BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of 

DELTA AIR LINES, INC.

 

for a frequency allocation 

(Detroit-Sao Paulo, Brazil)

)

)

)

)

)

)

)

Docket DOT-OST-2010-

0090

Application of 

AMERICAN AIRLINES, INC.

 

for an allocation of 11 U.S.-Brazil frequencies

)

)

)

)

)

)

)

Docket DOT-OST-2010-

0088

CONSOLIDATED ANSWER OF WAYNE COUNTY AIRPORT AUTHORITY

TO MOTIONS OF AMERICAN AIRLINES, INC. 

Communications with respect to this document should be addressed to:

Lester W. Robinson

Chief Executive Officer 

Emily Neuberger

Senior Vice President and General Counsel

Steve Economy

Senior Vice President, Government Affairs

Joe Cambron

Director, Air Service Development

Wayne County Airport Authority

L.C. Smith Terminal

Detroit, MI 48242

April 22, 2010
Docket OST-2010-0090

2

BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Application of 

DELTA AIR LINES, INC.

 

for a frequency allocation 

(Detroit-Sao Paulo, Brazil)

)

)

)

)

)

)

)

Docket DOT-OST-2010-

0090

Application of 

AMERICAN AIRLINES, INC.

 

for an allocation of 11 U.S.-Brazil frequencies

)

)

)

)

)

)

)

Docket DOT-OST-2010-

0088

CONSOLIDATED ANSWER OF WAYNE COUNTY AIRPORT AUTHORITY

TO MOTIONS OF AMERICAN AIRLINES, INC. 

The Wayne County Airport Authority (“WCAA”), which operates Detroit Metropolitan Wayne 

County Airport (“DTW”), hereby answers the motions of American Airlines, Inc. (“American”) in the 

captioned dockets which seek immediate approval of American’s U.S.-Brazil services and to dismiss 

the request of Delta Airlines, Inc. (“Delta”) for additional frequencies to support daily Detroit-Sao 

Paulo service.

The WCAA is extremely pleased that Delta has announced new service from DTW to Sao 

Paulo. Detroit-Sao Paulo is Detroit's largest unserved market as ranked by local revenue1. With 

nearly $20 million in annual passenger revenue, the Detroit-Sao Paulo market has long needed nonstop service. Not surprisingly, Brazil is a key market for Detroit's recovering auto industry, and that 

 

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3

link has driven steady growth in this route. General Motors officials already have commented 

publicly that this new service will be a boon to further business development between Brazil and the 

United States, but have expressed the need for daily air service to support their routine business 

travel needs. As a result, it is important that Detroit not only gains service to Sao Paulo, but also has

a schedule suitable for business travelers now connecting via other gateways. As currently proposed, 

Delta only would be able to operate two flights per week without the award of the additional 

frequencies it is seeking. This "deeper" schedule is particularly important in a business-oriented 

market as evidenced by GM's comments. The business ties a daily schedule would afford would create 

approximately $150 million in economic impact which is of vital importance to the Michigan economy.

Detroit's extensive catchment area combined with its modern, state-of-the-art McNamara 

Terminal, will allow an entirely new region to enjoy the benefits of non-stop Brazilian service, while 

maximizing passenger comfort, convenience, and competition. 

A Key Link for the Recovering Auto Industry

Detroit's role at the center of the global auto industry has created extensive traffic flows to 

other auto production and design centers around the globe. GM's Tech Center in Sao Paulo employs 

8,000 people, including 1,300 engineers who routinely need to visit GM's four other Tech Centers 

around the world to fully coordinate numerous design projects. In the last year, GM has announced 

plans to invest an additional $1 billion in its Brazilian operations, including a new engine and 

components plant. GM previously had three production facilities in Brazil with employment largely 

clustered around Sao Paulo. Ford also has four production plants in Brazil, and in 2009 began 

exporting Ford Escorts from Brazil back to the United States for sale here. 

