APPLICATION OF ABC AEROLÍNEAS, S.A. DE C.V., D/B/A INTERJET JOHN F. KENNEDY INTERNATIONAL AIRPORT

Transcription

1 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of DELTA AIR LINES, INC. and AEROVIAS DE MEXICO, S.A. DE C.V. under 49 U.S.C and for approval of and antitrust immunity for alliance agreements Docket No. DOT-OST APPLICATION OF ABC AEROLÍNEAS, S.A. DE C.V., D/B/A INTERJET FOR SLOT ALLOCATION AT JOHN F. KENNEDY INTERNATIONAL AIRPORT Communications with respect to this document should be sent to: Moffett B. Roller Charles M. Greene ROLLER & BAUER, PLLC Washington Dulles International Airport Aviation Drive; Suite 200 Dulles, VA Phone: (202) Fax: (202) Attorneys for ABC Aerolíneas, S.A. de C.V., d/b/a Interjet January 23, 2017

2 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of DELTA AIR LINES, INC. and AEROVIAS DE MEXICO, S.A. DE C.V. under 49 U.S.C and for approval of and antitrust immunity for alliance agreements Docket No. DOT-OST APPLICATION OF ABC AEROLÍNEAS, S.A. DE C.V., D/B/A INTERJET FOR SLOT ALLOCATION AT JOHN F. KENNEDY INTERNATIONAL AIRPORT Pursuant to DOT Order , ABC Aerolíneas, S.A. de C.V., d/b/a Interjet, hereby submits a request for a slot-pair to be awarded at John F. Kennedy International Airport (JFK) during Phase One of the Slot Assignment Phase of the Delta-Aeromexico ATI Proceeding. Interjet specifically requests a slot-pair to accommodate a daily 4:25 pm arrival at JFK from Mexico City International Airport (MEX) and a 5:40 pm daily departure from JFK to MEX, effective for the IATA 2017 Summer Season. 1 In the alternative, Interjet applies for a Phase One slot-pair with a JFK arrival from MEX at 9:00 pm and a departure at 10:15 Further, in the event that Interjet does not receive a JFK slot-pair in Phase One, Interjet renews the foregoing request for one of the two slot-pairs to be contingently awarded in Phase Two for Summer Season 2018 namely, a primary request for a slotpair with daily arrival and departure times at 4:25pm and 5:40 pm and a request in the 1 All times in this Application are local to JFK or MEX.

3 Page 2 alternative for a slot-pair with daily arrival and departure times of 9:00 pm and 10:15 p.m. Interjet s proposed service will provide a cost-effective alternative to the Joint Applicant s services. It will serve the scheduling needs of both business and discretionary travelers and provide competition to restrain the extensive market power that the Joint Applicants will exercise in the JFK-MEX market. Passengers originating at JFK will also have the option of connecting at MEX for travel on Interjet s services to cities throughout Mexico, and passengers originating at these Mexican points will be able to connect through MEX to New York. I. Background Interjet initiated service on its JFK-MEX route on August 2, 2012, at prices that were significantly lower than those of its competitors, and Interjet has provided reliable JFK-MEX service at competitive rates ever since. 2 Unfortunately, Interjet s efforts to obtain slots at JFK at times that would be most convenient for passengers travelling between JFK and MEX have not been successful. Most recently, on January 3, 2017, Interjet requested slots at JFK to accommodate an arrival from MEX at 4:25 p.m. and a 5:40 p.m. departure from JFK. The FAA responded later the same day that it was unable to accommodate the request and added as supplemental information that runway slots are not available from 1600 to 0229 UTC at JFK, [noon to 22:29 EDT]

