BEFORE THE FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

______Application of ) ) AMERICAN AIRLINES, INC. ) ) Docket FAA-2015-3491 for an exemption ) pursuant to 14 C.F.R. Part 11.15 ) (Lansing, Michigan – Washington, D.C.) ) ______)

REPLY OF AMERICAN AIRLINES, INC. TO ANSWER OF JETBLUE AIRWAYS CORPORATION (Lansing, Michigan – Washington, D.C.)

Communications with respect to this document should be addressed to:

Howard Kass Vice President – Regulatory Affairs

Abigail Donovan Director, Congressional and Federal Affairs

American Airlines, Inc. 1101 17th Street, N.W. Washington, D.C. 20036 (202) 326-5153 [email protected] [email protected]

October 6, 2015

BEFORE THE FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C.

______Application of ) ) AMERICAN AIRLINES, INC. ) ) Docket FAA-2015-3491 for an exemption ) pursuant to 14 C.F.R. Part 11.15 ) (Lansing, Michigan – Washington, D.C.) ) ______)

REPLY OF AMERICAN AIRLINES, INC. TO ANSWER OF JETBLUE AIRWAYS CORPORATION (Lansing, Michigan – Washington, D.C.)

American hereby replies to the Answer of JetBlue Airways Corporation (“JetBlue

Answer”) of September 17, 2015.1 When the rhetoric and bravado are taken out of the JetBlue

Answer, it is clear that JetBlue has missed the point. The question before FAA is: does the public interest demand that FAA preserve Lansing, Michigan’s Capital Region International

Airport (“LAN”) and Mid-Michigan’s air service to Washington, D.C.? The answer to that question is an unqualified YES!2

As LAN and the Mid-Michigan region have made clear, the best result is the immediate grant of an exemption to American.3 Indeed, the LAN community has amply demonstrated its enthusiasm for American service, by providing:

1 American requests leave from FAA and the Department of Transportation (“Department” or “DOT”) to file this Reply after the seven business day time limit for replies contained in 14 CFR §§ 302.308 and 302.8. The JetBlue Answer was not posted in the online docket until September 28, 2015, and JetBlue did not provide American with a copy of the Answer it filed. Thus, in the interest of a complete record, FAA/DOT should grant American’s request. 2 JetBlue’s Answer barely mentions the concerns of LAN and Mid-Michigan. Instead, JetBlue attempts to make the proceeding about JetBlue and its DCA aspirations. 3 Contrary to JetBlue’s assertions, granting American the right to provide LAN-DCA service is not in any way barred by the Settlement Agreement between American and the Department of Justice (“DOJ”). Indeed, as evidenced by American’s agreement with DOT on using DCA slots for small community service, American’s proposal is wholly-consistent with providing a small community access to Washington. 1

 Multiple pleadings and letters from Lansing’s Capital Region Airport Authority (“CRAA”) in support of American;4  An economic impact analysis by Trillion Aviation, Inc. showing the substantial economic benefits American would provide;5  A formal resolution from the CRAA Board of Directors supporting the American service as providing the greatest economic benefits;6  Support for American service from federal, state, regional, and local political leaders;7  Support for American service from a wide range of businesses, as well as many regional and local business associations;8  Support for American service from Michigan State University, with over 50,000 students, and the Facility for Rare Isotope Beams, funded by the U.S. Department of Energy;9 and  Over 1,000 letters in support of American from citizens who want a new travel option at LAN.10

The FAA should recognize the community’s desire for American’s service proposal and immediately grant American an exemption for LAN-DCA service.

I. THE SUN COUNTRY EXEMPTION WAS GRANTED SPECIFICALLY TO PRESERVE LAN-DCA SERVICE UNDER FAA’S AUTHORITY TO ACT IN THE PUBLIC INTEREST

JetBlue’s Answer contorts a series of FAA, DOT and DOJ pronouncements to support its view that, rather than protect LAN air service, the government should institute a slot proceeding to use the LAN slots for a different community. Unfortunately for JetBlue, that proceeding already occurred and JetBlue lost.11

