American Airlines Consolidated Answer

8/19/2019 American Airlines Consolidated Answer

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Consolidated Answer, Testimony, and Rebuttal Exhibits

of American Airlines in Support of

American Airlines U.S.-Cuba Scheduled Service

Docket DOT-OST-2016-0021

March 14, 2016


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CONTENTS

Consolidated Answer of American Airlines, Inc.

Supporting Testimony from Tessie Aral, President of ABC Charters, Inc.

Letter of Support from Mike Fernandez, Chairman of MBF Healthcare Partners, L.P.

Rebuttal Exhibits

• Section 1: General Overview

• Section 2: American’s Request

• Section 3: Gateway Comparisons

• Section 4: Rebuttal to JetBlue

• Section 5: Rebuttal to Southwest

• Section 6: Rebuttal to Delta

• Section 7: Rebuttal to Frontier

• Section 8: Rebuttal to Spirit

• Section 9: Rebuttal to United


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BEFORE THEU.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

____________________________________)

Application of ))

AMERICAN AIRLINES, INC. ) Docket DOT-OST-2016-0021

)in the matter of 2016 U.S.-Cuba Frequency )Allocation Proceeding ) ____________________________________)

CONSOLIDATED ANSWER OF AMERICAN AIRLINES, INC.

Communications with respect to this document should be addressed to:

Howard KassVice PresidentRegulatory Affairs

Robert A. WirickManaging Director

Regulatory and International Affairs

J h B Willi

Paul T. DenisSteven G. BradburyWilliam B. Sohn

DECHERT LLP1900 K Street NW

Washington, D.C. 20006(202) 261-3300

l d i @d h t


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TABLE OF CONTENTS

Executive Summary ...................................................................................................................... 1

Discussion....................................................................................................................................... 4

I. The Applications of Other Carriers Confirm that MIA is the Necessary

Starting Point for Successfully Restoring and Growing U.S.-Cuba Scheduled

Service ................................................................................................................................ 4

II. American’s Proposed Schedule Offers the Strongest Foundation for Service

from MIA, While Providing Sufficient Frequencies for Scheduled Service to

and Through Other Connecting Hubs ............................................................................ 6

A.

Demographic and Charter Traffic Data Conclusively Demonstrate that

MIA Deserves No Less than the Ten Daily MIA-HAV Frequencies

Proposed by American ........................................................................................... 6

B. Awarding American Ten Daily MIA-HAV Frequencies Leaves Ample Frequencies for Fulfilling Other Objectives ......................................................... 8

C. Only American’s Proposed Service from MIA Maximizes Public Benefits ........ 9

III. MIA Is Superior to FLL for Serving the Miami-Centered Cuban-American

Community in South Florida ......................................................................................... 11

A. MIA Has Long Been the Preferred Airport for U.S.-Cuba Service ................... 12


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E. Application of Spirit Airlines, Inc. ...................................................................... 25

F.

Application of United Airlines, Inc. .................................................................... 25

G.

Application of Alaska Airlines, Inc. .................................................................... 26

H.

Application of Sun Country Airlines ................................................................... 26

I.

Application of Federal Express Corp. ................................................................. 27

J.

Application of Dynamic International Airways, LLC ........................................ 27

K. Application Eastern Air Lines Group, Inc. ......................................................... 28

L. Application of Silver Airways Corp. .................................................................... 29

Conclusion ................................................................................................................................... 29


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BEFORE THE

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

____________________________________)

Application of ))

AMERICAN AIRLINES, INC. ) Docket DOT-OST-2016-0021

)in the matter of 2016 U.S.-Cuba Frequency )Allocation Proceeding ) ____________________________________)

CONSOLIDATED ANSWER OF AMERICAN AIRLINES, INC.

American Airlines, Inc. (“American”) submits the following Consolidated Answer in

response to the Applications of Alaska Airlines, Inc. (“Alaska”), Delta Air Lines, Inc. (“Delta”),

Dynamic International Airways, LLC (“Dynamic”), Eastern Air Lines Group, Inc. (“Eastern”),

Federal Express Corp. (“FedEx”), Frontier Airlines, Inc. (“Frontier”), JetBlue Airways Corp.

(“JetBlue”), Silver Airways Corp. (“Silver”), Southwest Airlines Co. (“Southwest”), Spirit

Ai li I (“S i it”) S C t Ai li (“S C t ”) d U it d Ai li I


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Consolidated Answer of American Airlines, Inc.Page 2 of 30

The applications filed do not dispute that the greatest demand for U.S.-Cuba travel comes

from the Miami-Dade Cuban-American community, and this supports the fundamental premises

of American’s proposed schedule:

• The largest share of scheduled frequencies to Havana (“HAV”) should be

allocated to American’s flights out of MIA, in order to match the

availability of scheduled passenger service to the existing demand for

HAV service at MIA.

• The success of the Administration’s objective of promoting U.S.-Cuba

engagement depends on the allocated frequencies’ being concentrated

where demand and traffic currently exist, and no airline has proposed an

allocation more tailored to demand and traffic than American.

American is the only airline to propose sufficient frequencies to meet the anticipated near-term

growth in demand for U.S.-Cuba travel by the Miami-Dade Cuban-American community—

nearly half the Cuban-American population of the entire United States. And American’s

proposed schedule is the only proposal that will fully satisfy the Administration’s objective

underlying this proceeding.

First, American’s proposed service lays the strongest foundation for connecting the


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throughout Miami-Dade County, its experience with Cuba, and its network of connections to

Cuba through MIA.

Second , the excessive frequencies requested to Cuba from Fort Lauderdale (“FLL”) do

not meet the needs of Miami-Dade Cuban Americans. These proposals are based on the premise

that hundreds of thousands of Cuban Americans living in Miami-Dade County should be

inconvenienced by having to travel to Broward County for scheduled service to Cuba. Decades

of experience with U.S.-Cuba charter flights establishes beyond doubt that these passengers

prefer MIA, as the president of one of the largest U.S-Cuba charter companies has testified. AA-

R-T-1. There has never been more than one or two weekly charter flights from FLL to anywhere

in Cuba, and there is no basis to assume that multiple daily scheduled frequencies to HAV at

FLL will create demand where very little has ever existed.

Third , the volume of daily frequencies proposed to HAV from other Florida airports far

surpasses any realistic level of demand. These airports, including Tampa (“TPA”) and Orlando

(“MCO”), serve minimal local demand and offer almost no connectivity. Were the overall


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frequencies to match anticipated traffic and demand. These considerations compel the award of

American’s proposed frequencies.

Discussion

I. The Applications of Other Carriers Confirm that MIA is the Necessary Starting

Point for Successfully Restoring and Growing U.S.-Cuba Scheduled Service

This route allocation proceeding is the most contested case in the Department’s history.

The thirteen applicants here far exceed the number of applicants in any other case before the

Department, and combined they have requested 397 weekly frequencies from the United States

to Havana, when just 140 are available.1 Despite this fierce competition for these limited

resources, however, the applicants have reached a remarkable consensus on the realities of U.S.-

Cuba travel that must govern the allocation. The applicants generally agree that:

• U.S.-Cuba traffic will largely be limited to those visiting family and relatives in Cu ba,and to those traveling for other reasons permissible under current OFAC sanctions.2

• Tourism has no place in this pr oceeding, because tourism-related travel to Cuba

remains prohibited under U.S. law.

3

• The demand for U.S.-Cuba travel will therefore be strongest in Miami-Dade County,4


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These realities all support American’s proposed schedule. As U.S. Senator Jeff Flake (R-

AZ) recently explained on the Senate floor, U.S.-Cuba scheduled service “should include

adequate regular service to accommodate the growing demand from the largest and closet

Cuban-American population located in Miami-Dade County.”6 Prominent members of the

Miami-Dade Cuban-American community, including Mike Fernandez, the Chairman of MBF

Healthcare Partners, agree with the Senator’s observation.7 Family, cultural, and commercial

ties with Cuba are the strongest in Miami-Dade County, and American’s ten requested MIA-

HAV frequencies are firmly supported by the factors most indicative of near-term demand for

U.S.-Cuba travel:

• Nearly half the Cuban-American population resides in Miami-Dade County. Based

on the size and location of the Cuban-American population near MIA, MIA wouldreceive more than half of the frequencies were this allocation made purely on thedistribution of Cuban Americans among the population centers served by the airportsfor which applicants have requested U.S.-Cuba frequencies. Ex. AA-R-107.

• Nearly 84 percent of all charter flights between the U.S. and HAV in 2015 originated

from MIA—almost 11 times more than from the next U.S. airport. Ex. AA-R-111.

