BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Applications of

DELTA AIR LINES, INC. AMERICAN AIRLINES, INC. and US AIRWAYS, INC.

for frequency allocations

(U.S. - Brazil) ) ) ) ) ) ) ) ) ) Docket DOT-OST-2013-0045

DOT-OST-2013-0041 DOT-OST-2013-0046

CONSOLIDATED REPLY OF DELTA AIR LINES, INC.

Communications with respect to this document should be addressed to:

Glen Hauenstein Executive Vice President, Network Planning & Revenue Management Robert J. Cortelyou Senior Vice President – Network Planning DELTA AIR LINES, INC. 1030 Delta Boulevard Atlanta, Georgia 30320 Andrea Fischer Newman Senior Vice President – Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005

Alexander Van der Bellen Managing Director – Government Affairs & Associate General Counsel Chris Walker Regional Director – Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842-4184 sascha.vanderbellen@delta.com

March 22, 2013BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Applications of

DELTA AIR LINES, INC. AMERICAN AIRLINES, INC. and US AIRWAYS, INC.

for frequency allocations

(U.S. - Brazil) ) ) ) ) ) ) ) ) ) Docket DOT-OST-2013-0045

DOT-OST-2013-0041 DOT-OST-2013-0046

CONSOLIDATED REPLY OF DELTA AIR LINES, INC. 1

US Airways filed a seven-page brief, which goes to great lengths to evade

Delta’s simple and legitimate request for additional information. It is important for

interested parties and the Department to have access to the relevant facts in order to

reach the best public interest decision.

The facts US Airways has put forward in this proceeding are inconsistent with the

facts it represented when it applied for approval of its Sao Paulo frequency lease with

United. US Airways refuses to disclose why it now needs additional frequencies in

October 2013 to continue Charlotte-Sao Paulo service -- when US Airways already has

a DOT-approved lease with an initial term that runs through summer 2015, and when US

Airways will receive additional frequencies from Delta allowing for the continuation of

Charlotte-Sao Paulo service thereafter.

US Airways has already backed away from the claim in its application that

“unless US Airways receives the necessary frequencies available for service beginning

October 1, 2013, it would be required to suspend its existing Charlotte-Sao Paulo

1 To the extent necessary, Delta requests leave to file this brief reply, which is necessary to correct inaccurate assertions regarding the purpose and intent of Delta’s request for additional information.Reply of Delta Page 2

service.” 2 In its answer US Airways now says that “barring a revision to the US AirwaysUnited lease, there remains a risk that US Airways could lose the frequencies it requires

for its Charlotte-Sao Paulo service . . . [and] because of this uncertainty , US Airways

requested an allocation of seven unrestricted Brazil frequencies available in October

2013. 3

In order to have a fair and transparent route case, Delta and interested parties

need to know the basis of this new “risk” and “uncertainty” that would allegedly alter the

stated initial term of the United-US Airways lease which ends in summer 2015. If the

early lease termination and return of fr equencies is triggered by the US AirwaysAmerican merger, then US Airways cannot legitimately present itself here as a “separate”

“independent” or “new entrant” carrier. It is for this reason and this reason only that

Delta seeks information on the US Airways frequency lease.

According to the American/US Airways joint website, “We expect the merger to

be completed in the third quarter of 2013.” 4 Thus, at the very time the October 2013

opportunities become effective, American and US Airways will be merged. It would not

be in the public interest for US Airways to obtain addition frequencies under the pretense

of being “independent” from American, only to combine these frequencies with

American’s holdings as soon as they are effective. As Delta will demonstrate in the

route case, it is not in the public interest for American – “new” or old -- to increase its

dominance of U.S.-Brazil routes. Delta’s proposed new services will provide

competitive discipline to offset the loss of U. S.-Brazil competition that will result from

2 US Airways application at n.2 (emphasis added).

3 US Airways answer at 5 (emphasis added).

4 http://newamericanarriving.com/investors/whats-happening-next/Reply of Delta Page 3

consolidation of the American and US Airway s networks in this important limited-entry

market. 5

Delta’s request for information on United’s intended use of the returned US

Airways frequencies is equally legitimate. In order to evaluate the route case proposals,

the Department needs to take account of other services in the marketplace. If United

plans to operate nonstop Sao Paulo service from its Los Angeles or Chicago hubs, it

would impact American’s proposals to operat e from those gateways. In conducting

carrier selection proceedings, the Department has previously required carriers to report

their intended use of frequencies, including those allocated on a non-gateway specific

basis. See, e.g. Order 2007-11-23.

WHERFORE, Delta respectfully requests that its Motion to compel additional

information be granted.

Respectfully submitted,

_________________________________ Alexander Van der Bellen Managing Director, Government Affairs & Associate General Counsel DELTA AIR LINES, INC.

5 The full grant of Delta’s proposal will maximize benefits to the traveling public and promote the most competitive market structure possible in the existing circumstances. If American’s and US Airway’s proposals were granted here, and Delta’s was not, post merger American would have 82 unrestricted Brazil frequencies, Delta 16, and United 35. On the other hand, if Delta’s proposal is granted in full, American would still be the dominant carrier, but with a much more competitive distribution of unrestricted frequencies: 61 for American, 37 for Delta, and 35 for United.CERTIFICATE OF SERVICE

A copy of the foregoing Motion has been served this 22nd day of March, 2013, upon the following persons via email:

Francis.Heil@aa.com Robert.Wirick@aa.com howard.kass@usairways.com benjamin.slocum@usairways.com dan.weiss@united.com thomas.bolling@united.com paul.gretch@dot.gov esta.rosenberg@dot.gov brian.hedberg@dot.gov brett.kruger@dot.gov urskr@state.gov joe.cambron@wcaa.us brubinst@panynj.gov louis.miller@atlanta-airport.com Steve.Luben@atlanta-airport.com info@airlineinfo.com