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 RESPONSE OF DELTA AIR LINES, INC. 

TO APPLICATION OF AMERICAN AIRLINES, INC. 

AND ANSWER OF US AIRWAYS, 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

April 23, 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 RESPONSE OF DELTA AIR LINES, INC. 

TO APPLICATION OF AMERICAN AIRLINES, INC. 

AND ANSWER OF US AIRWAYS, INC. 

Delta Air Lines, Inc. (“Delta”) hereby files this consolidated response to the 

Application of American Airlines, and the April 19, 2010 Answer of US Airways. The 

circumstances of this case provide the Department with a valuable public interest 

opportunity to fund all current requests for Brazil frequencies -- while simultaneously 

laying the foundation for the future expansion of Delta’s nonstop Detroit-Sao Paulo 

service, which is set to begin on October 21, 2010. Delta plans to begin the service at a 

level of two weekly flights – but substantial additional benefits can and will be realized 

through the future expansion of Detroit-Sao Paulo to a full daily service pattern. 

Detroit and Sao Paulo are each major industrial manufacturing centers and 

Detroit-Sao Paulo is one of the largest U.S.-Sao Paulo O&D markets without nonstop 

service. Delta’s Detroit hub provides extensive coverage of the underserved Midwest 
Response of Delta 

Page 2 

region and northern tier of the United States, and will provide effective intergateway 

competition to United’s Chicago-Sao Paulo service. 

As proposed in Delta’s April 16, 2010 Answer, 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.1

 Delta’s proposal and American’s proposal are thus not

mutually exclusive, and no further carrier selection procedures are required. 

On April 19, 2010, US Airways filed a misguided and internally inconsistent 

answer -- opposing only Delta’s request -- but with no objection to American’s 

application for 11 of the 14 Sao Paulo-eligible frequencies. Either US Airways does not 

 

1 Delta plans to seek the 5th Sao Paulo-eligible frequency required for daily Detroit-Sao 

Paulo service from the unallocated pool in the future. Such a request would, of course, 

be subject to any additional carrier selection procedures that might be necessary at the 

time. 
Response of Delta 

Page 3 

understand the nature of Delta’s proposal, or it is asking the Department to intentionally 

award the available frequencies in a sub-optimal manner so as to limit future U.S. carrier 

services, unnecessarily enrich the portfolio of the largest and most dominant U.S. carrier 

to Brazil, and create artificial scarcity of Sao Paulo frequencies. It is not in the public 

interest to do so. 

US Airways erroneously claims that Delta is attempting to “warehouse” 

frequencies that “must lay fallow until an indeterminate future date.” US at 1, 3. This is 

simply wrong, and ignores the clear substance of Delta’s request. Whatever objections 

US Airways may have had to Delta’s initial Application do not apply to the modified 

proposal explained in Delta’s April 16 pleading, since all four frequencies will be 

immediately used for current services. US Airways notes that “Delta apparently 

believes that holding Sao Paulo-eligible frequencies for its own ‘lower category’ regional 

service should be preferred by the Department to American’s use of the same 

frequencies for its regional Miami-Brasilia service.” US at n.2. This is, in fact, exactly

Delta’s point. These frequencies are eligible for future use at Sao Paulo -- and 

American already holds the vast majority of unrestricted Brazil frequencies with a total of 

47 Sao Paulo-eligible frequencies to Delta’s 23. 

It would be contrary to the public interest to allocate the currently available 

frequencies to American so as to unnecessarily foreclose Detroit-Sao Paulo service and 

further undermine the competitive market structure. Because exactly the same number 

of Sao Paulo-eligible frequencies will remain in the unallocated pool regardless of 

whether the current rights are distributed to American or Delta, US Airways should be 

indifferent to the allocation.2

 Indeed, US Airways is likely better off under Delta’s 

 

2 Delta’s modified proposal reduced its initial frequency request from five to four – thus 

ensuring complete neutrality with respect to US Airways or any other carrier that might 

be interested in applying for these rights in the future. 
Response of Delta 

Page 4 

proposal since Detroit-Sao Paulo will be nearly fully funded, leaving more future rights 

available to US Airways. 

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

Department only because Delta has been diligent in pursuing the important 

northern/regional market-opportunities negotiated in 2008 and available to all U.S. 

carriers. US Airways has eschewed those rights and failed to apply for a single 

northern/regional market now or at any time in the past. In these circumstances, US 

Airways should not be heard to complain about Delta’s requested frequency allocation, 

nor should the Department entertain US Airways’ attempt to thwart or condition Delta’s 

future use of frequencies for which US Airways has submitted no proposal. Moreover, 

US Airways has failed to take advantage of any of the open skies or liberal entry 

opportunities in any South American country including Chile, Argentina, and Peru, 

among others. Instead, US Airways seeks to cherry pick only select limited entry 

opportunities in Brazil.3

Delta’s proposal is fully consistent with the Department’s March 24, 2010 Notice, 

as well as the U.S.-Brazil Air Transport Agreement. The Department’s Notice 

specifically states that “the frequencies at issue here may be used at any points that U.S. 

carriers may serve, subject to the restriction that these frequencies may not be used at 

Sao Paulo’s Guarulhos International Airport until infrastructure-related constraints at the 

airport are removed.” Delta’s proposal recognizes the infrastructure-related constraint, 

and will utilize the frequencies beginning in October 2010, consistent with the bilateral 

conditions. In allocating frequencies, the Department routinely takes expected future 

developments into account, and weighs factors such as the applicants’ proposed start 

 

3 Ironically, Delta is actively working to assist US Airway’s entry into the Sao Paulo 

market through the mutual exchange of Brazil frequencies as part of a larger transaction. 

Additional frequencies will continue to be available to US Airways in the unallocated 

pool, and US Airways has the option of serving both Rio de Janeiro and Sao Paulo on a 

tag basis, as Delta did for many years as it worked to gain entry to the market. 
Response of Delta 

Page 5 

date, aircraft availability, and infrastructure constraints in its decision.4

 Delta is confident 

that Brazil will resolve the airport infrastructure constraints at the Guarulhos International 

Airport. There is nothing in the Notice nor in any DOT policy or precedent that precludes 

the Department from taking expected future considerations into account when allocating 

these rights. The Notice expressed a strong intent to allocate the available frequencies 

for current services, but this does not prevent the Department from taking into account 

all factors that have a bearing on the highest and best long term use of the frequencies. 

Delta’s proposed solution maximizes public benefits by fully funding all current 

carrier proposals, while laying the foundation for the important expansion of Detroit-Sao 

Paulo service. 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. 

 

4 For example, in 2007 US Airways sought and received China frequencies even though 

it did not have a transpacific-capable aircraft. The Department is currently allocating 

rights for future U.S.-Haneda services, although the new international terminal at that 

airport has not yet opened. 
CERTIFICATE OF SERVICE 

 A copy of the foregoing Response has been served this 23rd day of April, 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