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BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON DC _________________________________________________________ ) ) NOTICE OF PETITION FOR WAIVER ) AND SOLICITATION OF COMMENTS ) Docket No. FAA­2010­0109 GRANT OF PETITION WITH CONDITIONS ) ) ________________________________________________________ ) COMMENTS OF CONSUMER TRAVEL ALLIANCE Communications with respect to this document should be sent to: Charles Leocha, Director Consumer Travel Alliance, Inc. PO Box 15286, Washington, DC 20003 Tel. 202‐713‐9596 Email: [email protected] The Consumer Travel Alliance (CTA) is a nonprofit, nonpartisan organization that works to provide an articulate and reasoned voice in decisions that affect travel consumers across travel’s entire spectrum. CTA’s staff gathers facts, analyzes issues, and disseminates that information to the public, the travel industry, regulators and policy makers. CTA was founded in January 2009 by longtime travel journalists Charles Leocha, former MSNBC travel guru and author of Travel Rights, and Christopher Elliott, ombudsman for National Geographic Traveler and author of travel columns for Tribune Syndicates, MSNBC.com and the Washington Post syndicate. Introduction Delta Air Lines, Inc. (Delta) and US Airways, Inc. (US Airways) have petitioned the Department of Transportation for permission to swap slots between La Guardia Airport (LGA) and Ronald Reagan Washington National Airport (DCA). CTA submits these comments in response to the July 28, 2011 Notice issued by the Department of Transportation (DOT) soliciting comments on a “Petition for Waiver” from Delta Air Lines and US Airways (“Joint Applicants”) to consummate a proposed transfer of a total of 349 slots at New York LaGuardia Airport (LGA) and Ronald Reagan Washington National Airport (DCA) (“Slot Swap # 2”). See 76 Fed. Reg. 45313 et seq., July 28, 2011. CTA proposes that the entire question of swapping or selling slots should be reexamined by the DOT in terms of the taxpayer good. Airline airport slots were once provided by the DOT at no cost to airlines as needed. These slots are the property of the American public and have been controlled by the DOT as a public asset for the public good. Over the years based on bureaucratic precedent, the airlines have assumed the position that these slots are airline property and now place a monetary value on them, sell them and lease them just as they might any other assets. Under normal circumstances, the assignment of airline slots is non‐controversial since there is no shortage of slots at the majority of airports, but where circumstances have limited airport slots, they should be allocated in the public interest to maximize the public good. This request for permission to swap slots provides DOT and FAA an opportunity to reexamine the question of airline slots at slot‐controlled airports. These two airlines have indicated that they do not need the slots they are ready to divest. In DCA, American Airlines has indicated that they do not need the slots that they have leased to JetBlue. And in the case of Southwest Airlines and Continental with their court‐ imposed leasing arrangements at Newark, the slot permissions have effectively been stripped from Continental Airlines by DOJ. DOT and the FAA need to make a basic statement that airline slots at the handful of airports with slot restrictions will be treated as public assets rather than airline assets. Airlines that do not maintain their slot awards in the public interest or that have publicly declared that they do not need said slots for their operation should be divested of those slots. • This public good includes assigning slots to airlines that can use the slots as a profitable enterprise. • Slots should be used to maximize the capacity of the airport — airlines that only utilize smaller commuter aircraft should have slots reassigned to other more efficient carriers that can offer a more robust lift. • Slots should be allocated to airlines that have a history of profitably offering fair and balanced airfares. Maintaining unprofitable operations is neither in an airline’s corporate interest nor the public interest Any airline that is maintaining slots and losing money on said slots should be forced to divest themselves of those slots because it serves no good for the corporation or of the public. In comments submitted to DOT, Delta and US Airways acknowledge “the transaction allows US Airways to reduce its unprofitable flying at LGA and exit from its expensive facilities obligations…” US Airways assumed the slots at no cost through DOT from the taxpayers. They should give those slots back to the taxpayers. When they admit to losing money on service using those slots, the only imaginable reason to keep the slots is to eliminate competition. Competition is in the public interest. CTA strongly holds that DOT should act in the taxpayer interest rather than the corporate interest, especially in the case where US Airways is seeking to profit from selling a taxpayer asset