BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

 

 ) 

In the matter of ) 

 ) Docket DOT-OST-2013-0072 

2013/2014 U.S.-Brazil Combination ) 

Frequency Allocation Proceeding ) 

 ) 

CONSOLIDATED REPLY OF US AIRWAYS, INC. 

Communications with respect to this document should be addressed to: 

Howard Kass 

Vice President, Legal and Government Affairs 

Benjamin T. Slocum 

Director, Legal and Government Affairs 

US Airways, Inc. 

1401 H Street, NW, Suite 1075 

Washington, DC 20005 

(202) 326-5153 

howard.kass@usairways.com 

benjamin.slocum@usairways.com

DATED: May 14, 2013 
- i - 

TABLE OF CONTENTS 

Overview .......................................................................................................................... 1

I. Introduction ......................................................................................................... 2

II. Even if Wrongly Treated as a Single Carrier, US Airways and American’s 

Proposals Will Generate Greater Consumer Benefits than Delta’s 

Proposal .............................................................................................................. 5

III. The Department Should Not Place US Airways Charlotte-Sao Paulo Service 

– an Essential Alternative to Atlanta – at Risk Barely Sixteen Months after 

its Inauguration ................................................................................................... 7

A. The Charlotte-Sao Paulo Service that US Airways and the 

Department Toiled to Achieve Could be Interrupted without 

Department Action................................................................................... 7

B. Charlotte Provides an Essential Alternative to Atlanta that Must be 

Maintained to Ensure Consumer Choice............................................... 7

C. The Department Should Ignore Delta’s Attempt to Discredit Charlotte 

Based on Local Traffic ............................................................................ 9 

IV. The Public Interest Requires that Philadelphia-Sao Paulo Service 

Commence ......................................................................................................... 11

A. Department Precedent Favors the Introduction of New Entrants and 

New Gateways to Brazil ........................................................................ 11

B. Philadelphia Provides More Consumer Benefits as an Alternative to 

Other Connecting Hubs than JFK Does as another Flight Serving 

Local New York Passengers ................................................................. 12

C. Philadelphia Deserves Sao Paulo Service, and is Primed and Ready 

to Support It ........................................................................................... 14

V. The Department Should Not Bail Out Delta After It Voluntarily Abandoned 

Detroit-Sao Paulo Service ................................................................................ 16

A. Delta’s Frequency Exchange with US Airways is Not Part of this 

Proceeding ............................................................................................. 16

B. Delta Sold its Detroit-Sao Paulo Frequencies for Good Reason ...... 17

C. Delta’s Practice Is to Withdraw from Brazil Routes, Not Expand 

Them ....................................................................................................... 19

VI. Conclusion - US Airways’ Service Proposal Provides More Benefits than 

Delta’s Service Proposal in Every Way ........................................................... 21
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

 

 ) 

In the matter of ) 

 ) Docket DOT-OST-2013-0072 

2013/2014 U.S.-Brazil Combination ) 

Frequency Allocation Proceeding ) 

 ) 

CONSOLIDATED REPLY OF US AIRWAYS, INC. 

Pursuant to Subpart C of the Department of Transportation’s (“Department”) 

Rules of Practice and the Department’s April 12, 2013, Order Instituting Proceeding

(“Instituting Order”), US Airways, Inc. submits this reply to the competing 

applications of Delta Air Lines, Inc. and American Airlines, Inc. for unrestricted 

frequencies to serve Sao Paulo, Brazil.1

Overview 

 The purpose of this pleading is to respond to the applications, supplements 

and answers submitted by competing applicants, in further support of US Airways’ 

request for 14 unrestricted Brazil frequencies available for use beginning October 1, 

2014. US Airways will use seven of these frequencies to continue benefiting 

consumers flying on its new Charlotte-Sao Paulo service, which will commence June 

8, 2013, using frequencies leased temporarily from United. The other seven 

frequencies will be used to institute new service from US Airways’ Philadelphia hub, 

a new gateway to Brazil in the Northeastern United States. 

 

1

 Common names of carriers are used. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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 This pleading is organized into six sections that, taken as a whole, 

demonstrate why the Department should allocate 14 frequencies to US Airways 

before others receive an award. Following an Introduction in Section I, Section II 

explains that US Airways and American remain separate companies and shows that 

even if US Airways and American are wrongly viewed as a single entity, US Airways’ 

proposal would still generate the greatest public benefits. Sections III and IV show 

that continuing US Airways’ Charlotte-Sao Paulo service is required by the public 

interest, as is opening a new gateway at Philadelphia. Section V explains why the 

Department should not bail Delta out of its decision to voluntarily abandon DetroitSao Paulo service. Finally, Section VI concludes by summarizing the many more 

public benefits an award to US Airways of 14 frequencies will provide compared to 

authorizing the same-carrier-same-gateway services sought by Delta. 

