in fact a new entrant and not even a limited incumbent because its slots are operated by its wholly owned subsidiary AirTran Airways. Source: FAA Slot Reports, Current and Future, dated and OAG schedules June DCA Slots by Carrier Docket OST Exhibit WN-R-108 DCA Slots Total Slots = Percent of Airport Total B6 4.0% WN 2.9% F9 2.3% AC 2.1% AS 0.7% NK 0.7% SY 0.2% VX 0.0% US 53.9% DL 12.8% AA 11.4% UA 8.9% Total Domestic O&D Passengers Limited Incumbent Carriers Non-Limited Incumbent Carriers (Millions) N/A

29 Note: VX and AC excluded (VX= 0 slots, AC=unreported O&D). Source: US DOT O&D Survey, YE Q3 2011, via Diio, LLC; and FAA Slot Reports, Current and Future, dated and OAG schedules June Southwest s Share of DCA Slots is Disproportionately Small Among Limited Incumbents Docket OST Exhibit WN-R-109 DCA Slots per 100,000 Daily Domestic O&D Passengers WN AS NK B6 F9 SY

30 Rebuttal to JetBlue

31 Docket OST Exhibit WN-R-201 JetBlue Has 7 Times More DCA Slots Than Southwest On a Size-Adjusted Basis DCA Slots per 100,000 Daily Domestic O&D Passengers Southwest JetBlue Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated and OAG schedules June 2012.

32 JetBlue Has Relegated Its Request to Serve Austin to a Distinctly Conditional Status Docket OST Exhibit WN-R-202 Excerpts from JetBlue s Application JetBlue requests two (2) slot exemptions for new service between DCA and JetBlue s focus city at SJU and, if the slots for SJU are granted, two (2) slot exemptions for new service between DCA and JetBlue s growth city of AUS (p. 1) Only if that service to our focus city (SJU) is granted does JetBlue request that DOT consider its second request for service to Austin, Texas. (p. 1) If, and only if, the SJU service proposal is selected, JetBlue also requests that it be awarded two (2) slots for service between DCA and Austin, Texas... (p. 29) Source: JetBlue s Application

33 Docket OST Exhibit WN-R-203 Southwest Would Offer 75% More DCA-AUS Seats Per Flight Than JetBlue s Conditional RJ Proposal Seats per Departure % Southwest B JetBlue E190 Source: Carrier Applications.

34 Docket OST Exhibit WN-R-204 Southwest Would Carry 45,000 More DCA-AUS Annual Passengers than JetBlue s Conditional Proposal Annual Onboard Passengers Assuming 85% Load Factor 120, , ,000 80, ,607 60,000 60,809 40,000 20,000 0 Southwest B JetBlue E190 Source: Carrier Applications. Assumes an 85% load factor for both carriers.

35 Docket OST Exhibit WN-R-205 Southwest Is 7 Times the Size of JetBlue at Austin Southwest AUS Nonstop Service JetBlue AUS Nonstop Service OAK DEN MDW BW I BOS JFK SJC LAS BNA SFO LAX SAN PHX ELP LBB DAL ATL LGB AUS HRL HOU MCO TPA FLL AUS MCO FLL CUN Departures per Week 364 Seat-Departures per Week 49,829 Number of Destinations 20 Share of Point of Sale SAN O&D Passengers 36% Departures per Week Seat-Departures per Week Number of Destinations Share of Point of Sale SAN O&D Passengers 49 7, % Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11 th through the 17 th, 2012.

36 JetBlue s Conditional Proposal to Serve AUS Would Use a Small Aircraft With Unit Costs 88% Higher Than Southwest s B Aircraft Direct Operating Cost per ASM (cents) 10.5 Docket OST Exhibit WN-R % Southwest B JetBlue E190 Average Stage Length (Miles) Source: US DOT Form 41, via Diio, LLC. Southwest s Direct operating cost for the B is based on its reported Form 41 costs for the B adjusted for differences in unit operating costs between the two aircraft types.

37 Docket OST Exhibit WN-R-207 JetBlue s DCA-AUS Fares Would Be At Least $30 Higher Than Southwest s DCA Fared O&D Passengers $250 $200 $199 $ % $150 $100 $50 $0 Proposed Southwest AUS Fare Estimated at Weighted Average B6 Yield In E190 Markets Over 1000 Miles 1 1/ Includes all markets over 1000 miles where B6 operated for the entire YE Q period exclusively with E190s. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC; Exhibit WN-121.

38 DCA-SJU Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-208 Page 1 of 2 Market Yield per RPM YE Q AUS 15.0 SJU Yield Curve for DCA Beyond Perimeter Markets 1 y = 10,244x Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

39 Percentage Market Yield Above DCA Market Yield Curve 15% DCA-SJU Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-208 Page 2 of 2 11% 10% 5% 0% -5% -10% -11% -15% AUS SJU Current DCA Yield Market Yield Curve Yield Note: Regression curve shown on page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

40 Docket OST Exhibit WN-R-209 The DCA-AUS Market Is 51% Larger than the DCA-SJU Market DCA Fared O&D Passengers 90,000 80,000 76,995 70,000 60,000 50, % 51,061 40,000 30,000 20,000 10,000 0 DCA-AUS DCA-SJU Note: Fared passengers only. Source: US DOT O&D Survey YE Q3 2011,via Diio, LLC.

41 Docket OST Exhibit WN-R-210 JetBlue s DCA-SJU Fares Would Not Be More Than 13% Below Current Fares SJU Average Fare $250 $216 $200 $187 $150 $100 $50 $0 Estimated JetBlue Fare Current DCA-SJU Market Fare Based on Its JFK-SJU Yield Nonstop Distance: 1,554 1, / Estimated DCA-SJU fare based on fare per mile in JetBlue s nonstop JFK route. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

42 Docket OST Exhibit WN-R-211 Southwest Would Offer 17% More Seats Per Flight Than JetBlue s Proposed SJU Service Seats per Departure % Southwest B JetBlue A320 Source: Carrier Applications.

