BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Application of 

DELTA AIR LINES, INC. 

 

for a frequency allocation 

(Detroit-Sao Paulo, Brazil) 

) 

) 

) 

) 

) 

) 

) 

Docket DOT-OST-2010-0090

Application of 

AMERICAN AIRLINES, INC. 

 

for an allocation of 11 U.S.-Brazil frequencies 

) 

) 

) 

) 

) 

) 

) 

Docket DOT-OST-2010-0088

CONSOLIDATED REPLY OF DELTA AIR LINES, INC. 

Communications with respect to this document should be addressed to: 

 

Glen Hauenstein 

Executive Vice President – 

Network Planning and Revenue Management 

Robert J. Cortelyou 

Senior Vice President – Network Planning 

Andreas Renner 

Director – International Network Planning 

Chris Kennedy 

General Manager – International 

Network Analysis 

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 

Jeff Morgan 

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 4, 2010 

 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

WASHINGTON, D.C. 

Application of 

DELTA AIR LINES, INC. 

 

for a frequency allocation 

(Detroit-Sao Paulo, Brazil) 

) 

) 

) 

) 

) 

) 

) 

Docket DOT-OST-2010-0090

Application of 

AMERICAN AIRLINES, INC. 

 

for an allocation of 11 U.S.-Brazil frequencies 

) 

) 

) 

) 

) 

) 

) 

Docket DOT-OST-2010-0088

CONSOLIDATED REPLY OF DELTA AIR LINES, INC. 

 This case presents the Department with an important public interest opportunity 

to fully fund all pending requests for U.S.-Brazil frequencies – while simultaneously 

promoting the highest and best long-term use of these valuable bilateral rights. Thanks 

to the Department’s recent grant of exemption authority, Delta will be able to begin 

nonstop service on the Detroit-Sao Paulo route effective October 21, 2010 -- but 

unfortunately Delta is restricted to offering just two weekly flights. No interested party 

questions the significant public benefits that would be achieved by expanded service on 

this important new route -- and the route case solution proposed by Delta will fully fund 

all current requests for service while also enabling the expansion of Detroit-Sao Paulo in 

the future. 

Delta believes that the Department should maximize the public interest 

opportunities from these important rights by allocating them in the most prudent and 

efficient manner possible under the bilateral agreement with Brazil. The requests of 

American and Delta for U.S.-Brazil frequencies are not mutually exclusive, but 
Reply of Delta 

Page 2 

regrettably American has attempted to create a false conflict in an effort to usurp Sao 

Paulo-eligible frequencies, preserve American’s dominant position at Sao Paulo, and 

foreclose additional competitive service by Delta.1

 

The frequencies available for allocation in this proceeding are, by their own terms, 

and the express terms of the Department’s Notice, eligible for service “at any point in 

Brazil that U.S. carriers may serve,” including Sao Paulo. Notice at 1. While the 

introduction of services at Sao Paulo’s Guarulhos International Airport is subject to 

resolution of the infrastructure-related constraints, that is no reason, as American would 

have it, to intentionally consign these frequencies to permanent, sub-optimal use by the 

largest and dominant U.S.-Brazil carrier on a route that does not require Sao Paulo 

frequencies.2

 Delta respectfully submits that such a result would be contrary to the 

public interest, Department precedent, and well-settled carrier selection criteria. 

 

1

 As previously explained, the Department can achieve a public interest maximizing 

result that will promote the full implementation of American’s current services and Delta’s 

future expansion through the prudent allocation and redistribution of existing frequencies. 

American has requested a total of 11 frequencies – 7 for New York-Rio de Janeiro 

service and 4 for Miami-Brasilia. The Miami-Brasilia flights are eligible for service using 

the lower category of northern/regional Brazil frequencies – and do not require high 

value Rio/Sao Paulo rights. There is a strong expectation that the U.S. Government will 

be able to negotiate substantial further liberalization of northern/regional frequencies – 

but that securing future Sao Paulo frequencies from the Government of Brazil will be 

more difficult. Accordingly, Delta proposed that 4 of Delta’s 10 northern/regional 

frequencies be reallocated to American for Miami-Brasilia service – and that Delta 

receive 4 replacement frequencies eligible for future Sao Paulo service from the 

currently available pool of 14 frequencies. Delta will immediately use these replacement 

frequencies to fund its existing northern/regional services. This provides American with 

all the authority necessary to implement its current service plans, provides Delta with the 

ability to fund 4 daily Detroit-Sao Paulo flights, leaving 3 Sao Paulo-eligible frequencies 

available to any carrier in the unallocated pool. 