4 Page 3 Due to Interjet s inability to obtain JFK slots at the most competitive times, Interjet has only been able to offer flights at off-peak hours. These off-peak flights are far less convenient for both business and discretionary passengers forcing them to choose between Interjet s flights or flights at more convenient times from Interjet s competitors. In order to benefit from Interjet s current JFK-MEX service, U.S.-originating passengers must either depart JFK at 12:50 a.m. and fly overnight to arrive at MEX at 4:00 a.m. or else they must get up very early to arrive at JFK with sufficient time to depart on the Interjet flight that departs at 7:10 a.m. In the other direction, at least one of Interjet s two northbound MEX flights also has less than ideal times since it also operates overnight, just like one of Interjet s JFK to MEX flights. The northbound overnight flight departs from MEX at 12:20 a.m. and arrives at JFK at 6:10 a.m. The limited availability of JFK slots has placed Interjet at a disadvantage to Delta and Aeromexico in competing for passengers on the JFK-MEX route. Interjet is therefore seeking a slot-pair in Phase One that would accommodates an arrival at JFK at 4:25 p.m. after departing MEX at 10:35 a.m., and a JFK departure at 5:40 p.m., with an arrival at MEX at 9:50 p.m. These Interjet flights would compete most directly with Aeromexico s northbound Flight 402 that departs MEX at 9:26 a.m. and arrives at JFK at 3:30 p.m. and its Flight 403 that departs JFK at 5:00 p.m. and arrives at MEX at 9:47 p.m. If the FAA is unable award Interjet slots at these times, Interjet seeks, in the alternative, a slot-pair in Phase One that would accommodates an arrival at JFK at 9:00

5 Page 4 p.m. after departing, MEX at 2:10 p.m., and a JFK departure at 10:15 p.m., with an arrival at MEX at 1:25 a.m. the following day. The northbound flight of this slot-pair would compete most directly with Delta s northbound Flight 0948 that departs MEX at 3:00 p.m. The southbound flight that would depart JFK at 10:15 p.m. would fill a gap in the times for departures for JFK to MEX. Interjet s proposed southbound departure at 10:15 falls between what is currently the last daily departure from JFK for MEX, Aeromexico Flight 403 at 5:00 p.m., and the first southbound flight the next day, Aeromexico Flight 401 at 12:45 a.m. The traveling public would immediately benefit from Interjet s service at these times. Interjet s new service would act as a deterrent to supracompetitive airfares for flights that operate during periods that are highly slot-restricted. II. Interjet s Transborder Service A. Past and Current Interjet operates a US-Mexico transborder network that has grown steadily since Interjet first introduced service to San Antonio from Mexico City in December of Interjet currently operates over 23 daily, roundtrip flights between points in Mexico and nine major cities in the United States, namely, Miami, New York, Orlando-Sanford, San Antonio, Dallas-Fort Worth, Houston, Las Vegas, Los Angeles, and Chicago. Altogether, Interjet serves 53 destinations, of which 37 are in Mexico, nine are in the U.S., and seven are in other countries. The table below chronicles Interjet s growth in the U.S.-Mexico transborder market over the past five years.

6 Page 5 Route Initiation of Operations Route Initiation of Operations MEX-SAT January 12, 2011 GDL-LAX February 18, 2016 MEX-MIA February 23, 2012 MEX-DFW March 3, 2016 MEX-JFK February 8, 2012 MEX-SFB April 21, 2016 MTY-SAT November 11, 2012 GDL-LAS April 28, 2016 MTY-LAS March 14, 2013 CUN-LAX May 19, 2016 GDL-SAT June 12, 2013 CUN-JFK January 9, 2016 MTY-IAH October 23, 2014 MEX-LAX February 10, 2016 CUN-MIA December 18, 2014 MEX-LAS October 11, 2016 MEX-IAH May 14, 2015 MEX-ORD November 17, 2016 As shown above, Interjet significantly expanded its U.S.-Mexico transborder network in From January 9 to November 17, 2016, Interjet added 12 new daily flights on eight new routes plus new Guadalajara-Las Vegas service four times per week. Interjet currently provides nonstop service between the following points in the United States and Mexico: Mexico United States Frequencies Mexico City New York 2 Mexico City Los Angeles 2 Mexico City Las Vegas 1 Mexico City San Antonio 2 (1 on weekends) Mexico City Miami 3 (1-2 weekends) Mexico City Houston 2 Mexico City Dallas 2 Mexico City Chicago 2 Mexico City Orlando-Sanford Sun, Mon, Thurs, Fri Guadalajara Los Angeles 2 Guadalajara Las Vegas Sun, Mon, Thurs, Fri Guadalajara San Antonio Thurs, Sunday Cancun New York 1 Cancun Los Angeles 1 Monterrey Las Vegas Sun, Mon, Thurs, Fri