Indeed, other applicants have requested MIA-HAV frequencies despite having a minimal


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II. American’s Proposed Schedule Offers the Strongest Foundation for Service from

MIA, While Providing Sufficient Frequencies for Scheduled Service to and Through

Other Connecting Hubs

American’s proposed schedule is the only proposal that meets the needs of the Miami-

Dade Cuban-American community. This community requires the ten daily MIA-HAV

frequencies proposed by American, which matches current demand and anticipated near-term

growth.8 Anything less than ten daily MIA-HAV frequencies leaves a shortage of seats for the

residents of Miami-Dade County, and falls short of the Department’s long-standing practice of

allocating scarce resources in a manner that best suits the overall needs of the traveling public.

Failing to meet the needs of Miami-Dade would seriously undermine the President’s and,

necessarily, the Department’s policy towards Cuba. The Miami-Dade Cuban-American

community is at the core of renewed U.S.-Cuba engagement, and any barrier to its ability to

enjoy adequate scheduled service to Cuba from MIA threatens the Administration’s broader

goals. American’s unparalleled presence and commitment to both MIA and Cuba enable it to

provide superior service for linking MIA with Cuba, and its extensive network from MIA


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contrast to American’s demand-matched proposal from MIA, the other applicants’ proposed

schedules are largely out of sync with these metrics. Figure 1 below shows how an allocation of

frequencies to HAV would look if it were based on the distribution of the Cuban-American

population at each of the population centers served by the airports for which applicants have

requested frequencies, and then compares that allocation to the frequencies actually requested by

applicants at those airports.

Figure 1: All Requested HAV Frequencies Compared to an Allocation Based on

Local Cuban-American Population (Ex. AA-R-107)


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Atlanta (“ATL”), Dallas/Fort-Worth (“DFW”), and Chicago (“ORD”), which are well situated

and have routes and connectivity to serve communities and businesses with Cuban ties across the

United States. Indeed, American’s proposed scheduled service from CLT and DFW would

connect more than 70 cities not connected through MIA with Cuba, providing blanket coverage

throughout the United States. Ex. AA-R-206, 207. American’s proposal also allows the

Department to allocate sufficient frequencies to serve other Cuban-American population

centers.10

But the Department has little room to spare, and the proposed daily frequencies to HAV

not justified by demand and/or connectivity cannot be awarded without (a) denying MIA the

necessary frequencies and thereby harming those who most demand travel to Cuba, or (b)

leaving the Department with insufficient frequencies to fulfill the objectives described above.

The requests by other applicants for these scarce frequencies are simply not justified by current

demand, and are merely aspirational at this point. Perhaps these requests can be fulfilled in the

future as the U.S.-Cuba aviation market evolves. The Department must ensure the needs of the


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sustainable. The service proposed by Eastern and Frontier also contains deficiencies that should

be disqualifying. These flaws are described below:

Delta: There is no basis to assume Delta will adequately serve the Miami market. Delta

has no hub at MIA, its frequent flyer membership in Miami-Dade County is minimal, and it

carried far fewer passengers than American from MIA in 2015. Ex. AA-R-605. Moreover,

Delta only connects two cities in both directions with Cuba via MIA. Ex. AA-R-605. There is

good reason to believe Delta cannot successfully operate an international flight from MIA.

Thinking it could, Delta inaugurated MIA-LHR nonstop service in March 2011, and the service

was terminated in April 2012, barely more than a year later. Ex. AA-R-606. Delta’s failure

suggests the Department should exercise caution before allowing Delta to experiment with such

scarce resources as the HAV frequencies.

Frontier: There are at least two reasons to reject Frontier’s proposed MIA-HAV service.

First, Frontier’s first two MIA-HAV frequencies are linked to Frontier also receiving a frequency

between Denver (“DEN”) and HAV, and there is no basis for the Department to award nonstop


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The public benefits created by these applicants’ proposed MIA frequencies are illusory,

in contrast to the benefits created by American’s proposal. American’s proposed service

connects 50 U.S. cities (and 7 other cities in Canada and Europe) with Cuba through MIA, ex.

AA-R-207, and it builds on a history of service to HAV that includes more than 600 charter

flights between the U.S. and HAV in 2015 alone. Ex. AA-R-219. American’s unrivaled

experience of 25 years with Cuban ground operations, other unique local conditions, and aviation

authorities will enable it to “offer and maintain the best service for the traveling and shipping

public.” Instituting Order at 2. From its hub at MIA, American will offer the best service to the

Miami-Dade Cuban-American community, while connecting those with Cuban ties across the

United States to the island nation.

The Administration’s objectives are too important to rely on airlines with little Miami

presence and no appropriate experience to provide consistent, reliable service to link the Miami-

Dade Cuban-American population with Cuba. The public benefits at stake here go well beyond

parochial aviation interests. Should the Department disperse MIA-HAV frequencies among


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to maximize passenger inconvenience, and one believes in a “build it and they will come”

philosophy.

The applicants requesting multiple daily frequencies from FLL ignore demographics and

the demand for U.S.-Cuba travel shown by charter flight data, which demonstrates that Cuban

Americans in the Miami area prefer MIA over FLL. The Cuban-American population is not

evenly distributed throughout the region of “South Florida”11 —an area 110 miles long. Instead,

the Cuban-American population in South Florida is concentrated in Miami-Dade County and

particularly in several communities surrounding MIA. Tellingly, if there is in fact demand from

FLL, then any (or all) of the applicants now touting FLL would have met that demand by flying

charters as, notably, JetBlue has done at TPA and JFK. FLL has never supported even one daily

charter flight to Cuba, ex. AA-R-404, and the Department should decline the invitation to award

FLL so many scheduled frequencies utterly disconnected from actual demand.

A.

MIA Has Long Been the Preferred Airport for U.S.-Cuba Service

Those providing U.S.-Cuba charter service strongly favor MIA over FLL, and that has


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Also, review of the requests for authorization to land elsewhere than at Ft.Lauderdale reveals that most of the requests are to use Miami International

Airport. This is apparently because most airlines willing to offer services to andfrom Cuba are based in Miami and their passengers, in most cases, are Cubanresident aliens or U.S. citizens of Cuban birth living in Miami. When an aircraftflies into or out of Ft. Lauderdale-Hollywood International Airport instead ofMiami International Airport, it increases the cost for all involved parties.13

The same reality still holds today, if not more so. U.S.-Cuba flights from FLL have been

authorized since 2011, yet the charter flight data from 2015 shows a stark preference among

airlines for MIA:

• 2,918 HAV-bound charter flights (83.3% of all U.S. flights to HAV) originated from

MIA in 2015. Just 69 (2.0%) originated from FLL. Put another way, 42 times asmany HAV-bound flights originated from MIA as from FLL. Ex. AA-R-202, 407.

•

The average number of HAV-bound flights in 2015 was more than seven per day from MIA, and less than two per week from FLL.

• There were 1,430 flights fr om MIA to non-Havana Cuba destinations in 2015. FromFLL, there was only one.14

Comparing the total requested frequencies to HAV from MIA and FLL, to an allocation

keyed to the proportion of charter flights flown to HAV from both airports in 2015, shows just


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Figure 3: All MIA-HAV and FLL-HAV Frequencies Requested Compared to an

Allocation Based on 2015 U.S.-Cuba Charter Flights

This is undoubtedly the result of demographics. Figure 4 below, which compares the

total requested frequencies to HAV from MIA and FLL to an allocation keyed to the Cuban-

American population surrounding each airport looks remarkably similar:


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Figure 4: All MIA-HAV and FLL-HAV Frequencies Requested Compared to an

Allocation Based on Local Cuban-American Population

The concentration of Cuban Americans near MIA plainly matters. The resumption of U.S.-Cuba

scheduled service cannot change this demographic reality, and it would only inconvenience

passengers and diminish public benefits to award excessive frequencies to FLL


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The Cuban Americans in these communities are much better served from MIA than from FLL.

The two airports cannot be considered equals for the surrounding Cuban-American communities.

These practical realities make travel to FLL undesirable for U.S.-Cuba travel, as Tessie Aral, the

President of one of the largest providers of U.S.-Cuba charter flights, explains in her testimony.

Ex. AA-R-T-1.


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The requests by JetBlue, Southwest, and Spirit for a combined 12 daily frequencies

between FLL and HAV are therefore meritless. The alleged advantages of FLL over MIA touted

by these carriers fall away when experience demonstrates that the hundreds of thousands of

Cuban Americans living near MIA do not drive to FLL for flights to Cuba. In contrast to the

numerous daily flights to Cuba from MIA operated by American, JetBlue currently operates just

one weekly Cuba-bound flight from FLL, ex. AA-R-404, 407, and Southwest and Spirit operate

exactly zero. None of these airlines offers any practical explanation or plans to support multiple

daily FLL-HAV frequencies when there has never been anywhere near that level of demand for

Cuba-bound charter flights from FLL.16 The absence of any evidentiary support should be fatal

to these applications.

