BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2013/2014 U.S.-Brazil Combination Frequency

Allocation Proceeding

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)

)

)

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Docket DOT-OST-2013-0072

CONSOLIDATED ANSWER

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

May 3, 2013
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2013/2014 U.S.-Brazil Combination Frequency

Allocation Proceeding

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)

)

)

)

)

)

Docket DOT-OST-2013-0072

CONSOLIDATED ANSWER

OF DELTA AIR LINES, INC. 

I. Introduction

As a result of the successful negotiation with Brazil, the Department has the 

opportunity in this proceeding to improve the U.S.-Brazil market structure and install 

meaningful competition against American, which dominates the restricted U.S.-Sao 

Paulo market with nearly half the entire U.S. flag frequency allocation. US Airways and 

American are in the process of completing their merger, which they expect to conclude

by the third quarter of this year. Given the Department’s stated public interest objectives 

in this case, and the fact of the pending American/US Airways merger, service and 

competitive benefits for the traveling public would be maximized by awarding Delta the 

21 frequencies requested to increase service from Atlanta and New York, and to 

maintain service at Detroit. 

II. Executive Summary

Delta respectfully submits that the most important public interest consideration in 

this case is to provide for an equitable and competitive distribution of U.S.-Sao Paulo 

frequencies. U.S.-Sao Paulo service is dominated by American which holds 47 of the 
Answer of Delta

Page 2

total 105 U.S. flag unrestricted frequencies. DL-A-101. American and US Airways are 

merging, and TAM’s decision to join the oneworld alliance will lead to even greater 

concentration of the U.S.-Brazil service in the hands of a single carrier/alliance group. 

DL-A-109. By authorizing Delta’s proposals to increase and maintain service at Atlanta, 

New York and Detroit, the Department will create important service benefits for the 

traveling public, and substantially improve the U.S.-Brazil competitive market structure. 

US Airways contends that because its merger with American cannot be closed 

without certain regulatory approvals, “US Airways and American today remain separate 

competitors.” (US Supp at 4). This claim is, at best, a fleeting and transient fact that no 

party reasonably expects to be true when frequencies at issue become effective in 

October. Actions speak louder than words. While US Airways and American claim to 

“remain separate competitors,” in the 84 pages of briefs and exhibits filed to date in this 

proceeding, not one word of criticism was leveled by either US Airways or American 

against the other. Instead, the American/US Airways merger parties direct all of their

attacks and criticisms against Delta. See, e.g. US Airways Supp at 10-12, 16-18; 

American Supp. at 5-6. 

Delta has requested 21 frequencies and American/US Airways have together 

requested 28. Delta’s request for 21 frequencies is more modest than appears, because 

Delta is required to transfer 7 frequencies to US Airways pursuant to the terms of the 

DCA/LGA slot swap transaction. Delta’s net request is for 14 incremental frequencies. 

US Airways will receive 7 unrestricted frequencies from Delta, and either American or 

US Airways are assured of receiving the 7 remaining surplus frequencies after grant of 

Delta’s request – thus providing the combined AA/US entity with 14 incremental 

frequencies. DL-A-102, 103. The 14 incremental frequencies AA/US are assured to 

receive are sufficient to fund both of the US Airways’ Charlotte and Philadelphia 
Answer of Delta

Page 3

proposals; and, American can fund nonstop service at Los Angeles or Chicago by 

moving just one of its four daily Miami flights. DL-A-401.

The full grant of Delta’s proposal will 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. DL-A-103. 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. DL-A-105. 

In the Instituting Order, the Department stated that in the applicants’ submissions, 

“we fully expect [the American/US Airways merger] issue to be developed further on the 

record as the carriers advance the merits of their proposals.” Order 2013-4-9 at 6. 

However, US Airways and American have failed to volunteer the relevant facts of their 

merger that bear on this case. In order to develop this issue for the record, Delta calls 

upon US Airways and American to address the following interrogatories:

1. Are American and US Airways merging?1

2. Do American and US Airways expect their merger to be completed in the 

third quarter of 2013?2

3. Have American and US Airways filed a route transfer application seeking to 

consolidate all of US Airways’ international route authorities with 

American’s?3

4. Will the combined entity have at least 61 unrestricted Brazil frequencies 

including the 47 currently held by American, the 7 to be transferred from 

 1 http://www.usairways.com/en-US/aboutus/pressroom/newamerican.html?cint=update_21132

2 http://newamericanarriving.com/investors/whats-happening-next/

3 Docket DOT-OST-2013-0082
Answer of Delta

Page 4

Delta to US Airways, and 7 surplus frequencies remaining after satisfaction 

of Delta’s full request in this case?

