BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) In the matter of ) ) Docket DOT

- OST

- 2013

- 0072 2013/2014 U.S.

- Brazil Combination ) Frequency Allocation Proceeding ) )

SUPPLEMENT OF US AIR WAYS, INC. TO APPLICATION FOR AN EXEMPTION AND FREQUE NCY ALLOCATION Communications with respect to this document should be addressed to:

Howard Kass Vice President, Legal and Government Affairs Benjamin T. Slocum Director, Legal and Government Affairs US Airways, Inc. 1401 H Street, NW, Suite 1075 Washington, DC 20005 (202) 326

- 5153 howard.kass@usairways.com benjamin.slocum@usairways.com
DATED: April 24, 2013- i

- TABLE OF CONTENTS Page OVERVIEW

................................ ................................ ................................ .......... 1

I. INTRODUCTION

................................ ................................ ....................... 2

II. THE CHARLOTTE - SAO PAULO SERVICE TH AT BOTH US AIRWAYS AND THE DEPARTMENT W ORKED HARD TO ACHIEV E COULD BE INTE RRUPTED WITHOUT DEPA RTMENT ACTION

............................... 5

III. MAINTAINING CHARLOTT E - SAO PAULO SERVICE AN D STARTING NEW PHILADELPHIA - SAO PAULO SERVICE SH OULD BE THE DEPARTMENT’S TOP PRI ORITY

................................ ............................ 6 Charlotte

- Sao Paulo

................................ ................................ ................... 6 Philadelphia

- Sao Paulo

................................ ................................ ............ 12

IV. THE SELECTION CRITER IA ESTABLIS HED BY THE DEPARTMEN T IN OTHER PROCEEDINGS CL EARLY SUPPORT APPROV AL OF US AIRWAYS’ APPLICATION

................................ ................................ ...... 16

V. AN AWARD TO US AIRWA YS WILL BEST SERVE T RAVELERS AND SHIPPERS

................................ ................................ ............................... 20

VI. CONCLUSION

................................ ................................ ......................... 21BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

) In the matter of ) ) Docket DOT

- OST

- 2013

- 0072 2013/2014 U.S.

- Brazil Combi nation ) Frequency Allocation Proceeding ) )

SUPPLEMENT OF US AIR WAYS, INC. TO APPLIC ATION FOR AN EXEMPTION AND FREQUE NCY ALLOCATION Pursuant to 49 U.S.C. 40109, Subpart C of the Department of Transportation’s (“Department”) Rules of Practice and the Department’s April 12, 2013, Order Instituting Proceeding , US Airways, Inc. (“US Airways”) 1 submits this supplement to its previously

- filed application in Docket DOT

- OST

- 2013

- 0046. 2
Overview The purpose of this pleading is to obtain the Departmen t’s approval of US Airways’ request for 14 unrestricted Brazil frequencies available for use beginning October 1, 2014. US Airways will use seven of these frequencies to continue to benefit consumers flying on its new Charlotte

- Sao Paulo service, which wi ll commence June 8, 2013, using seven frequencies leased temporarily from United. The other seven frequencies will be used to institute service from Philadelphia, a new gateway to Brazil in the Northeastern United States.

1 Common names of carriers are used.
2 Application of US Airways, Inc. for an Exemption and Frequency Allocation , Docket DOT

- OST

- 2013

- 0046, March 4, 2013.Supplement of US Airways, Inc. Docket DOT

- OST

- 2013

- 0072 April 24, 2013

- 2

- This pleading is organized into five sections that, taken as a whole, demonstrate why the Department should approve US Airways’ application. Section I summarizes US Airways’ frequency request and its position in the U.S.

- Brazil market place . Section II discusses the vested interest of consume rs, communities and the Department in ensuring that Charlotte

- Sao Paulo service continues. Section III details the numerous public interest benefits that will result from an award to US Airways for Charlotte

- Sao Paulo and Philadelphia

- Sao Paulo
service. Section IV sets forth the Department’s selection criteria, and demonstrates how US Airways’ proposal best satisfies them. Section V and Section VI summarize the public interest benefits flowing from approval of US Airways’ proposals to (i) continue its C harlotte

- Sao Paulo service beyond October 25, 2014; and (ii) begin new service between Philadelphia and Sao Paulo. Finally, US Airways responds to the specific evidentiary requirements set forth in the Department’s April 12, 2013, Order Instituting Procee ding (“Instituting Order”).

