BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. --------------------------------------------------------------- : 2016 U.S.-Cuba Frequency Allocation Proceeding : Docket DOT-OST-2016-0021 : --------------------------------------------------------------- APPLICATION OF UNITED AIRLINES, INC. Communications with respect to this document should be sent to: Steve Morrissey Vice President-Regulatory & Policy UNITED AIRLINES, INC. 1225 New York Avenue, NW Suite 1100 DCAIZ Washington, DC 20005 (202) 521-4373 steve.morrissey@united.com Daniel A. Weiss Managing Director-International Affairs and Regulatory UNITED AIRLINES, INC. 233 South Wacker Drive 10th Floor HDQIZ Chicago, IL 60606 (872) 825-6828 dan.weiss@united.com March 2, 2016 Thomas Newton Bolling Acting General Counsel Abby L. Bried Associate General Counsel James Conneely Counsel-Regulatory UNITED AIRLINES, INC. 233 South Wacker Drive 11th Floor HDQLD Chicago, IL 60606 (872) 825-8068 (872) 825-7415 (872) 825-8311 thomas.bolling@united.com abby.bried@united.com james.conneely@united.com Marc L. Warren Gerald F. Murphy Steven J. Seiden CROWELL & MORING LLP 1001 Pennsylvania Avenue, NW Washington, DC 20004 (202) 624-2500 mwarren@crowell.com gmurphy@crowell.com sseiden@crowell.com Counsel for United Airlines, Inc.
BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. --------------------------------------------------------------- : 2016 U.S.-Cuba Frequency Allocation Proceeding : Docket DOT-OST-2016-0021 : --------------------------------------------------------------- I. INTRODUCTION APPLICATION OF UNITED AIRLINES, INC. Pursuant to the Department s Order 2016-2-12 instituting this proceeding (the Instituting Order ), United 1 applies pursuant to 49 U.S.C. 40109 and Subpart C of the Department s Rules of Practice, for an exemption from 49 U.S.C. 41101 authorizing United to provide scheduled foreign air transportation of persons, property, and mail, as follows: Year-round daily round-trip service between Newark/New York City and Havana with additional Saturday-only service, utilizing 1.1 daily frequencies (or the equivalent of eight weekly frequencies). Year-round Saturday-only round-trip service between each of Houston, Washington, D.C., and Chicago, and Havana, utilizing individually 0.1 daily frequencies and collectively 0.3 daily frequencies (or the equivalent of three weekly frequencies). United seeks a total allocation of 1.4 daily round-trip (or the equivalent of 11 weekly) U.S.-Cuba round-trip combination frequencies. Exhibit UA-100. United s proposal represents approximately 1.4% of the total daily frequencies available for U.S.-Cuba services and approximately 7.0% of the total frequencies available for service to Havana. This proposal will deliver demonstrable public benefits to a diverse set of markets and communities by: connecting key population centers that are home to many of the largest Cuban American communities in the U.S., allowing families in both nations to reunite; providing increased competition for service 1 Common names are used for airlines.
Application of United Page 2 from the Newark/New York City market the nation s largest metropolitan area and home to the nation s second largest Cuban American community; and connecting travelers from communities nationwide through United s comprehensive route network. Indeed, United s application is already receiving support from elected officials, including Newark Mayor Ras J. Baraka, New Jersey Congressman Donald M. Payne, Jr., Houston Mayor Sylvester Turner, Virginia Senators Mark R. Warner and Tim Kaine, Virginia Governor Terence R. McAuliffe, Illinois Senator Richard J. Durbin, and Chicago Mayor Rahm Emanuel. United s application has also already received the support of the African American Chamber of Commerce of New Jersey. See Attachment 1. United proposes to start its Cuba service on August 15, 2016, or 90 days from the Department s issuance of a final order in this proceeding, whichever occurs later. This standard start-up period is necessary to give United sufficient time to obtain Cuban government approval, establish the infrastructure necessary for its Havana operations, and generate sufficient advanced ticket sales. United asks that its exemption authority be effective for a period of at least two years and that its frequency allocation remain in effect indefinitely, subject to the Department s standard conditions. II. UNITED S PROPOSED U.S.-HAVANA FLIGHTS WILL PROVIDE IMPORTANT PUBLIC BENEFITS, AND UNITED S APPLICATION SHOULD BE GRANTED PROMPTLY United s proposal will provide daily nonstop flights between United s hub at Newark Liberty International Airport and Havana s José Martí International Airport with an additional Newark/New York City-Havana round-trip flight on Saturday, as well as Saturday-only service between Havana and United s hubs at Houston George Bush Intercontinental Airport, Washington Dulles International Airport, and Chicago O Hare International Airport. Notably, United s proposal will:
Application of United Page 3 Provide new competition and consumer choice in the U.S.-Havana market in general, and specifically in the Newark/New York City-Havana market. o Today, consumers are limited to a few major airlines (i.e., American and JetBlue) operating charter service from a handful of U.S. gateways, including JetBlue charters from New York s John F. Kennedy International Airport to Havana. o United s proposal will give consumers in the Newark/New York City metropolitan area the ability to make a new set of important choices between different airports, airlines, flights, itineraries, and other air carrier products and services. Provide daily Havana service to the second largest Cuban American population in the U.S., which resides in the Newark/New York City metropolitan area. o The metropolitan area s Cuban American population is nearly evenly split between the two states, with New Jersey representing just over half (56%). o Nearly 90 thousand Cuban Americans reside in Newark Liberty s catchment area. Provide air service links to Havana through Saturday service at three other important U.S. gateways: Houston, Washington, D.C., and Chicago. o All three gateways Cuban American populations rank among the top 10 in the U.S. o All three gateways can provide behind/beyond connections to Havana from many points across the central, eastern, and western U.S. o Saturday-only service is a proven travel pattern between many of United s global gateways and points across the Caribbean. 2 Provide air service between three of the four largest cities in the U.S. (Newark/New York City, Chicago, and Houston) and Havana. o Chicago and Houston are United s two largest hubs, with Houston serving as United s primary gateway to Latin America. Provide a connection between the U.S. and Cuban capital cities, thus serving what will be a growing and critical diplomatic and governmental travel market. 2 For the most recent year on file, MIDT booking data for travel between the U.S. and the Caribbean shows Saturday demand to be 66% higher than demand for travel on any other day of the week.