43 Southwest Would Carry 15,000 More Annual Passengers than JetBlue s SJU Proposal Docket OST Exhibit WN-R-212 Annual Onboard Passengers Assuming 85% Load Factor 120, , , ,202 91,214 80,000 60,000 40,000 20,000 0 Southwest B JetBlue A320 Source: Carrier Applications. Assumes as 85% load factor for both carriers.

44 Rebuttal to Alaska

45 Alaska Is Not a Low Fare Carrier And Will Not Likely Reduce Yields in Its Proposed Markets Docket OST Exhibit WN-R-301 Yield per RPM YE Q Alaska Yield Curve Nonstop Miles AS Yield Curve Higher than WN Yield Curve % % % % Southwest Yield Curve Nonstop Miles Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Includes all markets domestic markets with 600 or more one-way flights for YE Q Alaska Yield Curve: y = x Southwest Yield Curve: y= x Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

46 Docket OST Exhibit WN-R-302 For Its Size Alaska Has Significantly More DCA Slots Than Southwest DCA Slots per 100,000 Daily Domestic O&D Passengers Southwest Alaska Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated and OAG schedules June 2012.

47 Docket OST Exhibit WN-R-303 Southwest Has A Significantly Larger San Diego Presence than Alaska Southwest Nonstop Service at SAN Alaska Nonstop Service at SAN SEA PDX RNO OAK SMF SJC SFO SAN LAS PHX TUS DEN ABQ ELP MCI AUS SAT HOU MDW STL BNA BW I HNL OGG STS MRY FAT SAN SJD PVR Departures per Week 648 Seat-Departures per Week 88,851 Number of Destinations 19 Share of Point of Sale SAN O&D Passengers 41% Departures per Week 137 Seat-Departures per Week 18,611 Number of Destinations 9 Share of Point of Sale SAN O&D Passengers 6% Source: OAG Schedules for June 2012; US DOT O&D Domestic Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

48 Docket OST Exhibit WN-R-304 Southwest Would Offer 11% More Seats Per Flight Than Alaska Seats per Departure % Southwest B Alaska B Source: Carrier Applications.

49 Docket OST Exhibit WN-R-305 Southwest Would Carry Nearly 11,000 More Annual Passengers than Alaska Annual Onboard Passengers Assuming 85% Load Factor 120, , , ,946 95,470 80,000 60,000 40,000 20,000 0 Southwest B Alaska B Note: Includes fared and non-fared passengers. Assumes a 98% completion factor. Source: Carrier Applications. Assumes an 85% load factor for both carriers.

50 AUS-DCA Yields Are Significantly Higher Than PDX and SAN Yields Docket OST Exhibit WN-R-306 Page 1 of 2 Market Yield per RPM YE Q AUS 15.0 SAN PDX Yield Curve for DCA Beyond Perimeter Markets 1 y = 10,244x Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

51 Percentage Market Yield Above DCA Market Yield Curve 14% AUS-DCA Yields Are Significantly Higher Than PDX and SAN Yields Docket OST Exhibit WN-R-306 Page 2 of 2 12% 11% 10% 8% 6% 4% 4% 2% 2% 0% AUS PDX SAN Current DCA Yield Market Yield Curve Yield Note: Regression curve shown on page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

52 Docket OST Exhibit WN-R-307 Using Actual Alaska Yields at DCA Its Fares for DCA-PDX Would Be Higher Than the Current Market Average Average Fare $300 $265 +5% $277 $250 $200 $150 $100 DCA-PDX Local Fare Savings with Alaska =$0 $50 $0 Current DCA-PDX DCA-PDX at Current AS Actual DCA Yield 1 1/ See Exhibit WN-R-309 for calculation of AS current yield for LAX and SEA to/from DCA. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

53 Docket OST Exhibit WN-R-308 Alaska s Fares for DCA-SAN Would Be 4% Higher than the Current Market Average And 37% Higher Than Southwest s Fare Average Fare $300 $258 +4% $269 $ % $200 $196 $150 $100 DCA-SAN Local Fare Savings with Alaska =$0 $50 $0 Current DCA-SAN (All Carriers) DCA-SAN at Current AS Actual DCA Yield 1 WN Proposed DCA-SAN Fare 2 1/ See Exhibit WN-R-309 for calculation of AS current yield for LAX and SEA to/from DCA. 2/ From Exhibit WN-122. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

54 Calculation of Actual Alaska Average Yield in Current DCA Nonstop Markets Docket OST Exhibit WN-R-309 AS DCA-SEA and DCA-LAX Actual Source/Basis 1 Fared Passengers 195,987 YE Q from O&D Survey via Diio, LLC. 2 Fared Revenue Including Fees 1 $53,762,971 YE Q and Form 41 Data from O&D Survey via Diio, LLC. 3 Fared RPM s 455,245,747 YE Q from O&D Survey via Diio, LLC. 4 Average Fare Including Fees 1 $274 Line 2 / Line 1 5 Average Yield (cents) 11.8 Line 2 / Line 3 x 100 1/ Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees.

55 US Airways DCA-SAN Average Fare Should Approximate $395 Docket OST Exhibit WN-R US DCA-PHX Yield (Cents) DCA-SAN Nonstop Miles 2, Estimated US DCA-SAN Fare $395 1/ From U.S. DOT, Origin-Destination Passenger Survey, via Diio, LLC. Inc. Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. 2/ Nonstop Miles 3/ Row 1 x Row 2

56 Rebuttal to Virgin America

57 California Will Receive Three New Nonstop Routes from DCA Added By Large Incumbent Carriers Docket OST Exhibit WN-R-401 UA B DCA SFO AA B757 LAX US A320 SAN Weekly Departures Weekly Seat-Departures LAX 7 1,309 From DCA To: SFO SAN 7 1,050 United DCA-SFO American DCA-LAX US Airways DCA-SAN Source: American and United Announcements

58 Docket OST Exhibit WN-R-402 Southwest Would Offer 47% More Seats Per Flight Than Virgin America Seats per Departure % Southwest B Virgin America A319 Source: Carrier Applications.

59 Docket OST Exhibit WN-R-403 Southwest Would Carry 34,000 More Annual Passengers than Virgin America With One Slot Pair Annual Onboard Passengers Assuming 85% Load Factor 120, , , ,053 80,000 72,363 60,000 40,000 20,000 0 Southwest B Virgin America A319 Note: Includes fared and non-fared passengers. Assumes a 98% completion factor. Source: Carrier Applications. Assumes an 85% load factor for both carriers.

