O MAN! This'll be GREAT!!!
US-Colombia Frequencies
Order 2008-11-12
OST-2008-0239 - Spirit Air - Allocation of Seven US-Colombia Frequencies Returned by Continental Airlines
OST-2008-0258 - American - Allocation for Seven Weekly Miami-Bogota Frequencies
Issued and Served November 14, 2008
Order to Show Cause Allocation Seven Frequencies to Spirit Airlines
We have tentatively decided to award Spirit the seven frequencies at issue here, along with underlying economic authority, to provide combination services in the Ft. Lauderdale-Medellin market. We also tentatively conclude that the record in this proceeding supports the selection of American for backup authority to the primary award to Spirit.
We tentatively conclude that Spirit’s proposal for the first-ever nonstop Ft. Lauderdale-Medellin service would introduce beneficial competition in the South Florida-Medellin market by establishing first-time U.S.-flag competition with the double-daily Miami-Medellin services of American, while also providing competition with Avianca’s daily Miami-Medellin service. Specifically, Spirit’s proposed service would offer the significant South Florida-Medellin traffic base an attractive alternative option to the existing services of American and Avianca from Miami, providing competition for Medellin traffic between the two airports. In addition, the record indicates that a large population that is geographically located in the vicinity of Ft. Lauderdale could potentially benefit from the availability of more convenient Medellin service from Ft. Lauderdale rather than Miami. Spirit’s proposal would also provide new competition in the overall U.S.-Medellin market, as American and Avianca have long been primarily the only carriers that have offered U.S.-Medellin service. Moreover, an award to Spirit would improve the overall U.S.-Colombia market structure by promoting a wider variety of U.S.-Colombia services, enhancing the competitive stance of a newer entrant carrier against a more established incumbent.
By comparison, American’s proposal, which would add a third daily flight to its already existing twice-daily Miami-Bogota service, offers markedly fewer competitive benefits. Also, while we recognize that the Miami/Ft. Lauderdale-Bogota market is the largest overall U.S.-Colombia O&D market, and that it is larger than the Miami/Ft. Lauderdale-Medellin market, it also currently enjoys far more service. There is also substantially more U.S.-Bogota service available overall, with U.S. and foreign carriers together providing an average of more than 12 daily nonstop flights in the U.S.-Bogota market, as compared to only four daily nonstop U.S.-Medellin flights. In addition, U.S.-Bogota services will soon be increasing to an average of more than 14 flights a day, when Delta institutes its New York (JFK)-Bogota service and JetBlue institutes its Orlando-Bogota service, on or before December 18, 2008 and February 15, 2009, respectively.
We have reviewed American’s arguments concerning its proposed greater capacity and its more extensive connecting services at Miami. However, in this case we have tentatively determined that the valuable competitive benefits of Spirit’s first-ever U.S.-flag competition to American’s Miami-Medellin service, as well as the positive effect that it would have on the overall U.S.-Colombia market structure, outweighs the benefits of adding a third daily flight in a market that already has considerable service, including service to on-line connecting points.
We direct any interested parties having objections to our tentative findings and conclusions set forth in this order and in ordering paragraphs 1 through 2 above, to file their objections in the above-captioned dockets no later than seven calendar days from the date of service of this order; answers thereto shall be filed no later than four calendar days thereafter.
By: Michael Reynolds