Treating MIA and FLL as fungible for U.S.-Cuba flights defies decades of experience,

and the Department should not award an allocation of Cuba frequencies to FLL so out of line

with current demand. American’s service proposal leaves adequate frequencies to serve the

actual modest demand from FLL. But any such frequencies certainly should not be awarded in


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scheduled frequency to HAV. Ex. AA-R-427. In light of all the requested frequencies given

priority over TPA-HAV, this frequency may not be merited now.

B.

No Other Florida Airport Should Receive Scheduled Frequencies to HAV at the

Present Time

There is no basis for the Department to award HAV frequencies to Orlando, Fort Myers,

West Palm Beach, Key West, and Jacksonville. The Cuban-American population in these

regions is small, and few charter flights to Cuba have originated from these airports. These cities

do not merit scheduled service to HAV in this first phase of U.S.-Cuba frequency allocations,

and their near-term needs can be met with one-stop scheduled service and charter service.

As to Orlando, demographics and charter traffic data show that a daily scheduled MCO-

HAV frequency would fly nearly empty. In 2015 there were just 65 MCO-HAV charter

flights—an average of 1 per week. Ex. AA-R-205. Daily scheduled service would be a gigantic

increase from this level. The lack of charter traffic should be no surprise, since there are just

30,000 Cuban Americans in Orange County, where MCO is located. Ex. AA-R-425. An overall

allocation of scheduled frequencies based purely on local Cuban-American population or keyed


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A.

Application of JetBlue Airways Corp.

The frequencies proposed by JetBlue have no relation to demand. JetBlue accurately

states that “international frequency allocations to cities without sufficient markets for service can

lead to squandered public benefits and are certainly not in the public interest.” 22 But among all

the airlines’ proposed schedules, this is most applicable to JetBlue. There is insufficient market

demand for JetBlue’s proposed level of service at all six of its proposed U.S. gateways to Havana

(the most of any applicant in this proceeding).

Fort Lauderdale (FLL): JetBlue currently operates just one weekly charter flight

between FLL and HAV, yet it proposes four daily scheduled flights between FLL and HAV.

This vastly surpasses current demand, as described above in Part III of this Answer. JetBlue’s

request is particularly surprising because its weekly FLL-HAV charter flight has historically had

a load factor of around 50 percent. By comparison, American’s MIA-HAV charter flights have

had load factors of around 75 percent. Ex. AA-R-415. And JetBlue’s proposed FLL-HAV

service will have only 15 connections in both directions. Ex. AA-R-410. Whether JetBlue can


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realm of possibility, especially since JetBlue’s proposed JFK-HAV service creates only six

connections in both directions. Ex. AA-R-421.

Orlando (MCO): JetBlue’s request for two daily MCO-HAV frequencies again finds no

basis in demand. As described in Part IV of this Answer, MCO deserves no scheduled

frequencies based on demographic and charter traffic data. The charter traffic from MCO to

HAV in 2015 was around the level of one flight per week . The tiny Cuban-American population

in Orlando, combined with JetBlue’s five connections to HAV through MCO, ex. AA-R-426,

will not support anywhere near the level of one daily MCO-HAV scheduled flight, let alone two.

Tampa (TPA): Similar to JetBlue’s proposed daily service from JFK, JetBlue offers no

answer as to how it plans to go from operating two weekly TPA-HAV charter flights to two daily

TPA-HAV scheduled frequencies. Especially given that JetBlue’s proposed TPA-HAV

frequencies create only four connections to HAV through TPA, ex. AA-R-430, there is zero

basis to assume that demand for service from TPA will suddenly skyrocket to support two daily

TPA-HAV frequencies.


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JetBlue’s last priority among its six requested U.S. gateways, and it should be last on the

Department’s list as well. Ex. AA-R-440.

B.

Application of Southwest Airlines Co.

The nine HAV frequencies requested by Southwest cover three of the U.S. gateways also

requested by JetBlue, and these requests suffer from the same flaw: They are divorced from

demographic and charter traffic reality. Moreover, Southwest’s minimal international operations

from Florida and lack of experience in operating charter flights to Cuba make it particularly

unsuited for its requested HAV frequencies.

Fort Lauderdale (FLL): The six daily FLL-HAV frequencies proposed by Southwest

would amount to 4,380 flights annually—a 6,348 percent increase over the 69 FLL-HAV charter

flights flown in 2015. Ex. AA-R-507. The absurdity of this result speaks for itself.

Tampa (TPA): As described earlier in this Answer, TPA might support one daily flight

to HAV at most. Southwest’s request for two TPA-HAV frequencies is therefore excessive.

Orlando (MCO): The average of one weekly MCO-HAV charter flight and small


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plummeting to 38 percent the next month (the last month for which DOT T-100 data is

available). Ex. AA-R-606, 607.

Delta’s proposed service to HAV from ATL creates comparable connectivity to

American’s proposed service to HAV from CLT and DFW. Ex. AA-R-601. But Delta has

almost no experience operating flights to Cuba, whereas American’s 25 years of experience is

first among all applicants. The steep learning curve required for reliably operating flights to and

from Cuba make American the best choice to provide comprehensive coverage to the entire

United States for U.S.-Cuba service.

Delta will likely struggle to attract passengers from both MIA and MCO. Delta’s lack of

a hub at MIA means that there are few residents of Miami-Dade County with Delta’s frequent

flier membership, and Delta’s operations from MIA in 2015 were tiny compared to American’s,

in terms of both domestic departures and domestic passengers carried. Ex. AA-R-213, 214, 217,

218, 605. As to Delta’s proposed MCO-HAV daily frequency, Orlando’s Cuban-American

population of 30,000 and Delta’s 3 connections (in both directions) through MCO to HAV


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R-704. Second, Frontier has almost no MIA presence. Ex. AA-R-705. And third, Frontier’s

proposed MIA-HAV and DEN-HAV frequencies both have only a single connection in both

directions. Ex. AA-R-706. There is no basis to award service with such little demand and

connectivity, to an airline with limited potential to serve the Cuban-American community and no

experience in Cuba.

E.

Application of Spirit Airlines, Inc.

Spirit only proposes service to HAV from FLL, and as discussed above, there is limited

demand for FLL-HAV service. The Broward County Cuban-American population is only 10

percent as large as Miami-Dade County’s, and historically, FLL has supported barely more than

a single weekly charter flight to HAV. Spirit’s request for two daily FLL-HAV frequencies is

excessive, especially given Spirit’s lack of experience in Cuba and that its proposed service

would create only ten connections through FLL in both directions. Ex. AA-R-806.

F.

Application of United Airlines, Inc.

Several problems with United’s proposed weekly service from IAD, IAH, and ORD arise


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inferior to the quick, every-day-of-the-week one-stop flights between these airports and Cuba

through MIA created by American’s network.

G.

Application of Alaska Airlines, Inc.

Alaska’s request for two daily LAX-HAV frequencies bears no relationship to anticipated

demand. American currently provides a weekly charter flight between LAX and HAV, and

knows the potential demand in the LAX-HAV market better than any other airline. If LAX

could support more than one weekly frequency to HAV, American would have applied for more.

The lack of LAX-HAV demand is demonstrated by the fact that the weekly charter flight

American operates has a load factor of under 50 percent. 23 Ex. AA-R-1002. Alaska must

stimulate demand by over 600 percent to support a 50 percent load factor on just one of its two

proposed daily LAX-HAV frequencies, ex. AA-R-1003, and Alaska offers no explanation for

how it plans to do so. The three connecting flights Alaska’s proposed service creates will hardly

increase traffic over current levels or improve travel times. Ex. AA-R-1004, 1005. LAX is best

served, for now, with the weekly scheduled service to HAV proposed by American, not the daily


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Country’s network would create only one connection in both directions at each airport. Ex. AA-

R-1102, 1105. There is no reason for either of these requested frequencies to be awarded.

I.

Application of Federal Express Corp.

The cargo service proposed by FedEx raises two issues. First, FedEx’s proposed service

from HAV to Mérida, Mexico (“MID”) is arguably outside the scope of the U.S.-Cuba MOU.

The MOU provides that “[t]he permission to perform scheduled and charter services between

any point or points in the United States and any point or points in Cuba,” and merely allows for

“stops for non-traffic purposes within or outside the territory of either country.” 25 Ex. AA-R-

1201. Whether this permits FedEx’s proposed MIA-HAV-MID-MIA frequency is unclear, and

the Department must resolve this question before granting FedEx any scheduled frequencies.

Second, FedEx admits that it must fly from HAV to MID “so that the flights can be economically

viable.”26 This raises another important question: Is now the right time to award a scarce HAV

scheduled frequency purely for cargo, when there is insufficient demand for cargo service from

HAV to MIA? At this time, charter flights may be more appropriate for U.S.-Cuba cargo


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substantial portion of the country from the benefits of the requested frequencies, because

Dynamic does not serve behind-gateway traffic.