60 DCA-AUS Is Under-Served Relative to DCA-SFO Including the Proposals of Southwest and Virgin America Docket OST Exhibit WN-R-404 PDEW per Daily Flight % % Austin With Southwest Proposal SFO With 1 VX Slot SFO With 2 VX Slots Fared O&D Passengers 76, , ,170 Daily Roundtrips including WN and VX Proposals: Source: OAG Schedules for the week of June 11, 2012 and proposals of Southwest and Virgin America and announced United service.

61 DCA-SFO Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-405 Page 1 of 2 Market Yield per RPM YE Q AUS Yield Curve for DCA Beyond Perimeter Markets 1 y = 10,244x SFO Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

62 Percentage Market Yield Above DCA Market Yield Curve 15% DCA-SFO Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-405 Page 2 of 2 11% 10% 5% 0% -5% -10% AUS -9% SFO Current DCA Yield Market Yield Curve Yield Note: Regression curve shown on page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

63 Docket OST Exhibit WN-R-406 Despite a Nonstop Distance Nearly Double that of DCA-AUS, the Current DCA-SFO Fare is 12% Lower than the DCA-AUS Fare Average Fare $300 $265 $250 12% $233 $200 $150 $100 $50 $0 DCA-AUS DCA-SFO Distance (Miles) 1,315 2,442 Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

64 Virgin America Had No Effect on United s Fares Or Passenger Volume After It Entered the IAD-SFO Nonstop Market Docket OST Exhibit WN-R-407 United IAD-SFO Fare Before And After VX Nonstop United IAD-SFO Fared Passengers Before And After VX Nonstop $ ,000 $425 $400 $375 $350 $325 $300 $275 $250 $225 $383 $ % Over 15 Mos. 380, , , , , , , , , , , , % Over 15 Mos. $ ,000 $175 $150 $125 $100 $75 $50 $25 160, , , ,000 80,000 60,000 40,000 20,000 $0 Last Full Year For VX Nonstop (YE Q2 2007) First Full Year With VX Nonstop (YE Q3 2008) 0 Last Full Year For VX Nonstop (YE Q2 2007) First Full Year With VX Nonstop (YE Q3 2008) Note: Fared passengers only. Excludes all taxes and government charges. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

65 Docket OST Exhibit WN-R-408 Virgin America Had Virtually No Effect on United s Fares Or Passenger Volume After It Entered the IAD-LAX Nonstop Market United IAD-LAX Fare Before And After VX Nonstop United IAD-LAX Fared Passengers Before And After VX Nonstop $300 $275 $292 $ , , , , ,473 $ , ,000 $ ,000 $200 $175 $ % Over 15 Mos. 280, , , , , % Over 15 Mos. $ , ,000 $ , ,000 $75 100,000 $50 80,000 60,000 $25 40,000 20,000 $0 Last Full Year For VX Nonstop (YE Q3 2007) First Full Year With VX Nonstop (YE Q4 2008) 0 Last Full Year For VX Nonstop (YE Q3 2007) First Full Year With VX Nonstop (YE Q4 2008) Note: Fared passengers only. Excludes all taxes and government charges. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

66 Virgin America s Fares for IAD-SFO Are $10 More than the Market Average for DCA-SFO Negating Any Fare Stimulation From DCA-SFO Service Docket OST Exhibit WN-R-409 Average Fare $300 $250 $243 $233 $200 $150 $100 $50 $0 VX IAD-SFO DCA-SFO-All Carriers Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

67 Rebuttal to Frontier

68 Docket OST Exhibit WN-R-501 There Are Already 16 Daily Nonstops Between DCA/IAD and COS/DEN UA DEN WN IAD COS UA UA F9 DCA Airline Origin Destination Daily Departures Daily Seat- Departures Frontier Denver DCA Southwest Denver IAD United Colorado Springs IAD 1 66 United Denver DCA United Denver IAD 9 1,348 Total 16 2,284

69 On a Size-Adjusted Basis Frontier Has Eight Times As Many DCA Slots As Southwest Docket OST Exhibit WN-R-502 DCA Slots per 100,000 Daily Domestic O&D Passengers Southwest Frontier Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated and OAG schedules June 2012.

70 Docket OST Exhibit WN-R-503 The AUS-DCA Market Is Over 160% Larger than the DCA-COS Market Fared DCA O&D Passengers (YE Q3 2011) 90,000 80,000 76,995 70,000 60, % 50,000 40,000 30,000 29,435 20,000 10,000 0 DCA-AUS DCA-COS Note: Fared passengers only. Source: US DOT O&D Survey YE Q3 2011; US DOT Form 41, via Diio, LLC.

71 Southwest s Network at AUS is Over 9 Times Larger Than Frontier s at COS Docket OST Exhibit WN-R-503A Southwest AUS Nonstop Service Frontier COS Nonstop Service SEA PDX OAK DEN MDW BW I DEN SJC LAS LAX PHX SAN LBB ELP AUS DAL HOU HRL BNA ATL MCO TPA FLL LAX PHX COS CUN Departures per Week Seat-Departures per Week Number of Destinations , Departures per Week Seat-Departures per Week Number of Destinations 46 5,009 5 Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11 th through the 17 th, 2012.

72 Docket OST Exhibit WN-R-504 Austin s Population is Over 4 Times the Size of Colorado Springs Population 2,000,000 1,800,000 1,771,161 1,600,000 1,400,000 1,200, % 1,000, , , , , ,000 0 Austin Colorado Springs Source: US Census 2010.