I. Introduction This proceeding stems from the Department’s February 15, 2013, Notice Inviting Applications , which solicited expressions of interest in, among other things, the unrestricted Brazil combination frequencies avai lable to U.S. carriers beginning October 1, 2013, and October 1, 2014. The applicants included US Airways, American and Delta, each of whom sought a portion of the 28 frequencies available to serve Sao Paulo. US Airways requested 14 of the frequencies

— se ven to prevent the cessation of its new Charlotte

- Sao Paulo service, and another seven to instituteSupplement of US Airways, Inc. Docket DOT

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- 2013

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- new Sao Paulo service from Philadelphia, a new gateway. 3 American also applied for 14 frequencies for service from Los Angeles and Chicago. Delta requeste d 21 frequencies, 14 of which are for duplicative flights from Atlanta and New York. Delta’s request for additional frequencies for Detroit service is to backfill frequencies that Delta contractually agreed to surrender in 2015, as part of its 2011 slot
t ransaction with US Airways. Since insufficient frequencies are available to fund all the requests made in March 2013, the Department instituted this proceeding to evaluate proposals, and allocate frequencies based on which proposal will best serve the public interest. To support its proposed services, US Airways requests that the Department award it 14 unrestricted combination frequencies available October 1, 2014, for operation of daily year

- round scheduled service between (i) Charlotte and Sao Paul o; and (ii) Philadelphia and Sao Paulo. US Airways will use seven of the 14 frequencies to continue without interruption its daily service between Charlotte and Sao Paulo. This service will begin June 8, 2013, using seven frequencies leased from United and end in October 2014 unless frequencies are awarded. Specifically, this lease will expire on October 25, 2014, approximately eleven months before the implementation of full Open Skies on October 1, 2015. 4

3 US Airways also requested that the Department grant it an exemption permitting it to engage in the scheduled foreign air transportation of persons, property and mail from any point or points behind the United Stat es via the United States and intermediate points to any point or points in Brazil and beyond. US Airways incorporates by reference information contained in its March 4, 2013, application required to demonstrate its citizenship and fitness for exemption aut hority.
4 As a result of the lease amendment, US Airways is modifying its initial frequency request set forth in its March 4, 2013, application in Docket DOT

- OST

- 2013

- 0046 and is today requesting 14 frequencies available October 1, 2014.Supplement of US Airways, Inc. Docket DOT

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- 2013

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- US Airways will use the other seven frequenci es to commence new service to Sao Paulo from Philadelphia on October 1, 2014, or as soon as possible thereafter upon receipt of all necessary approvals from the U.S. and Brazilian governments. US Airways will work diligently to obtain the Brazilian Govern ment’s approval of its
new service. Finally, although US Airways and American have announced their intent to merge, the merger cannot be closed without several required approvals. Thus, US Airways and American today remain separate companies. Neverthele ss, even if the merger closes, nonstop service between each of Charlotte and Philadelphia and Sao Paulo is still in the public interest and the merger does not diminish that fact. The Department’s focus should remain on the communities and consumers that will benefit from the new services. Merger or not, both Charlotte and Philadelphia are deserving of nonstop service to Sao Paulo. Both gateways are among the largest in the United States and would provide new options for consumers versus other gateways al ong the Eastern Seaboard including Atlanta, Newark and Washington

- Dulles. Adding two new Eastern gateways to Sao Paulo would have a tremendous benefit for consumers, communities and competition.Supplement of US Airways, Inc. Docket DOT

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- 2013

- 0072 April 24, 2013

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- II. The Charlotte - Sao Paulo Service that both US Airways a nd the Department Worked Hard to Achieve Could be Interrupted without Department Action That US Airways is even in a position to commence Charlotte

- Sao Paulo service is a testament to the leadership demonstrated by the Department. In June 2008, through h ard bilateral negotiations, the Department succeeded in getting the carrier designation limits removed from the U.S.

