BEFORE THE 

 DEPARTMENT OF TRANSPORTATION 

 WASHINGTON, D. C. 

--------------------------------------------- 

Application of : 

 : 

 AMERICAN AIRLINES, INC. : DOT-OST-2010- 

 : 0088 

under 49 USC 40l09 for allocation of : 

11 weekly U.S.-Brazil frequencies : 

--------------------------------------------- 

---------------------------------------------

Application of : 

 : 

 DELTA AIR LINES, INC. : DOT-OST-2010- 

 : 0090 

for frequency allocation : 

(Detroit-Sao Paulo) : 

--------------------------------------------- 

REPLY OF AMERICAN AIRLINES, INC. 

AND MOTION FOR LEAVE TO FILE 

Communications with respect to this document should be sent to: 

VIRASB VAHIDI WILLIAM K. RIS, JR. 

Senior Vice President - Senior Vice President - 

 Planning Government Affairs 

American Airlines, Inc. American Airlines, Inc. 

P.O. Box 619616, MD 5634 1101 17th Street, N.W. 

DFW Airport, Texas 75161 Washington, D.C. 20036 

 

KENJI C. HASHIMOTO CARL B. NELSON, JR. 

Vice President – Strategic Associate General Counsel 

 Alliances American Airlines, Inc. 

American Airlines, Inc. 1101 17th Street, N.W. 

P.O. Box 619616, MD 5635 Washington, D.C. 20036 

DFW Airport, Texas 75261 (202) 496-5647 

 carl.nelson@aa.com 

ROBERT A. WIRICK 

Director, Regulatory 

American Airlines, Inc. 

P.O. Box 619616, MD 5635 

DFW Airport, Texas 75261 

(817) 963-0394 

robert.wirick@aa.com 

April 23, 2010 
BEFORE THE 

 DEPARTMENT OF TRANSPORTATION 

 WASHINGTON, D. C. 

--------------------------------------------- 

Application of : 

 : 

 AMERICAN AIRLINES, INC. : DOT-OST-2010- 

 : 0088 

under 49 USC 40l09 for allocation of : 

11 weekly U.S.-Brazil frequencies : 

--------------------------------------------- 

---------------------------------------------

Application of : 

 : 

 DELTA AIR LINES, INC. : DOT-OST-2010- 

 : 0090 

for frequency allocation : 

(Detroit-Sao Paulo) : 

--------------------------------------------- 

REPLY OF AMERICAN AIRLINES, INC. 

AND MOTION FOR LEAVE TO FILE 

 American Airlines, Inc. hereby replies to the consolidated answer submitted by Delta Air Lines, Inc. on April 

16, 2010 to American’s motions of April 8, 2010 in the captioned dockets. In DOT-OST-2010-0088, American is seeking 

Brazil frequencies to serve JFK-Rio de Janeiro (daily) and 

Miami-Brasilia (4 days per week). In DOT-OST-2010-0090, Delta 

is seeking frequencies to serve Detroit-Sao Paulo (4 days per 

week). In its motions, American asked for immediate approval 

of its application, and dismissal of Delta’s. American requests leave to file this reply in the interest of a complete 

record for the Department’s consideration.
- 2 – 

 In its answer, Delta persists in its quest for frequencies to operate to Sao Paulo, despite the fact that the 

U.S.-Brazil Memorandum of Understanding,1

 and the Department’s 

March 24 notice inviting applications, make absolutely clear 

that none of the 14 new frequencies effective October 1, 2010 

can be used at Sao Paulo. Delta itself, in applying for 7 new 

frequencies last year, conceded that Sao Paulo is not available. See Delta application, DOT-OST-2009-0003, January 27, 

2009, p. 1 (calling Rio de Janeiro “the largest and most 

important traffic point eligible for 2009 award service”). 

Sao Paulo was ineligible for 2009 frequencies, and remains 

ineligible for 2010 frequencies, as the same MOU proviso 

applies in both years. See also joint application of Delta 

and US Airways, DOT-OST-2009-0197, August 24, 2009, acknowledging the Sao Paulo limitation (p. 2 n. 4), which applies to 

frequencies that become available in both 2009 and 2010. 

