In the matter ofthe application of )

VRG LINHAS AEREAS S.A. D/B!A GOL )

for an exemption from 49 U.S.C. §41301 )

Docket DOT-OST-20 10-

APPLICATION FOR EXEMPTION

Communications with respect to this document should be addressed to:

Charles F. Donlev II

Squire, Sanders & Dempsey L.L.P.

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 626-6840 phone

(202) 626-6780 fax

cdon1eyssd .com

Counsel to VRG Linhas Aereas S.A, d/b/aGol

DATED: April 13, 2010
VRG LINHAS AEREAS S.A. D/B/A GOL )

for an exemption from 49 U.S.C. §41301

Docket DOT-OST-2010- - APPLICATION FOR EXEMPTION

VRG Linhas Aereas S.A. d/b/a Gol (“Gol”), pursuant to 49 U.S.C. 40109, hereby

requests an exemption from 49 U.S.C. 41301 and. to the extent necessary, from any other

provisions of Title 49 and the Economic Regulations of the Department of Transportation(Department”) to permit Gol to transport persons. property and mail under the designator code

of Delta Air Lines. Inc. (“Delta”) (i) between points in Brazil; and (ii) beyond Brazil to any point

or points. Gol requests that any exemption granted by the Department pursuant to this

application remain in effect for a period of at least one year. Gol intends to commence codeshareservice with Delta as soon as all necessary government approvals are obtained.

In further support of its application, Gol states as follows:

1. The Applicant

Gol is one of the largest low-cost low-fare airlines in the world and the only low-cost

low-tare airline pro\ iding frequent service on routes connecting all of f3razils major cities. and

from Brazil to major cities in South America. With its voting and standardized ticet of Boeing

Go! and Delta are separateI appl\ ing for a statement of authorization and an exemption. respecti elk. permitting

them to implement their codeshare arrangement.
and its tcus on markets that were either underserved or did not have a lower-fare alternative

have led to a strong awareness of Gol’s brand and a rapid increase in its market share. Gol was

the first company to introduce successfully low-cost carrier industry practices and technologiesin Latin America. Gol has a diversified revenue base, with customers ranging from business

passengers to leisure passengers traveling throughout Brazil and to other South American

destinations. Gol’s strategy is to increase market size by attracting new passengers through its

consolidated flight network, a modern aircraft fleet, targeted marketing and its loyalty program

Smiles, the largest loyalty program in South America with more than six million members.

Gol operates more than 800 daily flights to 59 destinations connecting the most important

cities in Brazil as well as key destinations in Argentina, Bolivia, Chile, Colombia, Paraguay.

Uruguay and Venezuela. Gol’s fleet, which is one of Latin America’s largest and youngest,

consists of nearly 120 Boeing 737-300, 73 7-700 NO and 73 7-800 NG aircraft with an average

age of 6.8 years. Plans call for the acquisition of additional aircraft and phasing out the B737-

300 aircraft in favor of Next Generation B737-700 and 73 7-800 aircraft. As of June 30, 2009,

Gol had 99 firm purchase orders remaining with deliveries scheduled until 2016. and purchase

options for 40 additional B737 NO aircraft.

Gol’s headquarters are located in Sao Paulo. Gol’s principal business office is located at

the following address:
Gol is organized and exists under the laws of Brazil. Gol is a citizen of Brazil and is

substantially owned and effectively controlled by Brazilian citizens. The Department has

previously found Gol to be a citizen of Brazil. 2

2. The Proposed Service

Under the codeshare agreement between Gol and Delta, Gol will operate with its aircraft

and crews flights (i) between points in Brazil and (ii) beyond Brazil to third-country points on

which Gol will display Delta’s two-letter designator code. Gol’s domestic Brazil and Brazilthird-country flights will connect with Delta’s U.S-Brazil flights for the purpose of transporting

Delta’s U.S.-originating and U.S.-destined traffic. Under the authority sought in this application.