73 Current DCA-AUS Yields Are Higher Than DCA-COS Yields Docket OST Exhibit WN-R-505 Page 1 of 2 YE Q Market Yield AUS COS Yield Curve for DCA Beyond Perimeter Markets 1 y = 10,244x Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

74 Percentage Market Yield Above DCA Market Yield Curve Current DCA-AUS Yields Are Higher Than DCA-COS Yields Docket OST Exhibit WN-R-505 Page 2 of 2 13% 11% 11% 9% 7% 5% 5% 3% 1% -1% -3% -5% AUS COS Current DCA Yield Market Yield Curve Yield Note: Regression curve shown in Page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

75 There Are 13 Beyond-Perimeter Markets Without DCA Nonstop Service That Have More Passengers Than COS Docket OST Exhibit WN-R-506 Rank Market DCA Fared PDEW Average Fare Yield (Cents) 1 San Antonio (SAT) 136 $ Portland (PDX) 117 $ Austin (AUS) 105 $ Tucson (TUS) 89 $ Albuquerque (ABQ) 78 $ San Juan (SJU) 70 $ San Jose (SJC) 64 $ Honolulu (HNL) 60 $ Sacramento (SMF) 59 $ El Paso (ELP) 57 $ St. Thomas (STT) 50 $ Ontario (ONT) 50 $ Anchorage (ANC) 48 $ Colorado Springs (COS) 40 $ Excludes applicant markets with nonstop service (SFO and LAS) and YVR is not shown. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

76 Docket OST Exhibit WN-R-507 DCA is Only the 10 th Ranked COS O&D Market Rank Market Dallas (DFW) Las Vegas (LAS) Houston (IAH) Los Angeles (LAX) Washington (IAD) Atlanta (ATL) Orlando (MCO) Chicago (ORD) Salt Lake City (SLC) Washington (DCA) San Antonio (SAT) Phoenix (AZA) Long Beach (LGB) Phoenix (PHX) Tampa (TPA) COS Fared PDEW Source: US DOT O&D Survey, YE Q

77 Denver Has More DCA Flights Than Any Other Beyond-Perimeter Market Docket OST Exhibit WN-R-508 DCA Daily Roundtrips DEN PHX LAX SLC SEA LAS SFO Source: OAG Schedules for the week of June 11 th through the 17 th, 2012

78 Docket OST Exhibit WN-R-509 Southwest Is Over 20 Times Larger Than Frontier at San Diego Southwest Nonstop Service at SAN Frontier Nonstop Service at SAN MDW RNO OAK SMF SJC SFO SAN LAS PHX TUS DEN ABQ ELP MCI AUS SAT HOU STL BNA BW I SAN DEN Departures per Week 648 Seat-Departures per Week 88,851 Number of Destinations 19 Share of Point of Sale SAN O&D Passengers 41% Departures per Week Seat-Departures per Week Number of Destinations Share of Point of Sale SAN O&D Passengers 28 3, % Source: US DOT O&D Survey, YE Q3 2011; OAG Schedules for the week of June 11 th through the 17 th, 2012.

79 Docket OST Exhibit WN-R-510 Frontier s Schedules Do Not Provide Roundtrip Connections to Any of Its Claimed Markets Beyond COS Including Its DEN Hub Los Angeles Phoenix Seattle Portland Denver Westbound Connection Within 3 Hours 1 NO NO NO NO NO Westbound Same Day Over 3 Hours NO NO NO NO NO Eastbound Connection Within 3 Hours 1 NO NO NO NO YES Eastbound Same Day Over 3 Hours NO NO NO NO NO 1/ Used 30 minute minimum connect time, 3 hour maximum connect time. Source: OAG Schedules for the week of June 11 th through the 17 th, 2012 Claimed connecting markets are from Exhibit F9-3.

80 A Selection of Austin Washington DC Links Frontier Provides No Evidence or Analysis to Support Its Claimed Consumer Savings Docket OST Exhibit WN-R-511 Rebuttal to Exhibit F9-4 No supportable traffic forecast is provided. Without analysis Frontier simply assumes an 80% load factor. No details or derivation are provided for the blended O&D average fare, or for the blended forecast average fare. It appears that benefits are erroneously claimed for local COS-SAN O&D passengers (an irrelevant market for this case). It appears that Frontier has double-counted its claimed benefits for DCA- SAN passengers (counted once on the DCA-SAN segment and once more on the SAN-COS segment).

81 Docket OST Exhibit WN-R-512 Because the DCA-COS Market Is So Small Frontier Would Need to Achieve A Traffic Stimulation Rate of At Least 330% to 545% Source/Basis 1 F9 Forecast DCA-COS Onboard Passengers 98,381 Exhibit F9-4 (196,761 Onboard Passengers /2) 2 Maximum F9 DCA-SAN One-Stop Passengers 17,313 WN Projected Unconstrained DCA-SAN Passengers including non-fared passengers. Exhibit WN-202 Line 9 x (adjustment to include non-fared passsengers). WN passengers should exceed F9 passengers because of WN's larger presence at SAN. 3 Other Connections 0 F9 Has No roundtrip connections for its proposed times at COS. 4 Total Remaining for DCA-COS 81,067 Line 1 - Line 2 - Line 3 5 Current DCA-COS O&D Passengers (Including Zero-Fared) 31,443 U.S. DOT, Origin-Destination Passenger Survey, YE Q via Diio, LLC. Required DCA-COS Stimulation Assumed Share Stimulation 6 40% 545% Line 4 / Line 5 / 40% Share 7 50% 416% Line 4 / Line 5 / 50% Share 8 60% 330% Line 4 / Line 5 / 60% Share

82 Rebuttal to Sun Country

83 Docket OST Exhibit WN-R-601 DCA-LAS Already Has Nonstop Service LAS US A320 DCA Weekly Departures Weekly Seats 7 1,050 Source: OAG Schedules for the week of June 11 th through the 17 th, 2012

84 DCA-LAS Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-602 Page 1 of 2 Market Yield per RPM YE Q AUS Yield Curve for DCA Beyond Perimeter Markets 1 y = 10,244x LAS Nonstop Miles 1/ Curve derived from all DCA beyond perimeter markets with 50 or more fared passenger per day each way. Note: Fared passengers only. Excludes all taxes and government charges. Includes estimated checked baggage and rebooking/change fees. Source: U.S. DOT, O&D Survey and Schedule data, YE Q3 2011, via Diio, LLC.

