HEFARTMENTOF 

Alias Air, inc. 'HAMSPORTATlON , 

mmwniaAvenue, NW , ;j/rT OPERATION^ 

Washington, O.C. 20006 

?^^:3 m2U P 3:25 

RUSSELL g. POMMER 

(2021 822-9121 -TelBphone 

f202) 822-9152-Fax 

rpommer@atIasair.Bam 

July 30,2010 

Mr. Paul L. Gretch 

Director 

Office of International Aviation 

U.S. Department of Transportation 

1200 New Jersey Ave., SE 

Washington, D.C. 20590 

Re; Request for Issuance of Industry Waiver from Notice-of 

Consistency Procedures Applicable to Brazil Cargo Charters 

Dear Mr. Gretch; 

Of the seven carriers served with the Atlas waiver application, four (FedEx, UPS, 

Polar, Arrow) have advised us that they have no objection, and two (Centurion, Florida 

West) have stated that they do not intend to file responses. The remaining cairier. 

Southern, has answered in opposition.^ 

Southern takes the position, in essence, that the U.S.-Brazil air cargo niai-ket is 

highly regulated, with a careflilly drawn balance between scheduled and charter sei-vices 

in "a fish-or-fowl market,"^ and that the Department should not do anything to upset that 

balance, even though competition will be the casualty. Atlas respectfully disagrees. 

It is indeed unfortunate that the U.S.-Brazil market is severely constrained by the 

bilateral air transport agreement and Brazil's strict regulatory policies. Like Southern, 

Atlas would much prefer an open skies regime. However, that appears not to be a 

realistic aspkation at the present time. The practical choice before the Department is 

whether to accept the U.S.-Brazil status quo uncritically or to work within the existing 

fi:amework to achieve a more competitive enviromiient, 

Southern focuses on a purported need for the Department to maintain the existing 

"balance" of "economic rights of competitors."^ The antitrust laws and the Department's 

competition poUcy, however, are designed to advance competition and increase consumer 

' To the extent required, Atlas requests leave to file this reply in order to offer the Department a critical 

analysis of Soutliem's arguments. 

' Soutliem Answer at I. 

^ /rf.at2. 
Mr. Paul Gretch 

July 30, 2010 

Page 2 

choice, not to protect competitors from one another. By pennitting Atlas and other 

carriers with scheduled cargo authority to use Brazil charters to satisfy cun-ent demand, 

the Department will be increasing competition (both among U.S. carriers and vis-a^vis 

Brazilian carriers) and expanding the an* transportation options available to the shipping 

public. The pro-competitive benefits will be magnified because Southern and similarly 

situated chatter carriers will gain the ability to operate scheduled services, should they 

wish to do so, witliout shuttering their Brazil charter operations.'* 

Contrary to Southern's assertions, tlie ciuTent Brazil envirorunent is very different 

from that in which the Department formulated its charter assigrmient policies for limited 

entry markets. Formerly in Brazil, the number of scheduled designations was limited, 

and so, for carriers receiving charters allocations, this was the only way to serve the 

market. Japan and China also were (and temporarily remain) subject to scheduled cargo 

designation restrictions. Lideed, the China situation is dramatically different from Brazil 

because, there, combination and cargo charters together are limited to a mere 75 per year 

from China Zone 1 points in U.S.-China city-paii- markets served by a Chinese carrier. 

The present situation in Brazil provides ample basis for the Department to waive 

its normal charter policy. Today, Brazil scheduled cai-go designations are milimited and 

scheduled frequencies remain available for distribution. Because 1,250 Brazil charters 

ai*e available during the charter year enduig June 30,2011 and we understand that fewer 

than 700 were used in the charter year that just ended, granting the waiver should not 

restrict the ability of other U.S. carriers to serve the market. The waiver request, in short, 

ought to be considered a "no braiiier." 

In order to be responsive to continuing shipper demand for sei-vice to off-line 

points in Brazil, Atlas asks the Department to grant the requested waiver as soon as 

possible. 

Very truly yours, 

Russell E. Pommer 

Associate General. Counsel and 

Senior Dii-ector of Regulatory Affairs 

' cc: Mary Sti'eet 

Esta Rosenberg 

Brian Hedberg 

All persons on attached service list 

^ The related point that Atlas has tlie ability to forfeit its scheduled designation temporarily in order to 

operate chartei-s (id. at 1) is totally off the mark. It would serve no valid U.S. interest to force Atlas to 

make such a choice, especially when the increased flexibility Atlas is seeking can be accommodated 

witliout impact on other carriers' access to the Brazil market. 
Mr. Paul Gretch 

July 30,2010 

Pages 

CERTIFICATE OF SERVICE 

I hereby certify that I have, this 30"^ day of July 2010, caused a copy of the 

foregoing reply to be served by e-mail on all persons listed below: 

Name 

Aaron Goerlich 

Nancy Sparks 

David Vaughan 

Kevin Montgomery 

Pierre Murphy 

William C. Evans 

Marshall Sinick 

Representing 

Southern 

FedEx 

UPS 

Polar 

Arrow 

Centurion 

Florida West 

E-mail 

agoerlich@ggh-airlaw.com 

imsparks@fedex.com 

dvaughn@kelleydrye.com 

kevin.montgomery@polaraircargo.com 

pmurphy@lopmmphy.com 

bill@mietuslaw.com 

msinick@ssd.com 

Russell E. Pommer