BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Applications of NATIONAL AIR CARGO GROUP, INC. d/b/a NATIONAL AIRLINES
for amended certificates of public convenience and necessity pursuant to 49 U.S.C. § 41102 to engage in interstate and foreign air transportation of persons, property, and mail ) ) ) ) ) ) ) ) ) ) ) Docket DOT
- OST
- 2012
- 0204 and Docket DOT
- OST
- 2012
- 0205

ANSWER OF DELTA AIR LINES, INC. IN SUPPORT OF OBJECTIONS OF UNITED AIRLINES, INC.

Communications with respect to this document should be sent to:

Andrea Fischer Newman Senior Vice President, Government Affairs Alexander Van der Bellen Managing Director

– Regulatory and

International Affairs & Associate General Counsel Christopher Walker Regional Director

– Regulatory and

International Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842

- 4184 sascha.vanderbellen@delta .com chris.walker@delta.com

September 5, 2013BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Applications of NATIONAL AIR CARGO GROUP, INC. d/b/a NATIONAL AIRLINES for amended certificates of public convenience and necessity pursuant to 49 U.S.C. § 41102 to engage in interstate and foreign air transportation of persons, property, and mail ) ) ) ) ) ) ) ) ) ) ) Docket DOT
- OST
- 2012
- 0204 and Docket DOT
- OST
- 2012
- 0205

ANSWER OF DELTA AIR LINES, INC. IN SUPPORT OF OBJECTIONS OF UNITED AIRLINES, INC.

Delta Air Lines, Inc. (“Delta”) hereby answers in support of United Airlines , Inc. ( “ United ” ) , which objects to the tentative grant of authority to National Air Cargo Group, Inc. (“National”) to provide scheduled interstate and foreign air transportation of persons, property, and mail

. 1 Based on new facts and evidence that have just surfaced in
connecti on with the General Services Administration ( “ GSA ” ) ’s FY 2014 City Pair Contract
Awards ( August 16, 2013 ) , it is clear that National has not accurately portrayed its service plans to the Department

. Far from the modest plan described in its fitness applic ation,
National actually intend s to engage in extensive international codeshare servic e in some 31 city

- pair markets fed by Emirates

- operated flights on seven lon g haul U.S.

- Dubai trunk

routes. 2 National’s recently revealed service plans exceed the scope of the evidence and
information considered in the DOT’s underlying fitness review; furthermore , National’s

1 Show Cause Order 2013

- 4

- 12.
2 Dallas/Ft. Worth

- Dubai, Houston

- Dubai, Los Angeles

- Dubai, New York

- Dubai, San Francisco

Dubai, Seattle

- Dubai, and Washington DC

– Dubai.Answer of Delta Air Lines Page 2 GSA city pair bid is a sham transaction designed to circumvent the requirements of the Fly America Act, calling into question National’s compliance d isposition. For these reasons, Delta agrees with United (i) that Show Cause Order 2013

- 4

- 12
should be set aside, (ii) that National be required to submit detailed information demonstrating fitness for its actual service proposal, and (iii) that interested parties have the opportunity to comment on that information.

I

. National’s A pplication L acked I nformation N ecessary for the Department’s D etermination of F itness The Department ’s tentative grant of National’s fitness application for scheduled passenger service was issued on the basis of an incomplete record that did not reveal the
true extent of National’s plans . National is a small carrier that proposed very limited scheduled passenger service between Afghanistan and Dubai on a single Boeing 757

- 200 aircraft; National indicated it would offer connecting service to Washington Dulles with “a U.S. or foreign... codeshare partner operating the Dulles

- Dubai le g.” 3 It was on this basis
that DOT issue d its Show Cause determination. Now, h owever , in its GSA City

- Pair proposal, National purports to offer a much

more expansive scheduled international network with codesharing on seven daily
Emirates

- operated flights between the U.S. and Dubai. The Devel opment of this expansive new service proposal was likely know n to National during the pendency of its fitness review; yet National failed to su pplement its application. Lacking this important information the Department acted, tentatively granting National ’s application. Further, it appears that National and Emirates may have violate d the Department’s prohibition on advertising and sales by participating in the City Pair bidding without having the necessary economic authority.

3 Application of National at 4

.Answer of Delta Air Lines Page 3 As pointed out in United’s objections, National must be able to demonstrate to the Department that it would have the wherewithal to manage an extensive codeshare relationship with Emirates, something far beyond the scope of its current operations. National’s application to the Depa rtment anticipates little, if any, additional investment in

re servations and ticketing that would be necessary to prepare for broad codesharing operations. Additionally, u sing codeshares does not relieve an airline of responsibility to the passenger being carried by a partner , and it is unclear that National would be able to ensure compliance with (1) its partner u nder the Air Carrier Access Act; (2) rules governing disclosure of codeshare services ; (3) c ustomer complaints and notification requirements ; and (4) credit card transaction rules. Nothing in National’s fitness application record supports National’s ability to meet these important requirements.

II. National’s Codesharing with Em irates Violates the Fly America Act National’s codesharing proposal with Emirates, put forward in its GSA bid , is a blatant attempt to circumvent the Fly America Act. National would be doing little or no flying in the city

- pair markets at issue, but instead would be renti ng its code to Emirates and acting as little more than a booking agent for Emirates to capture Fly America traf fic
on its U.S.

- Dub a i service. As a U.S. carrier, National is allowed to bid on U.S. Government contracts such as the City Pair Program, but Emi rates is prohibited from doing so. To be sure, codesharing arrangements can be an effective way for U.S. carriers to
extend the reach of their networks and improve the attractiveness of their bids

– but
National’s role is so de mininimus there is no doubt that Emirates would be the true beneficiary of the City Pair contract, violating the purpose an d intent of the Fly America Act. Indeed, the GSA has expressed its “understanding that the U.S. carrier [in such codeshare arrangements] receives a subs tantial portion of the revenue [and] does not actAnswer of Delta Air Lines Page 4 as a mere booking agent on behalf of the foreign carrier

. ” 70 Comp. Gen 713, B

- 240956
at 717

- 718

.

III. Conclusion National has not yet been found fit to offer scheduled international transportation,
and its far

- reaching bid with Emirates to engage in extensive codesharing is a transparent attempt to circumvent the Fly America Act. For the reasons detailed above, Show Cause
Order 2013

- 4

- 12 should be set aside and National’s fitness record reopened to re ceive
additional evidence and comment concerning the extensive new international service plans revealed in its GSA bid.

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 document has been served this 5 th day of September , 2013 , upon the following persons via email:

MAtwood@cozen.com EWadsworth@cozen.com f rancis.heil@aa.com robert.wirick@aa.com jrichardson@johnlrichardson.com russell.pommer@atlasair.com esauer@ssd.com sam.white@evergreenairlines.com kevin.montgomery@polaraircargo.com agoerlich@ggh

- airlaw.com anita.mosner@hklaw. com jennifer.nowak@hklaw.com howard.kass@usairways.com benjamin.slocum@usairways.com mbenge@zsrlaw.com psanderlin@kalittaair.com john.allen@faa.gov hershel.kamen@united.com dan.weiss@united.com steve.morrissey@united.com karine.faden@united.com thomas.bolling@united.com doug.kelley@united.com lhalloway@crowell.com gmurphy@crowell.com