that was given to them at no cost with the assurances that airline service would be initiated and continued. Statements taken from Delta and US Airways’ petition noting “the transaction allows US Airways to receive productive assets to replace the loan collateral it is selling to Delta (i.e. LGA slots)…” should send shockwaves through DOT and its offices that deal with allocation of airport slots. These are taxpayer assets not airline assets. US Airways has not paid the taxpayer anything for these slots. They are only allocated to that airline on the basis that the airline will provide agreed service. When that service cannot be provided by the airline, when capacity suffers through the use of smaller commuter airlines to “hold” the airline slots, when corporations hold onto unprofitable airlines slots only to exclude competition, the consumer loses. Every slot that either Delta or US Airways says that they don’t need, by virtue of offering them for sale to anther airline, should be carefully reexamined based on the public good rather than the corporate game plan offered by Delta and US Airways. Maximizing the passenger lift at slot­controlled airports is in the consumer interest and in the airport’s interest of capacity maximization. As confessed by US Airways, “Approximately 39% of US Airways LGA operations are conducted with turbo prop aircraft almost all of which are configured with 37 or fewer seats.” The petition goes on to state, “(New slots) will allow for use of larger aircraft by Delta—approximately 44% larger on average than the current US Airways’ LGA fleet.” This translates to an average airplane size of just over 53 seats. Rather than limiting the transaction to a promise of a 44 percent increase, the increase in capacity would be 270 percent based on calculations similar to those presented by Delta and US Airways should Southwest, for example, fly that route with their 737 aircraft that carry 137 passengers. Even JetBlue is flying on average larger aircraft on their current DCA‐BOS routes. Any decision made in the public interest should focus on airlines that can promise and deliver larger aircraft at slot‐ constrained airports. Not only would there be a dramatic consumer benefit by more capacity flying from LGA, there would be, as Delta and US Airways argue, a dramatic reduction in congestion. As the FAA has recognized, “[p]romoting larger aircraft is the only means to increase passenger access to LGA. … [T]he increase in passenger throughput can be considered a measure of efficiency of the use of airspace.”1 Shifting these slots that belong to the public to an airline that can promise larger aircraft combined with a history of lower airfares and the possibility of reducing air traffic congestion seems like a win‐win‐win solution for the public. And, it would allow US Airways to avoid continued losses on their LGA operations. 1 71 Fed. FrG.51,367 (AuG. 29,2006). The DOT determined that a cut of just four fliGhts an hour durinG peak periods at LGA would result in a 41% decrease in delays and “savinG $178 million a year in delay‐related costs.” NextGen considerations Another factor that should be considered is the willingness of airlines to equip aircraft with modern avionics that can maximize air traffic control efficiencies that the FAA is developing, NextGen. So far, both Delta and US Airways have been reluctant to equip their fleets with RNP capabilities that could streamline approaches and take‐offs at LGA. The CEO of US Airways has been openly contemptuous of the need for enhanced air‐traffic systems. The New York, Philadelphia and Washington airspaces are three of the most congested in the country. Dealing with an airline whose CEO is not interested in spending to enhance NextGen technology and who openly questions its desirability, is a lose‐lose situation for travelers, DOT and the FAA. Southwest, on the other hand, has aggressively invested in equipping their entire fleet with the technology that can interface with ground equipment being installed at taxpayer expense. And other airlines, especially JetBlue, are at least enthusiastic about developing NextGen. When allocating slots, issues like these should merit some consideration. Supposed sources of consumer benefits at DCA The Petition submitted by Delta and US Airways claims that their solution would benefit Washington, DC consumers by improving US Airways’ service through added service to new destinations and proposes that this Delta/US Airways agreement would increase passenger enplanements by 20 to 25 percent because of new routes and schedule improvements. Simply adding another airline with significantly larger aircraft would more than likely improve enplanements by more than 100 percent. In terms of “connectivity,” US Airways claims an unquantified benefit from “travelers connecting through DCA” on an expanded network. CTA notes that there is no need for “seamless” transfers in this day of effective interline arrangements and code‐share arrangements.

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