Detroit is the Most Efficient and Customer Friendly Gateway 

DTW's McNamara Terminal offers state-of-the-art customer conveniences including an interminal passenger train to ease movement within the facility for passengers with tight connections. 
Docket OST-2010-0090

4

The McNamara Terminal opened in 2002 and was joined by the new North Terminal in 2008. DTW 

has vaulted to the upper echelon of American airports, and has been well reviewed by both passengers 

and the pundits. On February 21, 2010, DTW was recognized as the #1 large airport in the United 

States for overall customer satisfaction by J.D. Power & Associates. Other airports like JFK and 

Newark landed near the bottom of the list. 

"If you are flying from Newark and you're frustrated for some reason or another, and you land 

in Detroit, you say, 'Wow,' and scratch your head and ask 'Why can't Newark be like this?'"

-Stuart Greif

VP and general manager of the Global Travel and Hospitality Practice at J.D. Power

The Economic Benefit to Detroit

Throughout Southeast Michigan's economic ups-and-downs, DTW has remained an economic 

anchor helping stem the negative effects of problems in Detroit's other core industries. DTW reported 

a five percent increase in year-over-year originating traffic in November 20092(Exhibit DTW-C). By 

comparison, the rest of the country on average saw a 1% reduction during the same period. Only three 

large U.S. airports saw increases in originating revenue in November 2009 compared to the prior year. 

The key issue for Detroit relates to economic impact and its effect on jobs. The WCAA

believes that Detroit-Sao Paulo service will produce around $150 million in economic impact for the 

State of Michigan and as many as 300 direct jobs. Additionally, those new jobs would see high 

average pay typical of airline jobs. Indirectly, hundreds more jobs would be fostered by tourism 

generated by the flight. 

Application of American Airlines

While it would seem unnecessary to argue why a carrier already dominating existing 

allocations of Brazilian authorities should be denied a request for eleven more (which would give it an 

 

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unprecedented fifty-eight), Delta has proposed a unique solution that provides American all the 

authority necessary to operate its requested service without precluding Delta's stated plan for daily 

service in the Detroit market. It would appear, in fact, that American's attempt to use broader 

authorities rather than northern/regional frequencies for its proposed Brasilia service is a fairly 

transparent attempt to restrict access to one of American's key South American markets. According 

to MIDT data 3, American already has a 33% share of all O&D passengers between the United States

and Brazil making it the #1 carrier in the market. Among U.S. carriers flying to Brazil, American's 

share exceeds 50%. Delta's share, which is less than half of American's, would be bolstered by this 

award of service and would certainly set the stage for a more balanced competitive atmosphere going 

forward.

Answer of US Airways

US Airways' opposition to Delta's request is misplaced, since an allocation and redistribution 

of frequencies as proposed by Delta will promote the future expansion of Sao Paulo flights at Detroit 

at no cost to US Airways. Three frequencies will remain available in the unallocated pool in either 

case, and an award to American versus Delta creates no additional benefits to US Airways. Contrary 

to US Airways suggestion, Delta will not "warehouse" frequencies, but will fully utilize them to fund 

existing services. Delta's proposal will therefore maximize current and future public benefits. 

Closing

The Department of Transportation (“DOT”) has a unique opportunity in this proceeding to 

support the development of additional service at a new Midwestern gateway offering competitive 

service to Brazil. Detroit's unusually large existing traffic base, stemming from the auto industry's 

ties to both regions, makes this opportunity unique. That same unique demand also makes daily 

service imperative for the future. While leisure travelers may fly to Rio on whatever day affords them 

 

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the lowest fare, business travelers are much less flexible with their air service needs and must be 

offered competitive daily service to support these new flights. Finally, the improving economy of 

Michigan needs the additional momentum these flights would bring. Aside from auto manufacturing, 

the potential for greater ties between the two areas is as boundless as the imagination. From 

agriculture to ethanol to coffee, new business connections have the potential to create many more jobs 

in Michigan. This highway in the sky will foster other businesses in exactly the same way a new exit 

from a major interstate would, but to much greater effect. Therefore, we respectfully ask that the 

DOT allocate Delta four frequencies from the currently available pool and redistribute four 

northern/regional frequencies to American as proposed by Delta.