85 DCA-LAS Already Has Low Fares But DCA-AUS Does Not Docket OST Exhibit WN-R-602 Page 2 of 2 Percentage Market Yield Above DCA Market Yield Curve 13% 11% 11% 9% 7% 5% 3% 1% -1% -3% -5% AUS -3% LAS Current DCA Yield Market Yield Curve Yield Note: Regression curve shown on page 1. Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.

86 Docket OST Exhibit WN-R-603 Southwest Would Offer 36% More Seats Per Flight Than Sun Country Seats per Departure % Southwest B Sun Country B Source: Carrier Applications.

87 Docket OST Exhibit WN-R-604 Southwest Would Carry 28,000 More Annual Passengers than Sun Country Annual Onboard Passengers Assuming 85% Load Factor 120, , , ,972 80,000 78,444 60,000 40,000 20,000 0 Southwest B Sun Country B Note: Includes fared and non-fared passengers. Assumes a 98% completion factor. Source: Carrier Applications. Assumes an 85% load factor for both carriers.

88 Docket OST Exhibit WN-R-605 Sun Country Has Significantly More DCA Slots for Its Size Than Southwest DCA Slots per 100,000 Daily Domestic O&D Passengers Southwest Sun Country Source: US DOT O&D Survey YE Q3 2011, via Diio, LLC.; FAA Slot Reports, Current and Future, dated and OAG schedules June 2012.

89 Sun Country s DCA-LAN Traffic is 31% Below Forecast and It Has Had Little Effect on Delta s Fares Docket OST Exhibit WN-R ,000 DCA-LAN Local Passengers 31,390 $250 Delta Average Fare 30,000 25,000-31% 21,740 $200 $188-9% $171 20,000 $150 15,000 $100 10,000 $50 5,000 0 Forecast First Year 1 Actual 2 $0 Q2 + Q Q2 + Q / See corrected Exhibit SY-2, Docket DOT-OST / Q2 and Q3, 2011 traffic in letter from Sun Country to Docket FAA-2012-, January 26, 2012, Attachment A. Two quarters of data annualized by doubling the number from Attachment A. 3/ From Sun Country letter to Docket FAA-2012-, January 26, 2012, Attachment A.

90 Rebuttal to Air Canada

91 Source: U.S. DOT, T-100 Data, via Diio LLC. Air Canada and United Have Attempted IAD-YVR Five Times And Have Failed Every Time Docket OST Exhibit WN-R-701A Historical YVR-IAD Service AC Attempt 1 AC Attempt 2 Air Canada United Average Low Month Period Load Factor Load Factor June 2000-October % 32% June 2002-September % 36% June 2004-September % 49% May 2006-September % 39% June 2008-August % 82% AC Attempt 3 UA Attempt 1 UA Attempt

92 Vancouver is the Only Proposed Market That Does Not Have Service from IAD Docket OST Exhibit WN-R-701 Weekly IAD Roundtrips SFO SAN AUS LAS COS PDX SJU YVR Source: OAG Schedules for the week of June 11 th through the 17 th, 2012

93 Docket OST Exhibit WN-R-702 If YVR Doesn t Work at United s IAD Hub How Would it Work at DCA? United Beyond IAD YVR Weekly Departures Weekly Seat-Departures Destinations 1, , IAD Air Canada Beyond YVR Weekly Departures Weekly Seat-Departures Destinations , Note: United and Air Canada are Star Alliance partners. Source: OAG Schedules for the week of June 11 th through 17 th, 2012

94 The Asia Connecting Markets Proposed By Air Canada Are Well Served By United Docket OST Exhibit WN-703 Nonstop Service Offered From: YVR SFO LAX ORD IAD Hong Kong (HKG) YES YES NO YES NO Seoul (ICN) YES YES NO NO NO Tokyo (NRT) YES YES YES YES YES Beijing (PEK) YES YES NO YES YES Shanghai (PVG) YES YES YES YES NO Sydney (SYD) YES YES YES NO NO Source: OAG Schedules for the week of June 11 th through the 17 th, 2012

95 Docket OST Exhibit WN-R-704 Air Canada Has Significantly More DCA Slots for Its Size Than Southwest DCA Slots per 100,000 Daily U.S. Domestic or Transborder Seats Southwest Air Canada No. of DCA Slots Source: OAG Schedules for the week of June 11 th through 17 th, 2012; FAA Slot Reports, Current and Future, dated and OAG schedules June 2012.

96 Docket OST Exhibit WN-R-705 Southwest Will Offer 46% More Seats Per Flight Than Air Canada Seats per Departure % Southwest B Air Canada A319 Source: Carrier Applications.

97 Docket OST Exhibit WN-R-706 Southwest Would Carry Over 33,000 More Annual Passengers than Air Canada Annual Onboard Passengers Assuming 85% Load Factor 120, , ,000 80, ,445 72,971 60,000 40,000 20,000 0 Southwest B Air Canada A319 Note: Includes fared and non-fared passengers. Assumes a 98% completion factor. Source: Carrier Applications. Assumes an 85% load factor for both carriers.

98 SOUTHWEST AIRLINES CO. Robert W. Kneisley Associate General Counsel 1901 L Street, N.W. Suite 640 Washington, D.C (202) (202) Fax bob.kneisley@wnco.com March 27, 2012 Filed in the Docket Electronically The Honorable Susan Kurland Assistant Secretary for Aviation and International Affairs U.S. Department of Transportation 1200 New Jersey Avenue, SE Washington, DC Re: Application of Southwest Airlines Co. for Beyond-Perimeter Slot Exemptions (DCA-Austin); Docket DOT-OST Dear Ms. Kurland: Please find attached a packet of letters supporting Southwest Airlines Application for two beyond-perimeter slot exemptions for daily, nonstop service between Ronald Reagan Washington National Airport (DCA) and Austin-Bergstrom International Airport (AUS), with single-plane beyond service to San Diego (SAN). These letters come from a diverse array of elected officials and organizations from Austin, the State of Texas, and throughout the United States. Sincerely, Robert W. Kneisley cc: All parties on Southwest s service list