Application of United Page 4 Facilitate economic growth that has already been seeded by trade missions and/or private sector activity between United s proposed gateways and Havana. Provide access to Cuba for travelers across the U.S. through United s comprehensive route network, which provides convenient connections from markets of all sizes to United s hub airports. Awarding the requested Newark Liberty/Houston/Washington, D.C./Chicago-Havana frequencies to United will allow it to expeditiously maximize the use of these valuable frequencies to strengthen long-dormant business, family, and cultural ties between the U.S. and Cuba. It will also allow United to provide substantial benefits to the U.S. traveling and shipping public by offering new nonstop U.S.-Cuba service, and is clearly in the public interest. The requested frequencies will further enable United to complement its extensive U.S.-Caribbean service offerings (Exhibits UA-101 and UA-106); enhance its offerings to travelers at Newark/New York City, Houston, Washington, D.C., and Chicago (Exhibits UA-107 to UA- 110); and provide service to Cuba from three of the four largest cities in the U.S. (Newark/New York City, Chicago, and Houston) and four U.S. gateways that rank in the top 10 U.S. metropolitan areas for Cuban American populations. Exhibit UA-114. United s first priority is to offer one daily flight Sunday through Saturday between Newark/New York City and Havana. Next, United seeks the award of three round-trip frequencies to support Saturday-only service to Havana from: Houston, Washington, D.C., and Chicago (in order of preference). United also seeks one additional round-trip frequency for Saturday service between Newark/New York City and Havana, thereby allowing United to provide double-saturday service from the second largest U.S.-Cuba market in the country to complement United s daily service at Newark Liberty. Exhibits UA-116 to UA-127. Should the Department be willing to grant United only a partial award, United asks for one daily flight to
Application of United Page 5 support daily Newark/New York City-Havana service and three Saturday-only round-trip flights between each of Houston, Washington, D.C., and Chicago, and Havana. 3 United s proposed flights will feature United s award-winning service on Boeing B737-800 aircraft from its existing fleet. The B737-800, offering 154 seats (16 First Class, 138 Economy) with a total cargo capacity of 18,540 lbs., 4 has proven to be a customer friendly and efficient aircraft for flights between the U.S. and points in the Caribbean and Latin America. United believes the B737-800 strikes the right balance between anticipated market demand and a reasoned capacity allocation for its planned Cuba operations. Exhibit UA-128. United will offer convenient on-line round-trip connections between top U.S. points such as Baltimore, Boston, Cleveland, Denver, Los Angeles, and San Francisco, and between smaller communities such as Binghamton, Burlington, Dayton, Oklahoma City, and many others throughout the U.S. served via United s hubs at Newark/New York City, Houston, Washington, D.C., and Chicago. 5 Thus, United s proposed flights will provide competitive nonstop and connecting service options and greater convenience for customers in the broader population base and the Cuban American communities in these cities wanting to travel to Havana for business and/or other reasons. 3 United would also be willing to accept back-up authority subject to the usual conditions specified by the Department. 4 See United Cargo, Shipping Guide: Aircraft Specifications, http://www.unitedcargo.com/shipping/productsandshipping.jsp?name=aircraft&type=shipping Guide (last visited Mar. 2, 2016). 5 These connections are based on a summer schedule. Additional details on United s proposed flight schedules, connecting service and operating statistics appear in Exhibits UA-116 to UA-149. While United has provided schedule detail to reflect planned operations in each of the IATA summer and winter seasons and is not planning to make changes during offpeak periods at this time, United anticipates the off-peak period for Cuba travel will occur in the fall (September to November) and in the spring (May).
Application of United Page 6 United has a proven track record for launching new international service in the Caribbean it currently offers 231 weekly flights to 19 points throughout the region (Exhibit UA-101) and continues to expand its Caribbean service options. In recent months, United has successfully expanded its Newark Liberty hub to include nonstop service to/from St. Kitts, Santiago (STI) and St. Lucia; its Houston hub to include nonstop service to/from Providenciales, St. Thomas and Punta Cana; and its Chicago hub to include nonstop service to/from Grand Cayman and St. Lucia. Exhibit UA-106. Awarding United 1.4 daily U.S.-Cuba round-trip frequencies will enable it to inaugurate nonstop service at the cities that boast the second, sixth, eighth, and tenth largest populations of Cuban Americans in the U.S. (Exhibit UA-114), providing robust competition with other U.S. carriers that plan to launch scheduled Cuba operations or are already operating charter service, 6 such as JetBlue between Havana and the Newark/New York City metropolitan area. Exhibit UA-115. United s proposal will also offer nationwide public benefits stemming from new, competitive, nonstop and/or connecting service between each of United s Newark/New York City, Houston, Washington, D.C., and Chicago hubs and Havana. In summary, United s introduction of nonstop service between its four proposed U.S. gateways and Havana will add to its growing Caribbean network; provide nonstop service options for major U.S. population centers; maximize connecting service options for consumers; add competition in the marketplace; and facilitate the development of trade, cultural, and familial ties between four major metropolitan areas and key Cuban American populations in the U.S. 6 United did not operate any U.S.-Cuba charter flights during the period from January 1, 2014 to the present. See Instituting Order at 2. United does, however, have significant experience serving Cuba having operated thousands of charter flights in the years leading up to and including 2013.