Given that US Airways/American are assured of receiving 14 incremental 

frequencies over the next two years (even after full satisfaction of Delta’s request) there 

is no credible threat to US Airways ability to continue Charlotte service. US Airways has 

already extended its lease with United though October 2014 (but does not indicate if it 

sought to extend the lease until the summer 2015 season when it will receive seven 

unrestricted frequencies from Delta). Indeed, US Airways conveniently ignores the 

seven frequencies it will receive from Delta –which could also be used to fund its 

Philadelphia proposal. DL-A-102, 103. At most US Airways requires an award of seven 

frequencies, which will enable it to continue service at Charlotte and launch new service 

at Philadelphia following the transfer of the Delta frequencies.

With an astounding 47 unrestricted Brazil frequencies at its disposal, the legacy 

American entity should be ruled out for an award. The public interest requires that 

American receive more competition, not more frequencies. American operates 

quadruple daily Sao Paulo flights at Miami, double daily service at New York, and can 

readily fund either of its Los Angeles or Chicago service while maintaining service at all 

existing gateways. Interestingly, US Airways is highly critical of Delta and urges that:

the Department should only consider a frequency allocation for purely 

duplicative services that would be operated by a single carrier (such as 

Delta’s proposal to add same carrier second daily flights at Atlanta and 

New York) after accommodating needs for frequencies to preserve 

existing services and proposals to serve new gateways; and after U.S. 

cities that already have Sao Paulo nonstop service operated by another 

U.S. or foreign carrier receive an alternative service option. US Supp at 

19 (emphasis original). 

Yet, US Airways has no issue with American’s highly duplicative current service pattern, 

and US Airway awkwardly construes its pleading to endorse American over Delta. 
Answer of Delta

Page 5

It should not be forgotten that less than a year ago the Department granted a 

huge frequency request by American for 17 Brazil frequencies, which allowed American 

to “backfill” frequencies on the Miami-Rio de Janeiro route and move those seven

unrestricted frequencies to establish a second daily Sao Paulo flight at JFK.4

 DL-A-107, 

108. Thus, even without an award in this case, the Department has been very generous 

to American with regard to Brazil authority. 

Given the pending American/US Airways merger and the huge frequency cache 

that will be held by the combined entity, it is not surprising that US Airways would stress 

individual gateway attributes over market structure and competition. (US Supp. at 4) 

However this belies the reality of the U.S.-Brazil market. Under well settled DOT 

precedent, all allocated U.S.-Brazil frequencies can be used in any eligible U.S.-Brazil 

city-pair.5

 Given the large number of frequencies outstanding – and the flexibility the

Department has granted carriers to freely move them among gateways, market structure 

considerations should be given greater decisional significance than individual gateway 

attributes in this case. 

In terms of individual gateway attributes, however, Delta’s proposals excel on the 

merits. The following bullets summarize the service and competitive benefits that would 

result from Delta’s Atlanta, New York and Detroit proposals: 

• Atlanta is Delta’s largest hub with 1,000 daily flights serving 150 U.S. points. 

With just a single daily Atlanta-Sao Paulo flight, Delta’s network is 

handicapped against the four daily Miami flights operated by American, which 

will soon be consolidated with a fifth eastern network service operated by US 

Airways at Charlotte. A second Atlanta flight is needed to open a new time 

channel at this important hub and improve competition in the scores of onestop connecting markets served by American/US Airways from Miami and 

Charlotte.

 4 See Notice of Action Taken, Docket OST-2012-0079 (May 24, 2012). 5 “We . . . grant the . . . U.S. carriers designated for combination services in the U.S.-

Brazil markets flexibility to use their allocated frequencies in markets where the carriers 

hold requisite underlying authority.” (Order 2004-6-25). 
Answer of Delta

Page 6

• New York-Sao Paulo is the largest U.S.-Brazil market with nearly 340,000 

annual O&D passengers – far larger than any competing gateway at issue in 

this proceeding. American operates 2 daily flights, and an additional flight by 

its partner, TAM, gives oneworld a 3:1 schedule advantage over Delta. An 

award of one additional flight to Delta will open a new time channel and help 

close the competitive gap with American and the oneworld alliance at JFK. In 

addition, JFK is an important connecting hub with online service to 48 U.S. 

points. 

• Detroit-Sao Paulo is a successful, established service linking Detroit and the 

Midwest industrial base to the business and manufacturing center of Brazil. 

Delta’s flight benefits U.S. companies doing business abroad and extends the 

global reach of the U.S. auto industry. Detroit provides the only intergateway

competition to Chicago in the Midwest region, and offers nonstop service to 

114 U.S. points. Continuation of Detroit-Sao Paulo service is very important 

to Delta, Detroit, the State of Michigan and U.S. industrial interests. 