99 Letters Supporting Southwest Airlines Proposed DCA Austin Service The Honorable Kay Bailey Hutchison, United States Senator The Honorable John Cornyn, United States Senator The Honorable Eddie Bernice Johnson, Member of Congress The Honorable Lloyd Doggett, Member of Congress The Honorable Lamar Smith, John Carter and Michael McCaul, Members of Congress The Honorable Daniel Webster, Member of Congress The Honorable Lee Leffingwell, Mayor of Austin The Honorable Kirk Watson, Texas State Senator & Former Mayor of Austin The Honorable Leticia Van de Putte, Texas State Senator The Honorable Robert Rivera, Arlington (Texas) City Council Member Arturo Vargas, Executive Director, National Association of Latino Elected and Appointed Officials David Teel, President and CEO, Texas Travel Industry Association Mary Ann Kellam, Chair, Hispanic Women s Network of Texas Andrew Martinez, President & CEO, Greater Austin Hispanic Chamber of Commerce Gloria Rubio-Cortes, President, National Civic League Dr. Juan Andrade, Jr., President, United States Hispanic Leadership Institute Thomas A. Saenz, President & General Counsel, Mexican American Legal Defense and Education Fund Mickey Ibarra, Founder & Chairman, Latino Leaders Network Frank Alvarez, President & CEO, Hispanic Scholarship Fund Diane Tomb, President & CEO, National Association of Women Business Owners Dr. E. Faye Williams, National Chair, National Congress of Black Women Dr. Cathy Gorn, Executive Director, National Historic Day Dr. Loui Olivas, President, American Association of Hispanics in Higher Education Mario Lopez De Leon, Executive Director, National Association of Latino Arts and Culture Rick Leal, President, Hispanic Medal of Honor Society Kenneth D. Bynum, Chairman, Northern Virginia Urban League

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106 Mayor Lee Leffingwell 301 Willie Nelson Boulevard, Austin, Texas Office (512) Fax (512) March 12, 2012 Honorable Ray LaHood Secretary U.S. Department of Transportation 400 Seventh Street SW Washington, DC Dear Mr. Secretary: I am writing in strong support for the award of slot exemptions (Docket No. OST ) for Southwest Airlines to provide service between Washington Reagan National Airport and Austin-Bergstrom International Airport (ABIA). As Mayor of the Capital City of Texas and on behalf of the citizens I represent, I urge you to consider the following as you make this important decision. The citizens of Austin have worked hard for and supported service additions by new carriers, particularly Southwest, the largest carrier at ABIA. The community recognizes the economic and social benefits of strong low cost service and actively supports competition. You can be assured that awarding this exemption to Austin will be successful and create long term public benefits. The City of Austin is the owner and operator of ABIA which has enjoyed 25 consecutive months of passenger growth and which set another passenger record in ABIA is the third largest airport in Texas (after DFW and Houston IAH) and serves 5.1 million Texans residing within 100 miles of ABIA. Nonstop service between the capital of Texas and the capital of the U. S. is long overdue. Austin has important commercial and governmental links with Washington, D.C. Twenty-nine Austin companies are headquartered in the D.C. area and Austin is home to a dozen national associations. In addition to the natural linkages between the capital of the third largest state and the U. S. capital, Austin s high tech industry provides IT services to a variety of federal agencies. The growing local economy in Austin relies on quality air service to foster business, government and leisure travel. The City of Austin is committed to compliance with the Americans with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request

107 Award of these slots to Austin would be in support of the key criteria outlined in the order establishing the process for making this award. These slots will greatly enhance service to ABIA. New Southwest service will greatly improve competition in this market and produce public benefits of lower fares. In addition, these slots will result in increased capacity and greatly improve service options at ABIA for both business and leisure carriers. Again, I would appreciate your careful and favorable consideration to the Southwest petition and award the slot exemptions necessary to allow nonstop service from Austin to Washington Reagan National Airport. Sincerely, Lee Leffingwell Mayor The City of Austin is committed to compliance with the Americans with Disabilities Act. Reasonable modifications and equal access to communications will be provided upon request

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115 Promotes the advancement of Hispanic women in Public, Corporate and Civic Life through Education and Professional Development Board of Directors Mary Ann Kellam Dallas, Texas State Chair Dr. Mary Jane Garza Corpus Christi, Texas State Chair-Elect Dora Trinidad-Campos San Antonio, Texas State Vice Chair of Membership Maricela Martinez Dallas, Texas Mary Ann Kellam State Secretary HWNT State Chair (214) Marti Cascio Austin, Texas State Treasurer Helen Cedillo San Antonio, Texas State Parliamentarian Eva Bonilla Fort Worth, Texas State Education Chair Rita Rodriguez-Utt Fort Worth, Texas Immediate Past State Chair State Office Staff Lupe Morin Executive Director Gloria Ann Garcia Administrative Assistant Patricia Duran Webmaster Mailing Address P.O. Box 327 Austin, TX o/f (512) March 15, 2012 The Honorable Ray LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the Hispanic Women s Network of Texas (HWNT), I am writing in strong support of Southwest Airlines (Southwest s) application for two beyond-perimeter slot exemptions (or one roundtrip flight) at Ronald Reagan Washington National Airport (DCA). With the authorization to fly beyond DCA s 1250-mile perimeter, Southwest proposes to operate the first-ever daily nonstop flight between Austin-Bergstrom International Airport (ABIA) and DCA. Such a capital-to-capital flight would be a huge success and merits the Department of Transportation s favorable consideration. The Austin area is one of the most vibrant, dynamic and economically and culturally diverse communities in the country. The Austin area is home to dozens of major corporate and nonprofit headquarters and features one of the world s largest high-tech centers. Austin is also emerging as a center for pharmaceutical and biotechnology companies. Other major employers include the public sector, including the City of Austin, the State of Texas and the U.S. Government. With approximately 5 million people residing within driving distance of ABIA, greater Austin is also one of the largest communities without existing nonstop service to DCA. As evidenced by the hundreds of travelers who fly between ABIA and DCA on an average daily basis on connecting itineraries, there is clearly strong demand for a daily nonstop flight connecting these two capital cities. Furthermore, with Southwest s projected lower fares for nonstop ABIA-DCA travel, new consumer demand would be created on top of the existing demand by business and leisure travelers, all of which will benefit the local economy. In its application, Southwest proposes serving the Austin-DCA route with its new Boeing aircraft. This plane would be the largest in Southwest s fleet (175 seats), resulting in significant economic and competitive benefits to both ABIA and DCA travelers. Moreover, with dozens of daily nonstop flights at ABIA, Southwest s proposed Austin-DCA flight would provide benefits to travelers in other markets through convenient one-stop and connecting opportunities from ABIA. Based on these reasons, I respectfully ask for the Department of Transportation s careful and favorable consideration of Southwest s application for nonstop service between Austin and DCA. Thank you for your attention to this important matter. Sincerely, Website Mary Ann Kellam HWNT State Chair (214) chair@hwnt.org

