**BEFORE THE**

**DEPARTMENT OF TRANSPORTATION**

**WASHINGTON, D. C.**

--------------------------------------------- Application of : : DELTA AIR LINES, INC. : DOT-OST-2010- : 0285 for allocation of U.S.-China frequencies : (Tokyo-Guangzhou and Detroit-Beijing) :

---------------------------------------------

**ANSWER OF AMERICAN AIRLINES, INC.**

Communications with respect to this document should be sent to:

VIRASB VAHIDI WILLIAM K. RIS, JR. Senior Vice President - Senior Vice President - Marketing and Planning Government Affairs and Chief Commercial Officer American Airlines, Inc. American Airlines, Inc. 1101 17 th Street, N.W. P.O. Box 619616, MD 5634 Washington, D.C. 20036 DFW Airport, Texas 75161 CARL B. NELSON KENJI C. HASHIMOTO Associate General Counsel Vice President – Strategic American Airlines, Inc. Alliances 1101 17 th Street, N.W. American Airlines, Inc. Washington, D.C. 20036 P.O. Box 619616, MD 5635 (202) 4969-5647 DFW Airport, Texas 75261 carl.nelson@aa.com

ROBERT A. WIRICK Director, Regulatory Affairs American Airlines, Inc. P.O. Box 619616, MD 5635 DFW Airport, Texas 75261 (817) 963-0394 robert.wirick@aa.com

November 17, 2010**BEFORE THE**

**DEPARTMENT OF TRANSPORTATION**

**WASHINGTON, D. C.**

--------------------------------------------- Application of : : DELTA AIR LINES, INC. : DOT-OST-2010- : 0285 for allocation of U.S.-China frequencies : (Tokyo-Guangzhou and Detroit-Beijing) :

---------------------------------------------

**ANSWER OF AMERICAN AIRLINES, INC.**

American Airlines, Inc. hereby answers the applicationsubmitted by Delta Air Lines, Inc. on November 16, 2010, requesting 12 of the 14 U.S.-China weekly combination frequencies in the unallocated pool. Delta proposes daily TokyoGuangzhou service starting April 6, 2011 and five-times-a-week Detroit-Beijing service starting July 1, 2011.Delta would virtually empty the unallocated pool, leaving only two frequencies remaining. Yet as Delta states in footnote 2 (p. 3), it is now sitting on seven dormant U.S.- China frequencies, two for Seattle-Beijing and five for Atlanta-Shanghai. Delta should seek to re-assign these seven dormant frequencies to its proposed Guangzhou and Beijing service before turning to the unallocated pool. 1

1 Delta’s Atlanta-Shanghai frequencies are route specific and would require DOT approval for use on another city-pair. The Seattle-Beijing frequencies are not route specific. See Order 2004-7-23, July 23, 2004, p. 4, allocating frequencies to Northwest to serve “between the U.S. and China.”- 2 –

We do not object to an award of five frequencies from the pool, but we strongly oppose Delta’s bid to continue warehousing seven dormant frequencies, as that could have a chilling effect on future plans of other carriers to serve China. The fact that additional frequencies become available in 2011 and 2012 under the U.S.-China aviation agreement is immaterial. As a matter of sound principle, carriers should not be granted new frequencies from the unallocated pool when they hold dormant frequencies they are not using. Delta (including Northwest) already holds 35 weekly U.S.-China frequencies, and by its application here is seeking 12 more, for a total of 47. American holds 21. If Delta is allowed to retain seven dormant frequencies while gaining 12 new ones, U.S. carriers wishing to expand their service to China could have to go through Delta and seek to dislodge its dormant cache instead of applying to the unallocated pool. In footnote 2, Delta asserts that “it is in the publicinterest to allow Delta to continue to hold the China frequencies allocated for Seattle-Beijing and Atlanta-Shanghai. In these circumstances, neither Seattle nor Atlanta should be stripped of China frequencies that are necessary to fund thefuture expansion and potential for daily service at those important gateways.” Note that Delta has no proposal to actually use the frequencies, but merely cites their “potential.”- 3 -