2

 American repeatedly and erroneously asserts that “Sao Paulo frequencies are not an 

issue.” (AA Ans. at 3, 6, 7). But, “mere repetition of arguments . . . is insufficient,” 

Reliance Steel Products Co. v. National Fire Ins. Co., 880 F.2d 575, 577 (1st Cir. 1989), 

and “no amount of pure repetitive assertion can make it so,” United States v. Lynch, 499 

F.2d 1011, 1039 (D.C. Cir. 1974) (MacKinnon, C.J., dissenting). Of course, if it were true 

that Sao Paulo is not an issue, American would have no objection to Delta’s proposed 

solution, which fully funds both of American’s New York-Rio de Janeiro and MiamiBrasilia proposals – neither of which require Sao Paulo rights. 
Reply of Delta 

Page 3 

The benefits-maximizing solution proposed by Delta is available to the 

Department as a direct result of Delta’s prior efforts to develop northern/regional Brazil 

services. Delta’s proposed allocation and redistribution of frequencies is fully consistent 

with DOT precedent and is expressly allowed under the terms of the U.S.-Brazil bilateral 

agreement. Contrary to American’s protestations, this is neither “alchemy” nor a “shell 

game”3

 -- it is sound decision-making that will serve and promote the public interest. 

The June 26, 2008 U.S.-Brazil MOU contains a number of carefully specified 

categories of frequencies, including: (i) frequencies that can be used only for 

northern/regional services; (ii) frequencies that can be used northern/regional services, 

and/or Belo Horizonte and/or Rio de Janeiro, and (iii) frequencies that may be used at 

any point in Brazil (including Sao Paulo – once the airport infrastructure constrains are 

resolved). See MOU, Section II (2). There is no question that the frequencies available 

in this proceeding are of the latter, most flexible category. Having negotiated separate, 

distinct, categories of rights, Delta does not believe the Department would intend to 

allocate these rights without regard to their highest and best use. Delta’s proposal is 

fully consistent with the Department’s Notice, the bilateral agreement, and the temporary 

airport infrastructure constraints at Sao Paulo. 

American is far and away the dominant U.S. flag carrier serving Brazil, with 47 

Sao Paulo-eligible frequencies to Delta’s 23. In fact, American alone holds nearly half 

the entire U.S. pool of 105 unrestricted U.S.-Brazil frequencies. In these circumstances 

Delta does not believe there is any legitimate public interest basis in awarding American 

further Sao Paulo-eligible frequencies, which are unnecessary to fund its proposed 

services. In recent similar circumstances, the Department reallocated northern/regional 

frequencies returned by Delta to American -- and denied American’s request for more 

unrestricted frequencies than were necessary for its proposal: 

 

3

 AA Reply at 3, 4. 
Reply of Delta 

Page 4 

Delta returned to the Department one of the Brazil gateway-restricted 

combination service frequencies it was recently awarded. Delta states that 

because the returned frequency may be allocated to American for its additional 

Miami-Belo Horizonte service, each of the competing service proposals may now 

be satisfied. . . . We instituted the instant proceeding because we had competing 

requests for three U.S.-Brazil combination service frequencies when only two 

were available. In instituting this proceeding, we stated that we would expedite 

matters so that the selected carrier(s) could use, to the fullest extent, the limitedentry bilateral route rights available. We further stated that our principal objective 

would be to maximize the public benefits that would result from such an award 

and provide the most beneficial use of the bilateral rights. As a result of the 

described subsequent events, three frequencies are now available for immediate 

allocation and use. Specifically, two combination service frequencies are 

available to support Delta’s Los Angeles-Sao Paulo service proposal, and one 

combination service frequency is available to support American’s proposal for 

additional Miami-Belo Horizonte service. Under these circumstances, we 

conclude that the applications of American and Delta are no longer mutually 

exclusive and that we can immediately award the frequencies available, enabling 

both carriers to commence promptly their proposed services and make maximum 

use of the available bilateral rights . . .We have considered American’s argument 

that the Department should split the two unrestricted Brazil frequencies by 

granting American and Delta one each. However, we do not find that doing so 

would be in the public interest . . . 

Order 2008-11-21. 

American’s reliance Order 2006-6-17, which dismissed AirTran’s request for 

medium hub service from DCA using small/nonhub slots, is inapposite. AirTran’s DCA 

proposal involved the forced and involuntary confiscation and redistribution of 

unrestricted DCA slots from another unwilling applicant to AirTran. The Department 

correctly concluded that such confiscatory action was outside the scope of the 

proceeding and would be fundamentally unfair. But that is not at all the case here. 