Dynamic’s proposal is also not viable. First, despite having issued an order granting

Dynamic scheduled air-transportation authority, the Department has not made this authority

effective. Dynamic has not provided a clear timeline indicating when it will satisfy the

conditions of receiving effective authority, and when the Department will complete its review of

recent safety and delay incidents.29 Second, the foreign scheduled air transportation authority

Dynamic will have if its certificate becomes effective is limited to two points, one in China and

one in Guyana. Dynamic proposes a substantial change in operations that more than doubles the

certificate authority it might receive and substantially alters the operating costs upon which the

Department based its latest fitness finding for Dynamic. But Dynamic has not shown that it has

sufficient resources to cover the pre-operating costs and operating costs related to these routes.

Third, Dynamic has no experience operating to Cuba. And fourth, given current OFAC

restrictions on passengers, the large size of Dynamic’s equipment, and Dynamic’s proposed U.S.


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frequencies.30 And it does not possess adequate economic authority to use the frequencies. Any

grant of exemption authority by the Department cannot cure Eastern’s lack of FAA authority.

Eastern also does not appear able to perform the basic task of issuing a ticket and accepting

payment via its website. And as a charter carrier, Eastern likely lacks the reservations and

customer-service team necessary to handle scheduled passenger traffic. Eastern does not need its

requested MIA-HAV frequencies to continue serving this route via charter flights, and until

Eastern cures these deficiencies, it should not receive consideration for one of the limited

frequencies to HAV available in this proceeding.

L. Application of Silver Airways Corp.

Silver’s proposed use of 34-seat turboprop planes would drastically underutilize the

available frequencies to HAV. This equipment is far too small to serve anticipated U.S.-Cuba

traffic, and Silver should not be awarded any frequencies to Cuba when many carriers, such as

American, have proposed service using planes that can seat five times as many passengers.

There are far too few frequencies available in this proceeding to allocate even one to a carrier


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For the reasons stated above, American respectfully requests that the Department of

Transportation grant its application to operate 22 scheduled frequencies between the United

States and Cuba.

Respectfully submitted,

________________________

Howard KassVice PresidentRegulatory Affairs

Robert A. WirickManaging DirectorRegulatory and International Affairs

John B. WilliamsSenior Analyst

Regulatory and International Affairs

AMERICAN AIRLINES, INC.

Paul T. DenisSteven G. BradburyWilliam B. Sohn

DECHERT LLP1900 K Street NWWashington, D.C. 20006(202) 261-3300 [email protected]

[email protected]

[email protected]

Charles A. Hunnicutt


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CERTIFICATE OF SERVICE

I certify that, on March 14, 2016, I caused to be served a copy of the foregoingConsolidated Answer of American Airlines, Inc. by email upon those addressees listed below:

[email protected] (Dept. of Transportation)[email protected] (Dept. of Transportation) [email protected] (Dept. of Transportation) [email protected] (Dept. of Transportation) [email protected] (United)

[email protected] (United)[email protected] (Counsel for United)[email protected] (Counsel for United)[email protected] (Counsel for United)[email protected] (JetBlue) [email protected] (Counsel for JetBlue) [email protected] (Counsel for JetBlue) [email protected] (Counsel for Hawaiian)

[email protected] (Virgin America)[email protected] (Counsel for Virgin America) [email protected] (Counsel for Virgin America) [email protected] (Alaska) [email protected] (Alaska) [email protected] (Alaska)[email protected] (Counsel for Alaska)[email protected] (Counsel for Alaska)

[email protected] (Counsel for Spirit) [email protected] (Counsel for Spirit)

[email protected] (Dept. of State) [email protected] (Dept. of State)[email protected] (Silver) [email protected] (Silver) [email protected] (Counsel for Eastern)

[email protected] (Delta)[email protected] (Delta) [email protected] (Southwest)[email protected] (Southwest)[email protected] (Frontier)[email protected] (Counsel for Frontier)[email protected] (FedEx)[email protected] (FedEx)

[email protected] ( DFW) [email protected] (CLT) [email protected] (LAWA)[email protected] (MIA) [email protected] ( IAH ) [email protected] ( IAH )[email protected]@airlineinfo.com

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Testimony

DOT Docket OST-2016-0021


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#aacuba

Testimony

AA-R-T-1 Testimony of Tessie Aral

Testimony of American Airlines

List of TestimonyPage 1 of 1


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A Better Choice Travel

ABC Charters TM

Tel: (305) 263 - 6555 Fax: (305) 263

-

6801

Toll Free: (866) 4ABC - AIR

1125 SW 87 AVE MIAMI FL 33174

Testimony of Tessie Aral

President

ABC Charters, Inc.

March 14, 2016

My name is Maria T Aral, and I am the President of ABC Charters, Inc. ABC Charters

holds a General License from the Office of Foreign Assets Control (“OFAC”) to provide charter

air service between the United States and Cuba, and has provided regular U.S.-Cuba charterservice since 2000. ABC Charters currently provides more than 800 annual flights to Cuba, the

overwhelming number of which originate at Miami International Airport (“MIA”) and are

operated by American Airlines, Inc. (“American”). We also provide charter flights operated by

other airlines as well. I’ve worked with American for many years, and my testimony will focuson the need for extensive U.S.-Cuba scheduled frequencies from MIA, as American proposes.

Cuba is unique among international destinations due to the current restrictions on U.S.-Cuba travel. In general there are three types of international travelers: (1) leisure travelers; (2)

travelers visiting family and relatives; and (3) business travelers. But U.S. law currently

prohibits leisure travel to Cuba, and U.S.-Cuba trade is also limited by law, meaning that those

visiting family and relatives in Cuba comprise most of the U.S.-Cuba traffic. This will notchange until the existing sanctions are lifted. It follows that charter service to Cuba, and the

scheduled service to come, must primarily originate at airports that can best serve the Cuban-


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It’s no surprise that most of the region’s Cuban Americans prefer MIA to FLL for short U.S.-

Cuba flights.

The preference of Cuban-American travelers is reflected in data on U.S.-Cuba charter

flights. Flights to Cuba have been allowed from FLL for nearly five years, yet in 2015, 83 percent of all flights from the United States to Havana’s José Martí International Airport

(“HAV”) originated from MIA, and just 2 percent originated from FLL. On average there wereover seven flights per day from MIA to HAV in 2015, and less than two flights per week from

FLL to HAV. Indeed, of the more than eight hundred charter flights that my company flew to

Cuba in 2015, just one was from FLL, and I’ve only been asked to provide 3 private groupcharter flights to Cuba from FLL in the past five years. If demand for flights from FLL to HAV

were greater, surely more charter service providers such as mine would have initiated service to

Cuba from FLL, but that hasn’t happened. Instead, I’ve observed weak demand for the few FLLto HAV charter flights offered since 2011, only being able to sustain one rotation per week. The

Miami-Dade Cuban American population strongly favors MIA, and there is not enough local

demand in Fort Lauderdale/Broward County to support daily FLL-HAV charter flights.

There is also smaller demand for charter flights to Cuba from other airports. My company

provided no charter flights to Cuba from any other Florida airport in 2015 except for the three

weekly flights from Tampa to Havana. Since 2011, we have not received any requests forcharters to Cuba from MCO, RSW, PBI, EYW and JAX. With the flights arranged from Tampa

and those from Miami, it covers all the demand in the state of Florida. Accorss the entire

charter industry, just 115 flights were flown from EYW in 2015 (all with very small airplanes,not regional or mainline jets), 65 from MCO, 9 from RWS and none from PBI and JAX.

Consistent with demographics, top demand for U.S.-Cuba flights continue to be centered on

MIA.

There’s no reason to expect anything different when U.S.-Cuba scheduled service arrives.Scheduled service won’t change demographics. Cuban Americans, who are concentrated in

areas near MIA will continue to prefer their neighborhood airport for U S Cuba travel The


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Letter of Support

DOT Docket OST-2016-0021Li t f L tt f S t


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#aacuba

Letter of Support

Letter from Mike Fernandez

Letter of Support of American Airlines

List of Letters of SupportPage 1 of 1


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Rebuttal Exhibits

DOT Docket OST-2016-0021List of Rebuttal Exhibits


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#aacuba

Exhibit

Number Title

AA-R-101 Summary of Applicants and Proposed U.S. Gateways For Havana Service

AA-R-102 U.S. Carrier Applicant Proposed Frequencies to Havana by Gateway

AA-R-103 Some Threshold "Disqualifying" Issues

AA-R-104 Applicants in This Proceeding Agree That the Overwhelming Source of Traffic to Havana Will Be the U.S. Cuban- American Population

AA-R-105 Data Point #1: U.S. Cuban-American Population - MIA is, Unquestionably, the U.S. Gateway with the Largest U.S.