Application of United Page 7 A. Newark/New York City United s proposal to serve Newark/New York City, the largest city in the U.S. and the second-largest U.S.-Cuba market (Exhibit UA-114), and to connect this market with United s comprehensive route network, will deliver significant public benefits. United has developed its Newark Liberty hub into a premier global gateway serving the Newark/New York City metropolitan area and linking United s comprehensive North American network on routes through the Caribbean, Europe, Latin America, and beyond. United and its United Express partners operate nearly 380 daily flights out of Newark Liberty, providing 79 daily nonstop flights to 67 international destinations including 37 daily nonstop flights to 33 destinations across Latin America and the Caribbean. Located just 14 miles from Manhattan, Newark Liberty serves in a critical role for the Newark/New York City metropolitan area. Its Cuban American population ranks second nationally behind Miami (Exhibit UA-114), making Newark Liberty a natural fit for scheduled service to Havana. Indeed, the Cuban American population in New Jersey is highly concentrated in the area surrounding Newark Liberty with 85% of the state s Cuban American population living in the five counties surrounding the airport (Exhibit UA-113), and approximately twothirds of the Newark/New York City metropolitan area Cuban American population residing in Newark Liberty s immediate catchment area. Exhibit UA-112. The size of the market and the population surrounding the airport are what compels United to seek daily service, and an additional Saturday flight, at Newark Liberty. United already provides service from Newark Liberty to 19 destinations in the Caribbean, with 19 daily departures. Exhibits UA-102 and UA-107. United s combined summer and winter schedules for its proposed Newark/New York City-Havana service will offer online connections to over 50 U.S. points. Exhibits UA-130 to UA-137. However, United anticipates that nearly
Application of United Page 8 three quarters of the traffic on its Newark Liberty-Havana service will come from the local market given the large population base in the Newark/New York City metropolitan area and the large Cuban American population in the areas surrounding the airport. United, which for more than two decades has offered the Newark/New York City metropolitan area the most flights to the most destinations around the world, is also upgrading the customer experience at Newark Liberty with new, chef-driven restaurants, world-class retail shops, and leading-edge technology. 7 United is also modernizing its check-in facilities and checked baggage screening system, and is in the process of building a new catering facility at the airport. Notably, the New Jersey business community has expressed tremendous interest in growth opportunities in Cuba. In April 2015, a group of business leaders from industries including technology, software, biotechnology, IT staffing, and construction and engineering led a trip to Cuba to explore future business opportunities. The group met with the Cuban Chamber of Commerce, toured small businesses, biotech laboratories and farms, and visited cultural and tourist destinations. Daily service from Newark Liberty will help further facilitate these types of business and cultural exchanges. 8 B. Houston Houston Intercontinental serves the nation s fourth largest city, provides the entire Gulf Coast region with first-class facilities and a wide range of aviation services, and caters to a Cuban American population that ranks among the top ten largest in the U.S. The airport serves 7 See, e.g., Belinda Banks, Massive Redesign Turns Newark Airport Terminal into a Foodie Theme Park, BLOOMBERG BUSINESS (Mar. 2, 2015), http://www.bloomberg.com/news/features/2015-03-02/massive-redesign-turns-newark-airportterminal-into-a-foodie-theme-park. 8 See Hugh Morley, N.J. Business Delegation to Cuba Sees Future Ties, THE RECORD (Apr. 22, 2015), http://www.northjersey.com/news/patience-urged-on-cuba- 1.1314636?page=all.
Application of United Page 9 more than 40 million passengers annually and is United s gateway to Latin America. According to Trusted Traveler Network, Houston Intercontinental is also one of the most internationalfriendly points of entry for foreign travelers. 9 In 2013, United opened its new $97 million, 225,000-square-foot Terminal B South Concourse facility dedicated to regional flight operations at the airport and has begun redevelopment of the new Terminal C North Concourse. 10 United and its United Express partners operate an average of 528 daily flights out of this airport, with 107 daily nonstop flights to 63 international destinations including 91 daily nonstop flights to 52 destinations across Latin America and the Caribbean. Exhibit UA-108. The Cuban American population in the Houston metropolitan area ranks eighth nationally (Exhibit UA-114), making Houston Intercontinental a logical gateway for scheduled service to Havana. Important to United s proposed Houston service is the hub s ability to connect cities across the central and western U.S. with Havana, and to do so with limited and/or competitive circuity. 11 Based on a summer schedule, United s proposed Houston-Havana Saturday service will provide round-trip connections to 20 central and western U.S. points which, in addition to the local Houston population, presents a market opportunity that approaches 200,000 Cuban Americans. The points accessed by United s Houston hub range in size from large metropolitan areas such as Denver and San Francisco, to smaller communities such as Baton Rouge and Laredo. 9 See Houston Intercontinental (IAH) Airport, Overview, ifly.com (last visited Mar. 2, 2016), http://www.ifly.com/george-bush-intercontinental-airport. 10 See Olivia Pulsinelli, United Airlines, Houston Airport System to Break Ground on IAH Concourse, HOUSTON BUSINESS JOURNAL (May 11, 2015), http://www.bizjournals.com/houston/morning_call/2015/05/united-airlines-houston-airportsystem-to-break.html. 11 Circuity refers to the elapsed miles for travel via a connecting hub versus the direct miles between the spoke and Havana.
Application of United Page 10 In analyzing a sample of five potential connecting points that, under United s proposal, will have one-stop connecting service via Houston to Havana, Houston competes well with other southern tier hubs for the same connect traffic in terms of journey distance. For example, the distance for a customer to travel from Los Angeles to Havana via Houston is 2,308 miles and the direct distance from Los Angeles to Havana is 2,298 miles. The circuity for a customer traveling over Houston is minimal, at a difference of only 10 miles, or a circuity factor of 1.004. Adding four other cities to the Houston circuity calculation that are also natural flow points based on their geographical position, and which have a Cuban American population of at least 1,000 people, Houston performs the best in a circuity analysis compared to other hubs. To illustrate this point, provided below is a chart labeled Western Flow that shows Houston s circuity ranking compared to hubs located in Dallas/Ft. Worth, Phoenix, Miami, Atlanta, and Charlotte for traffic connecting between Havana and Las Vegas, Los Angeles, Portland, San Diego, and San Francisco. United already provides service from Houston Intercontinental to eight destinations in the Caribbean, with an average of six daily departures. Exhibits UA-103 and UA-108. United s
Application of United Page 11 combined summer and winter schedules for its proposed Houston-Havana service will offer online connections to over 60 U.S. points. Exhibits UA-138 to UA-141. Houston is well positioned to take advantage of the rapidly changing regulatory and economic environment between the U.S. and Havana. Houston is a large exporter of many raw materials that are seen to be in demand in Cuba, including building materials, drainage and water supply systems, and parts and services related to the oil and gas industry. Reportedly, the Port of Houston is already exporting items like grains, soybeans, corn, and chicken, to Cuba, and Houston s central U.S. location makes Houston a prime location for further trade development. 12 United s proposed Houston-Havana service will help enhance these economic opportunities. C. Washington, D.C. Washington Dulles is the largest airport in the Washington, D.C. metropolitan area, which encompasses one of the largest U.S.-Cuba markets and is a key destination for political and economic links to international capital cities like Havana. Washington Dulles is also one of the nation s busiest airports, serving nearly 22 million passengers per year. United and its United Express partners operate an average of 200 daily flights out of the airport, with 31 daily nonstop flights to 30 international destinations including an average of eight daily nonstop flights to 13 destinations across Latin America and the Caribbean. Exhibit UA-109. Moreover, United is the only carrier to operate a major international gateway hub in Washington, D.C. United s service will thus be vital to fostering official travel between the U.S. and Cuban governments and increasing the role of intergovernmental organizations in Cuba. By providing a critical diplomatic and governmental link between the U.S. and Cuban capital cities, United s proposal is singularly situated to fulfill this important role. 12 See Olivia P. Tallet, Could Houston be the U.S. Hub of Trade with Cuba?, HOUSTON CHRONICLE (Jan. 30, 2015), http://www.houstonchronicle.com/local/graymatters/article/could-houston-be-the-hub-of-u-s-trade-with-cuba-6051515.php.