Delta is voluntarily making available northern/regional frequencies that can be 

redistributed to American, while simultaneously providing Delta the replacement 

frequencies it needs from the current Sao Paulo-eligible pool to fund future Detroit 

service. This is squarely in line with DOT precedent. Order 2008-11-21. American has 

no pre-existing claim or interest in any of the incremental frequencies it is seeking – and 

it is up to the Department, not American, whether American receives northern/regional or 

Sao Paulo-eligible frequencies for its Miami-Brasilia proposal. Furthermore, unlike the 
Reply of Delta 

Page 5 

DCA slots which were permanently ineligible for medium-hub service, here, the 

frequencies available for allocation are eligible for service at Sao Paulo once the airport 

infrastructure constraints are resolved. The Department’s Notice and the bilateral 

agreement both expressly say so. 

American’s attempt to analogize this proceeding to the 2007/2008 Colombia 

frequency proceeding is even less availing. As American knows, the rules applicable to 

U.S.-Brazil and U.S.-Colombia frequencies are very different. As a general matter, 

allocated U.S.-Brazil frequencies may be used at any eligible gateway where the carrier 

holds underlying authority. See, Order 2004-6-24; see also, NOAT dated August 8, 

2008 dockets OST-2008-0227 & 0229 (allocating northern/regional Brazil frequencies to 

both American and Delta for service between any eligible U.S.-Brazil points). While 

Brazil frequencies can be freely moved among any eligible gateways, the Department 

has imposed stricter conditions on Colombia frequencies. Delta was denied the 

flexibility to move its JFK-Bogotá frequencies to Atlanta. And, after the Department put 

American on notice that it would reexamine American’s Colombia frequencies if not used 

as proposed, American moved its frequencies which were subsequently reallocated by 

the Department. See Order 2008-5-27. 

American has made extensive use of the frequency flexibility available to it in 

Brazil, and shuffles its 47 unrestricted Brazil frequencies about at will among its multiple 

gateways. This is at least the third time American has sought frequencies for JFK-Rio 

de Janeiro service. See Order 1996-3-47 (awarding 7 JFK-Rio de Janeiro frequencies 

to American); Order 2000-10-6 (awarding 7 JFK-Rio de Janeiro frequencies to American 

after American improperly moved them without notice -- prior to the DOT’s stated new 

policy on gateway flexibility). Last year, despite its huge cache of unrestricted U.S.-

Brazil frequencies, American operated sporadic, less than daily service on JFK-Rio de 

Janeiro just two out of twelve months. See, Exhibit DL-R-1. While Delta does not 

object to the grant of additional JFK-Rio de Janeiro frequencies to American, or the grant 
Reply of Delta 

Page 6 

of northern/regional frequencies to American for Miami-Brasilia, Delta submits that both 

carriers’ requests – and in particular Delta’s request for future Sao Paulo-eligible 

frequencies – be viewed in the context of the carriers’ existing frequency holdings and 

existing gateway flexibility. Delta’s request does not conflict with American’s and can be 

readily accommodated in a way that will maximize public interest benefits. 

Accordingly, Delta respectfully urges the Department to conclude this proceeding 

by redistributing four of Delta’s northern/regional frequencies to American, and allocating 

Delta four of the 14 frequencies which become available for service in October, 2010. 

 

 Respectfully submitted,

_________________________________ 

Alexander Van der Bellen 

Managing Director, Government Affairs 

 & Associate General Counsel 

DELTA AIR LINES, INC. 
Org Dst Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 N

DFW GRU 7 7 7 7 7 10 10 10 7 7 

MIA GRU 28 19 19 21 21 21 19 19 16 16 JFK GRU 7 7 7 7 7 7 7 7 7 7 JFK GIG 4 3MIA GIG 12 12 12 7 7 7 11 11 7 7 

58 48 45 42 42 45 47 47 37 37 

Source: Schedules via APGdat

Total

American Airlines GRU/GIG Scheduled Weekly Frequencies

Despite Holding 47 Unrestricted U.S.-Brazil Frequencies, 

A Route Where it Received Two Prior Frequency Awards

American Operates Only Sporadic Service Between JFK and Rio de Jan
CERTIFICATE OF SERVICE 

 A copy of the foregoing Reply has been served this 4th day of May, 2010, upon the 

following persons via email: 

 

carl.nelson@aa.com 

howard_kass@usairways.com 

benjamin.slocum@usairways.com 

hkamen@coair.com 

dan.weiss@coair.com 

rbkeiner@crowell.com (for Continental) 

mrosia@crowell.com (for Continental) 

jeffrey.manley@united.com 

julie.oettinger@united.com 

robert.land@jetblue.com 

jhill@dlalaw.com (for JetBlue) 

dkirstein@yklaw.com (for Spirit) 

jyoung@yklaw.com (for Spirit) 

paul.gretch@dot.gov 

esta.rosenberg@dot.gov 

brian.hedberg@dot.gov 

byerlyjr@state.gov 

john.allen@faa.gov 

lester.robinson@wcaa.us 

emily.neuberger@wcaa.us 

joe.cambron@wcaa.us 

mike.orr@airlineinfo.com