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 , 2010Docket OST

- 2010

- 00 90



### 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, IN C. 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.

Th e WCAA is extremely pleased that Delta has announced new service from DTW to Sao Paulo. Detroit

- Sao P aulo is Detroit's largest unserved market as ranked by local revenue 1 . With nearly $20 million in annual passenger revenue , the Detroit

- Sao Paulo market has long needed non

stop service. Not surprisingly, Brazil is a key market for Detroit's recovering a uto industry , and that

1 Sabre MIDT YE1Q2009Docket OST

- 2010

- 00 90



### 3 link has driven steady growth in this route. G eneral M otors officials already have commented publicly that th is 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 gain s service to Sao Paulo, but also ha s a schedule suitable for business travelers now connecting via other gateways. As curre ntly 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 busin ess 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 a llow 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 c reated 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 c oordinate 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 employm ent 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 McN amara Terminal offers state

- of

- the

- art customer conveniences including a n in

terminal passenger train to ease movement within the facility for passengers with tight connections.Docket OST

- 2010

- 00 90



### 4 The McNamara Terminal opened in 2002 and was joined by the new North Terminal in 2008. D TW has vault ed 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 U nited 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 help ing 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 2009 2 (Exhibit DTW

- C). By comparison, the rest of the country on average saw a 1% reducti on 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 i t an

2 Sabre MIDT dataDocket OST

- 2010

- 00 90



### 5 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 f act, 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 U nited 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 America n versus Delta creates n o 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 D epartment 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, st emming from the auto industry's ties to both regions, make s 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

3 Sabre MIDT YE1Q2009Docket OST

- 2010

- 00 90



### 6 the lowest fare, business travelers are much less flexible with their air service need s 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

nor thern/regional frequencies to American as proposed by Delta.