I. Introduction 

 Of the applicants participating in this proceeding, only US Airways has 

submitted a proposal that best meets the goals of the Instituting Order and 

generates the greatest public benefits. By using 14 frequencies to maintain new 

service to Sao Paulo from its Charlotte hub and to open a new gateway to Sao 

Paulo from its Philadelphia hub, US Airways offers numerous unique and valuable 

benefits, including: 

• Daily year-round Sao Paulo service from two new U.S. gateways—Charlotte 

and Philadelphia—US Airways’ largest and second largest hubs; 

• Continued daily year-round service from Charlotte gateway—US 

Airways’ largest hub and one of the world’s largest airline hubs, offering more 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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than 640 daily departures to 136 destinations in the United States, Canada, 

the Caribbean, Europe, Mexico and Latin America; 

• An attractive new U.S. gateway to Sao Paulo at Philadelphia, from which 

US Airways operates more than 450 daily departures to 117 destinations in 

the United States, Canada, the Caribbean, Europe, Mexico, the Middle East 

and Latin America; 

• Daily year-round Sao Paulo connections at Charlotte to 87 U.S. cities 

southbound and 97 U.S. cities northbound;2 

• Daily year-round Sao Paulo connections at Philadelphia to 65 U.S. cities 

southbound and 61 U.S. cities northbound;3 and 

• Service provided with US Airways’ newest Airbus A330-200 aircraft—the 

largest aircraft proposed in this proceeding—offering two classes of 

service, including Envoy class with fully lie-flat seats. 

In addition, US Airways is the only U.S.-Sao Paulo new entrant applicant in 

this proceeding, albeit one that has proven its commitment to Brazil service. Indeed, 

US Airways will commence Charlotte-Sao Paulo service on June 8, 2013, having 

overcome obstacles no incumbent U.S. carrier has ever faced, including having to 

find a commercial solution to overcome the complete lack of available Sao Paulo 

frequencies. Despite these impediments, consumers will soon enjoy the benefits of 

new service between the United States and Sao Paulo. US Airways’ existing 

Charlotte-Rio de Janeiro service has unquestionably benefited travelers between the 

U.S. and Brazil. As such, US Airways deserves the opportunity to preserve 

Charlotte-Sao Paulo service beyond October 2014, and to bring even greater 

 

2 See Supplement of US Airways, Inc. to Application for an Exemption and Frequency Allocation, April 

24, 2013, Docket DOT-OST-2013-0072 (“US Supplement”), p. 9.

3 See Answer of US Airways, Inc., May 3, 2013, Docket DOT-OST-2013-0072 (“US Answer”), p.14, 

Figure 4. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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benefits to consumers with new Sao Paulo service from a new gateway at 

Philadelphia. 

 Delta, on the other hand, seeks 75 percent of the available unrestricted 

frequencies for duplicative service at existing gateways, using the smallest aircraft of 

any applicant. It makes this request despite failing to use all of its existing 

unrestricted frequencies to operate Sao Paulo service, or to operate additional extrasection/peak season Sao Paulo flights. In fact, Delta offers little justification for an 

award of 21 frequencies other than its desire for an “equitable” distribution of 

frequencies.4 As explained in US Airways’ Answer, allocating additional unrestricted 

frequencies to Delta for more-of-the-same service, simply to achieve parity, would 

not accomplish the Instituting Order’s goal of maximizing public benefits between the 

U.S. and Sao Paulo.5

 This proceeding represents the final opportunity for the Department to 

allocate unrestricted frequencies prior to the implementation of U.S.-Brazil Open 

Skies in 2015. Rather than merely achieving frequency parity, it is essential that the 

Department ensure that the maximum number of consumers and communities 

receive the benefits of new service. Approval of US Airways’ proposal to open two 

new gateways to Sao Paulo at its largest hubs—Charlotte and Philadelphia—will 

guarantee that travelers and shippers all along the East Coast, as well as in scores 

 

4 Consolidated Answer of Delta Air Lines, Inc., May 3, 2013, Docket DOT-OST-2013-0072 (“Delta 

Answer”), p. 1. 

5

 US Answer, p. 6-8 (“Delta’s purely duplicative service proposal offers so few benefits that striving for 

symmetry would negate the Department’s goal of maximizing the benefits flowing from these limited 

entry rights.”). 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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of connecting cities across the country enjoy the benefits of additional service, 

choice of airline and gateway, and improved access to Brazil. 