III. Rebuttal of Other Carrier/Gateway Proposals

A. US Airways – Charlotte

Between them, US Airways and American are assured of receiving 14 

incremental frequencies over the next two years even after full satisfaction of Delta’s 

request. DL-A-102, 103. In these circumstances, there does not appear to be a material 

threat to US Airways ability to continue Charlotte service. As noted, US Airways has 

already extended its lease with United though October 2014 (but does not indicate if it 

sought to extend the lease until the summer 2015 season when it will receive seven 

unrestricted frequencies from Delta). The combined American/US Airways entity will 

have a minimum of 61 unrestricted Brazil frequencies and it would seem likely that the 

new American would use at least 7 of those frequencies to maintain service at Charlotte.

A second daily Atlanta-Sao Paulo flight will compete with Charlotte and help to 

offset the loss of eastern U.S. network competition as the result of the consolidation of 

US Airways and American. DL-A-202. With just a single daily Sao Paulo flight, the 

potential of the Atlanta hub is underutilized. The Department can create substantial 
Answer of Delta

Page 7

service and competitive benefits for the traveling public by authorizing an additional 

Atlanta-Sao Paulo frequency. Delta’s U.S.-Sao Paulo network is at a disadvantage to 

the four daily Miami-Sao Paulo flights operated by American, which will soon be 

combined with a fifth daily Charlotte-Sao Paulo flight operated by US Airways. DL-A-201. 

New service at Atlanta will help close this competitive gap. Importantly, additional 

frequencies at Atlanta will help to improve competition in the 48 one-stop overlap 

markets served by both American and US Airways that will lose a competitor as a result 

of the merger. DL-A-202. 

In terms of comparative metrics, Atlanta is superior to Charlotte both in terms of 

local market size, and as a connecting hub. Delta provides nonstop service from 

Atlanta to 150 U.S. cities – nearly 50 percent more cities than served by US Airways 

from Charlotte. DL-A-203. And, the Atlanta flight serves a metropolitan area with a 

population more than double Charlottes. DL-A-204. Atlanta’s location in the 

Southeastern United States provides convenient, competitive, and non-circuitous Sao 

Paulo connections. Delta and its regional affiliates provide nonstop service from Atlanta 

to more than 150 U.S. points, and operate more than 1,000 peak day departures at the 

hub. DL-A-206. The availability of new time of day coverage and increased capacity on 

this route will allow more passengers to take advantage of the Atlanta hub gateway. 

DL-A-208. Atlanta offers unsurpassed facilities and convenience for U.S.-Brazil 

passengers. In May, 2012, Delta and Atlanta celebrated the opening of Atlanta's new, 

state-of-the-art $1.4 billion international terminal. DL-A-209 The new Maynard H. 

Jackson Terminal interfaces with Atlanta’s multi-concourse terminal layout that is 

designed to facilitate seamless connections to onward flights. DL-A-210. 

Detroit is also superior to Charlotte because it provides the only competitive 

nonstop flight to Sao Paulo for the entire Midwest region. DL-A-211. Detroit-Sao Paulo 
Answer of Delta

Page 8

is a successful established service linking Detroit and the Midwest industrial base to the 

business and manufacturing center of Brazil. Delta’s flight benefits U.S. companies 

doing business abroad and extends the global reach of the U.S. auto industry. From 

Detroit, Delta and the Delta Connection carriers offer nonstop service to 114 U.S. points. 

DL-A-214. Continuation of Detroit-Sao Paulo service is very important to Delta, Detroit, 

and the State of Michigan. 

Unlike American/US Airways which are assured of receiving 14 frequencies, 

Delta would be forced to suspend Detroit service if the Department does not grant 

priority to its request over the competing applications of American and US Airways, 

which collectively seek all 28 frequencies in this case. As previously discussed, Delta is 

contractually obligated to transfer seven weekly unrestricted frequencies to US Airways 

as part of the DOT-approved DCA/LaGuardia slot swap transaction, which would leave

Delta with insufficient frequencies to maintain service at Detroit. DL-A-103. It is very 

important that Delta receive an allocation of frequencies to offset the required transfer to 

US Airways, which is now American’s merger partner, not a stand-alone new entrant to 

Brazil as it was at the time of the slot swap. 

While Delta would obviously have preferred not to transfer any of its unrestricted 

Brazil frequencies to US Airways, this was a necessary part of the consideration needed 

to close the LGA/DCA transaction and to achieve the enormous benefits of establishing 

a new Delta hub at LaGuardia. American’s attack on the slot swap transaction is 

specious. AA Supp at 5. The Department recognized the enormous consumer benefits 

that would be created by the establishment of a new Delta hub at LaGuardia, and the 

benefit of granting US Airways access to an important international market. Delta has 

delivered on the public benefits of its new hub, increasing DL/US LGA capacity 8 percent, 

and driving 13 percent more traffic on these flights. DL-A-215. The fact is that 
Answer of Delta

Page 9

circumstances have now changed dramatically by virtue of the American/US Airways 

merger. Favorable action by the Department on Delta’s application is necessary to 

prevent the new American from attaining unacceptable market power on U.S.-Sao Paulo

routes. 