- Brazil air services agreement. This led directly to US Airways’ commencement of Charlotte

- Rio de Janeiro service in December 2009. Subseq uently, in August 2010 the Department approved US Airways’ lease of unrestricted Brazil frequencies from United, and temporarily reallocated seven unrestricted frequencies to US Airways. Upon Department approval, US Airways began in earnest the work requi red to obtain all necessary Brazilian regulatory and airport approvals for brand new Charlotte

- Sao Paulo service. Despite several setbacks, with the Department’s continued support over this period, US Airways ultimately received the necessary approvals an d a slot award from the Brazilian Government and Guarulhos Airport, enabling it to begin Charlotte

- Sao Paulo service in June 2013. Without a recent amendment to the frequency lease, US Airways could have lost the frequencies as early as Fall 2013. In an e ffort to maintain the leased frequencies for as long as possible, and give the Department additional flexibility in awarding frequencies for Charlotte service, US Airways renegotiated the lease termination date. However, Department action is still require d or else US Airways will no longer have any service to Sao Paulo, and the consumers and communitiesSupplement of US Airways, Inc. Docket DOT

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- 2013

- 0072 April 24, 2013

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- that rely upon Charlotte

- Sao Paulo flights will lose the benefits of the service. The Department can avoid this result with an award of frequencies to Cha rlotte.

III. Maintaining Charlotte - Sao Paulo Service and Starting New Philadelphia Sao Paulo Service Should Be the Department’s Top Priority Charlotte and Philadelphia offer the Department a unique opportunity within this proceeding to preserve and add Sao Paulo service at US Airways’ two largest hubs, respectively. Charlotte and Philadelphia are both robust hubs that serve communities with strong ties to Brazil. Each will provide numerous connections for Sao Paulo travelers every day, to/from destinat ions across the United States. Furthermore, as new gateways, Charlotte will provide connecting passengers with needed intergateway competition with Atlanta, while Philadelphia competes with gateways at Newark and Washington

- Dulles.

Charlotte

- Sao Paulo US Airways’ daily Charlo tte

- Sao Paulo service will commence with B767

- 200 aircraft seating 200 passengers in two classes. However, at the start of the 2013

- 2014 Winter Season, US Airways will upgrade this service to larger, newer A330

- 200 equipment, seating 253 passengers in two classes. 5 The seating layouts of these aircraft are shown in Figure 1. 6

5 US Airways’ B767

- 200 and A330

- 200 aircraft have 204 and 258 total seats, respectively; however, on US Airways flights to/from Brazil, four seats are reserved for crew rest on the B767

- 200 and five seats are reserved for crew rest on the A330

- 200. US Airways is in the proc ess of obtaining all necessary Brazilian regulatory approvals to implement its Charlotte

- Sao Paulo equipment change effective late October 2014.
6 An overview of the amenities provided by US Airways’ state of the art A330

- 200 aircraft is attached as Annex A.Supplement of US Airways, Inc. Docket DOT

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- Figure 1: US Airways Would Operate Frequencies Awarded to Charlotte Using A330 - 200 Aircraft

The A330

- 200 aircraft is the newest in US Airways’ fleet, and is particularly well

suited to long

- haul service. The aircraft features lie

- flat seats in Envoy class and comfortable leather seats in coach class, ensuring passenger comfort and
convenience. Charlotte is US Airways’ largest hub, and the third largest airline hub in the
Uni ted States. US Airways operates more than 640 daily nonstop flights from Charlotte to 131 destinations in the U.S., Canada, the Caribbean, Mexico and Latin
America. 7 Over the past five years, Charlotte’s long

- haul international service level

7 An Overview of US Airways’ Charlotte hub is attached as Annex B.Supplement of US Airways, Inc. Docket DOT

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- has expanded dramatically, commencing in 2009 when US Airways started service to both Rio de Janeiro and Paris, France. In 2010, Charlotte received service to Rome, followed in 2011 by service to Dublin and Madrid. Just last month, Charlotte received its first fligh t to London’s Heathrow Airport, and will enjoy Sao Paulo service in June. Indeed, over the last five years, the total number of international seats offered by US Airways at Charlotte has increased nearly 25 percent, while total ASMs have increased over 50 percent. Charlotte has proven to be an excellent gateway to Brazil. The Department recognized the value of US Airways’ Charlotte hub in 2009 when it awarded US Airways seven frequencies to serve Rio de Janeiro. The Department found that approval of US A irways’ Charlotte

- Rio de Janeiro service would introduce service at a “major hub, resulting in more service options for the traveling public.” 8 The Department was correct

— US Airways’ Charlotte

- Rio de Janeiro service is highly successful and growing consis tently, as shown in Figure 2.