 

II. Even if Wrongly Treated as a Single Carrier, US Airways and American’s 

Proposals Will Generate Greater Consumer Benefits than Delta’s 

Proposal 

Delta has repeatedly asserted that the Department should treat US Airways 

and American as a single carrier for this proceeding, stating “[i]n reality there are 

only two applicants in this proceeding.”6 This is wrong. US Airways and American 

remain separate companies. Finding to the contrary would ignore this fact and 

Department precedent. 7 But even if US Airways and American were wrongly 

considered a single-entity for purposes of this proceeding, it would not matter 

because US Airways and American have each submitted compelling proposals that 

will provide more consumer benefits than the same-carrier-at-the-same-gateway 

service proposed by Delta. 

 

6 Application Supplement of Delta Air Lines, Inc., April 24, 2013, Docket DOT-OST-2013-0072 (“Delta 

Supplement”), p. 2. See also Delta Answer, p. 2 (stating that the idea of US Airways and American 

as separate carriers today is a “fleeting and transient fact”). 

7

 In the US Answer, US Airways cited Department precedent requiring that applications for limitedentry route authority be considered and evaluated individually and on their own merits, even where 

two applicants in a single proceeding may be engaged in merger activities. (See US Answer, p.3-4.) 

That precedent is applicable here. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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US Airways previously set forth the hierarchy of consumer benefits that will 

result from allocating frequencies based on (i) preserving existing service; 8 (ii) 

adding new service at new gateways; (iii) adding new competing service at an 

existing gateway; and (iv) adding duplicative, same-carrier service at an existing 

gateway. 

Using this clearly defined approach (which is wholly consistent with 

Department precedent), approval of US Airways’ proposals—which satisfies criteria 

(i) through (iii)—will unquestionably generate maximum benefits. Moreover, the 

benefits brought by American’s proposal would also exceed any benefits that Delta 

might produce, as shown in Figure 1. 

Figure 1: US Airways’ Service Proposal Offers Maximum Benefits; 

American’s Service Proposal Offers Less Benefits, but More Than Delta’s 

Purely Duplicative Service 

The public interest clearly justifies full awards to US Airways on this basis alone. 

 

8

 Except in the case of a carrier that voluntarily divested frequencies needed to maintain such service. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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III. The Department Should Not Place US Airways Charlotte-Sao Paulo 

Service – an Essential Alternative to Atlanta – at Risk Barely Sixteen 

Months after its Inauguration 

A. The Charlotte-Sao Paulo Service that US Airways and the Department 

Toiled to Achieve Could be Interrupted without Department Action

 US Airways will commence daily Charlotte-Sao Paulo service on June 8, 

2013. This is the result of a years-long effort by US Airways and the Department to 

bring new U.S. carrier service to Sao Paulo—a feat previously believed to be 

impossible due to the lack of Sao Paulo frequencies. US Airways’ Supplement 

documented the efforts required to bring this valuable new service to fruition. 9 

However, unless US Airways receives seven unrestricted frequencies in this 

proceeding, Charlotte-Sao Paulo service will be lost in late October 2014 when US 

Airways’ frequency lease with United expires.10 It is imperative that US Airways 

receive seven frequencies to continue this new service. 

B. Charlotte Provides an Essential Alternative to Atlanta that Must be 

Maintained to Ensure Consumer Choice

 Delta goes to great lengths to portray Miami as the primary alternative 

connecting gateway to Atlanta, and uses American’s service there to justify an 

award of frequencies. 11 However, the fact remains that Miami is not the main 

alternative, because it is an entirely different type of airport than Atlanta. Delta’s 

 

9 See US Supplement, p. 5-6. 

10 In negotiating an amendment of the frequency lease with United, US Airways obtained the 

maximum extension possible. Further extension of the lease is not available, and it will expire in late 

October 2014. 

11 See, e.g. Delta Answer, p. 5 and 7, and Exhibits DL-A-201 and DL-A-205. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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own exhibits suggest that Miami focuses on the local marketplace as Miami offers 

connections to 50 cities, while Atlanta offers three times as many connections.12 In 

fact, American serves 49 cities in the United States from Miami compared to 66 

international destinations, including 32 points in Mexico and Central and South 

America.13 The low number of domestic connecting points compared to the high 

level of Brazilian and other Latin American service demonstrates that Miami serves 

predominantly local traffic. 

 Miami International Airport’s website further reflects Miami as an international 

origin and destination airport, primarily to Latin America. Fifty-three international 

carriers offer service to 86 international destinations, resulting in a nearly even split 

between international and domestic flights and passengers.14 Furthermore, eight of 

Miami’s top 10 trade partners by value were Latin American countries, with Brazil 

being number one.15

 Rather, Charlotte is the principle competing connecting gateway with 

Atlanta. US Airways’ service to Sao Paulo from Charlotte will connect conveniently 

to more cities than Miami’s total possible connections. With more than 640 daily 

departures to 136 destinations, Charlotte provides the essential alternative to Delta’s 

Atlanta gateway, offering additional choice and new connecting opportunities. In 

total Charlotte will benefit 97 U.S. cities with Northbound connecting service, and 87 

 

12 See Exhibit DL-A-205 (duplicating Delta Supplement Exhibit DL-206). 

13 Source: Innovata August 1-31, 2013. 

14 See Miami-Dade Aviation Department (MDAD), Facts-At-A-Glance, p.1, available at

http://www.miami-airport.com/pdfdoc/facts_at_a_glance.pdf. 