 

1

 June 26, 2008, Attachment B, Annex 1, Section II (2), p. 4 n. 

5 (“the frequencies provided in (D) [7 available October 1, 

2009] and (E) [14 available October 1, 2010] may not be used 

for services between Guarulhos International Airport and 

points in the United States until the regulatory constraints 

in place as of June 26, 2008, related to infrastructure at 

that airport, are removed.” 
- 3 - 

 

 Rather than accepting the reality that Sao Paulo is 

not in issue, Delta has devised a tactic to game the system 

and defeat the Sao Paulo limitation. Specifically, Delta 

envisions a process whereby it would surrender 4 of its lesser 

value regional Brazil frequencies for re-allocation to American to serve Miami-Brasilia. The Department would at the same 

time “replace” the surrendered frequencies by awarding highervalue frequencies to Delta from the 2010 allocation. Delta 

proposes to park the replacement frequencies on regional 

Brazil routes until the Sao Paulo restriction is lifted, at 

which point Delta would shift the frequencies to Detroit-Sao 

Paulo. 

 The Department should squarely reject Delta’s invocation of alchemy to turn lead into gold. Its proposal is 

inconsistent with the MOU, the Department’s notice, and 

applicable precedent, as we explain below. 

 Directly on point is Order 2006-6-17, June 10, 2006, 

where the Department had invited applications for DCA withinperimeter slots, which under Air-21 could be used only to 

serve small hub or non-hub destination airports. Despite this 

clear limitation, AirTran applied for DCA slots to serve two 
- 4 - 

medium hub airports, Chicago (Midway) and Indianapolis, proposing a scheme remarkably similar to the shell game Delta is 

promoting here: 

 “While AirTran acknowledges that both Indiana- 

 polis and Midway were designated as medium hub 

 airports in 1997 [Air-21’s baseline], the carrier 

 contends that the Department should remove two 

 slots from a legacy carrier, give them to AirTran 

 to serve Indianapolis or Midway, and then replace 

 the two pulled slots with two exemption slots, 

 which the legacy carrier could then use for service 

 to a small or non-hub airport” (p. 2). 

 The Department dismissed AirTran’s DCA-Midway/ 

Indianapolis request as non-responsive to the notice inviting applications, notwithstanding AirTran’s proposal to 

sidestep the small hub/non-hub restriction: 

 “AirTran’s application [seeks] medium hub slot 

 exemptions when the ones made available in the 

 proceeding are limited to small hubs/non-hubs. 

 We cannot find this application to be responsive 

 to our Notice; simply put, AirTran seeks some-

 thing that was not advertised as available and 

 is not in fact available. Moreover, AirTran’s 

 attempted cure for its lack of responsiveness 

 would require that the Department, in the name 

 of promoting competition, withdraw slots from 

 one of the other applicants and award them non- 

 competitively to AirTran. Not only does this 

 raise competitive issues well outside the scope 

 of this proceeding, but would . . . be incon- 

 sistent with the precepts of fundamental 

 fairness” (p. 6, emphasis added). 
- 5 - 

 

 See also 2004 Combination Frequencies (U.S.-China), 

where American applied for China frequencies that would become 

effective on August 1, 2004, whereas the Department’s notice 

inviting applications limited the pool of applicants to 

carriers already designated to serve China (at that time 

Northwest and United). By Order 2004-7-23, July 12, 2004, the 

Department denied American’s application, finding that the 

U.S.-China Air Transport Agreement, “with its carefully phased 

structure for the introduction of new frequencies and designnations,” precluded non-designated carriers such as American 

from applying for 2004 frequencies. The Department should 

reach a similar conclusion here, and disqualify Delta (or any 

other applicant) from an award of 2010 Brazil frequencies to 

serve Sao Paulo. 

 See also Order 2000-7-2, July 5, 2000, p. 15 n. 12 

(denying AirTran’s application for DCA slots to serve Atlanta 

(a large hub) as being inconsistent with the instituting 

order, which called for applications to serve DCA from medium 

hubs or smaller). And see Order 98-5-8, May 8, 1998, concerning allocation of U.S.-France frequencies. There, the Department’s notice inviting applications, “by its terms, called 

specifically for [proposals] for 1998 services” (p. 4). 
- 6 - 

United and Tower Air proposed to start U.S.-France service in 

1998, but American and US Airways proposed service in 1999. 