Cuban-American Population, and, Thus, Has the Most Proven Need for HAV Frequencies AA-R-106 Allocating U.S.-Havana Frequencies in This Proceeding Based on the Size and Location of Cuban-American

Population, MIA Should Receive 12 U.S.-Havana Frequencies of the 20 Available

AA-R-107 A Comparison of the Frequency Allocation Based on the U.S. Gateways Proposed in This Proceeding with the

Frequencies Requested at Each U.S. Gateway Shows that the MIA-HAV "Asks" Were in Line with Historical Demand

AA-R-108 FLL Has the Largest Difference Between Its Proportionate Share of U.S.-Havana Frequencies and the Number of

U.S.-Havana Frequencies Requested

AA-R-109 Based on Percentages, MIA Has the Smallest Difference Between Its Proportionate Share of U.S.-Havana

frequencies and the Frequencies Requested at MIA of Any Gateway for Which Daily Service Is Proposed

AA-R-110 Date Point #2: Historical Information on U.S.-Cuba Charter Flights - The Overwhelming Number of Charter Operated

From The U.S. Gateways Proposed in This Proceeding to Cuba Originated at MIA in 2015 - Over 86%

AA-R-111 Data Point #3: Historical Information on U.S.-Havana Charter Flights - Close to 84% of All Charters Between the U.S.

and Havana in 2015 Originated At MIA

Rebuttal Exhibits of American Airlines

List of Rebuttal ExhibitsPage 1 of 14



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#aacuba

Exhibit

Number Title



AA-R-112 Allocating U.S.-Havana Frequencies in This Proceeding Based on the Number of U.S.-Havana Charter Flights

Operated in 2015 Proportionately to Each U.S. Gateway, MIA Should Receive 17 of the 20 Available U.S.-HavanaFrequencies

AA-R-113 A Comparison of the Frequency Allocation Based on 2015 Charter Flights Operated with the Frequencies Proposed

at Each U.S. Gateway Shows that MIA's, and Only MIA's, Request for HAV Service Is Less Than Its Proportionate

Share of Historical Charter Flights

AA-R-114 Several Applicants Did Not Build Realistic Connections to Their Proposed U.S.-Havana Services

AA-R-115 Several Applicants Included "Connecting" Flights with Maximum Connection Times Exceeding Four Hours andMinimum Connecting Times on the Outbound Flight of Less Than 55 Minutes

AA-R-116 Adjusting the Applicants' Claimed Connections for the Same Connections Methodology Used by American Shows:

AA-R-201 Remarks of U.S. Senator Jeff Flake on Senate Floor

AA-R-202 MIA Is the Home of Almost 50% of the U.S. Cuban-American Population and the Epicenter of U.S.-Havana Flights

and Passenger Demand

AA-R-203 American's MIA-HAV Request Is Less Than MIA's Proportionate Share of U.S.-Havana Frequency Allocations

AA-R-204 In Addition, American's MIA-HAV Service Provides Comprehensive Domestic U.S. Coverage

AA-R-205 American's Request for Ten Miami-Havana Frequencies Only Matches -- Actually "Under-Requests" -- Existing

Charter Demand

AA-R-206 American's request for Daily CLT Frequencies Provides a Combination of Service to the Charlotte Cuban-American

Community and, Together with MIA, the Largest and Most Efficient Connecting Gateway Combination to HAV for the

Entire U.S.



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#aacuba

Exhibit

Number Title



AA-R-207 American's Request for Daily DFW Frequencies Enables service to the Local Dallas/Fort Worth Cuban-American

Community and Further Complements the Domestic Coverage of MIA and CLT

AA-R-208 American's Request for Once Weekly ORD Frequency Meets the Demand of the Local Chicago Cuban-American

Community. More Than Twice Weekly Service Would Be Excessive to the Current and Anticipated Demand in the

ORD-HAV Market

AA-R-209 American's Request for Once Weekly Service from LAX Is Consistent with Existing and Anticipated LAX-HAV

Demand

AA-R-210 American Airlines Is "Miami's Hometown Airline"

AA-R-211 American Serves More Than 3x the Number of Domestic U.S. Destinations from MIA Than the Other Three

Applicants for MIA-HAV Services Combined

AA-R-212 American's Domestic Service Share at MIA Far Outstrips the Share of the Other Three MIA-HAV Applicants

Combined

AA-R-213 American Operates Almost 6x as Many Domestic Departures at MIA as the Other Three MIA-HAV Applicants

Combined

AA-R-214 Of All the MIA-HAV Applicants, American Accounts for 85% of All the MIA Domestic Departures

AA-R-215 American Flies More Than 83% of the Domestic Seats at MIA - More Than All of the Other MIA-HAV ApplicantsCombined

AA-R-216 American Flies More Than 5x the Number of Domestic Seats from MIA as the Other Three MIA-HAV Applicants

Combined

AA-R-217 American Flew More Than Five Times the Number of Domestic Passengers at MIA Than the Three Other MIA-HAV Applicants Combined



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#aacuba

Exhibit

Number Title



AA-R-218 Of All the MIA-HAV Applicants, American Accounted for 84.5% of All MIA Domestic Passengers

AA-R-219 American Has the Longest and Deepest Experience in U.S.-Cuba Flights and Operational Know-How in the Unique

Cuba Market

AA-R-220 The Importance of Knowing the Unique Cuba Aviation Structure Was Highlighted on the Floor of the U.S. Senate

AA-R-301 A Comparison of the Frequency Allocation Based on the U.S. Gateway Proposed in This Proceeding with the

Frequencies Requested at Each U.S. Gateway

AA-R-302 American Airlines' Request for 10 Daily MIA-HAV Flights Is Less Than MIA's Proportionate Share - Even Before Adjusting for Any Growth, Which Will Be Greater at MIA Than Anywhere Else

AA-R-303 In Contrast to American's MIA-HAV Frequency Request, JetBlue's Requests for U.S.-HAV Freuencies Are Excessive

to Current and Anticipated Demand from JetBlue's Requested U.S. Gateways

AA-R-304 In Contrast to American's MIA-HAV Frequency Request, Southwest's Requests for U.S.-HAV Freuencies Are

Excessive to Current and Anticipated Demand from Southwest's Requested U.S. Gateways

AA-R-305 In Contrast to American's MIA-HAV Frequency Request, Alaska's Requests for U.S.-HAV Freuencies Are Excessive

to Current and Anticipated Demand from Alaska's Requested U.S. Gateways

AA-R-306 In Contrast to American's MIA-HAV Frequency Request, Spirit's Requests for U.S.-HAV Freuencies Are Excessive toCurrent and Anticipated Demand from Spirit's Requested U.S. Gateways

AA-R-307 There Is More Cuban-American Population per Requested HAV Frequency at MIA Than Any Other Requested U.S.

Gateway

AA-R-308 There Is More Cuban-American Population per Requested HAV Frequency at MIA Than Any Other Requested

Florida Gateway



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#aacuba

Exhibit

Number Title


Page 5 of 14

AA-R-309 Service to MCO Ranked No Higher Than 5th In Any Applicant's Prioritization of Havana Routes

AA-R-310 Service to TPA Ranked NO Higher Than 6th In Any Applicant's Prioritization of Havana Routes

AA-R-311 The "FLL Applicants" Attempt to Claim MIA's and Miami-Dade County's 856,007 Cuban-Amerians as Their Own is

Patently False

AA-R-312 FLL ≠ MIA

AA-R-313 Several Gateways Claim Broad U.S. Coverage to Cuba, But Only 4 Carrier Gateways Can Legitimately Provide

Connections to Most of the U.S. AA-R-401 JetBlue's Request for Four Daily FLL-HAV Flights Greatly Exceeds FLL-HAV's Proportionate Share of the Total U.S.-

HAV Frequency Allocation

AA-R-402 …And, When Combined with the Requests of All Other FLL Applicants, the FLL-HAV Frequency Request Is "Off The

Charts" Excessive

AA-R-403 The Cuban-American Population of Broward Count (FLL's Home) Is Miniscule Compared to Miami-Dade County

(MIA's Home)

AA-R-404 JetBlue Tries to Claim that MIA's Traffic and Demand Are "Also" FLL's, But It Just Isn't So

AA-R-405 …And Other Applicants (Non-FLL Applicants) Have Said It Isn't So:

AA-R-406 And One Applicant, Which Did Not Apply for FLL-HAV Service, Admitted That FLL's Catchment Area Is One-Tenththe Size of MIA's



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#aacuba

Exhibit

Number Title


Page 6 of 14

AA-R-407 Historical Data Proves That MIA-HAV Demand Far Outstrips FLL-HAV Demand

AA-R-408 Havana Arriving Flights Involve a Change of Terminals at FLL and Either a Walk Outside Between Terminals or a

Connector Bus

AA-R-409 While American's Havana Arriving Flights Are All Under "One Roof"

AA-R-410 JetBlue's FLL-HAV Will Have Only a Small Number of Connections to HAV in Both Directions

AA-R-411 JetBlue's 15 FLL-HAV Connections Cannot Compare to American's 58 MIA-HAV Connections

AA-R-412 JetBlue's FLL-HAV Charter Experience Is Not Comparable or Even Close to American's MIA-HAV CharterExperience

AA-R-413 JetBlue's FLL-HAV Charters Have Experienced Load Factors That Have Been, Well, Let Us Just Say, Challenging

AA-R-414 American's MIA-HAV Charters Have Enjoyed Strong Load Factors

AA-R-415 As Demonstrated, JetBlue's FLL-HAV Charters' Load Factors Cannot Compare to American's MIA-HAV Charters'Load Factors

AA-R-416 JetBlue's Double Daily JFK-HAV Request Exceeds JFK-HAV's Proportionate Share of U.S.-Cuba Frequency

Allocation

AA-R-417 JetBlue's Double Daily JFK-HAV Request, When Combined with Delta's Single Daily JFK-HAV Request, Would Allocate Far Greater Frequencies to JFK-HAV Than Demand Warrants



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#aacuba

Exhibit

Number Title


Page 7 of 14

AA-R-418 JetBlue Has Been Operating Charters in the JFK-HAV Market Since 2015…But Only Twice Weekly. If JFK-HAV

Demand Existed for a Daily or Double Daily Flight, Why Hasn't JetBlue Increased the Frequency?