15 Id.
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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U.S. cities communities with southbound connections, including 57 communities in 

the United States not served by American via Miami.16 

An award for Charlotte-Sao Paulo service will ensure that connecting 

travelers have a choice when choosing which U.S. gateway to use for travel to/from 

Sao Paulo. The Department must preserve this competitive alternative. 

C. The Department Should Ignore Delta’s Attempt to Discredit Charlotte 

Based on Local Traffic

 Delta states that Atlanta is more deserving of its second Sao Paulo flight than 

Charlotte is of its first because Atlanta’s population is larger than Charlotte’s. 17 

Based on Delta’s logic, Atlanta-Rio de Janeiro should outperform Charlotte-Rio de 

Janeiro in number of local passengers. However, as Figure 2 shows, the opposite is 

true. 

 

16 Assumes maximum 4-hour connection time and no more than 130% circuity. Although Delta touts 

the 150 connecting points at Atlanta, Delta never provides a number of cities that actually connect to 

its proposed Sao Paulo service within a reasonable time period, and includes numerous backhaul 

cities (e.g. San Juan) as well as cities with existing nonstop service (e.g. Detroit and New York). 

17 See Delta Answer, p. 7 and Exhibit DL-A-204. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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Figure 2: US Airways’ Charlotte-Rio de Janeiro Service Has Grown to Carry 

More Local Passengers than Atlanta-Rio de Janeiro Despite Having Half the 

Population

Source: US DOT Data, Q4 2009 thru Q32012 

US Airways expects similar success with its new Charlotte-Sao Paulo service. 

 Similarly, Delta suggests that Detroit has more local Sao Paulo passenger 

traffic than Charlotte.18 However, this comparison is faulty as Detroit currently has 

nonstop Sao Paulo service and Charlotte does not. The stimulative effects of 

nonstop air service on local marketplace passenger traffic are well known. The 

Department should not be misled by Delta’s apples-to-oranges comparison. 

 The City of Charlotte enthusiastically supports US Airways proposal. 19 

Charlotte is a rapidly growing and diverse city which has provided strong support for 

US Airways’ largest hub. Both Charlotte and the State of North Carolina are bases 

 

18 See Exhibit DL-A-212. 

19 See Answer of the City of Charlotte, Docket DOT-OST-2013-0072, May 3, 2013 (“CLT Answer”). 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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for major companies with extensive international operations and strong ties to 

Brazil.20 With state-of-the-art facilities and construction of an expanded international 

terminal underway,21 Charlotte has proven its ability to support Brazil service. 

IV. The Public Interest Requires that Philadelphia-Sao Paulo Service 

Commence 

A. Department Precedent Favors the Introduction of New Entrants and 

New Gateways to Brazil 

The Department has repeatedly emphasized its strong commitment to 

encouraging and promoting new entry and new gateways in limited-entry 

marketplaces, particularly in Brazil. Specifically, in approving US Airways’ request 

for frequencies to serve Charlotte-Rio de Janeiro, the Department acknowledged: 

 For the October 2009 frequencies, we tentatively find that the 

introduction of new U.S. air carrier competition through our selection of 

US Airways and its Charlotte-Rio de Janeiro proposal, along with the 

benefits of new gateway competition...would better serve the public 

interest... 

 ... 

 Selection of US Airways would not only introduce new U.S. air carrier 

competition, but it would do so at an additional U.S. gateway and a 

major hub, resulting in more service options for the traveling 

public.

22

 

20 See CLT Answer, p.3. 

21 See CLT Answer, p.4. 

22 2009 U.S.-Brazil Combination Frequency Proceeding, Order 2009-3-14, pp.7-8 (emphasis added). 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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Approval of US Airways’ Philadelphia-Sao Paulo proposal would result in 

virtually identical benefits.23

B. Philadelphia Provides More Consumer Benefits as an Alternative to 

Other Connecting Hubs than JFK Does as another Flight Serving Local 

New York Passengers 

By opening a new Northeastern U.S. gateway to Sao Paulo, US Airways’ 

Philadelphia-Sao Paulo service will provide an attractive alternative to United’s 

existing service at Newark and Washington-Dulles for many connecting 

passengers—another key benefit the Department has recognized in limited-entry 

selection cases.24 Philadelphia offers service to 83 U.S. cities, more than either 