B. US Airways – Philadelphia

US Airways requests 14 frequencies from the Department: 7 to fund CharlotteSao Paulo and 7 to fund Philadelphia-Sao Paulo. Yet, US Airways inexplicably ignores 

the seven frequencies it will receive from Delta – which can be used to fund its 

Philadelphia proposal. DL-A-102, 103. US Airways should not receive two sets of 

frequencies in this case, and be allowed to warehouse the 7 frequencies it will receive 

from Delta for some unspecified future use. At most US Airways requires an award of 

seven frequencies, which will enable it to continue service at Charlotte and launch new 

service at Philadelphia following the transfer of the Delta frequencies.

US Airways’ Philadelphia gateway is immediately adjacent to Delta’s proposed 

New York gateway. But, New York-Sao Paulo is the largest U.S.-Brazil market with 

nearly 340,000 annual O&D passengers – far larger than any competing gateway at 

issue in this proceeding. DL-A-301. New York is nearly 50 times larger than 

Philadelphia or Charlotte, 3.5 times larger than Los Angeles, and 6.5 times larger than 

Chicago. Id. Given the importance of the New York market, a second daily flight at 

Delta’s large and well established New York hub is likely to produce greater benefits 

than speculative proposals for smaller O&D gateways than have never been able to 

sustain U.S. flag scheduled service to Sao Paulo. 

Delta’s second daily New York (JFK) - Sao Paulo flight will compete with the 

merged US Airways/American entity, and the fact that US Airways will likely have the 

resources to fund Philadelphia service in the region makes an additional Delta flight all 
Answer of Delta

Page 10

the more important. American already operates two daily New York-Sao Paulo flights, 

and an additional flight is offered by its partner, TAM, giving oneworld a 3:1 schedule 

advantage over Delta. DL-A-302. An award of seven additional frequencies to Delta will 

open a new time channel and help close the competitive gap with American and the 

oneworld alliance at JFK. DL-A-303. 

In addition to serving the largest local market in this case, Delta’s JFK hub will

provide significant connecting benefits with online service to 48 U.S. points. DL-A-304.

Whether passengers are originating in New York or connecting from other cities, their 

experience will be enhanced by Delta’s new Terminal 4 facility opening in May 2013. 

DL-A-306, 307. This $1.4 billion investment features the largest SkyClub in Delta’s 

system, and will allow international arrivals to be concentrated in the new facility. 

C. American – Los Angeles

With 47 unrestricted Brazil frequencies at its disposal, American should not 

receive any additional frequencies in this proceeding and the expense of new 

competitive service by Delta. Less than a year ago the Department granted a large

frequency request by American for 17 Brazil frequencies, which allowed American to 

“backfill” frequencies on the Miami-Rio de Janeiro route and move those seven

unrestricted frequencies to establish a second daily Sao Paulo flight at JFK.6 DL-A-107, 

108. Even without an award in this case, the Department has been very generous to 

American with regard to Brazil authority. The Department has provided American with 

unlimited “flexibility to use [its] allocated frequencies in markets where [American] hold[s] 

requisite underlying authority.” (Order 2004-6-25). Thus, while American has the 

flexibility to serve the Los Angeles-Sao Paulo market today, it prefers to operate

 6 See Notice of Action Taken, Docket OST-2012-0079 (May 24, 2012).
Answer of Delta

Page 11

quadruple daily Sao Paulo flights at Miami, and double daily service at New York. DL-A401.

The fact that American does not chose to operate nonstop service at Sao Paulo 

is not surprising given that Los Angeles has not been able to sustain U.S. flag scheduled 

service to Sao Paulo. Two prior attempts to serve the market failed after less than eight 

months. DL-A-402. While Los Angeles does have nonstop service by Korean Air, this 

is due in large part to the fact that Seoul-Sao Paolo is too far to fly nonstop, and 

Korean’s load factors on the LAX-GRU segment average less than 70 percent. Id. It is 

unlikely that American’s flight would be viable, and that American would seek to pocket 

the frequencies and move them to new gateway using the unrestricted flexibility that is 

standard for Brazil awards. 

American has excellent schedule coverage in the LAX-GRU market with at least 

six different service options via its DFW and Miami gateways. DL-A-403. Because of 

its west coast location, Los Angeles provides little in the way of connecting benefits 

because all points east of Phoenix require unacceptable backhaul. DL-A-404. In 

addition, American provides nonstop-to-nonstop connections via DFW to 37 of 43

western U.S. cities it serves from Los Angeles. DL-A-405. 

