BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2013/2014 U.S.
- Brazil Combination Frequency Allocation Proceeding ) ) ) ) ) ) Docket DOT
- OST
- 2013
- 0072

ANSWER OF THE DELTA MASTER EXECUTIVE COUNCIL OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL IN SUPPORT OF APPLICATION OF DELTA AIR LINES , INC.

Communications with respect to this document should be addressed to:
Kingsley S. Roberts Chairman Delta Master Executive Council Air Line Pilots Association, International 100 Hartsfield Centre Parkway, Suite 800 Atlanta, Georgia 30354 Kingsley.Roberts @alpa.org

May 3, 2013BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

2013/2014 U.S.
- Brazil Combination Frequency Allocation Proceeding ) ) ) ) ) ) Docket DOT
- OST
- 2013
- 0072

ANSWER OF THE DELTA MASTER EXECUTIVE COUNCIL OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL IN SUPPORT OF APPLICATION OF DELTA AIR LINES , INC. Delta Air Lines, Inc. (“Delta”) has requested that the DOT allocate to it 21 Brazil frequencies in order to increase service to Sao Paulo at Delta’s New York and Atlanta gateways and to sustain its current Detroit

- Sao Paulo service. The Delta Master Executive Council, th e Delta chapter of the Air Line P ilots Association, Int ernational (the “Delta MEC”), strongly supports Delta’s request for 21 Brazil frequencies.
The award of 21 frequenc ies to Delta will , of course, benefit the 12,000 members of the Delta chapter of the Air Line Pilots Ass ociation , International as well as the other
68 ,000 dedicated employees of Delta. Just as important , however, an award to Delta of the 21 frequencies will satisfy the DOT’s public interest objective to promote inter

gateway and inter alliance competition in entry limited market s. The U.S.

- Brazil market is overwhelmingly dominated by American Airlines , which is on the cusp of being merged with USAirways. Together, American /US Airways have applied for 28 frequencies on top of the 7 frequencies Delta is required to transfer to
US Airways pursuant to the DCA/LGA slot swap transaction. Specifically , American hasapplied for an additional 14 additional frequencies to serve Sao Paulo from Los Angeles

and Chicago. US Airways has applied for the authority necessary to serve Sao Paulo from Charlotte and Philadelphia and requests 14 frequencies to provide the service. US Airways has not stated its plans for the 7 frequencies it will receive from Delta. The optimal competitive distribution of frequencies can only be achieved by granting Delta’s request in full. Exhibit DL

- 105. While American will still be the dominant carrier to Sao Paulo, there will be two credible challenges of roughly equal strength. Id. Significantly, net of the slot swap frequency transfers, Delta’s p roposal will result in an equitable division of 14 incremental frequencies to each of Delta and American /US Airways over the next two years. Given the reality of the merger, US Airways and American should be considered as one for purposes of this case. I f, however, either carrier should receive frequencies on the basis of its “independent” status (and Delta’s request was not fully satisfied) the Department should condition the award of any such frequencies to be immediately divested and reallocated to Del ta upon consummation of the pending merger. As the DOT is only too aware, American dominates the U.S.

- Brazil market with
47 weekly flights to Sao Paulo from points in the U.S. United is the second largest U.S.

- Brazil carrier with 35 weekly frequencies. Currently Delta only operates three daily flights to Sao Paulo from Atlanta , New York (JFK) and Detroit . To bring balance to the competitive level among and between the three major international air carriers, an award of 21 frequency allocations to Delta (14 in 2013 and 7 in 2014) is essential . Apart from the many consumer and public benefits that will result from Delta being able to offer double daily service to Sao Paulo from both the large and important New York andAtlanta gateways, an award to Delta is important to continue daily Detroit

- Sao Paulo in

2015 when Delta is committed to transfer seven unrestricted Brazil frequencies to USAirways. Detroit

- Sao Paulo is a proven and successful route with a strong and growing community of interest between Det roit and Sao Paulo, centered around the U.S. automobile industry and the Midwest industrial base