Newark (77) or Washington-Dulles (78).25 Importantly, US Airways’ PhiladelphiaSao Paulo service will connect more communities to Brazil than either Newark or 

Washington-Dulles, demonstrating its attractiveness. Southbound, Philadelphia will 

connect 65 cities to Sao Paulo, substantially more than the 49 connections offered 

by Newark and 59 offered by Washington-Dulles. Northbound, 61 U.S. communities 

 

23 Delta argues US Airways should support its Philadelphia-Sao Paulo service with the seven 

frequencies Delta will transfer to US Airways in March 2015 or else US Airways would be 

warehousing frequencies. US Airways has other plans for the seven frequencies it will receive from 

Delta in 2015. If US Airways does not receive seven frequencies in October 2014 for PhiladelphiaSao Paulo in favor of Detroit, it will be forced to delay introduction of service while Delta warehouses 

seven October 2014 frequencies until March 2015. Such a result would be contrary to the 

Department’s policy against allowing bilateral rights to lie unused for extended periods, as previously 

acknowledged by Delta. (See Application of Delta Air Lines, Inc. for Atlanta-Rio de Janeiro 

Frequencies, Order 2005-2-10, February 16, 2005, p. 3.) 

24 See, e.g., 2009 U.S.-Brazil Combination Frequency Proceeding, Order 2009-3-14, p. 7-8.

25 Source: August 2013 OAG schedules. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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will enjoy Sao Paulo connections via Philadelphia, while Newark provides only 46 

connections and Washington-Dulles offers 54.26

Despite Delta’s incorrect assertion that Philadelphia competes with JFK,27 the 

fact remains that Philadelphia provides broad benefits for connecting passengers in 

a way that JFK simply cannot. Unlike Philadelphia, JFK is not a strong connecting 

hub for any carrier – a fact already admitted by Delta. 28 Rather, Delta’s JFK 

proposal would serve New York origin and destination passengers, providing a fifth 

JFK service option, in the same time slot as one of the already existing Sao Paulo 

flights. 

As such, Delta’s proposed duplicative service at JFK stands in sharp contrast 

to US Airways’ innovative Philadelphia-Sao Paulo service. US Airways’ new service 

will likely compete for many connecting passengers with United’s Newark-Sao Paulo 

and Washington-Sao Paulo services. It will leverage the strength of US Airways’ 

Philadelphia hub to provide far more connecting opportunities than JFK, bringing the 

benefits of new Sao Paulo service to a far greater number of communities and 

travelers. Any attempt by Delta to convert JFK into a connecting airport is 

completely contrary to the record of this proceeding and years of operational 

experience at JFK. 

 

26 Source: Innovata Friday June 14, 2013 Innovata Schedule as of March 4, 2013. See also US 

Answer, p. 14-15. 

27 See Delta Answer, p. 9. 

28 See US Answer, p. 12 for a complete discussion of Delta’s acknowledgment of the limitations of 

JFK as a connecting hub. US Airways incorporates these arguments by reference. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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C. Philadelphia Deserves Sao Paulo Service, and is Primed and Ready to 

Support It 

Philadelphia is the largest hub airport and largest U.S. city (by population) 

without Sao Paulo service (or service to any South American point), despite 

important and growing cultural, business and tourism ties between the city and 

Brazil.29 The city is home to the fourth largest Brazilian population in the U.S.—the 

largest of any applicant city in this proceeding, and larger than Atlanta and Detroit.30 

Brazilians are the single largest Latin American travel group to Philadelphia. Brazil 

is also the largest Latin American export market for Philadelphia and its largest 

South American import market.31 It is therefore not surprising that 32 multi-national 

companies have their headquarters or a substantial presence in both Philadelphia 

and Brazil.32

 Beyond just Philadelphia, the Commonwealth of Pennsylvania also enjoys a 

close economic relationship with Brazil. Since 1998, Pennsylvania has had a trade 

representative in Brazil which has helped grow trade between the two significantly. 

Pennsylvania exports to Brazil exceed $2 billion annually—the fourth greatest in the 

U.S.—and Brazil ranks seventh among trading partners with Pennsylvania, due 

largely to the chemical, machinery, metal manufacturing and mineral/ore 

industries.33 Moreover, a significant number of Pennsylvania-based corporations, 

 

29 See Answer of the City of Philadelphia, Docket DOT-OST-2013-0072, May 3, 2013 (“PHL 

Answer”), Exhibit PHL-2. 