Application of United Page 12 The Cuban American population in the Washington, D.C. metropolitan area ranks tenth nationally (Exhibit UA-114), making Washington Dulles an important gateway for scheduled service to Havana. United already provides service from Washington Dulles to seven destinations in the Caribbean, with an average of three daily departures. Exhibits UA-104 and UA-109. United s combined summer and winter schedules for its Washington, D.C.-Havana service will offer online connections to over 40 U.S. points. Exhibits UA-142 to UA-145. A similar circuity analysis as described above and applied at United s Washington, D.C. hub, illustrated in the Eastern Flow chart below, reveals that Dulles is in a highly competitive position for connect traffic along the eastern part of the United States. As the chart shows, Dulles ranks second only to Miami and performs better than hubs at Philadelphia, Charlotte, and Atlanta for traffic connecting between Havana and Boston, Hartford, Providence, Rochester, and Syracuse. According to The Washington Post, Virginia has become Cuba s largest source for U.S. agricultural products, having exported $42 million in products in 2015. 13 Recently, Virginia 13 Laura Vozzella, Virginia Becomes Cuba s Largest U.S.-based Agricultural Exporter, THE WASHINGTON POST (Feb. 18, 2016),
Application of United Page 13 Governor McAuliffe became the fourth U.S. Governor to visit Cuba since plans to normalize relations were announced by the Obama Administration. In fact, just weeks ago, Governor McAuliffe hosted a 30-member delegation consisting of large and small Virginia businesses, among others, to facilitate business development discussions, which ultimately helped to conclude a deal between Virginia Commonwealth University and the University of Havana that will lead to academic exchange programs and research collaboration. 14 These economic developments and opportunities underscore the importance of air service between Washington Dulles and Havana. D. Chicago Chicago not only represents one of the largest U.S.-Cuba markets but is the third largest city in the U.S., and O Hare is United s hometown hub and the fifth busiest airport in the world. It has been voted the Best Airport in North America by Global Traveler for 14 consecutive years 15 and, as recently as 2013, was deemed to have the best connections to other airports in the U.S. and around the world. 16 United and its United Express partners operate nearly 500 daily flights out of Chicago O Hare, serving more than 46 daily nonstop flights to 40 international https://www.washingtonpost.com/local/virginia-politics/virginia-becomes-cubas-largest-usbased-agricultural-exporter/2016/02/18/d37d38a2-d657-11e5-b195-2e29a4e13425_story.html. 14 See Laura Vozzella, In Cuba, Gov. McAuliffe Touts His State s Pork, Wine and Seaport, THE WASHINGTON POST (Jan. 4, 2016), https://www.washingtonpost.com/local/virginiapolitics/on-day-1-in-cuba-gov-mcauliffe-touts-his-states-pork-wine--and- seaport/2016/01/04/f062e9ca-b2ea-11e5-9388-466021d971de_story.html. 15 See Kimberly Krol, Global Traveler Announces 12 th Annual GT Tested Reader Survey Awards, GLOBAL TRAVELER (Dec. 1, 2015), http://www.globaltravelerusa.com/globaltraveler-announces-12th-annual-gt-tested-reader-survey-awards/. 16 See Paul Merrion, O Hare Passes Atlanta s Hartsfield as Best-Connected Airport, CRAIN S CHICAGO BUSINESS (Oct. 12, 2013), http://www.chicagobusiness.com/article/20131012/issue01/310129998/ohare-passes-atlantashartsfield-as-best-connected-airport.
Application of United Page 14 destinations including 13 daily nonstop flights to 21 destinations across Latin America and the Caribbean. Exhibit UA-110. The Cuban American population in the Chicago metropolitan area ranks sixth nationally (Exhibit UA-114), making Chicago O Hare a natural fit for scheduled service to Havana. United already provides service from Chicago O Hare to 10 destinations in the Caribbean, with an average of four daily departures. Exhibits UA-105 and UA-110. United s combined summer and winter schedules for its proposed Chicago-Havana service will offer online connections to over 40 U.S. points. Exhibits UA-146 to UA-149. Chicago also performs favorably in a circuity analysis compared to other regional hubs. The below chart labeled Central Flow shows United s O Hare hub providing less circuitous routings as compared to Detroit and Minneapolis for traffic connecting between Havana and Indianapolis, Kansas City, Lansing, Milwaukee, and St. Louis. In fall 2015, certain Illinois members of the U.S. House of Representatives and state agricultural and business leaders traveled to Havana to investigate new economic development and export opportunities for Illinois farmers. The group also focused on opportunities to
Application of United Page 15 increase the state s exports to Cuba and to strengthen bilateral trade relations. 17 This is yet another example of how trade and economic opportunities exist across United s proposed gateways and how air service, as proposed by United, would help develop business opportunities between the two countries. III. THE NEW U.S.-CUBA AVIATION ARRANGEMENT AND THE DEPARTMENT S OBJECTIVES SUPPORT UNITED S PROPOSAL Through the signing of the aviation arrangement between the U.S. and Cuba 18 and by instituting a route proceeding to allocate frequencies to interested U.S. carriers for up to 110 daily flights between any point in the U.S. and any point in Cuba authorized for international services (Instituting Order at 1), the Department will effectuate the Obama Administration s plans to improve diplomatic relations with Cuba and to develop modern-day air service, trade, and commerce between the two nations. United recognizes that not everyone in the U.S. has been supportive of this policy change and it respects the diverse views of the nation s broad set of stakeholders. But now that this policy framework has been put in place, United believes that any new air service between the U.S. and Cuba should benefit as many citizens as possible. And United s proposal will play an important role in fulfilling this objective. The opportunity to restore regularly scheduled commercial airline services between the U.S. and Cuba is best served by the selection of United for Newark Liberty/Houston/Washington, D.C./Chicago-Havana service. Now that the U.S. government has 17 See Press Release, Reps. Bustos and Davis Return from Bipartisan Agricultural Trade Mission to Cuba (Oct. 15, 2015), https://bustos.house.gov/press-and-media/pressreleases/reps-bustos-and-davis-return-from-bipartisan-agricultural-trade. 18 See Memorandum of Understanding Between the Government of the United States of America and the Government of the Republic of Cuba (signed Feb. 16, 2016) ( MOU ).