American’s dominance in the U.S.- Brazil marketplace is formidable in its own 

right, and is even more concerning when the effects of the US Airways merger and 

oneworld alliance are considered. Together, these carriers will control 64 percent of 

U.S.-Sao Paulo capacity. DL-A-109. American holds antitrust immunity with LAN,7 and 

LAN has now completed its take-over of TAM, the largest airline in Brazil.8

 TAM has 

announced that it will be part of oneworld, and given American’s immunized relationship 

 7 Order 2005-10-8.

8 http://www.economist.com/blogs/gulliver/2012/06/south-american-airlines
Answer of Delta

Page 12

with LAN, those ties are likely to be especially close. The award of 21 frequencies to 

Delta in this case will help to offset the growing dominance of oneworld in Brazil and 

Latin America. 

D. American – Chicago

As with Los Angeles, American has sufficient frequencies and the flexibility to 

serve Chicago-Sao Paulo today if it was in American’s commercial interest to do so. DLA-401. American should not receive a further award for Chicago service at Delta’s 

expense. 

American proposes to add a second nonstop Sao Paulo flight at Chicago (a route 

already served by United) whereas Delta seeks frequencies to maintain Detroit’s only 

nonstop flight – which is also the only competing gateway in the entire Midwest region. 

DL-A-501. As noted above, Delta’s Detroit-Sao Paulo flight is an important service 

linking Detroit and the Midwest industrial base to the business and manufacturing center 

of Brazil. 

Detroit is a superior connecting hub. From Detroit, Delta and the Delta 

Connection carriers offer nonstop service to 114 U.S. points. DL-A-502. By contrast, 

American serves 101 points from Chicago. DL-A-504. And, Delta’s state-of-the-art 

McNamara terminal was designed with simplicity and ease of passenger transfers in 

mind, featuring an elevated monorail, moving sidewalks and integrated customs facility –

a welcome relief to American’s dated facilities at Chicago. DL-A-505, 506.
Answer of Delta

Page 13

V. Conclusion

Delta’s request for frequencies to increase and maintain Sao Paulo service at 

Atlanta, New York, and Detroit will create important benefits for the traveling public and 

enhance competition on U.S.-Brazil routes. Delta respectfully submits that the 

Department’s objective to maximize public benefits would be best served by the grant of 

21 frequencies to Delta necessary to implement its full service proposal. 

 Respectfully submitted,

_________________________________

Alexander Van der Bellen

Managing Director, Government Affairs

 & Associate General Counsel

DELTA AIR LINES, INC.
CERTIFICATE OF SERVICE

A copy of the foregoing Application has been served this 3rd day of May, 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

info@airlineinfo.com
Delta Answer Exhibits

Section I: Competitive Overview the of U.S.-Brazil Marketplace

Section II: US Airways – Charlotte

Section III: US Airways – Philadelphia

Section IV: American – Los Angeles

Section V: American – Chicago
Section I: Competitive Overview the of U.S.-Brazil Marketplace
An Award of 21 Frequencies to Delta is Required to Improve 

the Competitive Market Structure

• American currently dominates Brazil, with nearly half of the U.S. total of unrestricted Sao 

Paulo frequencies.

47

7

23

35

AA US DL UA

US-Brazil 

Unrestricted Weekly Frequencies by Airline

*

MIA 26x

JFK 14x

DFW 7x

EWR 7x

IAD 7x

IAH 7x

ORD 7x

*7x leased to US

ATL 7x

JFK 7x

DTW 7x

Docket DOT-OST-2013-0072

Exhibit DL-A-101

CLT 7x*

leased from UA

Note: 2 DL Unrestricted Frequencies Support Atlanta-Rio de Janeiro
Delta’s Proposal Improves the Competitive Market Structure Docket DOT-OST-2013-0072

Exhibit DL-A-102

23

7

47

DL US AA

16 7

47

DL US AA

37

14

47

DL US AA

37

7

54

DL US AA

DL frequencies to US 

to backfill leased UA

DL awarded 21 

frequencies, US or AA 

receive 7

37

61

DL AA/US

AA/US merge, 

increase frequency 

advantage 

37

61

DL AA/US

Current allocation of 

unrestricted 

frequencies

DOT DOT
American and US Airways Proposals

Exacerbate Competitive Imbalance Docket DOT-OST-2013-0072

Exhibit DL-A-103

23

7

47

DL US AA

16 7

47

DL US AA

16 21

61

DL US AA

DL frequencies to US 

to backfill leased UA

DL awarded no 

frequencies, US and 

AA receive 14 each

AA/US merge, 

increase frequency 

advantage 16

82

DL AA/US

Current allocation of 

unrestricted 

frequencies

DOT
An Award of 21 Frequencies to Delta Will Create the Optimal 

Competitive Distribution of Frequencies 

• AA will remain the largest U.S. carrier to Brazil, but with two credible challengers of equal 

strength

61

37 35

AA/US DL UA

U.S.-Brazil Unrestricted Frequency 

Distribution if Delta’s Proposal is Granted

MIA 26x

JFK 14x

CLT 7x

DFW 7x

LAX/ORD/PHL7x

EWR 7x

IAD 7x

IAH 7x

ORD 7x

??? 7x

ATL 14x

JFK 14x

DTW 7x

Docket DOT-OST-2013-0072

Exhibit DL-A-104

Note: 2 DL Unrestricted Frequencies Support Atlanta-Rio de Janeiro
American Airlines and US Airways are Merging Docket DOT-OST-2013-0072