30 See PHL Answer, Exhibit PHL-3. 

31 See PHL Answer, Exhibits PHL-13, PHL-14. 

32 See PHL Answer, Exhibit PHL-15. 

33 See PHL Answer, p. 8. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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including US Steel, TIMET, Crown Holdings, GE Transportation and Air Products, 

have extensive business relationships and interests in Brazil.34 By any measure, 

Philadelphia and Pennsylvania have important and growing connections to Brazil, 

and strong ties exist to support US Airways’ Philadelphia-Sao Paulo service. 

 The City of Philadelphia has ensured that US Airways’ Philadelphia-Sao 

Paulo operation will be well-served through the Philadelphia International Airport’s 

International Terminal A-West. This state-of-the-art facility houses 13 new 

international gates as well as expanded federal inspection facilities (acknowledged 

to be among the easiest to transit) and an accommodating Arrivals Hall. Additional 

airport improvements include expanded security checkpoints, food and beverage 

outlets, a new connecting concourse that eliminates the need for second security 

screening, and new baggage facilities.35 No other city or airport is better prepared to 

welcome Sao Paulo travelers. 

 Philadelphia, the Commonwealth of Pennsylvania and tens of thousands of 

connecting passengers need and deserve the economic and competitive benefits 

that US Airways’ new Philadelphia-Sao Paulo service will generate. US Airways 

urges the Department to allocate frequencies for this important and necessary 

service. 

 

34 See PHL Answer, p. 8-9. 

35 See PHL Answer p. 12. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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V. The Department Should Not Bail Out Delta After It Voluntarily 

Abandoned Detroit-Sao Paulo Service 

A. Delta’s Frequency Exchange with US Airways is Not Part of this 

Proceeding 

 Throughout this proceeding, Delta has repeatedly claimed that there are 35 

frequencies at issue because of the seven unrestricted frequencies it voluntarily 

agreed to transfer to US Airways in March 2015. No matter how many times this 

claim is made, Delta is wrong—the Instituting Order is clear that there are 28 

frequencies at issue in this proceeding, not 35. 36 The Department should not 

countenance Delta’s attempt to inject other Sao Paulo frequencies into this 

proceeding. 

 Although Delta strives to cast its Brazil frequency exchange with US Airways 

as something to which it was forced to agree, the fact remains Delta knowingly and 

voluntarily entered into an agreement with US Airways under which Delta received 

valuable LaGuardia slots (and will receive seven restricted Brazil frequencies) in 

exchange for its seven unrestricted Brazil frequencies, among other things.37 By 

repeatedly seeking to interject this separate commercial agreement into this 

proceeding, Delta is essentially asking the Department not only to rebalance the 

 

36 See Order 2013-4-9, p. 1 (“ By this order we institute the 2013/2014 U.S.-Brazil Combination 

Frequency Allocation Proceeding to select U.S. carriers to use (1) the 14 weekly combination 

frequencies that may be used to serve any point in Brazil, which become available October 1, 2013; 

and (2) the 14 weekly combination frequencies that may be used to serve any point in Brazil, which 

become available October 1, 2014; as set forth in the Memorandum of Consultations between the 

United States and Brazil dated March 19, 2011 (MOC).”). 

37 This knowledge went to the highest levels of Delta, as senior executives were personally involved 

with the negotiations.
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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commercial terms of this agreement but also to fund Delta’s purchase of LaGuardia 

slots—at the expense of consumers. 

B. Delta Sold its Detroit-Sao Paulo Frequencies for Good Reason 

 

Delta argues that Detroit will lose Sao Paulo service if the Department does 

backfill the service. However, close examination reveals that Detroit may lose Sao 

Paulo service no matter this proceeding’s outcome. Despite Delta’s claim that 

Detroit is a “successful established service”,38 Delta’s Detroit-Sao Paulo service has 

performed poorly since its inception, and there is no reason to believe it will improve 

in the future. Delta’s average load factor on its Detroit-Sao Paulo service is only 69 

percent, including a low of 53 percent in November 2010, and three months below 

60 percent in February, March and April 2012.39 In contrast, Delta’s load factor for 

its JFK and Atlanta services during this period averaged 79 percent and 86 percent, 

respectively.40 

Notably, Delta’s 69 percent Detroit-Sao Paulo load factor is less than the 70 

percent load factor averaged by Korean Air Lines on the Los Angeles-Sao Paulo 

route, which Delta decries as evidence of an unsustainable service and as proof that 

American would move its Los Angeles-Sao Paulo frequencies to another gateway.41 

Citing Korean’s 70% load factor, Delta claims “It is unlikely that American’s flight 

 

38 Delta Answer, p. 8. 

39 Source: DOT T-100 data, October 2009-September 2012. One reason for this low level of 

passenger traffic may be the poor location of Detroit as a hub for Brazil service. Exhibit DL-A-214 

touts the 114 cities that connect with Detroit; however, the map clearly shows that the majority of 

these connections involve highly circuitous, or even backhaul, routings. 