Application of United Page 16 secured a broad array of U.S.-Cuba route opportunities, United is uniquely positioned to offer and maintain the best service for the traveling and shipping public. Instituting Order at 2. To maximize the benefits of the opportunities made immediately available pursuant to the new U.S.-Cuba arrangement, the Department has adopted an accelerated procedural schedule in recognition of the eagerness of U.S. carriers to take advantage of these new Cuba opportunities and the benefits to the traveling and shipping public of enabling them to do so. Id. Selecting United to offer 1.1 daily (eight weekly) nonstop Newark/New York City-Havana flights and weekly Saturday flights from Houston, Washington, D.C., and Chicago will maximize the benefits of these valuable bilateral rights recently negotiated with Cuba by authorizing nonstop services in four major U.S. metropolitan areas that are among those with the 10 largest Cuban American populations in the country. United s proposed Newark/New York City-Havana daily service (with two Saturday flights) will also offer a reliable, alternative service option to JetBlue and other carriers offering (or planning to offer) U.S.-Cuba scheduled or charter services from the Newark/New York City metropolitan area, as will United s proposed Saturday services from its hubs at Houston, Washington D.C., and Chicago with respect to passengers traveling to Cuba from each of those cities and points behind/beyond. IV. THE DEPARTMENT SHOULD IMMEDIATELY GRANT UNITED THE NECESSARY EXEMPTION AUTHORITY TO PROVIDE ITS PROPOSED SERVICES TO HAVANA For the reasons described above, awarding Newark Liberty/Houston/Washington, D.C./Chicago-Havana exemption authority and corresponding frequencies to United will allow it to make the best use of the available U.S.-Cuba frequencies, provide effective competition to other carriers providing U.S.-Cuba services, and fulfill the goals set forth in the Department s Instituting Order. United urges the Department to act promptly on this application so that it can
Application of United Page 17 secure foreign authority, make final operating plans, and begin marketing its U.S.-Havana flights well in advance of operations. The authority sought by United fully complies with the relevant terms of the MOU. Among other things, the MOU authorizes U.S. carriers to operate up to 20 daily round-trip frequencies to and from Havana (encompassing scheduled combination or all-cargo services), and up to 10 daily round-trip frequencies to nine other international airports in Cuba. 19 Accordingly, ample frequencies are available for United to operate the service proposal described herein. United holds various certificates of public convenience and necessity and exemptions authorizing it to engage in scheduled air transportation of persons, property and mail, and United is clearly fit, willing and able to provide the proposed services. See, e.g., Orders 2015-12-9 (San Francisco-Xi an, China certificate), 2013-4-11 (reissuing United/Continental authorities to United), 2010-5-17 (U.S.-Mexico), 2007-4-19 (Blanket Open Skies), and Notices of Action Taken dated December 10, 2015 in Docket DOT-OST-1997-2516 (New Orleans/Houston/Dallas/Ft. Worth-Maracaibo/Caracas, Venezuela; and Newark-Caracas, Venezuela), October 21, 2015 in Docket DOT-OST-2015-0207 (Houston-Huatulco, Mexico); June 17, 2015 in Docket DOT-OST-2015-0120 (Chicago-Ixtapa/Zihuatanejo, Mexico) and June 12, 2015 in Docket DOT-OST-2015-0125 (Chicago-Grand Cayman, Cayman Islands). Pursuant to Rule 24 of the Department s Rules of Practice, United requests that the Department take official notice of all information and data that have been filed to establish its fitness. 19 MOU at 6 (Annex). The MOU does not place limits on the number of carriers that may provide U.S.-Cuba services or limit aircraft capacity. Id. See also Instituting Order at 2.
Application of United Page 18 WHEREFORE, United urges the Department to grant immediately the requested exemption authority and corresponding frequencies for United to provide scheduled combination foreign air transportation of persons, property and mail between Newark/New York City, Houston, Washington, D.C., and Chicago, and Havana, Cuba, and such other relief that the Department may deem necessary or appropriate. Respectfully submitted, CROWELL & MORING LLP March 2, 2016 Marc L. Warren Gerald F. Murphy Steven J. Seiden mwarren@crowell.com gmurphy@crowell.com sseiden@crowell.com Counsel for United Airlines, Inc.