Exhibit DL-A-105

“The combination is expected to 

be completed in the third 

quarter of 2013”

 - newamericanarriving.com/faq

American and US Airways 

expect to merge before any of 

the U.S.-Brazil frequencies at 

issue become effective.
American Airlines and US Airways are Merging

• American and US Airways tout the strength of their combined Latin American network

Docket DOT-OST-2013-0072

Exhibit DL-A-106

Source: American/US Airways Route Transfer Application at 17.
American was Awarded 17 Brazil Frequencies Just Last Year 

– 7 of Which It Used to Fund New Service on the Restricted 

JFK-Sao Paulo Route

Docket DOT-OST-2013-0072

Exhibit DL-A-107
American was Able to Increase New York-Sao Paulo Service 

by Using DOT’s Award of New Frequencies to “Backfill” 

Miami-Rio de Janeiro

Docket DOT-OST-2013-0072

Exhibit DL-A-108

26

7 7 7

MIA-GRU MIA-GIG JFK-GRU DFW-GRU

AA Unrestricted 

Frequencies May 

2012

DOT

26

14 14

7

MIA-GRU MIA-GIG JFK-GRU DFW-GRU

Select AA 

Frequencies 

Following “Backfill”

• American was allowed to move frequencies that became eligible for Sao Paulo flying from 

their Miami-Rio de Janeiro flight to New York (JFK)-Sao Paulo

– DOT then immediately granted American new Rio de Janeiro frequencies to backfill 

those transferred to JFK-GRU, and additional MIA-Brazil frequencies as well

New Restricted Frequencies

Note: 11 Frequencies currently used for non-Sao Paulo service are eligible for future 

use at Sao Paulo once infrastructure constraints are addressed. 
An Award of 21 Frequencies to Delta is Required to Improve 

Competitive Balance

American

34%

US Airways

4% Tam, future 

oneworld

26%

Delta

14%

United

19%

Other

3%

U.S.-Sao Paulo 

Capacity Share by Airline

Docket DOT-OST-2013-0072

Exhibit DL-A-109

Source: August 2013 OAG

oneworld

64%

Star

19%

Skyteam

17%

U.S.-Sao Paulo 

Capacity Share by Alliance

American and US Airways offer 277% 

more Sao Paulo capacity than Delta

oneworld will control 64% of U.S.-Sao 

Paulo capacity
Gol Enhances Delta’s Brazil Network

• Delta codeshares on Gol to 19 Points beyond Sao Paulo

Docket DOT-OST-2013-0072

Exhibit DL-A-110

Source: August 2013 OAG
Section II: US Airways – Charlotte
Delta Needs Additional Frequencies at Atlanta to Better 

Compete with the 5 Daily Flights of AA/US from Their Eastern 

Network Hubs

• A single daily Atlanta flight puts Delta’s network at a competitive disadvantage to the five 

daily flights offered by AA/US from Miami and Charlotte.

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-201

5

1

AA/US DL

Daily Flights to GRU from Southeastern U.S. 

Gateways 

US Hub

DL Hub

AA Hub

500%
Additional Atlanta Frequencies Will Help to Alleviate the Loss 

of One-Stop Connecting Competition from AA/US Merger

48 Cities Will Lose A Competitive Alternative

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-202

Note: Cities served from ATL by DL, and US/AA from MIA and CLT
Delta’s Proposed Atlanta Gateway Offers Broadest Access 

for U.S. Cities Docket DOT-OST-2013-0072

Exhibit DL-A-203

150

108

85

ATL CLT PHL

Non-stop Destinations from Proposed Hubs

Source: August 2013 OAG

US Proposal

DL Proposal
Delta’s Proposed Sao Paulo Gateways Offer Greater Access 

for More U.S. Customers Docket DOT-OST-2013-0072

Exhibit DL-A-204

5,457

2,296

0

2,000

4,000

6,000

ATL CLT

Population from Proposed Hub’s 

Metropolitan Areas (Thousands)

Source: 2012 Census Estimate

18,897

5,965

0

5,000

10,000

15,000

20,000

JFK PHL

Population from Proposed Hub’s 

Metropolitan Areas (Thousands)