The Department granted the United and Tower Air applications 

as responsive, but declined to award any U.S.-France frequencies to American or US Airways, as they had submitted 

proposals outside the scope of the Department’s invitation. 

 What Delta is seeking is also contrary to “precepts 

of fundamental fairness” (Order 2006-6-17, p. 6). Delta would 

gain higher value frequencies and warehouse them on regional 

Brazil routes until removal of Sao Paulo’s infrastructure 

constraints, at that point switching the authority to Sao 

Paulo. In contrast, American would have 7 new frequencies to 

serve Rio de Janeiro, 4 cast-off frequencies from Delta 

restricted to regional service, and zero frequencies useable 

at Sao Paulo. Delta alone would achieve the ability to use 

its award to serve Sao Paulo. 

 Delta’s ploy to turn these proceedings into something they are not should be rejected. Sao Paulo frequencies 

are not in issue. Delta cannot place them in issue with its 

“surrender” and “replacement” idea, just as AirTran could not 

place medium hub destinations in issue under a similar ruse 
- 7 - 

involving DCA within-perimeter slots in 2006. See also Order 

2009-11-3, November 3, 2009, prohibiting Delta from selecting 

“at its discretion a different U.S. gateway for service to 

Bogota from that awarded in the . . . 2007/2008 proceeding” 

(p. 3). Similarly, Delta should not be allowed “at its 

discretion” to apply for service to a Brazil point that is 

ineligible for an award. 

 Finally, there is no public interest justification 

for favoring Delta with higher-value frequencies. If Delta is 

allowed to park such frequencies on its regional Brazil routes 

and shift them in the future to Sao Paulo, why shouldn’t American have the equivalent privilege of serving Miami-Brasilia 

now and moving the frequencies to Sao Paulo later? The reason 

is very simple – Sao Paulo frequencies are not in issue. 

 Accordingly, Delta’s request for 2010 Brazil frequencies for Detroit-Sao Paulo service should be dismissed. 

American has submitted the only legitimate application for 

2010 frequencies, and our request should be granted in full 

as uncontested. 

 
- 8 - 

 Respectfully submitted, 

 

 ___________________________ 

 CARL B. NELSON, JR. 

 Associate General Counsel 

 American Airlines, Inc. 

April 23, 2010 
CERTIFICATE OF SERVICE

 

 I hereby certify that I have this day served the foregoing 

document by email on the following persons: 

 

sascha.vanderbellen@delta.com jhill@dlalaw.com 

scott.mcclain@delta.com bill@mietuslaw.com 

sametta.c.barnett@delta.com mgoldman@sgbdc.com 

kquinn@pillsburywinthrop.com rsilverberg@sgbdc.com 

bkeiner@crowell.com dhainbach@ggh-airlaw.com 

mrosia@crowell.com mcmillin@woa.com 

bruce.rabinovitz@wilmerhale.com eskraft@jamhoff.com 

jeffrey.manley@united.com dpdean@jamhoff.com 

bob.kneisley@wnco.com dkirstein@yklaw.com 

robert.land@jetblue.com jyoung@yklaw.com 

msinick@ssd.com donna.kooperstein@usdoj.gov 

cdonley@ssd.com dwight.moore@ustranscom.mil 

gbleopard@fedex.com jim.ballough@faa.gov 

dvaughan@kelleydrye.com byerlyjr@state.gov 

kevin.montgomery@polaraircargo.com recohn@hhlaw.com 

jrichardson@johnlrichardson.com cjsimpson@zsrlaw.com 

lhalloway@crowell.com pmurphy@lopmurphy.com 

efaberman@wileyrein.com lachter@starpower.net 

mroller@rollerbauer.com anita.mosner@hklaw.com 

howard.kass@usairways.com rpommer@atlasair.com 

benjamin.slocum@usairways.com gmurphy@crowell.com 

sophy.chen@hklaw.com russell.bailey@alpa.org 

david.heffernan@wilmerhale.com 

 

 

 _______________________________ 

 CARL B. NELSON, JR. 

April 23, 2010