8 In the Matter of 2009 U.S.

- Brazil Combination Frequency Proceeding, Order 2009

- 3

- 14, p.7Supplement of US Airways, Inc. Docket DOT

- OST

- 2013

- 0072 April 24, 2013

- 9

- Figure 2: Charlotte Is a Successful and Still - Growing Brazilian Gateway

Source: US Airways internal data. The Department’s 2009 conclusions apply equally to US Airways’ new Charlotte

- Sao Paulo service. This service will provide a compelling alternative to
Delta’s Atlanta

- Sao Paulo service, providing travelers with additional choice of gateways and numerous new connecting options. As shown in Figure 3, US Airways’ Charlotte

- Sao Paulo service will provide connections to 87 U.S. points southbound, and 97 points northbound, increasing passenger convenience throughout the United States. 9

9 Connecting schedules for Charlotte are attached as Annexes C and D.Supplement of US Airways, Inc. Docket DOT

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- 0072 April 24, 2013

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- Figure 3: US Airways’ Charlotte - Sao Paulo Service Connects Passengers Nationwide

Connections limited to within 4 hours of GRU departure/arrival and less than 130% circuitous. Source: US Airways’ Schedule for June 14, 2013. Regardless of whether the US Airways

- American merger is approved or not, the fact remains that the Charlotte gateway is a highly competitive a lternative for many connecting passengers to Delta’s Atlanta

- Sao Paulo service, generating considerable consumer benefits, as was already recognized by the Department regarding to Rio de Janeiro. Charlotte is the principle competing gateway with
Atlanta

— a fact that will not change if U S Airways and American merge. 10 The Department should preserve this alternative to Delta’s Atlanta

- Sao Paulo service.

10 Indeed, 90% of the traf fic that Atlanta connects in both directions to Sao Paulo can also connect in both directions via Charlotte. (Assumes four hour maximum connect time and less than 130% circuity.)Supplement of US Airways, Inc. Docket DOT

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- 2013

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- This compelling factor is alone sufficient to justify an allocation of seven frequencies for Charlotte

- Sao Paulo service. Charlotte also has strong business and commercial links with Brazil. US Airways’ Charlotte

- Rio de Janeiro service has received strong and growing support from the Charlotte community. Commerce and trade with Brazil is enormously important to Charlotte (and North Caroli na as a whole), and is valued at more than $1 billion. Brazilian businesses have found an excellent business climate in Charlotte, and seven Brazilian companies have established operations in Charlotte including two with their U.S. headquarters in the cit y. 11 Finally, not only is Brazil service important to Charlotte and North Carolina, Charlotte

- Sao Paulo service is critically important to US Airways. Since leasing the frequencies in 2010, it has made an enormous investment to ensure the service is

succe ssful, and efforts to ensure the successful inauguration of service are ongoing. Although US Airways looks forward to beginning the first new U.S. carrier service to Sao Paulo in many years, it is deeply concerned that its efforts will be thwarted by
the loss of its leased frequencies in October 2014, to the detriment of consumers, communities and competition. Should Charlotte

- Sao Paulo service be lost due to a lack of frequencies, there is no assurance US Airways can resume service even if frequencies be come available in the future. Although infrastructure constraints at GRU are improving, there remains a significant possibility that US Airways would be unable to recover the gates, airport offices, ticketing facilities and slots needed to resume Charlott e - Sao Paulo service, even after Open Skies is implemented. As a

11 An Overview of the Charlotte business links to Brazil is attached as Annex E.Supplement of US Airways, Inc. Docket DOT

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- result, to ensure that its new Charlotte

- Sao Paulo service will continue, and travelers can enjoy the benefits of new U.S. carrier competition to Sao Paulo without interruption, US Airways re quests allocation of seven unrestricted frequencies available October 1, 2014. Philadelphia

