Below The Radar: Internal LB Airport Docs Show How Southwest Sought And Got Temporary Use Of Three JetBlue Flight Slots Thru Dec. 31; What Happens After Jan. 1?

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Publisher's introduction: LBREPORT.com has learned details of developments unfolding at Long Beach Airport. On July 13, the City issued a press release which, while accurate, downplayed details of what's taking place. Regardless of one's views on the Airport, we believe the public has a right to know these matters. They show there's more at stake than just being able to fly to Las Vegas.

(July 21, 2016, 5:50 a.m., updated 10:25 a.m.) -- Internal Long Beach Airport documents, obtained by LBREPORT.com under the CA Public Records Act, show that less than five months after Long Beach Airport gave four of nine newly-available flight slots to Southwest and three to JetBlue, Southwest cited a section of LGB's flight allocation rules (that administer flights under LB's Airport Ordinance) in applying to LB Airport to use "unused" flights from slots allocated to JetBlue, a direct competitor.

Southwest cited an LB Airport procedure that lets the Airport temporarily re-allocate flights that aren't being fully utilized ("Unused Flights") by a carrier. In a July 1 letter to LB Airport, Southwest expressed its interest in "Unused Flights" without explicitly mentioning JetBlue by name, although its request effectively pertained to three slots allocated to JetBlue that JetBlue was flying at minimum levels.

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In its July 1 letter to Long Beach Airport, Southwest's Associate General Counsel, Barry Brown, cited Section 9.B.1 of Resolution No. C-28465 and indicated that if the Airport approves its application, Southwest would operate three additional flights per day on a daily seven day per week schedule above the four flight slots it has been allocated for a period beginning on Sept. 18 .

By letter dated July 13, 2016, LB Airport Interim Director Juan Lopez-Rios, informed JetBlue that based on JetBlue's "flights-per-day-of-week" flight slot schedule for the period from July 1-Dec. 31, 2016, "JetBlue's schedule indicates that a minimum of nine (9) Unused Flights will not be operated between September 18 and December 31, 2016. As such, Unused Flights have been temporarily reassigned to another air carrier for its use for the period of September 18 through December 31, 2016, in accordance with the provisions of the Flight Slot Resolution..."

LGB's letter added, "JetBlue may activate the re-assigned Unused Flights upon showing a firm schedule for use of the airline slots after December 31, 2016 during the next required "flights-per-day-of-the-week" schedule, which is due on or before August 1, 2016. [emphasis in original] Should JetBlue desire to use any of the three re-assigned Unused Flights after December 31, 2016, the City will notify the other carrier of this fact."

Also by separate letter dated July 13, LB Airport informed Southwest that based on its July 1 letter and subsequent conversations, and "based on the information provided by the air carriers currently operating at the Airport, including Southwest, the Airport can accommodate Southwest's request for the temporary allocation of Unused Flights" for the period from September 18 through December 31, 2016. "Continued use of the Unused Flights beyond the temporary allocation period is subject to their continued availability based on information received on a monthly basis from the air carriers on their respective one-hundred and eighty (180) day look-ahead schedules, which are due on or before the first of each month," LGB told Southwest.

LGB's July 13 letter to Southwest also includes multiple conditions in numbered paragraphs to which Southwest gave a signed acknowledgment indicating its agreement. The conditions include that the Usused Flights allocation is only for the period specified in the letter [to Dec. 31] and expire completely on that date, and "None of the allocation of Unused Flights will or may be carried forward beyond the specific allocation termination date." For reference, LBREPORT.com provides a copy of LGB's complete July 13 letter to Southwest at this link. [On July 21, in response to our inquiry, LGB spokesperson Stephanie Montuya-Morisky confirmed that Southwest had signed the acknowledgment on p. 4 of the letter, indicating its agreement to the letter's conditions.]

In a statement emailed to LBREPORT.com in response to our invitation for comment, JetBlue's Manager of Corporate Communications, Philip Stewart, stated:

[JetBlue text] JetBlue is proud of our 15 year history of delivering low fares and award winning customer service to Long Beach, and we're excited about future growth in our Southern California focus city. As a corporate citizen active in the community and on behalf of our more than 700 locally based crewmembers, JetBlue looks forward to utilizing all of our slots at the airport with service to new destinations that could include exciting international destinations.