US Proposal

DL Proposal
Atlanta Offers More Potential U.S. City Connections Than 

Charlotte and Miami Combined

• Atlanta offers 38 more unique U.S. destinations than Charlotte and Miami Combined

150

112 108

50

ATL Combined CLT & MIA CLT MIA

U.S. City Connections from Southeastern Hubs

AA/US Hub

DL Hub

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-205
Atlanta is an Ideal East Coast Gateway to Sao Paulo 

Delta Provides Nonstop Service to 150 U.S. Points 

Source: August 2013 schedules, Diio Mi To GRU

To HNL

Docket DOT-OST-2013-0072

Exhibit DL-A-206

To ANC
Atlanta is Delta’s Largest Hub 

and a Major Long-Haul International Gateway

• Atlanta is a major South American gateway

• Delta has a leading international presence in Atlanta and currently serves nine non-stop

destinations in South America, two in Africa, one in Asia, and sixteen in Europe

Docket DOT-OST-2013-0072

Exhibit DL-A-207
Atlanta Needs a Second Frequency to Offer Competitive Time 

Channel Coverage to Miami

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-208
Atlanta Offers Unsurpassed Convenience for U.S.-Brazil 

Connection Passengers Docket DOT-OST-2013-0072

Exhibit DL-A-209

• In May 2012, Delta and Atlanta opened the state-of-the-art Maynard H. Jackson 

Jr. International Terminal, a new $1.4 billion terminal project.
Atlanta Offers Unsurpassed Convenience for U.S.-Brazil 

Connection Passengers Docket DOT-OST-2013-0072

Exhibit DL-A-210

• DL offers exceptional convenience for connecting passengers at HartsfieldJackson Atlanta International Airport. International arrivals and departures are 

gated in Concourses E and F and are easily accessed via airport tram.
EWR EWR

LAX LAX

ORD ORD

MIA MIA

MCO MCO

ATL ATL

CLT CLT

IAHIAH

DFW

JFK JFK

IADIAD

Delta’s Detroit-Sao Paulo Service Gives the Underserved 

Midwest Region A Second U.S. Gateway to Brazil

DTW

Existing Brazil Gateway

Docket DOT-OST-2013-0072

Exhibit DL-A-211
Docket DOT-OST-2013-0072

Exhibit DL-A-212

Page 25

20,347

6,271

DTW CLT

Local GRU Bookings

DL Proposal

Detroit is a Important Gateway At Risk of Losing Service

Source: MIDT YE Mar 2013

US Proposal

• Detroit is more than three times larger than Charlotte, which US Airways claims 

is at risk of loss of service as a result of the merger.
Docket DOT-OST-2013-0072

Exhibit DL-A-213

Michigan Industry Relies on DTW International Service 

Major Michigan Companies:

General Motors Stryker

Ford Motor Autoliv

Chrysler Group Visteon

Dow Chemical Masco 

Whirlpool Borg Warner

TRW Automotive Holdings CMS Energy

Lear Auto-Owners Insurance

Ally Financial Kelly Services

Kellogg Con-way

Penske Automotive Group Meritor

DTE Energy
DTW is Delta’s Primary Midwestern Hub

Delta Provides Nonstop Service to 114 U.S. Points 

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-214

Page 27

To GRU
The DOT-Approved DCA/LGA Slot Swap Produced 

Enormous Consumer Benefits Docket DOT-OST-2013-0072

Exhibit DL-A-215

8%

13%

Seat Chg Pax Chg

LGA Capacity vs. Demand

Slot transaction created immediate value to traveling public

• DL/US seats in LGA increased 8% and passenger demand increased 

almost twice that amount at 13%

• LGA industry traffic increased by more than 2,000 daily passengers YoY 

which is over 750,000 annually

Source: Seat Change – OAG guide for peak week August 2012 v August 2011 to USA 

DOT 3Q 2012 v. 3Q 2011 for passenger change (U.S. only)
Section III: US Airways – Philadelphia
New York is the Largest and Most Important U.S. Market to 

Sao Paulo Docket DOT-OST-2013-0072

Exhibit DL-A-301

338,196

97,309

51,281

7,288 6,271

NYC LAX ORD PHL CLT

0

100000

200000

300000

400000

U.S.-GRU Local Bookings

DL Proposal

Source: MIDT YE Mar 2013

• New York dwarfs the competing gateway proposals in terms of local market size

AA Proposal

US Proposal
American and Its oneworld Partner, TAM, Out-schedule Delta 

3 Flight to 1 in the Critical New York-Sao Paulo Market

• An additional JFK frequency will help to achieve parity with American, but Delta will still 

trail the combined American/TAM (JJ) oneworld offering.