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118 OFFICERS Hon. Sandra Freedman, Chair Elizabeth Hollander, Vice Chair Jack Van Sambeek, Treasurer Charles Ozaki, Secretary Gloria Rubio-Cortes, President DIRECTORS Christine Benero Hon. Michael Burke James A. Cloar Dr. Jarvis Hall Suzanne Hildick John Klimm Hon. Sharon Metz Terrence Terry Minger Hon. Bev Perry Mark Pisano Hon. David M. Sander Dr. Lyle Wray FORMER BOARD CHAIRS Robert Rawson, Jr. ( 04-07) Dorothy S. Ridings ( ) Hon. R. Scott Fosler ( 98-00) Hon. Bill Bradley ( 96-98) Hon. John Gardner ( 94-96) Hon. George Latimer ( 93) Hon. Henry G. Cisneros ( 89-92) Hon. William F. Winter ( 88-89, 93) Terrell Blodgett ( 87-88) James L. Hetland, Jr. ( 82-86) Hon. William W. Scranton ( 70-73) NATIONAL CIVIC LEAGUE National Headquarters 1889 York Street Denver, CO Tel.: (303) FAX: (888) ncl@ncl.org The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the National Civic League, I write to voice my strong support for Southwest Airlines (Southwest s) application for daily nonstop service between Washington National Airport (DCA) and the City of Austin. Because of the lack of effective low-fare competition, DCA travelers have endured inadequate travel options and high average ticket prices for years. With Southwest s 40-year history of providing low-fare completion and with a nationwide route map that is second-to-none among low-cost airlines, Southwest is in the best position to bring competitive benefits to DCA. Moreover, as the nation s largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin. This would include several cities with few travel options to DCA today and which would benefit from one-stop or connecting opportunities via Austin. Finally, Southwest proposes serving the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the with 175 seats). Large plane service will ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. For these reasons, I respectfully ask for the Department of Transportation s approval of Southwest s application in the above-referenced proceeding. Sincerely, Gloria Rubio-Cortes President, National Civic League Home of the All-America City Award

119 March 19, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Dear Secretary LaHood: Re: Docket DOT-OST As President of the United States Hispanic Leadership Institute (USHLI), a Chicago-based national nonprofit organization with an executive office in Washington, DC, I am writing to respectfully convey my strong support for Southwest Airlines and its application for daily nonstop service between Washington Reagan National Airport (DCA) and Austin, TX. As a member of a coalition of 30 national and regional policy advocacy organizations representing the Latino community and serving most of its 50 million people, USHLI members utilize DCA frequently in meeting our travel needs. And, as part of a 16-member association of national organizations that focus on corporate responsibility, USHLI and several other association members also frequently utilize DCA. Because of the lack of effective low-fare competition, DCA travelers including USHLI have endured inadequate travel options and high average ticket prices for years. Southwest Airlines has a distinguished 40-year history of providing low-fare competition and the highest quality in customer service with a nationwide route map that is second-to-none among lowcost airlines, Southwest is in the best position to bring competitive benefits to DCA. Moreover, as the nation s largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin. This would include several cities with few travel options to DCA today and which would benefit from one-stop or connecting opportunities via Austin. Finally, Southwest proposes serving the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the series with 175 seats). Large plane service will ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. For these reasons, I respectfully urge the Department of Transportation to approval the application submitted by Southwest Airlines in the above-referenced proceeding. Sincerely, Dr. Juan Andrade, Jr President 431 S. Dearborn St. Suite 1203 Chicago, IL Phone Fax

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122 March 19, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, I write on behalf of the Hispanic Scholarship Fund, to voice support for Southwest Airlines (Southwest s) application for daily nonstop service between Washington National Airport (DCA) and the City of Austin. As a Washington, DC, chartered nonprofit, we spend a good deal of time in Texas, where we have awarded $72,129,601 to deserving students, the majority of whom are first in their family to complete college. Because of the lack of effective low-fare competition, DCA travelers to Austin, like ourselves, have endured inadequate travel options and high average ticket prices for years. Southwest, throughout its 40-year history of second-to-none low-cost and high quality service, has proven to bring competitive benefits to cities across the nation. HSF is proud to have their support in our mission to strengthen our country through Generation First Degree, a national campaign to place a college degree in every Latino Household. Moreover, as the nation s largest domestic airline, Southwest is well positioned to bring competitive benefits to markets beyond DCA-Austin. This would include cities with few travel options to DCA. Southwest proposal to serve DCA-Austin with same-plane continuing service to/from San Diego would greatly shorten travel time and increase our effectiveness and it is for these reasons we request Department of Transportation approval of Southwest s application in the above-referenced proceeding. Sincerely, Frank D. Alvarez President & CEO Hispanic Scholarship Fund

123 March 20, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the National Association of Women Business Owners (NAWBO ), I am writing to express my support for Southwest Airlines (Southwest s) application for daily nonstop service between Washington National Airport (DCA) and the City of Austin, Texas. With our recent relocation to Washington, DC, NAWBO staff and members utilize DCA more than ever for their business travel needs. As you know, the lack of effective low-fare competition has resulted in DCA travelers enduring inadequate travel options and high average ticket prices for years. Southwest s 40-year history of providing low-fare completion coupled with a nationwide route map that is second-to-none among low-cost airlines, ideally positions them to bring competitive benefits to DCA. Additionally, Southwest s proposal to serve the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the with 175 seats) would ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. I respectfully ask for the Department of Transportation s approval of Southwest s application in the above-referenced proceeding. Sincerely, Diane Tomb President & CEO