40 Id. 

41 See Delta Answer, p.11. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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would be viable, and that American would seek to pocket the frequencies and move 

them to new gateway [sic] using the unrestricted flexibility that is standard for Brazil 

awards.” 42 Certainly, the same could be said to apply to Delta’s Detroit-Sao Paulo 

service and its 69% load factor. 

Throughout this proceeding, Delta has repeatedly reminded the Department 

of its 2004 decision to allow incumbent carriers freedom to move their Brazil 

frequencies among U.S. gateways. Given the demonstrated weakness of DetroitSao Paulo service, moving frequencies from Detroit to a city with greater traffic may 

become Delta’s only alternative. 

 If, notwithstanding its poor results, Delta wishes to maintain Detroit-Sao Paulo 

service beyond March 2015, it should seek the frequencies it needs not from the 

Department but the marketplace, just as US Airways did to obtain frequencies for its 

Charlotte-Sao Paulo service. Since Delta requires only five frequencies for its 

Detroit-Sao Paulo service (in addition to its two Sao Paulo frequencies that it is now 

using for Rio de Janeiro service), it has ample time to negotiate a frequency lease or 

purchase agreement with an incumbent carrier. US Airways did not ask the 

Department to extract Sao Paulo frequencies from another carrier so that US 

Airways could begin Sao Paulo service, and the Department should not entertain 

Delta’s request that it do so in this proceeding. 

 

42 Id.
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

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C. Delta’s Practice Is to Withdraw from Brazil Routes, Not Expand Them 

Delta has a long history of withdrawal from U.S.-Brazil routes, including 

routes to/from Sao Paulo. Indeed, Delta has retreated from at least three U.S.-Brazil 

routes since 2009, including Los Angeles-Sao Paulo, Atlanta-Recife and AtlantaFortaleza.43 Given Detroit’s poor performance (described above), it would not be 

surprising if Delta added Detroit-Sao Paulo to this list. 

Aside from not proposing any new Sao Paulo service in this proceeding, Delta 

has declined to take steps to expand the Sao Paulo service it currently enjoys: 

First, Delta does not use all 23 of its unrestricted frequencies for service to 

Sao Paulo. By its own admission, two of these frequencies are used for less 

restricted Rio de Janeiro service.44 

Second, Delta has not availed itself of the opportunity to operate extra section 

and peak season flights as the bilateral agreement permits. 

Third, Delta has failed to upgauge its existing Sao Paulo services to any of its 

at least four types of larger wide-bodied aircraft,45 which would maximize use of the 

23 Sao Paulo frequencies it holds currently.46 Furthermore, Delta proposes to use 

even smaller widebody aircraft on any services it is awarded in this proceeding.47

 

43 See Answer of American Airlines, Inc., May 3, 2013, p.6. 

44 Exhibit DL-A-101. 

45 By contrast, US Airways upgauged its Charlotte-Rio de Janeiro service for the Winter 2012-13 

operating season. 

46 Just last week the Department stated a preference for the use of larger aircraft for service to 

airports with limited operating rights, eliminating US Airways from contention for a pair of DCA slot 

exemptions in part on the basis of proposed aircraft size. (See Order 2013-5-6, May 7, 2013, p. 9.) 

47 See US Answer, p. 18-20. Delta’s proposed aircraft is the smallest widebody aircraft in its fleet. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

- 20 - 

Finally, despite its apparent fascination with US Airways’ frequency lease 

from United,48 Delta has made no effort to use the private marketplace to obtain 

additional Sao Paulo frequencies. Indeed, the only market-based efforts made by 

Delta have been service expansions benefiting the Brazilian carrier GOL – of which 

Delta owns 3 percent and appoints a member to its Board of Directors – enabling it 

to benefit economically from the frequencies, slots, terminal facilities, and other Sao 

Paulo resources available to Brazilian carriers.49 

 

48 Even after the Department denied Delta’s Motion to compel US Airways and United to make their 

frequency lease public (see Order 2013-4-9, p.6), Delta continues to question US Airways’ 

statements about its frequency lease. (See Delta Answer, p. 4.) 

49 See “Delta and GOL Extend Codeshare to US-Brazil Routes”, May 9, 2013, Reuters available at 

http://www.reuters.com/article/2013/05/09/snippetidUSL2N0DQ26C20130509?feedType=RSS&feedName=marketsNews&rpc=43 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

- 21 - 

VI. Conclusion - US Airways’ Service Proposal Provides More Benefits than 

Delta’s Service Proposal in Every Way 

 Throughout this proceeding, Delta has asked questions of, and demanded 

information from, US Airways – all of which US Airways has provided. Yet Delta has 

still failed to demonstrate that frequency allocations to Atlanta, Detroit, and New 

York will achieve the Department’s objective of maximizing public benefits. Indeed, 

approval of Delta’s service proposal would actually reduce consumer choice. By 

preventing US Airways from commencing new service and opening new gateways to 

Sao Paulo, many consumers would lose the alternative service options US Airways 

would provide. 