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-302

3

1

AA & JJ DL

Daily JFK-Sao Paulo Flights

AA

JJ

1,838

492

AA & JJ DL

Daily JFK-Sao Paulo Seats

AA

JJ
Delta Needs a Second JFK Frequency

to Offer Competitive Time Channel Coverage

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-303
Delta’s Domestic JFK Routes Provide Key Access to 

International Destinations 

Delta Provides Nonstop Service to 48 U.S. Points 

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-304

To GRU
JFK is Delta’s Premier International Gateway 

Delta Provides Nonstop Service to 44 International Points 

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-305
JFK’s New Terminal 4 Will Offer NYC-Brazil Passengers A 

Premier Airport Experience Docket DOT-OST-2013-0072

Exhibit DL-A-306

• In May 2013, Delta and New York will open the new Terminal 4, a $1.4 billion 

terminal project that will allow for easier transit with additional baggage claims, 

as well as customs and border-security facilities.
JFK’s New Terminal 4 Will Offer NYC-Brazil Passengers A 

Premier Airport Experience Docket DOT-OST-2013-0072

Exhibit DL-A-307

• International arrivals will be concentrated in the new Terminal 4.
Section IV: American – Los Angeles
American is Able to Fly LAX-GRU Today Docket DOT-OST-2013-0072

Exhibit DL-A-401

26

14

7

0

MIA JFK DFW LAX

AA Frequencies by Gateway

• Despite holding 47 unrestricted frequencies, with no U.S. gateway limitations, AA spurns 

LAX-GRU in favor of quadruple daily service at MIA and double daily service at JFK

?
Los Angeles Has Not Sustained Direct 

Daily Sao Paulo Service

• Only Korean Air Lines operates this route currently

– 3x weekly

– Historical Load Factor < 70%

• Delta and United have both operated the route before, each attempt lasted less 

than 8 months

– DL August 2009-February 2010

– UA October 1992-April 1993

Docket DOT-OST-2013-0072

Exhibit DL-A-402

1990 2000 2010

DL

UA

AA

LAX-GRU Scheduled Service History by U.S. Flag Carriers
American’s Los Angeles Customers Can Conveniently 

Connect Via DFW & MIA Docket DOT-OST-2013-0072

Exhibit DL-A-403

LAX-GRU via DFW via MIA

Distance 6,346 6,414

Circuity 3.1% 4.2%
LAX-GRU Would Only Benefit a few West Coast Connections Docket DOT-OST-2013-0072

Exhibit DL-A-404

More convenient 

via LAX

More convenient via DFW or MIA
American’s Los Angeles Customers Can Conveniently 

Connect Via DFW & MIA Docket DOT-OST-2013-0072

Exhibit DL-A-405

• Of the 43 cities AA serves from LAX, only 6 are not already connected to DFW

Source: August 2013 OAG
American’s Los Angeles Customers Can Conveniently 

Connect Via DFW & MIA Docket DOT-OST-2013-0072

Exhibit DL-A-406

• Of the 43 cities AA serves from LAX, only 6 are not already connected to DFW

Source: August 2013 OAG

37

6

Already 

Connected

New Conneciton 

via LAX

AA LAX Cities Already 

Connected to GRU via DFW
Section V: American – Chicago
EWR EWR

LAX LAX

ORD ORD

MIA MIA

MCO MCO

ATL ATL

CLT CLT

IAHIAH

DFW

JFK JFK

IADIAD

Delta’s Detroit-Sao Paulo Service Gives the Underserved 

Midwest Region A Second U.S. Gateway to Brazil

DTW

Existing Brazil Gateway

Docket DOT-OST-2013-0072

Exhibit DL-A-501
DTW is Delta’s Primary Midwestern Hub

Delta Provides Nonstop Service to 114 U.S. Points 

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-502

Page 46

To GRU
DTW is Delta’s Midwest International Gateway 

Delta Provides Nonstop Service to 16 International Points 

Source: August 2013 schedules, Diio Mi

Docket DOT-OST-2013-0072

Exhibit DL-A-503
Detroit Offers More Potential U.S. City Connections Than 

AA at O’Hare

• Detroit offers 13 more unique U.S. destinations than O’Hare

114

101

DTW ORD

U.S. City Connections from 

Midwestern Hubs

AA Hub

DL Hub

Source: August 2013 OAG

Docket DOT-OST-2013-0072

Exhibit DL-A-504
Passengers Throughout the U.S. 

Can Conveniently Travel via Detroit Docket DOT-OST-2013-0072

Exhibit DL-A-505

• The McNamara Terminal was designed with simplicity and ease of passenger 

transfer in mind.
Passengers Throughout the U.S. 

Can Conveniently Travel via Detroit Docket DOT-OST-2013-0072

Exhibit DL-A-506

• DL offers exceptional convenience for connecting passengers with the 

McNamara Terminal at Detroit Metropolitan Wayne County Airport.