AA-R-419 The Reason JetBlue Has Not Increased JFK-HAV Frequencies: JetBlue's JFK-HAV Load Factors Have Been

Mediocre with Only Two Weekly Flights

AA-R-420 …So One Could Imagine What the Load Factor Would Be With a Seven-Fold Increase in Service

AA-R-421 …And This Would Be Without the Benefit of Significant JetBlue Connections at JFK

AA-R-422 The Modest Demand for JFK-HAV Service Is Not Surprising Given the Size of the Cuban-American Popuation andthe Historical Demand for JFK-HAV Service

AA-R-423 JetBlue's request for Double Daily MCO-HAV Service Greatly Exaggerates the Size of the MCO-HAV Market

AA-R-424 JetBlue's Exaggerated MCO-HAV Request Is Made Worse by the Requests of Southwest and Delta. When

Combined, the Total MCO-HAV Requests Bear No Relationship to the Needs of or Demand in the MCO-HAV Market

AA-R-425 MCO's Catchment Area is 3.5% the Size of MIA's

AA-R-426 JetBlue Would Provide Only 5 Connections in Both Directions For its Mco-HAV Flight

AA-R-427 JetBlue's TPA-HAV Request for Double Daijly Service Over-Asks Based on the Demand in the Market

AA-R-428 When Combined with Southwest's Double Daily TPA-HAV Request, the Total TPA-HAV Frequency Request IsGrossly Oversubscribed



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#aacuba

Exhibit

Number Title


Page 8 of 14

AA-R-429 TPA's Catchment Area Is 10% the Size of MIA's

AA-R-430 JetBlue Would Have Only 4 Connections in Both Directions for Its TPA-HAV Service

AA-R-431 TPA's Cuban-American Population (Hillsborough County) Is a Fraction of MIA's (Miami-Dade County)

AA-R-432 TPA's Charter Flight History to Havana Demosntrates That Even a Single Daily Scheduled TPA-HAV Service Is Not

Warranted

AA-R-433 To Go from a 71% Load Factor on Two Weekly Flights to a 71% Load Factor on 14 Weekly Flights Requires a

Staggering 700% Stimulation AA-R-434 JetBlue's Proposed EWR-HAV Service Must Be Considered an Extreme Reach by JetBlue

AA-R-435 EWR-HAV Is JetBlue's Next to Last Gateway Priority Among Its Six Proposed U.S. Gateways to Havana (the Most of Any Applicant in This Proceeding)

AA-R-436 JetBlue Would Have No Connections in Both Directions for Its EWR-HAV Service

AA-R-437 JetBlue's BOS-HAV request for a Daily Service Is, at Best, Aspirational, Not Realistic Now

AA-R-438 Boston's Cuban-American Population Is Small

AA-R-439 JetBlue Would Have Only 1 Connection in Both Directions for Its BOS-HAV Service, and That Would Be to JFK



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#aacuba

Exhibit

Number Title


Page 9 of 14

AA-R-440 BOS-HAV Is The Last of the Six JetBlue U.S. Gateway Priorities

AA-R-441 Notwithstanding JetBlue's Self-Laudatory Claims, American Outshines JetBlue

AA-R-442 JetBlue Touts Its Customer Service "Advantages," But American's Advantages Are More Meaningful and Important to

Cuba-Destined U.S. Passengers

AA-R-501 Southwest's FLL-HAV Request for Six Daily Frequencies Vastly Exceeds FLL-HAV's Proportionate Share of the U.S.-Havana Frequency Allocation

AA-R-502 Southwest's FLL-HAV Request for Six Daily Frequencies, When Combined with the Other FLL Applicants' Requests,Would Result in FLL Having Almost as Many Havana Flights as MIA … an Absurd Result

AA-R-503 Southwest's Request for Six Daily FLL-HAV Frequencies Is Far Above and Beyond Current Demand and AnyReasonable Forecast of Expected Demand

AA-R-504 Southwest's FLL-HAV Service Would Have Only 20 Connections in Both Directions

AA-R-505 FLL's Catchment Area Is 10% the Size of MIA's

AA-R-506 Southwest Has Never Operated a Single Flight to Cuba, let Alone Any Flights in the FLL-HAV Market

AA-R-507 In Order to Operate Six Daily Flights at Just 70% Load Factor (Well Below Its Average Load Factor), Southwest

Would Have to "Stimulate" the FLL-HAV Market by 4,860%, Assuming All 2015 FLL-HAV Charter Flights Operated ata 100% Load Factor

AA-R-508 Southwest's Request for Double Daily TPA-HAV Frequencies Exceeds TPA-HAV's Proportionate Share of U.S.-

Havana Frequency Allocation


P 10 f 14


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#aacuba

Exhibit

Number Title


Page 10 of 14

AA-R-509 Southwest's TPA-HAV Double Daily Request, When Combined with JetBlue's Double Daily TPA-HAV request, Is

Excessive to TPA-HAV's Proportionate Share of U.S.-HAV Frequency Allocation

AA-R-510 Southwest's TPA-HAV Double Daily Request Severely Exceeds Historical, Current and Expected Demand in the

TPA-HAV Market

AA-R-511 Southwest Has No Experience in the TPA-HAV Market

AA-R-512 Southwest's TPA-HAV Service Would Have Only 15 Connections in Both Directions

AA-R-513 TPA's Catchment Area Is 10% the Size of MIA's AA-R-514 TPA-HAV Was Southwest's Second to Last Priority Out of Nine Proposed HAV Service

AA-R-515 Southwest's MCO-HAV Request for a Daily Frequency Allocation, When Combined with the Other Requests, Greatly

Exceeds MCO-HAV's Proportionate Share of U.S.-HAV Frequency Allocation

AA-R-516 Southwest's MCO-HAV Service Would Provide Only 10 Connections in Both Directions

AA-R-517 Southwest Has No Experience in the MCO-HAV Market

AA-R-518 MCO's Catchment Area Is 3.5% the Size of MIA's

AA-R-519 MCO-HAV Had Only 65 Charter Flights In 2015

AA-R-520 MCO-HAV Was Southwest's Last Priority Out of Nine Proposed HAV Services

AA-R-521 Southwest's HAV Forecasts Are a Result in Search of a Justification

AA-R-522 Southwest's Use of Canada MIDT Data in Its Forecast Is Just Plain Wrong


P 11 f 14


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#aacuba

Exhibit

Number Title


Page 11 of 14

AA-R-523 Southwest's Forecast for Proposed FLL-VRA Service Is Filled with Flaws

AA-R-601 ATL, Like CLT (and DFW), Provides Broad Coverage of the U.S.-HAV Markets Not Served by American Over MIA

AA-R-602 Delta's Request for a Daily JFK-HAV Frequency Allotment Is Proportionate to the U.S.-Cuba Frequency Allocation for

JFK, but Three JFK Daily Requests to Havana Are Excessive to Both Demand and Historical Traffic

AA-R-603 Delta's JFK-HAV Service Would Provide Only 2 Connections in Both Directions

AA-R-604 Delta's Daily JFK-HAV Request Is Excessive to Historical JFK-HAV Charter Demand

AA-R-605 Delta's MIA-HAV Proposed Service Has No Basis to Operate Successfully

AA-R-606 Delta's Other Attempt to Operate a Non-Hub International Flight at MIA Did Not Go Well or Last Long

AA-R-607 And Delta's Current Non-Hub International Flight at PHL Is Not Going Well

AA-R-608 Delta's MCO-Havana Proposed Daily Service, When Combined with the Other MCO-HAV Requests, Is Extremely

Excessive to Any Current or Even Medium-Term Real or Aspirational Demand

AA-R-609 Delta's MCO-HAV Service Would Provide Only 3 Connections in Both Directions

AA-R-610 MCO's Catchment Area is 3.5% the Size of MIA's

AA-R-611 MCO-HAV Has Experienced Very Little Charter Activity, and Nothing Compared to MIA-HAV