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126 March 20, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the American Association of Hispanics in Higher Education (AAHHE), I write to voice my strong support for Southwest Airlines (Southwest s) application for daily nonstop service between Washington National Airport (DCA) and the City of Austin. As an organization based in Washington, DC, our members utilize DCA frequently in meeting our travel needs. Because of the lack of effective low-fare competition, DCA travelers have endured inadequate travel options and high average ticket prices for years. With Southwest s 40-year history of providing low-fare completion and with a nationwide route map that is second-to-none among low-cost airlines, Southwest is in the best position to bring competitive benefits to DCA. Moreover, as the nation s largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin. This would include several cities with few travel options to DCA today and which would benefit from one-stop or connecting opportunities via Austin. Having additional flight destination options, especially direct routs greatly benefits consumers. Finally, Southwest proposes serving the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the with 175 seats). Large plane service will ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. In summary, maximizing passenger load via direct destinations is a value added service to custmomers. For these reasons, I respectfully ask for the Department of Transportation s approval of Southwest s application in the above-referenced proceeding. Sincerely, Dr. Loui Olivas President AAHHE olivas@asu.edu

127 Hispanic Medal Of Honor Society 2099 Market Street San Francisco,Ca T~I. (415) March 22, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the Hispanic Medal of Honor Society, I am writing in strong support for Southwest Airlines (Southwest's) in their desire to offer daily nonstop service between Washington National Airport (DCA) and the City of Austin, Texas. As an organization based in California, our Society and associates usually fly Southwest. It is a smooth-running, dependable, very comfortable airline, quite popular with Californians. As you are probably aware, 50% of the nation's Hispanics live in California and Texas, making considerable use of travel between the two states. Within our nation, air flight has become increasingly the transportation of choice. Southwest's f!exibility, low rates, and organizational strategies and methods for providing their excellent service, should be recognized and rew,arded by approving their flight expansion. Within my experience, I have found Southwest's history of providing lowfares and a nationwide route map second-to-none among low-cost airlines. As the nation's largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin connections. It would surely facilitate flights to DCA and would provide the greatest public benefit.

128 For these reasons, I respectfully ask for the Department of Transportation'!: approval of Southwest's application in the above-referenced proceeding. Sincerel

129 March 19, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of the National Association of Latino Arts and Cultures (NALAC), I write to voice my strong support for Southwest Airlines (Southwest s) application for daily nonstop service between Washington National Airport (DCA) and the City of Austin. As a national organization with members in Washington, DC and Austin, we travel frequently to DCA. Due to the lack of effective low-fare competition, DCA travelers have endured inadequate travel options and high average ticket prices for years. The National Association of Latino Arts and Cultures recognizes Southwest s 40-year history of providing low-fare competition and with a nationwide route map that is second-to-none among low-cost airlines, Southwest is in the best position to bring competitive benefits to DCA. Moreover, as the nation s largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin. This would include several cities with few travel options to DCA today and which would benefit from one-stop or connecting opportunities via Austin. This expanded travel access is particularly important to NALAC s work of sustaining the creative and cultural needs of our nation. Finally, Southwest proposes serving the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the with 175 seats). Large plane service will ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. For these reasons, I respectfully ask for the Department of Transportation s approval of Southwest s application in the above-referenced proceeding. Sincerely, Maria Lopez De Leon Executive Director

130 1315 Duke Street Alexandria, VA /phone /fax - CFC #49537 Board of Directors Kenneth D. Bynum, Chair Bynum & Jenkins, PLLC Keith E. Taylor, Vice Chair 2 nd Wave, LLC Ryan Myers, Treasurer Pretlow Myers Financial Group Chasiti Dawson, Secretary The Adellsen Group Steven Baker Metropolitan Washington Airports Authority Marion Barnwell Retired Military Huey Battle Washington Gas Darrell L. Crapps SENTEL John Fountaine, Ph.D. Fountaine Consultants W. James Green Northrop Grumman Ronald K. Hobson Virginia Commerce Bank Tyron L. Johnson Xerox, Retired Executive Herb Long, III Capstone Risk Management, LLC Michael E. Melton MEM Enterprises Angela Moody EDJ Associates, Inc. Gerald Padmore Young Professionals Network Gregory Pickett First Citizens Bank James A. Simms Frito-Lay, Inc. Richard Simpkins NOVAUL Guild Alotta E. Taylor NASA Headquarters Danyelle Taylor Lockheed Martin Rudolph Tota Cox Business Legal Counsel Daryle Jordon Patrick Henry LLP March 22, 2012 The Honorable Raymond H. LaHood Secretary of Transportation U.S. Department of Transportation 1200 New Jersey Avenue, S.E. Washington, DC Re: Docket DOT-OST Dear Secretary LaHood, On behalf of The Northern Virginia League, I write to voice our strong support for Southwest Airlines (Southwest s) application for daily nonstop service between Reagan National Airport (DCA) and the City of Austin. As an organization based five miles from DCA, our members utilize DCA frequently in meeting our travel needs. Because of the lack of effective low-fare competition, DCA travelers have endured inadequate travel options and high average ticket prices for years. With Southwest s 40-year history of providing low-fare completion and with a nationwide route map that is second-to-none among low-cost airlines, Southwest is in the best position to bring competitive benefits to DCA. Moreover, as the nation s largest domestic airline, Southwest would bring competitive benefits to markets beyond DCA-Austin. This would include several cities with few travel options to DCA today and which would benefit from one-stop or connecting opportunities via Austin. Finally, Southwest proposes serving the DCA-Austin market as well as same-plane, continuing service to/from San Diego with large Boeing aircraft (i.e., the with 175 seats). Large plane service will ensure that DCA s limited slot authorizations are used in a manner that serves the greatest public benefit. As a non-profit organization we fully support Southwest for it s efforts to make travel affordable in these uncertain economic times. For these reasons, I respectfully ask for the Department of Transportation s approval of Southwest s application in the above-referenced proceeding. Sincerely, Kenneth D. Bynum Kenneth D. Bynum, Esquire Chairman, Board of Directors