However, the serious flaws in Delta’s service proposal are far more 

widespread. When compared side-by-side with US Airways’ service proposal, as 

shown in Figure 3, the many disqualifying infirmities of Delta’s application are clear. 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

- 22 - 

Figure 3: US Airways’ Service Proposal Provides More Benefits than Delta’s 

Service Proposal in Every Facet 

US Airways Delta 

Proposes service at new 

gateways? 

YES No 

New entrant? YES No 

Proposes duplicative samecarrier/same-gateway service? 

NO Yes 

Proposes service at a gateway it 

has stated was not viable? 

NO – Charlotte and 

Philadelphia have a 

history of success 

Yes – Detroit 

averages a load 

factor under 70% 

Proposes service at a gateway it 

voluntarily tried to abandon? 

NO Yes – Delta 

voluntarily exchanged 

its Detroit frequencies 

for slots it considered 

more valuable 

Has a history of abandoning U.S.-

Brazil routes? 

NO Yes – has withdrawn 

from three U.S.-Brazil 

routes since 2009 

Uses Sao Paulo frequencies for 

service to less restricted Brazilian 

cities? 

NO Yes – uses two 

frequencies to serve 

Rio de Janeiro 

Proposes a small aircraft for Sao 

Paulo service? 

NO – US Airways’ 

A330-200 is the 

largest aircraft 

proposed 

YES – Delta’s B767-

300 is the smallest 

aircraft proposed and 

the smallest 

widebody in its fleet 

In short, Delta’s proposal contains multiple flaws, any one of which would be 

sufficient to deny its request. When combined, these infirmities should disqualify 

Delta from any allocation of frequencies – under no circumstance should a carrier 

that proposes no new competitive benefits, has failed to fully utilize frequencies 

currently available to it, and bargained away frequencies, receive additional 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

- 23 - 

frequencies, particularly when US Airways has demonstrated the superiority of its 

proposal. 

* * * 

This proceeding is the Department’s final opportunity to allocate frequencies 

and set the U.S.-Brazil marketplace on the most competitive path possible before 

Open Skies. US Airways has demonstrated the superiority of its proposal, which 

contains virtually every competitive and consumer benefit recognized by the 

Department when awarding limited entry operating authority, including (i) two new 

gateways; (ii) a new entrant between the United States and Sao Paulo; (iii) the 

largest aircraft of any applicant; (iv) enhanced connecting opportunities; and (v) a 

close community of interest between its gateway cities and Brazil. US Airways 

urges the Department to allocate it the 14 frequencies it requires for its new 

Charlotte-Sao Paulo and Philadelphia-Sao Paulo services. 

 

 
Consolidated Reply of US Airways, Inc. 

Docket DOT-OST-2013-0072 

May 14, 2013 

- 24 - 

For the foregoing reasons, US Airways, Inc. respectfully requests that the 

Department of Transportation grant it an exemption and 14 unrestricted Brazil 

frequencies as more fully explained herein, and grant such other or further relief as 

the Department deems necessary and appropriate. 

Respectfully submitted, 

_______________________________ 

Howard Kass 

Vice President, Legal and Government Affairs 

Benjamin T. Slocum 

Director, Legal and Government Affairs 

US Airways, Inc. 

1401 H Street, NW, Suite 1075 

Washington, DC 20005 

(202) 326-5153 

howard.kass@usairways.com 

benjamin.slocum@usairways.com 

DATED: May 14, 2013 
 

CERTIFICATE OF SERVICE 

I hereby certify that on May 14, 2013, a copy of the Consolidated Reply of 

US Airways, Inc. was served via e-mail on each of the following: 

urskr@state.gov (Department of State) 

paul.gretch@dot.gov (Department of Transportation) 

esta.rosenberg@dot.gov (Department of Transportation) 

brett.kruger@dot.gov (Department of Transportation) 

brian.hedberg@dot.gov (Department of Transportation)

francis.heil@aa.com (American) 

robert.wirick@aa.com (American) 

steve.morrissey@united.com (United) 

dan.weiss@united.com (United) 

richa.himani@united.com (United) 

karine.faden@united.com (United) 

sascha.vanderbellen@delta.com (Delta) 

mark.gale@phl.org (Philadelphia International Airport) 

tjorr@charlotteairport.com (Charlotte Douglas International Airport) 

________________________ 

 Benjamin T. Slocum