AA-R-612 Delta Has Operated No Charter to Havana from MCO

AA-R-613 MCO-HAV Was Delta's Last Priority Among Proposed Routes

AA-R-614

While No Forecast Was Required, and Any Forecast in the U.S.-Cuba Market Is Fraught with Unknowns, Delta's

Forecast Is at Best a Guesstimate with no Basis in Fact or Data


Page 12 of 14


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#aacuba

Exhibit

Number Title


Page 12 of 14

AA-R-701 Frontier's Request for the First Two of Its Three Proposed Daily MIA-HAV Flights Is Tied to Frontier Also Receiving

DEN-HAV Frequencies, and There Is No Basis - or Demand - for DEN-HAV Service

AA-R-702 DEN-HAV's Proportionate Share of U.S.-Havana Frequency Allocation Is Zero, yet Frontier Requests a Daily DEN-

HAV Frequency

AA-R-703 Frontier Has Never Operated Charter Flights to Cuba

AA-R-704 Cuban-American Population in Denver

AA-R-705 Frontier Has No Meaningful Presence in MIA AA-R-706 Frontier's MIA-HAV and DEN-HAV Flights Would Have Only a Single Connection in Both Directions

AA-R-801 Spirit's Request for Two Daily FLL-HAV Frequencies Exceeds FLL's Proportionate Share of the U.S.-HavanaFrequency Allocation

AA-R-802 Spirit's Request, Combined with the Other FLL-HAV Requests, Is "Off the Chart" Excessive Compared to Actual

Current Demand and Any Expectation of Future Demand

AA-R-803 FLL's Catchment Area Is 10% the Size of MIA's

AA-R-804 Spirit Has No Cuba Experience

AA-R-805 There Has Been Miniscule Demand for Charter Flights from FLL to HAV or Anywhere in Cuba … That's Highly

Probative of Future Demand

AA-R-806 Spirit's FLL-HAV Service Would Have only 10 Connections in Both Directions

AA-R-901 United's Request for a Daily EWR-HAV Service Is in Line with Its Proportionate Share of U.S.-Havana Frequencies


Page 13 of 14


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#aacuba

Exhibit

Number Title


Page 13 of 14

AA-R-902 But United's EWR-HAV Request Plus JetBlue's Daily EWR-HAV Service Request Exceeds EWR's Proportionate

Share of the U.S. EWR-HAV Frequency Allocation

AA-R-903 United's EWR-HAV Service Offers Only 25 Connecting in Both Direction, Compared to 68 Provided by American at

CLT, 58 at MIA and 52 at DFW

AA-R-904 United's Once Weekly Request for IAH Does Not Permit IAH-Originating Travelers to Go to or Return from Havanaon Any of the Other Six Days without Extreme Circuity and Unbearable Elapsed Times

AA-R-905 United's Once Weekly Request for IAD Does Not Permit IAD-Originating Travelers to Go to or Return from Havana

on Any of the Other Six Days without Doubling Their Travel Time

AA-R-906 United Once Weekly Request for ORD Does Not Permit ORD-Originating Travlers to Go to or Return from Havanaon Any of the Other Six Days without Doubling Their Elapsed Travel Time

AA-R-907 United Has Operated No Charter Flights to Cuba Since 2013

AA-R-1001 Alaska Airlines Request for Double Daily LAX-HAV Frequencies Is Excessive in the Extreme and Bears No

Rational Relationship to Historical, Current or Future Demand

AA-R-1002 American Knows the LAX-HAV Market, Current Operates LAX-HAV Charters (at less than 50% Load Factor) and, if

There were Sufficient Demand to Warrant Inreasing Its Single Weekly Service, American Would Have Done

So…and It Has Not

AA-R-1003 If Once-Weekly LAX-HAV Charter Flight Current Operated by American Has Experienced a Load Factor of LessThan 50% from the Start of the Service to Date, Can Anyone Believe That a Daily or Double Daily Service Will Be a

Viable or Prudent Use of Scarce Havana Frequency Allocations?

AA-R-1004 Alaska's Proposed LAX-HAV Services Would Have Only 3 Connections


Page 14 of 14


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#aacuba

Exhibit

Number Title


Page 14 of 14

AA-R-1005 Of the 3 Connections Alaska Has to Its LAX-HAV Flight, One - SEA - Actually Has Better Connect Times on

American

AA-R-1006 Alaska States an Estimated LAX-HAV Market Size but Without Attempting to Explain it, Source it, or Justify it

AA-R-1101 Sun Country's Proposed RSW-HAV Service Would Greatly Exceed the Historical Demand for RSW-HAV

AA-R-1102 Sun Country Would Have a Single Connection at RSW in Both Directions

AA-R-1103 Sun Country's Proposed Twice-Weekly MSP-HAV Service Would Greatly Exceed MSP-HAV's Proportionate Share

of U.S.-Havana Frequency Allocation AA-R-1104 Sun Country's Proposed Twice-Weekly MSP-HAV Service Would Greatly Exceed Historical Demand

AA-R-1105 Sun Country's MSP-HAV Service Would Have Only a Single Connection in Both Directions

AA-R-1106 Sun Country's MSP-HAV Passengers Would Have No Way to Return from HAV on Sun Country on the Five Days

of the Week on Which Sun Country Does Not Operate

AA-R-1201 FedEx Is Right That It Is Not "Asking For Much" (FedEx Argument, p.1), But Is the Authority It Seeks Consistent

with the U.S.-Cuba MOU?

AA-R-1202 FedEx Proposes the HAV-MID Blind Sector Because of the Lack of HAV-MIA Traffic, So Is Now the Right Time to

Award Any Scarce and Highly In-Demand U.S.-Cuba Frequencies for a Cargo Service That Has Not YetMaterialized?


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Series 100:

General Rebuttal Exhibits

of American Airl ines

DOT Docket OST-2016-0021Exhibit AA-R-101


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Summary of Applicants and Proposed U.S. Gateways For Havana Service

13 applicants for U.S.-Cuba

Frequency Allocations

397 U.S.-Havana weekly

frequencies requested

Total Weekly Frequencies

by All ApplicantsGateways to Havana

117 MIA

91 FLL

28 MCO

28 TPA

24 JFK

19 LAX

15 EWR

14 PBI9 RSW

7 CLT

7 DFW

7 BOS

7 DEN

7 ATL

6 ORD

5 EYW

2 JAX

2 MSP

1 IAH

1 IAD

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U.S. Carrier Applicant Proposed Frequencies to Havana by Gateway

117

91

28 2824

1915 14

9 7 7 7 7 7 6 52 2 1 1

0

20

40

60

80

100

120

140

MIA FLL TPA MCO JFK EWR LAX PBI RSW CLT DFW BOS DEN ATL ORD EYW JAX MSP IAH IAD

Source: Carrier Applications

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Weekly Frequencies


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Some Threshold “Disqualifying” Issues

Lack of current necessary authority to engage in

foreign scheduled air transportation

Application based on use of small, propeller aircraft

(34 seats only) for allocation of highly scarce,

heavily in-demand U.S.-Havana frequencies

Lack of ability to sell scheduled tickets

− No online booking portal

For these reasons, American’s Rebuttal Exhibits wi ll focus

on the service proposals of the other applicants in this proceeding

Dynamic International Airways

Eastern Airlines

Silver Airways

Eastern Airlines

Note: American uses “disqualifying” in the sense of clearly not maximizing the public benefits.

Issue Relevant Applicants

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Applicants In This Proceeding Agree That the Overwhelming

Source of Traffic to Havana Will Be the U.S. Cuban American Population

Carrier Comments

Southwest

JetBlue

Frontier

Silver

“. . . [t]he distribution of Cuban Americanpopulation [will be] the most likely major centers

for travel from the U.S. . . .”

(Application, Page 3)

“. . . [F]amilial, cultural and educational travel . . .

will be the primary drivers of United States-Cuba

traffic until Congress takes further steps torescind the embargo.”


“. . . [T]he largest population eligible to travel to

Cuba are those permitted to do so to visit ‘closer

relatives’ there.” (Application, Page 18)

“. . . Cuban Americans comprise the vast

majority of likely Cuba travelers.”


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Data Point #1: U.S. Cuban-American PopulationDOT Docket OST-2016-0021

Exhibit AA-R-105

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MIA is, Unquestionably, the U.S. Gateway with the Largest U.S. Cuban-American

Population, and, Thus, Has the Most Proven Need for HAV Frequencies

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Top 10 States – Cuban-American Population

1,213,438

88,607 83,362 70,803 46,541 25,048 22,541 21,459 18,079 17,930

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Florida California New Jersey New York Texas Georgia Illinois Nevada NorthCarolina

Pennsylvania

Miami-Dade (MIA): 856,007

Miami-Dade County represents almost half (47.9%)

of the entire U.S. Cuban-American population –

more than any county, city, MSA, or State (other than Florida)Source: U.S. Census Bureau

Allocating U.S.-Havana Frequencies in This ProceedingDOT Docket OST-2016-0021

Exhibit AA-R-106

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Based on the Size and Location of Cuban-American Population,

MIA Should Receive 12 U.S.-Havana Frequencies of the 20 Available

Note:1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-American

population in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on theallocation described in United’s application (Exhibit UA-112).