ATTACHMENT 1
March 1, 2016 The Honorable Anthony Foxx Secretary United States Department of Transportation 1200 New Jersey Avenue, S.E. Washington, D.C. 20590 Re: Docket DOT-OST-2016-0021 Dear Mr. Secretary: On behalf of the African American business community in New Jersey, I write in strong support of the application of United Airlines to provide new air service between the U.S. and Cuba. United has applied to provide daily, nonstop scheduled service between Newark Liberty International Airport and Havana s José Martí International Airport. United is also applying for an additional Saturday only flight between Newark and Havana. The Department should grant United s request given the very significant economic and competitive benefits United s services would provide, as well as the consumer benefits it would bring to New Jersey travelers, businesses and entrepreneurs. Business and leisure travelers in New Jersey would benefit from United s new competition in the U.S- Cuba air travel market, which is currently dominated by carriers operating flights on a charter basis at John F. Kennedy International Airport in New York. New Jersey tourism, hospitality, and numerous other economic sectors would benefit from increased travel and activity between the U.S. and Cuba. The job creation and economic development possibilities enabled by new United service will be enhanced by the nearly 80,000 Cuban Americans living in New Jersey who would gain new travel options and business development opportunities. The New Jersey metropolitan region is the second largest Cuban- American population in the United States. For that reason, we believe nonstop air service to Havana will be welcome and this key market should be served. I am grateful for the Department s work in concluding an historic agreement to liberalize air services between the U.S. and Cuba. I hope the Department will grant United s application for all the proconsumer and pro-business benefits that United s new service would provide. Sincerely, John E. Harmon, Sr. John E. Harmon, Sr., IOM Founder, President & CEO African American Chamber of Commerce of NJ Former Chairman National Black Chamber of Commerce JEH:jb 379 West State Street, Trenton, Trenton, NJ 08618 www.aaccnj.com
Before The Department Of Transportation 2016 U.S. Cuba Frequency Allocation Proceeding Docket DOT-OST-2016-0021 Newark Liberty - Havana Houston Bush - Havana Washington Dulles - Havana Chicago O Hare - Havana Application Exhibits of:
Index of Exhibits Page 1 of 4 Exhibit Number Service United Index Of Exhibits Number Of Pages UA-100 Proposed United Nonstop Service 1 UA-101 United Operated U.S. - Caribbean Service 2 UA-102 United Operated Newark Liberty - Caribbean Service 1 UA-103 United Operated Houston Bush - Caribbean Service 1 UA-104 United Operated Washington Dulles - Caribbean Service 1 UA-105 United Operated Chicago O Hare - Caribbean Service 1 UA-106 United Continues To Expand Caribbean Services 1 UA-107 United s Newark Liberty Hub Operations 1 UA-108 United s Houston Bush Hub Operations 1 UA-109 United s Washington Dulles Hub Operations 1 UA-110 United s Chicago O Hare Hub Operations 1 UA-111 UA-112 UA-113 UA-114 Newark / New York City Has The Second Largest Cuban American Population In The U.S. Among All Metropolitan Areas Nearly Two-Thirds Of The Newark / New York City Cuban American Population Resides In Newark Liberty s Catchment Area The Cuban American Population In New Jersey Is Highly Concentrated In Newark Liberty s Catchment Area All Four United Proposed Gateways Rank In The Top Ten U.S. Metropolitan Areas For Cuban American Populations 1 1 1 1
Index of Exhibits Page 2 of 4 Exhibit Number UA-115 Service United s Proposed Newark Liberty - Havana Service Will Provide A Competitive Alternative To Flights Already Offered Between New York JFK And Havana UA-116 United s Proposed Summer Schedule Newark Liberty - Havana UA-117 United s Proposed Summer Schedule Houston Bush - Havana UA-118 United s Proposed Summer Schedule Washington Dulles - Havana UA-119 United s Proposed Summer Schedule Chicago O Hare - Havana UA-120 United s Proposed Winter Schedule Newark Liberty - Havana UA-121 United s Proposed Winter Schedule Houston Bush - Havana UA-122 United s Proposed Winter Schedule Washington Dulles - Havana UA-123 United s Proposed Winter Schedule Chicago O Hare - Havana UA-124 UA-125 UA-126 UA-127 Year Ending March 31, 2017 B737-800 Operating Statistics For Daily Round Trip And Additional Saturday Only Newark Liberty - Havana Nonstop Service Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Houston Bush - Havana Nonstop Service Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Washington Dulles - Havana Nonstop Service Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Chicago O Hare - Havana Nonstop Service United Index Of Exhibits Number Of Pages UA-128 United s B737-800 Configuration 1 UA-129 United And United Express Fleet 3 1 1 1 1 1 1 1 1 1 1 1 1 1
Index of Exhibits Page 3 of 4 Exhibit Number UA-130 UA-131 UA-132 UA-133 UA-134 UA-135 UA-136 UA-137 Service Online Connections For United Newark Liberty Flight #1502 Southbound - Summer Online Connections For United Newark Liberty Flight #1503 Northbound - Summer Online Connections For United Newark Liberty Flight #1502 Southbound - Winter Online Connections For United Newark Liberty Flight #1503 Northbound - Winter Online Connections For United Newark Liberty Flight #1500 Southbound - Summer Online Connections For United Newark Liberty Flight #1501 Northbound - Summer Online Connections For United Newark Liberty Flight #1500 Southbound - Winter Online Connections For United Newark Liberty Flight #1501 Northbound - Winter UA-138 Online Connections For United Houston Flight #1506 Southbound - Summer UA-139 Online Connections For United Houston Flight #1507 Northbound - Summer UA-140 Online Connections For United Houston Flight #1506 Southbound - Winter UA-141 Online Connections For United Houston Flight #1507 Northbound - Winter UA-142 UA-143 Online Connections For United Washington D.C. Flight #1504 Southbound - Summer Online Connections For United Washington D.C. Flight #1505 Northbound - Summer United Index Of Exhibits Number Of Pages 10 9 9 8 1 2 1 1 3 1 3 1 1 1 UA-144 Online Connections For United Washington D.C. Flight #1504 Southbound - Winter 1