7 Page 6 Mexico United States Frequencies Monterrey San Antonio 1 Monterrey Houston 1 Total Daily Frequencies 23 (excluding GDL-LAS & GDL-SAN) B. Future Plans Interjet is continuously examining opportunities to introduce new service in the growing transborder market. As a value based carrier, Interjet s business strategy focuses on expanding service to markets in which Interjet s pricing and attractive service makes Interjet very competitive with legacy carriers. In the near future Interjet of course seeks to offer JFK-MEX service not only at competitive prices, but also at times that are more competitive. In the coming months, Interjet is planning to continue the expansion of its service from Mexico City to new U.S. cities. Cities that are candidates for expansion include Atlanta, Boston, Denver, Detroit, Phoenix, Salt Lake City, San Francisco, and Washington, D.C. III. Slots Requested A. Number of Phase One and Phase Two slots requested Interjet requests one slot-pair at JFK to be awarded during Phase One of the slot assignment phases of the Delta-Aeromexico ATI proceeding. In the event Interjet is not awarded a slot-pair that it has requested in Phase One, Interjet makes the same request, in the alternative, for one of the two Phase Two slotpairs to be contingently awarded for the 2018 Summer Season.

8 Page 7 B. Requested slot times (arrivals and departures) Interjet requests an 4:25 p.m. arrival slot and a 5:40 p.m. departure slot, or, in the alternative, a 9:00 p.m. arrival slot and 10:15 p.m. departure in Phase One or, alternatively, in Phase Two. Interjet will use the slot-pair requested to provide service between JFK and MEX. C. Routes intended to be served. Interjet will use the slot-pair requested to provide service between JFK and MEX. Interjet will offer connecting service at MEX to a wide number of Mexican and international points. As an example, Exhibit A provides a representative listing of twelve Mexican-originating flights, as well as one from Bogota, Colombia, that would connect with Interjet s proposed flight to New York. D. Frequency of service, including any variance by season Interjet intends to use the new JFK slot pair for daily, year-round, roundtrip service between JFK and MEX. E. Aircraft to be operated Interjet will operate Airbus 320 aircraft. As Interjet s business model emphasizes both low cost and passenger comfort there are only 150 passenger seats on each aircraft allowing all passengers ample legroom. F. Minimum and maximum ground time for the aircraft The ground time for aircraft at JFK will be from 75 to 100 minutes. G. Proposed service start date Interjet proposes to begin service using the requested slot-pair on April 17, 2017.

9 Page 8 IV. Business Plan for the Proposed Service (including marketing and pricing plans) 1. Current Fleet As of December 2016, Interjet s fleet includes 44 A320 aircraft that serve the US market, including the JFK-MEX route Pricing Plans For the flights at the requested slot times, fares will be the same as those that currently offers on its other flights in the JFK-MEX market. Interjet s fares include numerous benefits and amenitites and provide transparency on ticket restrictions. Marketing: Interjet is currently developing the marketing plan for This plan includes online and offline strategies for both Mexico City and New York. Interjet s online marketing strategy will include: 3 Interjet also operates 22 new Sukhoi Superjet 100 aircraft, primarily in the Mexican domestic market, and three A321 aircraft.

