BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of

ALASKA AIRLINES, INC.

AND

AMERICAN AIRLINES, INC. 

for transfer of international route authority under

49 U.S.C. § 40109, 41105

(Los Angeles-Mexico City)

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Docket OST-2015-0025

OBJECTIONS OF DELTA AIR LINES

Communications with respect to this document should be addressed to:

Robert J. Cortelyou

Senior Vice President – Network Planning

Joe Esposito, Vice President - Network Planning 

Americas

Amy Martin, Director, Network Planning, Latin 

Amercia

DELTA AIR LINES, INC.

1030 Delta Boulevard

Atlanta, Georgia 30320

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

April 27, 2015
BEFORE THE

DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

Joint Application of

ALASKA AIRLINES, INC.

AND

AMERICAN AIRLINES, INC. 

for transfer of international route authority under

49 U.S.C. § 40109, 41105

(Los Angeles-Mexico City)

)

)

)

)

)

)

)

)

)

)

)

Docket OST-2015-0025

OBJECTIONS OF DELTA AIR LINES

Delta Air Lines, Inc. (“Delta”) Objects to the findings of Show Cause Order 2015-

4-10, which tentatively decided to transfer Los Angeles (LAX) - Mexico City (MEX) 

exemption and designation authority from Alaska Airlines, Inc. (“Alaska”) to American 

Airlines, Inc. (“American”) without considering Delta’s contemporaneous application for 

same route.

First, Delta’s application is clearly superior on the merits. American proposes 

two daily flights with B-737-800 aircraft, whereas Delta would operate three daily flights

with the same aircraft type, both configured with 160 seats. Delta’s additional flight 

represents 117,000 more annual round-trip seats – a major public interest benefit on this 

important limited entry route:

0

50

100

150

200

250

300

350

400

AA DL

LAX-MEX Capacity

Annual Round-Trip Seats (K)

+ 33%
Delta Objections

Page 2

Second, Delta respectfully disagrees that the much older Horizon-San Juan 

Canadian Transfer Case (Orders 89-3-22 and 89-5-15) is controlling over the 

Department’s more recent pronouncement regarding exemption and frequency transfers

in the 1997 U.S.-Argentina All-Cargo Frequency Proceeding. There, the Department 

clearly and unequivocally stated that frequency awards were akin to exemptions and that 

a comparative selection case was required for the transfer of such authorities:

While some of the parties have invoked route transfer cases as

precedential guidance, the transfer language of the act relates to the 

transfer of certificate authority. Frequency allocations are not certificate 

awards. We have traditionally deemed them to be in the nature of 

exemption authority. Order 97-11-35 at 5 (emphasis added).

In the Argentina case, the Department found that the transfer of authorities “deemed to 

be in the nature of exemption authority”

1

required a route case to determine the best 

public interest use of the authorities. Delta respectfully submits that a similar inquiry is 

appropriate here.

Third, even if the Department were to decide that the Horizon case is controlling, 

contemporary consideration of the competing Delta and American applications is still 

required. In the Horizon case, the Department stated that it would conduct a 

comparative route case proceeding where “there are strong reasons of policy for 

reviewing the needs and status of the market.” 89-3-22 at 3. There are strong policy 

reasons at play here. In the U.S.-Mexico marketplace, American commands a 25% 

market share to Delta’s 11%. (OAG Seat Shares, March 2015). The competitive 

benefits of Alaska over American were primary considerations in the selection of Alaska 

for this award: 

American brings none of the competitive advantages that come with the 

selection of Alaska in this case. American currently offers significant foreign 

scheduled air transportation services in the U.S.-Mexico market, and directcarrier services in the U.S.-Mexico City market. More specifically, American 

offers direct-carrier service to 11 Mexican cities from nine U.S. cities (four of 

 

1

Id.
Delta Objections

Page 3

which are American hubs), and serves Mexico City from three U.S. points. 

Order 2005-05-01 at 5 (emphasis added).

The Show Cause Order at n.10 suggests at that American’s and Alaska’s proposals 

share some of the same competitive attributes - such as twice-daily service and 

facilitating entry by a new U.S.-flag carrier on the LAX-MEX route, but the Show Cause 

Order does not persuasively distinguish the Department’s prior finding that American 

provides “none” of the competitive benefits of Alaska. As such, the proposed transfer 

here “would defeat the Department’s rationale for selection of [American] over other 

competing applicants.” Order 2009-11-3 at 3. The selection of Delta, as a growing hub 

carrier at LAX, and as a much smaller player in the overall U.S.-MEX marketplace, 

would better serve the Department’s original competitive objectives.

Finally, should the Department nonetheless approve the transfer of LAX-MEX 

authorities from Alaska to American without conducting a comparative public interest 

proceeding, logic and precedent will compel the same deference to all future marketbased transfers of designations, frequencies, slots and exemptions. While such a 

declared policy change works to Delta’s detriment in this matter, the Department should 

straightforwardly acknowledge that it will henceforth permit all carriers to enjoy the same 

degree of certainty in future market-based transactions for international frequencies, 

slots and exemptions. 

Respectfully submitted,

_____________________

Alexander Van der Bellen

Managing Director, Regulatory and 

International Affairs & Associate General 

Counsel

DELTA AIR LINES, INC.
CERTIFICATE OF SERVICE

A copy of the foregoing Objections have been served this 27th day of April, 2015, 

upon the following persons via email:

Air Carrier Name Email Address

Alaska Airlines David Heffernan dheffernan@cozen.com

Alaska Airlines Jeremy Ross jeremy.ross@alaskaair.com

American Howard Kass howard.kass@aa.com

American Robert Wirick robert.wirick@aa.com

Frontier Mark Atwood matwood@cozen.com

Frontier Steve Lachter slachter@cozen.com

Hawaiian/JetBlue Jonathan Hill jhill@cooley.com

Hawaiian/JetBlue Parker Erkmann perkmann@cooley.com

JetBlue Robert Land robert.land@jetblue.com

Republic Bob Cohn robert.cohn@hoganlovells.com

Republic Pat Rizzi patrick.rizzi@hoganlovells.com

Southwest/AirTran Bob Kneisley bob.kneisley@wnco.com

Southwest/AirTran Leslie Abbott leslie.abbott@wnco.com

Spirit Airlines David Kirstein dkirstein@yklaw.com

Spirit Airlines Joanne Young jyoung@yklaw.com

Sun Country John Fredericksen john.fredericksen@suncountry.com

Sun Country Thomas Ting thomas.ting@suncountry.com

United Dan Weiss dan.weiss@united.com

United Thomas Bolling thomas.bolling@united.com

Virgin America John Varley john.varley@virginamerica.com

Brian Hedberg brian.hedberg@dot.gov

Robert Finamore robert.finamore@dot.gov

Brett Kruger brett.kruger@dot.gov

Reese Davidson reese.davidson@dot.gov

Info info@airlineinfo.com