Gol will not sell seats in its name for travel to or from the United States and will not operate its

aircraft to any U.S. point. Gol therefore requests an exemption permitting Gol to engage inscheduled foreign air transportation for the purpose of transporting persons, property and mail

under Delta’s designator code between points in Brazil, and beyond Brazil to any point or

points. 3 All codeshare flights will be marketed in accordance with the Department’s regulation

on codesharing contained in 14 C.F.R. 257.

I FitnessGol’s operations are authorized and regulated by the Government of Brazil. Brazil is a

contractin State to the Convention on International Civil Aviation (Chicago Convention”) and

Voiice 01 4 c/ion Taken. \larch 4. 2010. Docket DOT-OST-20 10-0008

Initial codeshare markets are identifled in the joint application being tiled separatel\ by Got and Delta.
The equipment utilized to operate the codeshare service is and will continue to be

maintained by Gol. All maintenance on Gol’s aircraft is performed in accordance with programs

that comply with the provisions of JCAO Pilots and Airmen Annexes 1. 6 (Part 1) and 7. OnFebruary 9, 2010, Delta’s compliance statement on Gol’s IOSA codeshare safety audit was

presented to the Federal Aviation Administration.

Gol has previously filed with the Department its insurance certificate, Warsaw

agreement. and financial staternents. The Department has found Gol to be operationally and

financially fit to perform the type of service proposed in this application. 6

4. Public Interest Factors

Service between the United States and Brazil is governed by the Air Transport

Agreement between the two countries signed on March 21, 1989, as amended (“Agreement”). In

accordance with Annex I, Section I, to the Agreement, Brazilian and U.S. carriers may engage in

codeshare operations:

In operating or holding out the authorized services on the agreed routes. anydesignated airline of one Contracting Party may enter into cooperative marketing

arrangements such as blocked-space, code sharing, leasing or aircraft interchange

arrangements with:

A. an airline or airlines of either Contracting Party[.]

Docket [)OT-OST201O-0008

Id.

4 iioj 7ah ii Dejet DO I OS1 21)10 0008 \htch 4 20 0
The codeshare services proposed by Gol are fully consistent with the bilateral, as the Department

has recognized in other cases involving Brazilian and U.S. carriers. 7 The United States has

consistently recognized that the inclusion of a service in a bilateral agreement to which the

United States is a party and the submission of an application by a qualified foreign carrier for

such service satisfy all relevant public interest requirements for grant of exemption authority. 8

5. Environmental Considerations

Go! submits that its application raises no environmental or energy issues. All of GoFs

operations under this exemption will be conducted in accordance with applicable noiseabatement requirements at points located outside the United States. Similarly, since approval is

sought only to display Delta’s designator code on Gol’s existing domestic Brazil and Brazilthird-country flights, approval of this application will not result in a near-term increase in fuel

consumption often million gallons or more.

WHEREFORE. VRG Linhas Aereas S .A. d/b/a Gol respectfully requests that it be

granted an exemption from 49 U.S.C. 41301 to the extent necessary to permit Gol to provide

scheduled foreign air transportation of persons. property and mail as more fully described herein.

or such other relief as the Department deems necessary and proper.

Se eg. Votice of Action 7Aken, Docket DOT-OST-2010-0008, March 4, 2010, authorizing American-Gol

codesharing: Var/ce of Action Taken, Docket DOT-OST-2007-0012, October 24, 2007, authorizing United-TAM

codesharing.

See. S.RH. \o. 96-329. at 4 (l979. reprinted in 1980 U.S.C.Q.A.N. 53, 57 (The negotiation of a bilateral

agreement itself represents a determination b the Goernment of the United States that the erant of route authorit

provided for under the bilateral is in the pub1ic interest.”.
I

Charles F. Donley II 1

Squire, Sanders & Dempsey L.L.P,

1201 Pennsylvania Avenue, NW.

Washington. D.C. 20004

(202) 626-6840 phone

(202) 626-6780 fax

cdon1ey:ssd,corn

Counsel to VRG Linhas Aereas S.A. d!b/aGol

DATED: April 13. 2010
/* / r—27 Y. ct

Charles F. Donley II

DATED: April 13. 2010

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