4 See Comments of the Capital Region Airport Authority in Support of the Application of American Airlines, Inc. for an Exemption, August 17, 2015, Docket FAA-2015-3491 (“CRAA Comments”); Additional Comments of the Capital Region Airport Authority in Support of the Application of American Airlines, Inc. for an Exemption, September 24, 2015, Docket FAA-2015-3491 (“Additional CRAA Comments”); and Second Additional Comments of the Capital Region Airport Authority in Support of the Application of American Airlines, Inc. for an Exemption, October 6, 2015, Docket FAA-2015-3491. 5 See “LAN-DCA Route Analysis”, Trillion Aviation, Inc., September 18, 2015 (“Trillion Economic Analysis”), p.4. 6 See Capital Region Airport Authority Resolution # 15-27, September 23, 2015, attached to Additional CRAA Comments. 7 See Additional CRAA Comments, p. 2. 8 Id. 9 Id. 10 Id. 11 See Motion for Leave to File an Otherwise Unauthorized Document and Additional Comments of American Airlines, Inc., April 4, 2014, Docket DOT-OST-2000-7182, p. 1-2. 2

JetBlue then ignores FAA’s fundamental reason for issuing Exemption 10466 to Sun

Country – to protect LAN-DCA service for a small community that has come to rely on it. As

JetBlue well knows – because it opposed Sun Country at every turn12 – an exemption was granted to Sun Country because FAA determined that preserving LAN-DCA service was in the public interest.

Under 49 U.S.C. § 41718, DOT has specific authority to grant exemptions to provide increased market access at DCA. However, this authority does not override FAA’s authority under 49 U.S.C. § 40109 to grant exemptions from its rules when those exemptions are in the public interest.13

In its analysis, FAA stated it “must weigh… the public benefits from the existing DCA-

LAN service.”14 Specifically, FAA stated that the loss of LAN-DCA service “could detrimentally impact the traveling public”;15 and that preservation of Sun Country’s service presented the same public interest in preserving existing DCA service as the exemption FAA granted to Air Canada.16

These statements by FAA remain true today, and that is all American wants to do – protect existing air service at LAN. The Sun Country Exemption exists solely for LAN-DCA

12 See Letter of JetBlue to FAA, February 10, 2012, Docket FAA-2012-0089. In arguing against the grant of an exemption to Sun Country, JetBlue challenged Sun Country’s reliance on Air Canada’s Exemption No. 10063 as justification for FAA granting an exemption when a carrier loses its slots through no fault of its own. Now, however, in arguing against an award of an exemption to American, JetBlue relies on Exemption No. 10063 for the proposition that FAA has approved exemption requests “only to redress the loss of a slot allocation that was beyond the carrier’s control.” (See JetBlue Answer, p. 2-3.) 13 Exemption No. 10466, March 2, 2012, Docket FAA-2012-0089 (“Sun Country Exemption”), p. 3. 14 Id., at 4. 15 Id., at 3. 16 See Exemption No. 10063, May 10, 2010, Docket FAA-2010-0101 (“Air Canada Exemption”). FAA also found that “[g]iven the unusual circumstances presented”, it was in the public interest to preserve LAN-DCA air service. (Compare Air Canada Exemption, p. 3 (FAA acknowledges the “unusual circumstances presented” made it in the public interest to preserve the existing DCA services offered by Air Canada).) Indeed, it is when such “unusual circumstances” exist that FAA is most correct to exercise its statutory authority under 49 U.S.C. § 40109 to issue an exemption based on the public interest. 3

service,17 and only granting an exemption to American will preserve the DCA service to LAN and the Mid-Michigan region that FAA previously determined was in the public interest.

II. THE RECISSION LANGUAGE CONTAINED IN THE SUN COUNTRY EXEMPTION DOES NOT PREVENT ISSUANCE OF A NEW EXEMPTION TO AMERICAN

JetBlue repeatedly states that the Sun Country Exemption was exclusive to Sun Country under its terms, and that this capacity cannot be reallocated to another carrier.18 However,

JetBlue selectively applies past FAA precedent.19

Culminating with Exemption No. 8112, FAA has, in fact, issued exemptions irrespective of recission language in the original exemption.20 In each case, when a carrier was no longer operating the DCA flights authorized by an exemption, FAA issued new exemptions for operations, notwithstanding language in the old exemption regarding rescission of the exemption in the event a carrier ceased service.

FAA also circumvented recission language by terminating the exemption no longer being used and issuing a new exemption for operations in Exemptions 8112, 7370 and 5153. In the same manner, FAA can comply with any rescission language by cancelling the Sun Country

Exemption and issuing American a new exemption for LAN-DCA service.