- Sao Paulo US Airways proposes daily roundtrip nonstop service between Philadelphia and Sao Paulo beginning October 1, 2014, or as soon thereafter as all necessary approvals are obtained. For this new service, US Airways will utilize wide

- body Airbus A330

- 200 aircraft, shown in Figure 1, above. Philadelphia

- Sao Paulo service is the logical and necessary next step in US Airways’ expansion of its Brazil services. Ph iladelphia is US Airways’ second largest hub and the second largest East Coast metropolitan area. It is US Airways’ primary transatlantic hub, from which US Airways operates more than 450 daily departures serving 117 U.S. and worldwide destinations. 12
P hiladelphia is the largest U.S. hub airport without service to Sao Paulo, as shown in Figure 4.

12 An Overview of US Airways’ Philadelphia hub is attached as Annex F.Supplement of US Airways, Inc. Docket DOT

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- Figure 4: Philadelphia is the Largest Hub without Sao Paulo Service

* Charlotte

- Sao Paulo service uses leased frequencies until October 25, 2014. Note: Chic ago includes both American and United departures. Source: 2012 Innovata departures. US Airways’ Philadelphia

- Sao Paulo service will provide compelling alternatives to the connecting gateways at Newark and Washington, D.C. The Department has recognized th e consumer benefits of allocating frequencies in a manner that enables both new entry and a new gateway: For the October 2009 frequencies, we tentatively find that the introduction of new U.S. air carrier competition through our selection of US Airways an d its Charlotte

- Rio de Janeiro proposal, along with the benefits of new gateway competition...would better serve the public interest...Supplement of US Airways, Inc. Docket DOT

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- . . . Selection of US Airways would not only introduce new U.S. air carrier competition, **but it would do so at an additi onal U.S. gateway and a**  **major hub, resulting in more service options for the traveling public.**  13 The Department’s findings in 2009 with respect to Charlotte

- Rio de Janeiro apply equally to US Airways’ proposed new Philadelphia

- Sao Paulo service. US Airway s’ Philadelphia

- Sao Paulo service will provide an attractive alternative to incumbent services operated today at Newark and Washington

- Dulles, a fact which the Department has already recognized. 14 As predicted by the Department, Philadelphia is exceptional ly well

- positioned to serve as US Airways’ second gateway to Sao Paulo. US Airways’ Philadelphia hub allows it to provide increased choice for Brazil passengers throughout the United States. Southbound, US Airways would be able to connect 65 U.S. cities to Sao Paulo

— 16 more than Newark and 6 more than Washington Dulles. Northbound, US Airways would be able to connect 61 U.S. cities to Sao Paulo

— 15 more than Newark and 7 more than Washington Dulles. 15 Figure 5 shows the numerous connections offered by US Airways via Philadelphia. 16

13 In the Matter of 2009 U.S.

- Brazil Combination Frequency Proceeding , Order 2009

- 3

- 14, pp.7

- 8 (emphasis added).
14 1996 U.S.

- Italy Service Proceeding , Order 96

- 2

- 35, February 21, 1996 , p.5
15 Source: Friday, 6/14/2013 Innovata Schedule as of 3/4/13.
16 Connecting schedules for Philadelphia are attached as Annexes G and H.Supplement of US Airways, Inc. Docket DOT

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- Figure 5: The Strength of US Airways’ Philadelphia Hub Will Enable US Airways to Compete for Travelers Across the U.S.

Connections limited to within 4 hours of GRU departure/arrival and less than 130% circuitous. Sourc e: US Airways’ Schedule for June 14, 2013. US Airways’ Philadelphia hub will be especially attractive in the Northeast, with significantly more flights to/from the major Northeastern U.S. population centers than
the incumbent carriers at Newark and Washi ngton

- Dulles. Finally, Philadelphia has a large and growing business community and population that will strongly support US Airways’ new Sao Paulo service. Philadelphia is the East Coast’s second largest city, with a population of nearly six million, and is the sixth largest U.S. metropolitan area. It hosts the headquarters of twelve Fortune 500 companies as well as numerous pharmaceutical and insurance companies. Business ties between Philadelphia and Brazil are strong andSupplement of US Airways, Inc. Docket DOT

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- increasing. Merck and Supera Farma recently established a Brazilian joint venture, and Braskem S.A. (based in Brazil and one of the world’s largest plastics producers) established its U.S. headquarters in Philadelphia. As many more Brazilian firms establish bases in region, Brazil i s a key element of Philadelphia’s economy which is increasingly dependent on international opportunities. 17 The immense public benefits flowing from the introduction of a new U.S. gateway to Brazil

— and to Sao Paulo in particular

— clearly support an award of seven frequencies to US Airways at Philadelphia.