10 Page 9 Website advertising Search campaign marketing Social Media Interjet s 2017 marketing will also include: Ads in Airports Billboards Radio spots Press media (newspapers and magazines) Flyers

11 Page 10 Service Options: Interjet is committed to providing its passengers with the best possible flight experience for the lowest price. The table below itemizes Interjet s various service options by fare category: Liberal Baggage Policy: Interjet is the only U.S. or Mexican airline that allows all passengers to check up to at least two bags that can each weigh up to 25 kilograms (55

12 Page 11 pounds), plus a carry-on bag of up to 10 kilograms (22 pounds), at no additional charge. 4 Complimentary Beverages: Interjet s flights include snacks and both alcoholic and non-alcoholic beverages at no additional charge. Generous Seat Pitch: Interjet recently decided to remove up to 30 seats in each of its A320 aircraft in order to provide more space between seats. The resulting seat pitch of 34 inches allows passengers to travel in comfort. Such generous seat spacing also allows seats to recline with a minimum of inconvenience to passengers in the next row. Subject to applicable safety and veterinary restrictions, Interjet will also allow passengers to bring a small pet carrier on board as carry-on luggage to transport certain breeds of cats and dogs. Complimentary Seat Selection for Optima & Priority Passengers: Interjet allows its Optima and Priority passengers to make seat selection at no additional cost. Optima passengers may choose any seat after the third row, and Priority passengers may choose a seat anywhere on the aircraft. Senior Discount: Passengers who are sixty-five or older receive a 15% discount on purchases for both domestic and international destinations. This discount automatically applies when eligible passengers enter their ages while purchasing tickets on Interjet s website. 4 Interjet s Priority Class allows each passenger to check even more, i.e., up to three bags of 25 kilograms (55 pounds) each, for a total of 75 kilograms (165 pounds) of checked baggage per passenger, plus a carry-on bag of up to 10 kilograms (22 pounds).

13 Page 12 Ticket Transfer Option for a Reasonable Fee: Another unique aspect of Interjet s service is the ability of an Interjet ticket holder to transfer a ticket to another person for a reasonable administrative fee $49.00 USD per flight segment for a regular ticket or $70.00 USD per flight segment for promotional fares, plus taxes. Flexible Reschduling for a Reasonable Fee: Interjet allows passengers to reschedule their flights for only $58 up to twenty-four hours before departure. 5 One Way Fare Structure: Interjet s pricing structure is based on one-way fares. This policy gives Interjet s passengers the freedom of traveling solely in one direction or to take a different return route. No Overbooking: Interjet does not overbook. This policy distinguishes Interjet from other Mexican carriers as well as most U.S. carriers. This policy is especially beneficial to passengers during peak travel periods. Frequent Flier Program: Interjet has an exceptional frequent-flyer program. Interjet s program provides its members with credits in dollars (or pesos, as appropriate). These credits can be accumulated and used to pay for all or part of future tickets, including taxes, as well as other ancillary fees on Interjet and are far more flexible than air-miles with their oblique restrictions. Interjet s frequent-flyer program has three tiers: Club Interjet, Club Interjet Premium, and Club Interjet Familiar. Club Interjet is free and gives members access to exclusive sales. Club Interjet Premium costs $25 USD per member, per year, and provides credits that vary from four to fifteen percent of the price of each ticket. 5 Passengers must also pay any difference in fares between the initial and rescheduled flights.

14 Page 13 Club Interjet Familiar is Interjet s frequent-flyer program for families. It works similarly to Interjet Premium, but Club Interjet Familiar provides the option of depositing into a single account the credits awarded based on tickets purchased for multiple family members. Club Interjet Familiar costs $25 per year for the first family member and an annual fee of $12 USD for each additional family member. Jet Book Discount Vouchers: Jet Books, with five, ten, or fifteen vouchers each, can be purchased for roundtrip discounted travel on a specific city-pair. Vouchers are valid for a year. Interjet also allows its Club Interjet Premium and Club Interjet Familiar members to receive a fifteen percent discount on the price of a Jet Book. Marketing: Interjet has partnered with M8, a multinational advertising agency, to handle its marketing to Hispanic travelers in the United States. 6 Since partnering with M8 in 2012 when Interjet was just starting its U.S. operations, Interjet has substantially improved its U.S. market presence. M8 reports that Interjet s market share increased by five percent over two years; that Interjet s cost per transaction decreased by five percent, and that Interjet s return on investment improved by 92%. 7 V. Projected Passengers Interjet anticipates transporting between approximately 6,500 and 8,750 passengers each month from May to December of 2017 on its rotations that would use the requested slot-pair