Index of Exhibits Page 4 of 4 Exhibit Number UA-145 Service Online Connections For United Washington D.C. Flight #1505 Northbound - Winter UA-146 Online Connections For United Chicago Flight #1508 Southbound - Summer UA-147 Online Connections For United Chicago Flight #1509 Northbound - Summer UA-148 Online Connections For United Chicago Flight #1508 Southbound - Winter UA-149 Online Connections For United Chicago Flight #1509 Northbound - Winter United Index Of Exhibits Number Of Pages 2 2 2 1 1
UA-100 Page 1 of 1 Proposed United Nonstop Service Chicago O Hare Newark Liberty Washington Dulles Houston Bush Havana Service Proposed In This Case Havana United Proposed Havana Service Weekly Daily U.S. Point Frequency Frequency Newark Liberty 8 1.1 Houston Bush 1 0.1 Washington Dulles 1 0.1 Chicago O'Hare 1 0.1 Total 11 1.4
UA-101 Page 1 of 2 United Operated U.S. - Caribbean Service Cleveland Chicago Newark Liberty Washington Dulles Bermuda Houston Bush Grand Cayman Havana Service Proposed In This Case Nassau Providenciales St. Havana Punta San Maarten Puerto Plata Cana Juan Santiago Antigua Montego Santo Aguadilla Bay Domingo St. Thomas Aruba Bonaire Port of Spain St. Kitts St. Lucia Source: December 2015 OAG Note: United also provides service between Houston and each of Providenciales and St. Thomas summer only
UA-101 Page 2 of 2 United Operated U.S. - Caribbean Service United Current and Proposed Caribbean Service Weekly Destination Frequency San Juan 59 Punta Cana 32 Montego Bay 16 Nassau 16 Aruba 15 St. Thomas 12 Port Of Spain 12 Santo Domingo 10 Grand Cayman 10 St. Maarten 8 Aguadilla 7 Antigua 7 Santiago 7 Providenciales 6 Puerto Plata 4 Bermuda 3 Bonaire 2 St. Lucia 2 St. Kitts 2 Subtotal 231 Havana 11 Total 242 Source: December 2015 OAG
UA-102 Page 1 of 1 United Operated Newark Liberty - Caribbean Service Newark Liberty Bermuda Grand Cayman Havana Service Proposed In This Case Nassau Providenciales St. Havana Punta San Maarten Puerto Plata Cana Juan Santiago Antigua Montego Santo Aguadilla Bay Domingo St. Thomas Aruba Bonaire Port of Spain St. Kitts St. Lucia Source: December 2015 OAG
UA-103 Page 1 of 1 United Operated Houston Bush - Caribbean Service Houston Bush Nassau Grand Cayman Havana Montego Bay Punta Cana San Juan Havana Service Proposed In This Case Aruba Bonaire Port of Spain Source: December 2015 OAG Note: United also provides service between Houston and each of Providenciales and St. Thomas summer only
UA-104 Page 1 of 1 United Operated Washington Dulles - Caribbean Service Washington Dulles Grand Cayman Havana Montego Bay Punta Cana St. San Maarten Juan St. Thomas Havana Service Proposed In This Case Aruba Source: December 2015 OAG
UA-105 Page 1 of 1 United Operated Chicago O Hare - Caribbean Service Chicago Grand Cayman Nassau Havana Montego Bay Providenciales Punta Cana St. San Maarten Juan Antigua Aruba St. Lucia Havana Service Proposed In This Case Source: December 2015 OAG
UA-106 Page 1 of 1 United Continues To Expand Caribbean Services Nonstop Market Chicago - Grand Cayman Chicago - St. Lucia Newark - St. Kitts Houston - Providenciales Houston - St. Thomas Newark - Santiago (STI) Houston - Punta Cana Newark - St. Lucia Commencement Date Dec-15 Dec-15 Dec-15 Jun-15 Jun-15 Jun-14 Dec-14 Jul-13 Source: OAG since December 2011
UA-107 Page 1 of 1 United s Newark Liberty Hub Operations Weekly Region Departures Destinations U.S./Canada 2,226 87 Trans Atlantic 172 24 Caribbean 134 19 Latin America 125 14 Asia/Pacific 28 4 Total 2,685 148 Source: December 2015 OAG
UA-108 Page 1 of 1 United s Houston Bush Hub Operations Weekly Region Departures Destinations U.S./Canada 3,003 121 Latin America 595 44 Trans Atlantic 46 5 Caribbean 45 8 Asia/Pacific 7 1 Total 3,697 179 Source: December 2015 OAG
UA-109 Page 1 of 1 United s Washington Dulles Hub Operations Weekly Region Departures Destinations U.S./Canada 1,252 70 Trans Atlantic 82 12 Latin America 30 6 Caribbean 23 7 Asia/Pacific 13 2 Total 1,401 97 Source: December 2015 OAG
UA-110 Page 1 of 1 United s Chicago O Hare Hub Operations Weekly Region Departures Destinations U.S./Canada 3,324 143 Latin America 68 11 Trans Atlantic 49 6 Caribbean 26 10 Asia/Pacific 25 4 Total 3,493 174 Source: December 2015 OAG
UA-111 Page 1 of 1 Newark / New York City Has The Second Largest Cuban American Population In The U.S. Among All Metropolitan Areas Newark / New York City Cuban American Population Cuban American Population Source: 2010 Census, Top 10 Metropolitan Areas Note: Miami/Ft. Lauderdale holds the largest Cuban American population
UA-112 Page 1 of 1 Nearly Two-Thirds Of The Newark / New York City Cuban American Population Resides In Newark Liberty s Catchment Area 64% Of The Metropolitan Area s Cuban American Population Resides In New Jersey And Manhattan Which Represent Part Of Newark Liberty s Catchment Area Other New York Manhattan New Jersey Breakdown Metropolitan Area Cuban American Population Source: 2010 Census, Top 10 Metropolitan Areas
UA-113 Page 1 of 1 The Cuban American Population In New Jersey Is Highly Concentrated In Newark Liberty s Catchment Area 16% 6% 41% 15% EWR 7% 85% of the Cuban-American population in New Jersey resides in the five counties surrounding Newark Liberty (EWR) Top 5 cities represent 45% of the Cuban American population in New Jersey West New York (Hudson County) Union City (Hudson County) North Bergen (Hudson County) Elizabeth (Union County) Newark (Essex County) Source: 2010 Census, by zip code
UA-114 Page 1 of 1 All Four United Proposed Gateways Rank In The Top Ten U.S. Metropolitan Areas For Cuban American Populations Cuban American Population Metropolitan Area Population 1/ Rank Miami/Ft. Lauderdale 983 1 Newark/New York 133 2 Tampa 81 3 Los Angeles 50 4 Orlando 36 5 Chicago 21 6 Las Vegas 21 7 Houston 19 8 Atlanta 17 9 Washington, D.C. 15 10 Source: 2010 Census, Top 10 Metropolitan Areas 1/ In Thousands