IV. The Selection Criteria Established by the Department in other Proceedings Clearly Support Approval of US Airways’ Application The Department has rightly observed in other proceedings involving
allo cations of international authority that, except in the most extraordinary cases, the public interest is best served by awarding frequencies to carriers proposing new service from a new gateway

— not by awarding frequencies to carriers proposing duplicative s ervice to city

- pairs already served. Consumers and communities benefit from new services, at new gateways which enable new connections and increased passenger choice. The Department’s decision in the recent U.S.

- Colombia case is instructive. Only after finding a “severe” geographic imbalance in service from the U.S. to Colombia did the Department conclude it would be appropriate to award Continental frequencies for a second service between Houston and Bogota over other applicants proposing new gateways. The Department made quite clear that, barring

17 An Overview of the Philadelphia business links to Brazil is attached as Annex I.Supplement of US Airways, Inc. Docket DOT

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- exceptional circumstances, its strong preference in limited

- entry route cases is to allocate frequencies to those carriers proposing new service from new gateways: Under other circumstances, we might not be i nclined to award frequencies to a carrier proposing a double

- daily service in a limited entry market **in preference to other proposals for initial nonstop service in a new city pair market**  . However, given the record before us, reflecting the considerable ge ographical imbalance of U.S.

- Colombia service options, the paucity of service west of Atlanta, and the demand for increased service, an allocation to Continental for a second daily Houston

- Bogota service is appropriate. 18 There are no such exceptional circ umstances concerning Atlanta or New York that would justify a departure from the Department’s traditional and well

- conceived preference in limited

- entry route cases for new service from new gateways. The Department already found Charlotte

- Sao Paulo servic e to be consistent with the public interest when it approved the frequency lease. 19 To prevent this service to a new gateway from being lost, the Department should first ensure that an allocation is made to guarantee its uninterrupted continuation. In thi s regard, maintaining US Airways’ Charlotte

- Sao Paulo service with an allocation of seven frequencies should be the Department’s top priority. After meeting the public interest need of maintaining Charlotte

- Sao Paulo service, the Department should reaffi rm its preference for new services from new gateways. US Airways’ Philadelphia

- Sao Paulo proposal should be primary. Philadelphia is not only the largest U.S. metropolitan area without nonstop Sao Paulo service; it would benefit c onnecting passengers and communities by providing an appealing alternative to other gateways, such as Newark and Washington

- Dulles,

18 2007/2008 U.S.

- Colombia Combi nation Frequency Allocation Proceeding , Order 2008

- 3

- 4, Docket DOT

- OST

2007

- 0006, March 5, 2008, p.13 (emphasis added)
19 Notice of Action Taken , Docket DOT

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- 2009

- 0003, August 2, 2010Supplement of US Airways, Inc. Docket DOT

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- a key goal the Department has recognized before. 20 Selection of Philadelphia for an award of seven frequencies will therefore achieve the multiple benefits of n ew service from a new gateway that is the largest metropolitan area without nonstop Sao Paulo service, while significantly increasing consumer choice of gateways, all to the benefit of consumers and communities. As shown in Figure 7, Charlotte’s Brazil ser vice would provide a close
alternative for connecting passengers to Atlanta and Delta/SkyTeam’s Brazil service. Similarly, if US Airways’ merger with American closes, US Airways will become part of oneworld and a Philadelphia

- Sao Paulo service will provide an attractive
alternativ e for connecting passengers to United/Star Alliance service at Newark and Washington

- Dulles. In both Charlotte and Philadelphia, US Airways would provide passengers throughout the Northeast and Midatlantic connecting opportunities via a new gateway and in a new alliance. 21