15 Page 14 Date Expected Passengers Apr-17 3,247 May-17 7,872 June-17 7,994 July-17 8,757 Aug-17 7,975 Sep-17 6,923 Oct-17 6,532 Nov-17 7,099 Dec-17 8,212 Interjet prepared these estimates using data available from the Mexican Government, 8 Interjet prepared the estimate by adapting the data based on market seasonality, historical traffic in the market, Interjet s market share, projected growth in the market, and Interjet s expertise and experience. VI. Plans to obtain the necessary access to gates and facilities at the relevant airports to support service using any slots awarded Interjet has access to the gates and other ground facilities at both JFK and MEX as may be necessary to accommodate a daily arrival and departure at JFK at the times that Interjet has requested. Interjet also has slots at MEX at the times necessary to allow Interjet s northbound and southbound flights to arrive and depart JFK at the requested slot times. Interjet operates at Terminal 7, the British Airways terminal at JFK, and Interjet is attaching as Exhibit B an from the Manager, Properties, Americas, for British 8

16 Page 15 Airways, that states that Terminal 7 will be able to accommodate arrivals and departures at the primary and alternate slot times that Interjet has requested. 9 CONCLUSION For the foregoing reasons, Interjet requests a slot-pair at JFK in Phase One to accommodate an arrival at JFK at 4:25 p.m. and departure from JFK at 5:40 p.m., or, in the alternative, a slot-pair that would accommodate an arrival at JFK at 9:00 p.m. and a departure at 10:15 p.m. If Interjet does not receive either the primary or alternate slotpairs that it has requested in Phase One, it renews the same request for a slot-pair in Phase Two. Respectfully submitted, Roller & Bauer, PLLC Attorneys for ABC Aerolíneas, S.A. de C.V., d/b/a Interjet By: Moffett B. Roller Charles M. Greene January 23, Exhibit B.

17 CERTIFICATE OF SERVICE I hereby certify that a copy of this Application of ABC Aerolíneas, S.A. de C.V., d/b/a Interjet, for Slot Allocation was this day served by upon the parties listed below. No indication has been received that any transmission by electronic mail failed. January 23, 2017 Air Carrier Name Address Moffett B. Roller Aeromexico Robert Cohn robert.cohn@hoganlovells.com Aeromexico Patrick Rizzi patrick.rizzi@hoganlovells.com Alaska Airlines David Heffernan dheffernan@cozen.com Alaska Airlines Jeremy Ross jeremy.ross@alaskaair.com American Howard Kass howard.kass@aa.com American Robert Wirick robert.wirick@aa.com Delta Chris Walker chris.walker@delta.com Delta Alex Krulic alex.krulic@delta.com Frontier Mark Atwood matwood@cozen.com Frontier Steve Lachter slachter@cozen.com Hawaiian Jonathan Hill jhill@cooley.com Hawaiian Parker Erkmann perkmann@cooley.com JetBlue Robert Land robert.land@jetblue.com JetBlue Evelyn Sahr esahr@eckertseamans.com JetBlue Drew Derco dderco@eckertseamans.com Southwest Bob Kneisley bob.kneisley@wnco.com Southwest/AirTran Leslie Abbott leslie.abbott@wnco.com Spirit Airlines David Kirstein dkirstein@yklaw.com Spirit Airlines Joanne Young jyoung@yklaw.com Sun Country John Frederick john.fredericksen@suncountry.com Sun Country Thomas Ting thomas.ting@suncountry.com United Dan Weiss dan.weiss@united.com United Thomas Bolling thomas.bolling@united.com United Gerry Murphy gmurphy@crowell.com United Steven Seiden sseiden@crowell.com United Marc Warren mwarren@crowell.com Virgin America John Varley john.varley@virginamerica.com Jenny Rosenberg Susan McDermott jenny.rosenberg@dot.gov susan.mcdermott@dot.gov