The seven dormant frequencies Delta wants to keep havelong been on ice. The frequencies now tagged for SeattleBeijing were initially granted to Northwest for DetroitGuangzhou service in 2004, and the frequencies for AtlantaShanghai were awarded to Delta in 2007. See Order 2004-7-23, July 23, 2004; 2007/2008/2009 U.S.-China Air Services and Combination Frequency Allocation Proceeding , Order 2007-9-25, September 25, 2007. These frequencies have been subject to a succession of dormancy waivers, the latest of which extend through June 15,2011 (Seattle-Beijing) and September 1, 2011 (AtlantaShanghai). See Delta motion of April 21, 2010, approved underassigned authority, May 20, 2010 (DOT-OST-2004-18469 and DOTOST-2007-28567 

### ) . In its April motion for extended dormancy waivers until mid to late 2011, Delta was careful to make no promises to operate the frequencies, but instead only vaguely mentioned “the potential future expansion of Seattle-Beijing”flights to daily and “the potential restoration of AtlantaShanghai nonstop service” (p. 2).- 4 -

In these circumstances, if Delta wishes to increase its service to China with new flights to Guangzhou and Beijing, it should be required to take its seven dormant frequencies off the shelf and put them to use. Frequencies in the unallocated pool should be preserved for carriers to seek in the future, free from any claim that unused frequencies in the hands of a competitor cannot be reassigned because they are tied up by an extended dormancy waiver. See Denial of Dormancy Waiver to Continental (U.S.-Brazil/Ecuador/Japan), Notice of Action Taken, DOT-OST-2002-11615, December 10, 2002 (“we find that the public interest would be best served by reassigning these frequencies to the unallocated pool of frequencies so that whenever Continental or another carrier has firm plans to use them, it may apply for the frequencies accordingly”); Denial of Dormancy Waiver to Continental Micronesia (U.S.-Japan), Notice of Action Taken, DOT-OST-2002-11614, September 30, 2002 (same); Denial of Dormancy Waiver to Delta (U.S.-Japan), Notice of Action Taken, DOT-OST-2002-11706, September 30, 2002 (same).- 5 -

**CONCLUSION** Delta’s bid to take 12 new U.S.-China frequencies from the unallocated pool, while continuing to hold seven dormant ones, should be denied. American does not object to an award of five frequencies from the pool. Respectfully submitted,

_______________________ CARL B. NELSON Associate General Counsel American Airlines, Inc.

November 17, 2010**CERTIFICATE OF SERVICE**

I hereby certify that I have this day served the foregoing document by email on the following persons:

sascha.vanderbellen@delta.com jhill@dlalaw.com scott.mcclain@delta.com bill@mietuslaw.com sametta.c.barnett@delta.com mgoldman@sgbdc.com kquinn@pillsburywinthrop.com rsilverberg@sgbdc.com bkeiner@crowell.com dhainbach@ggh-airlaw.com mrosia@crowell.com mcmillin@woa.com bruce.rabinovitz@wilmerhale.com eskraft@jamhoff.com jeffrey.manley@united.com dpdean@jamhoff.com bob.kneisley@wnco.com dkirstein@yklaw.com robert.land@jetblue.com jyoung@yklaw.com msinick@ssd.com donna.kooperstein@usdoj.gov cdonley@ssd.com dwight.moore@ustranscom.mil gbleopard@fedex.com john.allen@faa.gov dvaughan@kelleydrye.com byerlyjr@state.gov kevin.montgomery@polaraircargo.com recohn@hhlaw.com jrichardson@johnlrichardson.com cjsimpson@zsrlaw.com lhalloway@crowell.com pmurphy@lopmurphy.com efaberman@wileyrein.com lachter@starpower.net mroller@rollerbauer.com anita.mosner@hklaw.com howard.kass@usairways.com rpommer@atlasair.com benjamin.slocum@usairways.com gmurphy@crowell.com sophy.chen@hklaw.com russell.bailey@alpa.org david.heffernan@wilmerhale.com esahr@eckertseamons.com

_______________________________ CARL B. NELSON

November 17, 2010