20 See, e.g., 1996 U.S.

- Italy Service Proceeding , Order 96

- 2

- 35, Februa ry 21, 1996, p.5.
21 New York is the largest O&D city in the world and successfully supports long

- haul international air services on its own. As such, JFK is well

- suited to serve the local New York market, but infrastructure constraints make it less optima l as a connecting hub for traffic.Supplement of US Airways, Inc. Docket DOT

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- Figure 7: Charlotte and Philadelphia Add Competitive New Gateways for U.S. - Brazil Service

The Department should only consider a frequency allocation for purely duplicative services that would be operated by a single carrier (such as Delta’s
pr oposal to add same carrier second daily flights at Atlanta and New York) after accommodating needs for frequencies to preserve existing services and proposals to serve new gateways; and after U.S. cities that already have Sao Paulo nonstop service operated by another U.S. or foreign carrier receive an alternative service option. As the Department found in the U.S.

- Colombia case, only in the mostSupplement of US Airways, Inc. Docket DOT

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- exceptional circumstances should frequencies be awarded for duplicative services at the expense of services to n ew gateways. 22 Simply put, these “exceptional circumstances” do not exist in this case, and an award to Delta for duplicative service at New York and Atlanta will not enhance passenger choice and competition in the same way and will therefore be of less
b enefit to consumers and communities.

V. An Award to US Airways Will Best Serve Travelers and Shippers As stated in its initial application, 23 US Airways’ proposal to serve Sao Paulo provides a unique combination of benefits, including:



## • Daily year

- rou nd Sao Paulo service from both Charlotte and Philadelphia

— US Airways’ largest and second largest hubs;



## • Continued daily year

- round service from Charlotte

— one of the largest airline hubs in the world offering more than 640 daily departures to 136 destina tions in the United States, Canada, the Caribbean, Europe, Mexico and Latin America;



## • A robust new U.S. gateway to Brazil and Sao Paulo at Philadelphia, from which US Airways operates more than 450 daily departures to 117 destinations in the United Stat es and throughout the world;



## • Daily year

- round Sao Paulo connections at Philadelphia to 65 U.S. cities southbound, and 61 U.S. cities northbound;


## • Daily year

- round Sao Paulo connections at Charlotte to as many as 87 U.S. cities southbound, and 97 U.S . cities northbound;

22 2007/2008 U.S.

- Colombia Combination Frequency Allocation Proceeding , Order 2008

- 3

- 4, Docket DOT

- OST

2007

- 0006, March 5, 2008, p.13
23 Application of US Airways, Inc. for an Exemption and Frequency Allocation , Docket DO T

- OST

- 2013

- 0046, March 4, 2013, pp.2

- 3Supplement of US Airways, Inc. Docket DOT

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- 

## • Service provided with Airbus A330

- 200 aircraft, US Airways’ newest, with two classes of service, including Envoy class with fully lie

- flat seats; and

• An expansion of consumer choice from behind

- gateway cities throughout the Unit ed States. US Airways would achieve all these benefits with just 14 frequencies.

VI. Conclusion By approving US Airways’ application, the Department can provide travelers and communities compelling new service options between the U.S. and Brazil,
p rovided by a carrier with the network and hub scope necessary to best serve the needs of the traveling and shipping public. US Airways’ proposal offers (i) new and continuing daily service on two routes by a carrier with the fewest frequencies of any
incu mbent carrier; (ii) two attractive new U.S. gateways to Sao Paulo; (iii) service to Sao Paulo

— the most populous Brazilian city

— from Charlotte and Philadelphia, US Airways’ largest hubs; (iv) connections at Charlotte to approximately 90 U.S. cities,
and at Philadelphia to over 60 U.S. cities; (v) enhanced intergateway competition for connecting passengers , notably to Atlanta, Newark, and Washington

- Dulles; and (vi)
wide

- bodied A330

- 200 aircraft configured in two classes, including US Airways’ Envoy Suites. Only US Airways’ proposal offers this unique and compelling combination of benefits.Supplement of US Airways, Inc. Docket DOT

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- WHEREFORE , US Airways, Inc. respectfully requests that the Department of Transportation grant it an exemption and frequencies as more fully explained herein, and grant such other or furth er relief as the Department deems necessary and appropriate. Respectfully submitted,

