LAw QPFICIiS 'f\r:PARTMENT OF '~";~i'~SPORTATION 

GAROFALO GOERLICH HAINBACH ~(/ET OPERATIONS 

1200 NEW HAMPSHIRE AVENUE NW . SUITE 800 • WASHINGTON DC 20036·b80f"l It '6 ? Lt P ): 25 

TELEPHONE 202116-3970 • FACSIMILE 202 116-3975 i .. : i J ; ; '.' .-

Paul L. Gretch, Director 

Office of International Aviation 

U.S. Department of Transportation 

1200 New Jersey Avenue, S.E. 

Washington, D.C. 20590 

WWW.GGH·AIRLAW.COM 

July 28~ 2010 

Re;' Answer in Opposition to Brazil Waiver Request 

Dear Mr. Gretch: 

Southem AIr Inc. answers in opposition to the application of Atlas Air, IDe. dated July 

22, 2010. The application requests that DOT allow Atlas and other U.S.-Brazil scheduled a11-

cargo earners access to the limited pool of Brazil charter frequencies some nine months earlier 

than set by the Department's notice dated June 11,2010. 

In Southern's view~ the June 11 notice, in establishing Brazil cargo charter distribution 

procedures for the 2010-2011 charter year, strock an appropriate balance between the interests of 

scheduled carriers and charter carriers operating in the U.S.-Brazil market. Atlas's application 

provides no persuasive reason the balance should be disturbed, and Atlas's desire to have the 

benefit of both cbarter- and scheduled-carrier status in what is clearly a fish-or-fowl market 

should be rejected. 

The essence of Atlas's complaint is that Brazilian licensing procedures render the 

scheduled mode of operation too inflexible for Atlas to response to ad hoc, off-line demand. But 

certainly Atlas was well aware of the Brazilian procedures when it applied fur and received 

scheduled U.S.-Brazil authority, and in any event, there is nothing to stop Atlas from 

surrendering its U.S.-Brazil scheduled authority and reverting to the charter mode if increased 

flexibility is its desire. As Atlas itself points out, Brazil cargo designations are now unlimited; 

therefore, were Atlas to tbrfeit its scheduled designation, it could very well regain the 

designation at a later date. 

The scheduled versus charter dilemma Atlas is facing simply reflects the reality of the 

U.S.-Brazil market. Bilateral constraints on scheduled and charter frequencies have forced the 

Department to strike a balance between the two modes of service, implemented by DOT's annual 

notices. While Southern, and presumably Atlas, would prefer an open skies regime, the U.S.-

Brazil air transport agreement effectively bifurcates scheduled and charter service, limiting the 

fonner to an aggregate of 1,820 frequencies per year and the latter to 1,250. The Department 

should not tamper with the approach it has developed in rec:ognition of these relative constraints. 

Atlas asserts there can be no argument that limiting scheduled-carrier access to the 

charter pool to the last two months of the charter year protects carriers (such as Southern) that 
GAROFALO GOERLICH HAlNBACH PC 

Paul L. Gretch, Director 

July 28,2010 

Page 2 

could otherwise be precluded from conducting U.S.-Brazil operations. Atlas's assertion is 

flawed in two respects. 

First, if Atlas and other scheduled operators were allowed immediate access to the charter 

pool, interested parties could only speculate as to whether charter frequencies would remain fur 

use during the last few months of the charter year. The one thing that would be certain is that the 

scheduled versus charter balance crafted by the Department would be upset at the worst time, 

i. e., when market conditions appear to be causing an overall increase in demand. 

Second, implicit in Atlas's argument is that because Brazil cargo designations are now 

unlimited and three scheduled all-cargo frequencies are unassigned, a carrier such as Southern 

desiring "protection" could opt for scheduled service, thereby avoiding reliance on the charter 

pool. That, however, is precisely the licensing posture that prompted Atlas's present 

application. If this is a predicament for Atlas, it would likely be no less a predicament for other 

carriers. 

Atlas's argument that an outstanding waiver granted to Centurion is "conceptually" the 

same as Atlas's request is equally flawed. In the absence of continued access to the charter pool 

while awaiting Brazilian scheduled licensing, Centurion would be ousted completely from the 

U.S.-Brazil market under the tenns of the Department's June 11 notice and previous similar 

notices. That is not Atlas's situation at all. 

Finally, it bears mention that under current circumstances, Atlas is not barred entirely 

from access to the charter pool. The restrictions of which Atlas complains may be waived on a 

case-by-case basis in the public interest, as the Department has done fur Atlas. The situation 

described at Footnote 1 of Atlas's application is a prime example of such case-by-case approval. 

As noted, Southern would prefer an open skies U.S.-Brazil regime where there is no need 

for DOT to strike a balance between the economic rights of competitors. Until that day comes, 

however, the Department should not tamper with its tried and true formula. It would not be in 

the public interest fur the Department to treat a non-open skies market as though it were an open 

skies market at Atlas's or any other carrier's request. 

cc: Mary Street 

Esta Rosenberg 

Brian Hedberg 

AU persons on attached service list 

Z:'£ .d/~ Aaron A. Goerlich 

Garofalo Goerlich Hainbach PC 

Counsel for Southern Air Inc. 
GAROFALO GOERLICH HAlNBACH PC 

Paul L. Gretch, Director 

July 28, 2010 

Page 3 

CERTIFICATE OF SERVICE 

I hereby certify that on July 28,2010, a copy of the foregoing answer of Southern Air Inc. was 

served via email on the persons listed below. 

Nancy Sparks (FedEx) 

David Vaughan (UPS) 

Danielle Fisher (UPS) 

Kevin Montgomery (Polar) 

Pierre Murphy (Arrow) 

William Evans (Centmion) 

Marshall Sinick (Florida West) 

Russell Pommer (Atlas Air) 

Kristina R. Pickholtz 

nnsparks@fedex.com 

dvaughan@kelleydrye.com 

dfisher@kelleydrye.com 

Kevin.montgomery@polaraircargo.com 

pmurphy@lopmurphy.com 

Bi11@mietuslaw.com 

msinick@Ssd.com 

rpommer@atlasair.com