BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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

REPLY OF THE DELTA MASTER EXECUTIVE COUNCIL OF THE AIR LINE PILOTS ASSOCIATION, IN TERNATIONAL 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 Hartsfie ld Centre Parkway, Suite 800 Atlanta, Georgia 30354 Kingsley.Roberts @alpa.org

May 14 , 2013BEFORE THE DEPARTMENT OF TRANSPORTATION

WASHINGTON, D.C.

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

REPLY OF THE DELTA MASTER EXECUTIVE COUNCIL OF THE AIR LINE PILOTS ASSOCIATION, INTERNATIONAL IN SUPPORT OF APPLICATION OF DELTA AIR LINES , INC. The Delta Master Executive Council, th e Delta chapter of the Air Line P ilots Association , Int ernational (the “Delta MEC”), hereby submits this reply in support of the application of Delta Air Lines, Inc. (“Delta”) for 21 Brazil frequencies in order to
increase service to Sao Paulo at Delta’s New York and Atlanta gateways and to sustain
its cu rrent Detroit

- Sao Paulo service. In its prior answer in support of the Delta application the MEC noted that the award of 21 frequenc ies to Delta will , for obvious reasons , benefit the 12,000 members of the Delta chapter of the Air Line Pilots Association as well as the other 68 ,000 dedicated employees of Delta. However, the MEC also made the very important point that an award to Delta of the 21 frequencies will best satisfy the DOT’s public interest objective to promote inter

- gateway and inter alliance c ompetition in entry limited markets. American and USAirways insist the Department consider their applications separately although the carriers are seeking to combine their operations in a merger that will produce the single largest U.S. air carrier. N ot only will the combined carriers havethe most extensive U.S. and international route network, but as it involves this

proceeding, American and USAirways will hold the overwhelming dominant share of unrestricted Brazil frequency allocations supporting the provision of nonstop service from 5 U.S. gateway cities . Exhibit DL

- 105. Granting the American and USAirways applications would allow the carriers to control 82 frequencies while Delta, with no award in this case, would have only 16 allocations operating from only two gateways. Exhibit DL

- 104. To allow the competitive balance in the U.S.

- Brazil market to be swayed even more in favor of the current dom inant air carrier would be antithetical to the public interest standard the Department stated would cont rol the outcome of this proceeding. Put another way, the optimal competitive distribution of frequencies can only be achieved by granting Delta’s request in full. DL

- 105. As previously noted by the MEC , granting Delta’s application in full will result in there being two credible challenge r s of roughly equal strength in terms of frequency allocations

. Id. American and USAirways obviously do not want such a result and continue to argue that their applications must be independently processed and consider ed by the Department, even if the allocation of frequencies would overly favor the merged carrier. If the DOT is not prepared to consider the American and USAirways applications as one, then the DOT should retain the flexibility to deal with any eventual market imbalance by conditioning any award to American and USAirways by ordering that the awarded frequencies to both carriers be immediately divested and reallocated to Delta at the time the merger is consummated. This was the approach taken by the Depar tment in Order 89

- 5

- 16, May 4, 1989 when the Department said it would allocate Japan charter flight allocations to both FedEx andFlying Tigers , carriers that were then planning to merge , but that if the merger was

consummated the n one half of the allocati ons would be withdrawn. Order 8

- 5

- 16, page
8. The Department must fashion any award in this case that takes into account the merger impact on the U.S.

- Brazil market and allow the Department the needed flexibility to reassign frequency allocations to offs et the effect of the merger in the market place without the need to conduct yet another carrier selection proceeding

. Delta has made the case for an award of 21 Brazil frequency allocations (a net of 14 frequencies once Delta leases 7 frequencies to USAir ways as it is contractually committed to do in 2014). The Detroit market will retain its currently successful nonstop service and Delta will be able to offer more competitive service to American at New York and to better compete from Atlanta against the s ervices of American and its code share partner TAM at Miami. Any other award of frequency allocations would produce sub

- optimal results in terms of overall market structure. 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 of service from Atlanta and New York and to preserve existing Detroit

- Sao Paulo service. Respectfully submitted ,

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

A copy of the foregoing document has been served this 14 th day of May 2013 , upon the following persons via email: Francis.Heil@aa.com Robert.Wirick@aa.com howard.kass@usai rways.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

- airpor t.com Steve.Luben@atlanta

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