The reference to "international destinations" pertains to JetBlue's request that the LB City Council allow a federal customs inspection facility at LB Airport. If the Council were to allow this, it couldn't be limited to JetBlue or to any single operator. Some [including LBREPORT.com editorially] have warned that allowing a customs facility would create additional risk exposure for the City by giving international cargo and passenger operators an incentive to seek LB flight slots currently filled under LB's Airport Ordinance.

LB's Airport Ordinance protects the City from unlimited numbers of flights at all hours on all runways; without the Ordinance, LB would lose its current control over flight operations at its Airport. LB city management, the City Attorney's office and Councilmembers have repeatedly told the public that the Airport Ordinance is an extremely valuable City asset and must be protected. JetBlue has publicly stated that it intends to operate under the terms of LB's Airport ordinance. However, JetBlue doesn't control what Southwest or any other operators might do.

In Feb. 2015, former LB Airport Advisory Commissioner (and current Long Beach City Prosecutor) Doug Haubert testified to LB's Airport Advisory Commission that he believes allowing a customs facility could invite new and unprecedented levels of risk for the city's protective Airport ordinance. If any number of international passenger or cargo operator(s) -- incentivized by a customs facility to seek LB Airport flight slots not available (currently filled) under LB's Ordinance -- were to challenge LB's Airport Ordinance in court and prevail, the City could lose its current ability to protect the City and its neighborhoods from unlimited flights at all hours (no nighttime curfew) on all runways, including those currently protected from large aircraft.

City Prosecutor Haubert stated in his Feb. 2015 testimony that he viewed the greatest risk to City occurs when an Airport tenant feels threatened competitively by another, which in the past has led to airlines fighting for more slots. When asked if federal customs facilities could increase the risk of competition, Mr. Haubert noted that it could.

Southwest, a Dallas-based new arrival at LB Airport, is a direct competitor to NYC-HQ'd JetBlue.

In July 2015, the City Council voted 6-3 (Supernaw, Uranga and Austin dissenting) to conduct a "feasibility study" on international flights. An LB Airport spokesperson has told LBREPORT.com that the "feasibility study" is currently anticipated to come to the City Council for review, discussion and a potentially a voted decision by late August or early September 2016.

Long Beach Airport is a municipal airport serving domestic destinations, a matter of which JetBlue was aware when in 2001, it requested and received all of LGB's then-available flight slots for large aircraft over 75,000 pounds. JetBlue did so only after the City Council accommodated JetBlue by amending LGB's flight slot allocation rules to let new operators hold flight slots longer before flying them. The City Attorney's indicated that Council action on its flight allocation rules shouldn't put the Ordinance at risk, but that's what happened. Two other carriers objected to what the City had allowed; the FAA opened an inquiry into the matter; the City retained special aviation counsel and resolved the issue with the assistance of JetBlue which gave up some of its slots.

JetBlue is currently LGB's largest commercial tenant. It calls Long Beach its west coast hub. It holds nearly three dozen of LGB's now-fifty flight slots for large aircraft (which LGB increased in late 2015 from 41 slots, citing less cumulatively measured fleet noise.) Three of those slots have now been "temporarily" reassigned to a direct competitor, Southwest, until December 31, 2016.

The allocation of "Unused Flights" has apparently happened before at LGB involving JetBlue. A July 13, 2016 email from Interim Airport Dir. Lopez-Rios to JetBlue Sr. VP/Gov't Affairs Rob Land, mentions that the two men had handled a situation in 2008 involving LGB unused flights allocations. However LBREPORT.com is unaware of a time when a similar situation arose involving two direct competitors, as is taking place now.

In a July 13 press release, the City said the "temporary reallocation of two to three flights [to Southwest] and will maintain compliance with the City's Airport Noise Compatibility Ordinance." Quoted in the release, LB Mayor Robert Garcia said, "We are delighted that Southwest is putting these unused slots to use at the Long Beach Airport...This will attract new customers and bring additional revenue to our airport."

On or before August 1, JetBlue and Southwest are scheduled to submit their respective "flights-per-day-of-week" flight slot schedules for a period beginning Jan. 1, 2017.

Developing. Stay with LBREPORT.com for further developments on this story.

At midmorning July 21, LGB's spokesperson confirmed (in response to our inquiry) that Southwest had signed the acknowledgment indicating its agreement to conditions in the July 13 letter. At 10:25 a.m. LBREPORT.com added a link to the full text of the letter and its conditions in full.