12.2

1.2 1.20.9

0.7 0.7 0.60.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.00

2

4

6

8

10

12

14

MIA EWR FLL TPA LAX JFK PBI RSW MCO ORD IAH ATL IAD DFW BOS EYW JAX CLT DEN MSP

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Allocation of 20 U.S.-Havana Daily Frequencies

Based on Cuban-American Population

at Proposed U.S. Gateway Cities

A Comparison of the Frequency Allocation Based on the U.S. Gateways

P d i Thi P di ith th F i R t d t E h U S


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Proposed in This Proceeding with the Frequencies Requested at Each U.S.

Gateway Shows that the MIA-HAV “Asks” Were in Line with Historical Demand

15.0

2.1

13.0

4.0

2.1

3.0

2.0

1.3

4.0

0.3 0.1

1.0

0.1

1.0 1.00.7

0.3

1.0 1.0

0.3

12.2

1.2 1.20.9

0.7 0.7 0.60.4 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.0 0.00

2

4

6

8

10

12

14

16

MIA EWR FLL TPA LAX JFK PBI RSW MCO ORD IAH ATL IAD DFW BOS EYW JAX CLT DEN MSP

Total Daily Frequencies Requested by U.S. Carriersat Each Proposed U.S. Gateway

Allocation of Available 20 U.S.-Havana DailyFrequencies Based on Cuban-American Population

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Note:

1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on the

allocation described in United’s application (Exhibit UA-112).

FLL H th L t Diff B t It P ti t Sh f U S H


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FLL Has the Largest Difference Between Its Proportionate Share of U.S.-Havana

Frequencies and the Number of U.S.-Havana Frequencies Requested

U.S. Gateway

All ocation of Avai lab le

20 U.S.-Havana

Daily Frequencies Based onCuban-American Population

Total Daily Frequencies

Requested by U.S. Carriers

at Each Proposed U.S.Gateway

Frequency

Difference

FLL 1.2 13 (11.8)

MCO 0.3 4 (3.7)

TPA 0.9 4 (3.1)

MIA 12.2 15 (2.8)

JFK 0.7 3 (2.3)

LAX 0.7 2.1 (1.4)

PBI 0.6 2 (1.4)

DEN 0.0 1 (1.0)

EWR 1.2 2.1 (0.9)

RSW 0.4 1.3 (0.9)

CLT 0.1 1 (0.9)

DFW 0.2 1 (0.8)

BOS 0.2 1 (0.8)

ATL 0.3 1 (0.7)

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Note:

1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx). Minimum daily service proposed.3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on the allocation

described in United’s application (Exhibit UA-112).

Based on Percentages, MIA Has the Smallest Difference Between Its

P ti t Sh f U S H F i d th F i


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Proportionate Share of U.S.-Havana Frequencies and the Frequencies

Requested at MIA of Any Gateway for Which Daily Service Is Proposed

U.S. Gateway

All ocation of Avai lab le 20

U.S. -Havana Daily Frequencies

Based on Cuban-American

Population

(1)

Total Daily Frequencies

Requested by U.S. Carriers

at Each Proposed U.S. Gateway

(2)

% Difference

Between U.S.-HAV

Allocation and Request

of All Applicants

(2) ÷ (1)

MIA 12.2 (2.8) 23%

EWR 1.2 (0.9) 77%

LAX 0.7 (1.4) 202%

PBI 0.6 (1.4) 226%

RSW 0.4 (0.9) 261%

ATL 0.3 (0.7) 297%

TPA 0.9 (3.1) 329%

JFK 0.7 (2.3) 339%

DFW 0.2 (0.8) 518%

BOS 0.2 (0.8) 533%

CLT 0.1 (0.9) 872%

FLL 1.2 (11.8) 989%

MCO 0.3 (3.7) 1145%

DEN 0.0 (1.0) 1911%

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Note:1/ Daily frequencies per % of Cuban-American population were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of Cuban-Americanpopulation in each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx). Minimum daily service proposed.

3/ Cuban-American population: U.S. Census (2010) - County (FL gateways), MSA (Other gateways), MSA population distribution between EWR and JFK based on theallocation described in United’s application (Exhibit UA-112).

Data Point #2: Histor ical Information on U.S.-Cuba Charter Flights

Th O h l i N b f Ch t O t d F Th U S G t


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The Overwhelming Number of Charter Operated From The U.S. Gateways

Proposed in This Proceeding to Cuba Originated at MIA in 2015 – Over 86%

4,348

338115 70 70 65 9 3 1 1 1 0 0 0 0 0 0 0 0 0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

MIA TPA EYW JFK FLL MCO RSW LAX BOS MSP ATL CLT DFW DEN EWR IAD IAH JAX ORD PBI

Source: Havanatur Cuba Charter Data (2015)

age o

MIA: Almost 13x larger than next largest U.S. gateway to Cuba

2015 Charter Flights to Cuba

From U.S. Gateways Proposed in This Proceeding

By All Carriers (Including Non-Applicants)

Data Point #3: Histor ical Information on U.S.-Havana Charter Flights

Close to 84% of All Charters Between the U S and Havana in 2015


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2,918

26786 70 69 65 9 3 1 1 1 0 0 0 0 0 0 0 0 0

0

500

1,000

1,500

2,000

2,500

3,000

3,500

MIA TPA EYW JFK FLL MCO RSW LAX BOS MSP ATL CLT DFW DEN EWR IAD IAH JAX ORD PBI

Close to 84% of All Charters Between the U.S. and Havana in 2015

Originated At MIA

g

MIA: Almost 11x larger than next largest U.S. gateway to Cuba

Source: Havanatur Cuba Charter Data (2015)

2015 Charter Flights to Havana

From U.S. Gateways Proposed in This Proceeding

By All Carriers (Including Non-Applicants)

Allocating U.S.-Havana Frequencies in This Proceeding Based on the Number of

S C O S G


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U.S.-Havana Charter Flights Operated in 2015 Proportionately to Each U.S. Gateway,

MIA Should Receive 17 of the 20 Available U.S.-Havana Frequencies

g

16.7

1.5

0.5 0.4 0.4 0.40.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

MIA TPA EYW JFK FLL MCO RSW LAX BOS ATL MSP EWR PBI CLT DFW DEN ORD JAX IAD IAH

Source: Havanatur charter data (2015)Note:1/ Daily frequencies per % of 2015 charter flights operated were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of 2015 charter flights in

each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).

Allocation of 20 U.S.-Havana Daily Frequencies

Based On Charters Flown in U.S.-Havana Markets in 2015

A Comparison of the Frequency Allocation Based on 2015 Charter Flights Operated with the

F i P d t E h U S G t Sh th t MIA’ d O l MIA’ R t f


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16.7

1.5

0.5 0.4 0.4 0.40.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0-

2

4

6

8

10

12

14

16

MIA TPA EYW JFK FLL MCO RSW LAX BOS ATL MSP EWR PBI CLT DFW DEN ORD JAX IAD IAH

Total Daily Frequencies Requested by U.S. Carriers at Each Proposed U.S. Gateway

Al location of Avai lable 20 U.S.-Havana Daily Frequencies Based on 2015 U.S.-HAV Charter Operation

Frequencies Proposed at Each U.S. Gateway Shows that MIA’s, and Only MIA’s, Request for

HAV Service Is Less Than Its Proportionate Share of Historical Charter Flights

Source: Havanatur charter data (2015)Note:1/ Daily frequencies per % of 2015 charter flights operated were calculated based on total 20 daily frequencies to Havana for allocation multiplied by % of 2015 charter flights in

each proposed U.S. gateways.2/ Excludes carriers without necessary scheduled foreign authority (Eastern and Dynamic) and requested cargo-only authority (FedEx).

s

Several Applicants Did Not Build Realistic Connections


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Several Applicants Did Not Build Realistic Connections

to Their Proposed U.S.-Havana Services

Problems revealed by Direct Exhibits

General:

Applicants without Cuba experience did not augment the standard Minimum

Connecting Times (MCTs) at their gateway airports to account for the need to process

unique OFAC-required paperwork for Cuba flights to assure passenger and airline

compliance with categories of permissible travel to Cuba (American added 15 minutes to itsstandard MCTs)

Connections at proposed U.S. Gateways:

Showed insufficient connect times

Included one way connects, instead of just connects in both directions (Americandisplayed and enumerated connects only in both directions)

Displayed connecting flights beyond the customary four-hour maximum connect

window (American eliminated from its list of

Documents

American Airlines Consolidated Answer