18 Todd Homan Peter Irvine Brian Hedberg Robert Finamore Brett Kruger Kristen Davis Joseph Landart Benjamin Taylor Bob Goldner Jeffrey Gaynes Matt Zisman Thomas Engle Paul Brown Info

19 Flt Desg Eff Date Dis Date Freq Dept Arp Dept Time Arvl Arp Arrv Time Subfleet 4O APR APR CUN 21:35 MEX 00:00 4O 320 4O APR APR TIJ 19:05 MEX 00:25 4O 320 4O APR APR GDL 23:30 MEX 00:45 4O 320 4O APR APR GDL 23:30 MEX 00:45 4O 320 4O APR APR MTY 23:30 MEX 01:00 4O 320 4O APR APR MTY 23:30 MEX 01:00 4O 320 4O APR APR TIJ 00:25 MEX 05:45 4O 321 4O APR APR TIJ 00:25 MEX 05:45 4O 321 4O APR APR TIJ 00:25 MEX 05:45 4O 321 4O APR APR GDL 06:10 MEX 07:25 4O 320 4O APR APR ACA 06:30 MEX 07:35 4O SU9 4O APR APR GDL 06:25 MEX 07:40 4O 320 4O APR APR MTY 06:30 MEX 08:00 4O 320 4O APR APR GDL 07:00 MEX 08:15 4O 320 4O APR APR MID 06:25 MEX 08:25 4O 320 4O APR APR CUN 06:05 MEX 08:30 4O 321 4O APR APR MTY 07:00 MEX 08:30 4O 320 4O APR APR VSA 07:00 MEX 08:35 4O 320 4O APR APR AGU 07:30 MEX 08:35 4O SU9 4O APR APR TGZ 07:00 MEX 08:40 4O 320 4O APR APR BJX 07:45 MEX 08:45 4O SU9 4O APR APR MTY 07:20 MEX 08:50 4O 320 4O APR APR CUN 06:30 MEX 08:55 4O 320 4O APR APR SLP 07:55 MEX 09:00 4O SU9 4O APR APR CUU 06:00 MEX 09:05 4O SU9 4O APR APR VER 07:55 MEX 09:05 4O 320 4O APR APR VER 07:55 MEX 09:05 4O SU9 4O APR APR ACA 08:00 MEX 09:05 4O SU9 4O APR APR BOG 00:15 MEX 05:00 4O 320

20 From: "Kenneth Deming" To: "M Roller" Cc: "Charles Greene" "Carmen Navarro" "Jose Javier Berrios " "Steven Thody" Sent: Monday, January 23, :37 Subject: RE: Confirmation of T7's ability to handle Interjet arrival/dep times 16:25/17:40 & 21:00/22:15 Moffett, As requested we have reviewed facility availability for the revised timing of ARR: 21:00 / DPT: 22:15 and we can confirm that British Airways / Terminal 7 JFK can accommodate this revised timing, in addition to the ARR 16:25 / DPT 17:40 previously confirmed. Again, please keep us informed of intent so that we protect these slot pairs. Regards, Ken Ken Deming Manager, Properties, Americas British Airways Plc 2 Park Avenue, Suite 1100, New York, NY Tel: Mobile: ken.deming@ba.com

21 Phase Rank Carrier Origin Dest Effective Date Days Operated Departure Time (local time) Arrival Time (local time) Arrival Day Aircraft Type Seats on Aircraft Forecasted PPD Min/Max Ground Time Existing Nonstops in Market RON Required? 1 1 of 4 4O MEX JFK 04/17/ :35 16:25 A / NO 1 1 of 4 4O JFK MEX 04/17/ :40 21:50 A / NO 1 2 of 4 4O MEX JFK 04/17/ :10 21:00 A / NO 1 2 of 4 4O JFK MEX 04/17/ :15 01:25 A / NO 2 3 of 4 4O MEX JFK 04/17/ :35 16:25 A / NO 2 3 of 4 4O JFK MEX 04/17/ :40 21:50 A / NO 2 4 of 4 4O MEX JFK 04/17/ :10 21:00 A / NO 2 4 of 4 4O JFK MEX 04/17/ :15 01:25 A / NO