17 Contrary to JetBlue’s allegations that American is trying to use a backdoor mechanism to expand its slot holdings beyond the limitations of the High Density Rule, American has been clear that it merely wants to replace Sun Country on the LAN-DCA route. Indeed, the American Application even requested that, in the alternative to issuing a new exemption, the FAA simply amend the exemption to list American or American Eagle in place of Sun Country. (See American Application, p. 2, fn 1). 18 See JetBlue Answer, p. 2 and 5 19 JetBlue’s assertion that FAA’s 2012 issuance of an exemption to Sun Country does not constitute precedent, but that the older 2010 and 2003 exemptions it cites are valid precedent, is ridiculous. 20 See Exemption No. 5153, January 12, 1990, Docket 26101 (issuing an exemption to America West for four flights previously operated by Braniff, despite the previous Braniff exemption including the provision that “the exemption would be rescinded if Braniff ceased scheduled operations at National Airport.”). See also Exemption No. 8112, and Exemption No. 7370, (issuing exemptions for flights to AirTran and Midwest Express, respectively, notwithstanding the fact that Exemption No. 5133 stated that the exemption would be “rescinded if America West discontinues scheduled operations at National Airport.”). 4

III. CONTRARY TO JETBLUE’S ASSERTIONS, ASHBACKER DOES NOT APPLY AND NO CARRIER SELECTION CASE IS REQUIRED

American already detailed the reasons why Ashbacker21 does not apply to this proceeding, and incorporates these previous comments by reference.22 In summary:

 Applications for exemptions are not mutually exclusive, as FAA has the statutory authority under 49 U.S.C. §§ 40109, 40113 and 44701 to grant multiple exemptions, should it consider it in the public interest to do so;  FAA action would protect existing LAN-DCA air service for the community that supported it, not open the doors to exemptions for service to other markets; and  Ashbacker ensures an equal standard, not an equal result; and the standard for evaluating exemption applications remains constant regardless of the disposition of earlier applications.23

Similarly, American explained that FAA does not need to establish a carrier selection case or a new procedural calendar because it already determined the procedural calendar when it published the Summary Notice.24 American incorporates these previous comments by reference.

JetBlue had over three months to apply for LAN-DCA service after Sun Country advised

FAA on May 1, 2015, that it was returning its exemption. JetBlue was asked by CRAA if it had any interest in operating LAN-DCA after Sun Country’s departure, but did not respond to

CRAA. During the 20-day comment period, and with knowledge of a competing Delta

Application for LAN-DCA service,25 JetBlue still declined to file an application for an exemption to serve LAN-DCA. Indeed, the JetBlue Answer makes clear that it has no interest in

21 See Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945). 22 See Consolidated Response of American Airlines, Inc. to Application of Delta Air Lines, Inc. and Answer of Delta Air Lines, Inc., September 24, 2015, Dockets FAA-2015-3491 and -3932 (“Consolidated Response”), p. 4-6. 23 JetBlue wraps its Answer in Ashbacker but has not bothered to file a competing application. FAA should not even countenance JetBlue’s argument. However, if it is determined that Ashbacker applies, any proceeding should be limited to preserving LAN’s air service to DCA. 24 See Consolidated Response, p. 3-4. 25 See JetBlue Answer, p. 5 and 7. 5

serving LAN, but wants to bolster its slot portfolio at DCA to serve a different, likely larger, market.26

In essence, the JetBlue Answer seeks only to deny a small community the DCA air service it has supported. Regardless of the legal theory the FAA applies to this proceeding, the

FAA should preclude participation by any carrier that has no intent to serve LAN and seeks to sever the Lansing community from its only nonstop access to the Nation’s Capital.

26 See JetBlue Answer, p. 1, 6, and 7-8 (stating JetBlue’s desire to obtain additional DCA access, but never mentioning LAN as a destination). 6

IV. CONCLUSION

JetBlue’s Answer attempts to deny nonstop DCA air service to a deserving small community that JetBlue will not serve. The FAA should ignore JetBlue’s whining; its attempts to distract FAA with inaccurate and misleading information; its claims that Ashbacker must be applied; and its attempts to delay the continuation of LAN-DCA service by American, the carrier preferred and supported by Lansing and the Mid-Michigan region.

The FAA granted the Sun Country Exemption specifically to protect LAN-DCA service;

Lansing and the Mid-Michigan region have enthusiastically expressed their support for

American; and American’s service proposal is the only avenue for LAN to preserve its nonstop

DCA service and inject new competitive benefits into the region. Accordingly, American

Airlines respectfully requests that the FAA grant its petition for an exemption to maintain service between LAN and DCA without further delay.

Respectfully submitted,

______

Howard Kass Vice President – Regulatory Affairs

Abigail Donovan Director, Congressional and Federal Affairs

American Airlines, Inc. 1101 17th Street, N.W. Washington, D.C. 20036 (202) 326-5153 [email protected] abigail.donovan@ aa.com

7