. Delta’s request for 7 additional frequencies to serve the Atlanta

- Sao Paulo market will allow Delta for the first time to offer a second competitive time ch annel at the Atlanta hub compared to American's 4 times daily Miami

- Sao Paulo offerings. Exhibit
DL

- 104. The imbalance will be made even worse when American an d USAirways merge and the merged carrier will be able to offer 5 daily round trip flights to/from Sao Paulo from / to the largest southeastern U.S. gateways. Exhibit DL

- 205. In fact, the number of American operated and branded flights will be even greater when considering American’s fut ure alliance/code share partner , TAM , operates 2 daily flights from Miami to Sao Paulo bringing the total American /oneworld service from southeastern gateway to 7 daily flights. Doubling Delta’s Sao Paulo flights from Atlanta will enjoy greater connecting c ity support than American has at Miami or USAirways has at Charlotte thereby ensuring the success of Delta’s second Atlanta

- Sao Paulo flight. Exhibit DL

- 206. Delta’s proposal to enhance its existing New York (JFK)

- Sao Paulo service takes maximum advantage of the fact that New York generates more Sao Paulo bookings than any other U.S. gateway. The next largest local market is 1/3 the size of the New York market. Exhibit DL

- 303. It is obvious that Delta’s emphasis on the JFK

- Sao Paulo market is calculated to provide needed capacity in the market with the greatest need for service. Even if Delta can double its daily service at JFK, it will still lag behind theservice offerings of American and its oneworld partner TAM which offers 3 times daily

Sao Paulo s ervice from JFK . Exhibit DL

- 304. Improving the competitive balance in the
U.S.

- Brazil market is the principal objective of the DOT in this proceeding. Order 2013

- 4

- 9, page 3. An award to Delta of 7 frequencies to serve JFK will fully satisfy this state d
DOT objective. Delta’s need for 7 frequencies to enable it to continue offering Detroit

- Sao Paulo service is compelling and obvious. Delta is contractually committed to lease seven Sao Paulo f requencies to USAirways in 2014. Therefore, unless the DOT g rants 7 frequencies to Delta to serve Detroit, the Detroit

- Sao Paulo will cease to be served on a nonstop basis. As difficult as the loss of such service would be to the level of competition for Brazil service from the Midwest region of the U.S., the loss to the local Detroit market would be even greater. Detroit is the center of the revitalized and growing automobile industry that has grown to rely upon Delta’s existing Detroit

- Sao Paulo service. Since Delta commenced nonstop Detroit

- Sao Paulo service in 2010 the local market has doubled in size. A market that has responded as has Detroit to the introduction of nonstop service simply cannot be deprived of continuing nonstop service. Its one thing when new nonstop service does not result in sustaining l evels of market stimulation and service is then suspended or terminated. Its quite another for a market to respond to new service and then lose service due to artificial constraints imposed b y government al agreement s . The Detroit market has proven its bo na fides and more than deserves to enjoy continuing year round daily nonstop service to Sao Paulo

.For the foregoing reasons, the Delta MEC strongly supports Delta’s request for 21

additional frequencies to serve Sao Paulo, Brazil in order to enhance existing level s of service from Atlanta and New York and to preserve existing Detroit

- Sao Paulo service.

Respectfully submitted ,

Kingsley S. Roberts Chairman Delta Master Executive Council Air Line Pilots Association, In ternationa lCERTIFICATE OF SERVICE

A copy of the foregoing document has been served this 3 rd day of May 2013 , upon the following persons via email: sascha.vanderbellen@delta.com Francis.Heil@aa.com Robert.Wirick@aa.com howard.kass@usairways.com benjamin.slocum@usairways.com dan.weiss@united.com thomas.bolling@united.com paul.gretch@dot.gov esta.rosenberg@dot.gov brian.hedberg@dot.gov brett.kruger@dot.gov urskr@state.gov joe.cambron@wcaa.us brubinst@panynj.gov louis.miller@atlanta

- airport.com Stev e.Luben@atlanta

- airport.com info@airlineinfo.com sascha.vanderbelle n @delta.com