UA-115 Page 1 of 1 United s Proposed Newark Liberty - Havana Service Will Provide A Competitive Alternative To Flights Already Offered Between New York JFK And Havana Existing JetBlue Service Between New York JFK And Havana New York JFK Havana JetBlue Press Release: JetBlue and Cuba Travel Services Now Fly to Havana Twice per Week From New York City Released: 12/01/2015 Second Weekly Round-trip Between JFK and Cuba Takes Off as Travel Demand Grows JetBlue (NASDAQ: JBLU) and Cuba Travel Services (CTS) today announced the start of their second weekly round-trip charter flights between New York's John F. Kennedy International Airport (JFK) and José Martí International Airport (HAV) in Havana. The added flights will operate on Tuesdays and become JetBlue's sixth weekly round-trip charter route between the U.S. and Cuba. In July, JetBlue became the first major airline to fly to Cuba from New York when it launched weekly flights on Fridays Source: JetBlue Website
UA-116 Page 1 of 1 United s Proposed Summer Schedule Newark Liberty - Havana UA# 1502 UA# 1500 Flight Number UA# 1501 UA# 1503 Daily Saturday Frequency Saturday Daily B737-800 B737-800 Equipment B737-800 B737-800 10:23 8:53 Newark 16:48 18:18 13:53 12:23 Havana 13:23 14:53 3:30 3:30 Elapsed Time 3:25 3:25 There is no time change between Newark and Havana
UA-117 Page 1 of 1 United s Proposed Summer Schedule Houston Bush - Havana UA# 1506 Flight Number UA# 1507 Saturday Frequency Saturday B737-800 Equipment B737-800 12:55 Houston 19:15 16:30 Havana 17:30 2:35 Elapsed Time 2:45 Havana is one hour ahead of Houston
UA-118 Page 1 of 1 United s Proposed Summer Schedule Washington Dulles - Havana UA# 1504 Flight Number UA# 1505 Saturday Frequency Saturday B737-800 Equipment B737-800 8:25 Washington, D.C. 15:35 11:30 Havana 12:30 3:05 Elapsed Time 3:05 There is no time change between Washington, D.C. and Havana
UA-119 Page 1 of 1 United s Proposed Summer Schedule Chicago O Hare - Havana UA# 1508 Flight Number UA# 1509 Saturday Frequency Saturday B737-800 Equipment B737-800 9:05 Chicago 17:05 13:35 Havana 14:35 3:30 Elapsed Time 3:30 Havana is one hour ahead of Chicago
UA-120 Page 1 of 1 United s Proposed Winter Schedule Newark Liberty - Havana UA# 1502 UA# 1500 Flight Number UA# 1501 UA# 1503 Daily Saturday Frequency Saturday Daily B737-800 B737-800 Equipment B737-800 B737-800 10:18 8:48 Newark 16:43 18:13 13:53 12:23 Havana 13:23 14:53 3:35 3:35 Elapsed Time 3:20 3:20 There is no time change between Newark and Havana
UA-121 Page 1 of 1 United s Proposed Winter Schedule Houston Bush - Havana UA# 1506 Flight Number UA# 1507 Saturday Frequency Saturday B737-800 Equipment B737-800 13:00 Houston 19:20 16:30 Havana 17:30 2:30 Elapsed Time 2:50 Havana is one hour ahead of Houston
UA-122 Page 1 of 1 United s Proposed Winter Schedule Washington Dulles - Havana UA# 1504 Flight Number UA# 1505 Saturday Frequency Saturday B737-800 Equipment B737-800 8:20 Washington, D.C. 15:30 11:30 Havana 12:30 3:10 Elapsed Time 3:00 There is no time change between Washington, D.C. and Havana
UA-123 Page 1 of 1 United s Proposed Winter Schedule Chicago O Hare - Havana UA# 1508 Flight Number UA# 1509 Saturday Frequency Saturday B737-800 Equipment B737-800 9:05 Chicago 17:10 13:35 Havana 14:35 3:30 Elapsed Time 3:35 Havana is one hour ahead of Chicago
UA-124 Page 1 of 1 Year Ending March 31, 2017 B737-800 Operating Statistics For Daily Round-Trip And Additional Saturday Only Newark Liberty - Havana Nonstop Service Aircraft B737-800 Per Departure Segment Length (Statute Miles) 1,311 Average Block Time 3:27 Seats 154 (16 First, 138 Economy) Annual Roundtrip Departures 832 Total Annual Operating Statistics Completion Factor 1/ 98.7% Actual Departures 821 Aircraft Miles 1,076,572 Block Hours 2,685 Gallons of Fuel Required 2/ 2,343,800 1/ Completion factor for B737-800, 2015 data 2/ United will obtain fuel available at its proposed gateways pursuant to contracts with fuel vendors at the airports
UA-125 Page 1 of 1 Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Houston Bush - Havana Nonstop Service Aircraft B737-800 Per Departure Segment Length (Statute Miles) 934 Average Block Time 2:40 Seats 154 (16 First, 138 Economy) Annual Roundtrip Departures 104 Total Annual Operating Statistics Completion Factor 1/ 98.7% Actual Departures 103 Aircraft Miles 95,873 Block Hours 246 Gallons of Fuel Required 2/ 225,100 1/ Completion factor for B737-800, 2015 data 2/ United will obtain fuel available at its proposed gateways pursuant to contracts with fuel vendors at the airports
UA-126 Page 1 of 1 Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Washington Dulles - Havana Nonstop Service Aircraft B737-800 Per Departure Segment Length (Statute Miles) 1,137 Average Block Time 3:05 Seats 154 (16 First, 138 Economy) Annual Roundtrip Departures 104 Total Annual Operating Statistics Completion Factor 1/ 98.7% Actual Departures 103 Aircraft Miles 116,711 Block Hours 313 Gallons of Fuel Required 2/ 258,300 1/ Completion factor for B737-800, 2015 data 2/ United will obtain fuel available at its proposed gateways pursuant to contracts with fuel vendors at the airports
UA-127 Page 1 of 1 Year Ending March 31, 2017 B737-800 Operating Statistics For Saturday Only Round-Trip Chicago O Hare - Havana Nonstop Service Aircraft B737-800 Per Departure Segment Length (Statute Miles) 1,311 Average Block Time 3:30 Seats 154 (16 First, 138 Economy) Annual Roundtrip Departures 104 Total Annual Operating Statistics Completion Factor 1/ 98.7% Actual Departures 103 Aircraft Miles 134,572 Block Hours 313 Gallons of Fuel Required 2/ 275,063 1/ Completion factor for B737-800, 2015 data 2/ United will obtain fuel available at its proposed gateways pursuant to contracts with fuel vendors at the airports
UA-128 Page 1 of 1 United s B737-800 Configuration Seat Capacity First 16 Economy 138 Total 154 Note: United may swap among its B737 fleets including 737-700 and 737-900 aircraft. Aircraft from United s existing fleet and used in scheduled services will be used for the proposed Havana services. The aircraft to be used comply with all applicable FAA requirements, including FAR-36.