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RUSSELL g . POMME R (202 1 822-912 1 -TelBphon e f202 ) 822-9152-Fa x rpommer@atIasair.Ba m July 30,201 0 Mr . Paul L . Gretch Director Offic e o f Internationa

l Aviatio n U.S . Department

o f Transportatio n 120 0 Ne w Jerse y Ave. , S E Washington , D.C . 2059 0 Re ; Reques t

fo r Issuanc e o f

Industr y Waive r fromNotice-o f Consistenc y Procedure s Applicabl e t o Brazi l Carg o Charter s Dea r Mr . Gretch ; O f th e seve n carrier s serve d wit

h the Atla s waive

r application , fou

r (FedEx , UPS , Polar , Arrow ) hav e advised u s tha t they hav e n o objection , an

d tw o (Centurion , Florid a West ) hav e state d tha

t they do no t

intend t o file responses . Th

e remainin g cairier . Southern , ha s answered i n opposition. ^ Souther n take s th e position , i n essence , tha t th e U.S.-Brazi l ai r

carg o niai-ke

t i s highl y regulated , wit

h acareflill

y draw n balanc e between schedule d an d charter sei-vice s in " afish-or-fow l market," ^ an d tha t th e Departmen

t shoul d no t

do anythin g to upse t

tha t balance , even thoug

h competitio n wil l b e the casualty . Atla s respectfully disagrees . It i s indee d unfortunat

e tha t th e U.S.-Brazi l market

i s severely constraine d b y th e bilatera l air transpor t agreemen t an d Brazil' s stric t

regulator y policies . Lik

e Southern , Atla s woul d much prefe

r a n ope n skie s regime . However , tha t appear s no t

t o b e a realisti c aspkatio n a

t th e present

time . The practica

l choic e befor

e th e Department

i s whethe r t o accep t the U.S.-Brazi l statu s qu o uncriticall y o r t o wor k withi n th e existin g fi:amework

t o achiev e amor

e competitiv e enviromiient , Souther n focuse s o

n apurporte d nee d fo

r th e Departmen

t t o maintai n th e existin g "balance " o f

"economi c rights o f

competitors." ^ Th e antitrus t law s and th e Department' s competitio n poUcy , however , are designe d t o advanc e competitio n and increas e consume r

' T o th e extent

required , Atla s request s leav e t o fil e thi s repl y i n orde r t o offe r th e Department

acritica l analysi s o f Soutliem' s arguments . ' Soutlie mAnswe r at I . ^ /rf.at2 .Mr . Paul Gretch

Jul y 30 , 201 0 Pag e 2 choice , no t

t o protec t competitor s fromone another . B y pennittin g Atla s an d other carrier s wit

h schedule d carg o authorit

y t o us e Brazi l charter s t o satisf y cun-en t demand , the Departmen

t wil l b e increasin g competitio n (bot h amon g U.S . carrier s an d vis-a^vi s Brazilia n carriers ) an d expandin g th e an * transportatio n option s availabl e t o th e shippin g public . The pro-competitiv e benefits wil l b e magnified becaus e Souther n an d similarl y situate d chatter

carrier s wil l gain th e abilit y t o operat e schedule d services , shoul d the y wis h t o d o so , witliout

shutterin g their

Brazi l charte

r operations.' * Contrar y t o Southern' s assertions , tli e ciuTen t Brazi l envirorunen

t i s ver y differen t fromtha t in whic h th e Departmen

t formulate d it s charte

r assigrmien

t policie s fo

r limite d entr y markets . Formerl y i n Brazil , th e numbe r o f schedule d designation s wa s limited , an d so , fo r carrier s receivin g charter s allocations , thi s wa s th e only wa y t o serv e th e market . Japa

n and Chin aals o wer

e (and temporarily remain ) subjec t to schedule d carg o designatio n restrictions . Lideed , the Chin asituatio n i s dramaticall y differen t fromBrazi l because , there , combinatio n an d carg o charter s togethe

r ar e limite d t o amer e 7 5 pe r

yea r fromChin aZone 1 point s in U.S.-Chin acity-paii

- market s serve d b y aChines e carrier . The present

situatio n in Brazi l provide s ampl e basi s fo r th e Department

to waiv e it s norma l charte r policy . Today , Brazi l schedule d cai-g o designation s ar

e milimite d an

d schedule d frequencies remai n availabl e fo r distribution . Becaus e 1,25 0 Brazi l charter s ai* e availabl e durin g th e charte r yea r endui g Jun e 30,201 1 an d w e understan d tha t fewe r tha n 70 0 wer e use d i n th e charte

r yea r tha t jus t ended , grantin g th e waive

r shoul d no t restric t th e abilit y o f othe r U.S . carrier s to serv e th e market . The waive r request , i n short , ough t to b e considere d a"n o braiiier. " In orde r t o b e responsiv e t

o continuin g shippe

r demand fo

r sei-vice t o off-line point s i n Brazil , Atla s ask s th e Departmen t to gran t th e requeste d waive

r a s soo n a s possible . Ver y trul y yours , Russel l E . Pomme

r Associat e General . Counsel an d Senio r Dii-ecto r of Regulator y Affair s

' cc : Mar

y Sti'ee t Est aRosenber

g Bria n Hedber g All person s o

n attache d servic e lis t

^ Th e relate d point

tha t Atla s ha s tli e abilit

y t o forfei t it s schedule d designatio n temporarily i n order t o operat e chartei- s (id . at

1 ) i s totall y of

f th e mark . I t

would serv e no vali d U.S . interes t to forc e Atla s t

o mak e suc h achoice , especially whe n th e increase d flexibility Atla s i s seekin g ca n b e accommodate d witliou t impac t o n othe r carriers ' acces s t

o th e Brazi l market .Mr . Pau l Gretch

Jul y 30,201 0 Page s CERTIFICAT E OF SERVICE I hereb y certif

y tha t I have , thi s 30"

^ da y o f Jul y 2010 , cause d acop y o f th e foregoin g repl y t

o b e serve d b y e-mail o

n al l person s liste d below : Nam e Aaro n Goerlich Nanc y Spark s Davi d Vaugha

n Kevi n Montgomer

y Pierre Murph

y Willia mC . Evan s Marshal l Sinick Representin g

Souther n FedEx UP S Pola r Arro w Centurio n Florid aWes t E-mai l

agoerlich@ggh-airlaw.co m imsparks@fedex.co m dvaughn@kelleydrye.co m kevin.montgomery@polaraircargo.co m pmurphy@lopmmphy.co m bill@mietuslaw.co m msinick@ssd.co m

Russel l E . Pomme

r