_______________________________ Howard Kass Vice President, Legal and Government Affairs Benjamin T. Slocum Director, Legal and Government Affairs US Airways, I nc. 1401 H Street, NW, Suite 1075 Washington, DC 20005 (202) 326

- 5153 howard.kass@usairways.com benjamin.slocum@usairways.com
DATED: April 24, 2013RESPONSE TO EVIDENCE REQUEST

1. Provide a firm date for instituting service, and single

- plane and no n - stop connecting schedules proposed to be operated in the applicable base year with a break

- down for peak and off

- peak seasons. Identify all seasonal service, if any, and specify the period during which the seasonal services would be offered. Proposed s chedules should contain flight numbers, complete routings from origin to destination (including behind

- gateway and beyond

- gateway points and elapsed time for services), airports served, departure and arrival times, equipment types (including seat configura tion by class of service), days scheduled, and classes of service offered.
2. A brief description of the types of service the applicant currently provides, if any, between the United States and Brazil, including the types of service (state whether the ser vices are code

- share operations, seasonal or year

round, charter, and/or scheduled) and include frequency levels and type (restricted or unrestricted) by city

- pair market.
3. If the carrier seeks an award for both the October 2013 and October 2014 frequen cies and/or seeks authority to serve more than one city

- pair market, indicate the carrier’s order of preference for selection. Also provide, for each city

- pair market request, the minimum number of frequencies that the carrier would accept to institute ser vice.
4. Should the Department decide to make backup awards in this proceeding, provide a statement as to whether the carrier will accept backup authority with a condition that (a) permits it to implement the authority within the first year should the pri mary carrier withdraw from the market; and (b) should the authority not be activated, the authority expires at the end of one year.1. **Provide a firm date for instituting service, and single -**  **plane and non**   ** stop connecting schedules proposed to be operated** **in the applicable base year with a break**  **- down for peak and off**  **- peak seasons. Identify all**  **seasonal service, if any, and specify the period during which the seasonal services would be offered.**  **Proposed schedules should contain flight numbers, complete ro utings**  **from origin to destination (including behind -**  **gateway and beyond****** **gateway points and elapsed time for services), airports served, departure and arrival times, equipment types (including seat**  **configuration by class of service), days scheduled, and clas ses of**  **service offered.**
Proposed Start Date Charlotte

- Sao Paulo US Airways will commence Charlotte

- Sao Paulo daily service on June 8, 2013, utilizing seven frequencies leased currently from another carrier. The lease will expire on October 25, 2014. To maintain this service without interruption beyond the expiration of the lease and before full open skies is implemented on October 1, 2015, US Airways requires an allocation of seven unrestricted frequencies available October 1, 2014. Philadelphia

- Sao Pa ulo US Airways will commence Philadelphia

- Sao Paulo daily service on October 1, 2014, or later upon its receipt of all necessary approvals from the U.S. and
Brazilian authorities. US Airways will accept any reasonable condition requiring
that it institute service by a date certain. Type of Service US Airways will operate year

- round daily nonstop scheduled combination service between Charlotte

- Sao Paulo and Philadelphia

- Sao Paulo.Schedules Charlotte

- Sao Paulo US Airways’ Charlotte

- Sao Paulo flights will b e operated initially with B767

- 200 aircraft seating a total of 200 passengers in two classes, with 17 First/Envoy Class and 183 coach class seats (four crew rest seats not included). This aircraft’s cargo capacity ranges from 5,660 to 9,480 lbs. in the wi nter; and from 10,195 to 10,290 lbs. in the summer. Beginning October 27, 2013, US Airways will substitute a larger, newer A330

- 200 aircraft on this route. US Airways’ A330

- 200 aircraft seats a total of 253 passengers in two classes, with 19 First/Envoy Class and 234 coach class seats (five crew rest seats not included). Its cargo capacity ranges from 41,380 to 75,461 lbs. in the winter, and from 42,670 to 80,845lbs. in the summer. US Airways has on hand and operates B767

- 200 and A330

- 200 aircraft.
Both aircraft types have been used successfully for US Airways’ Charlotte

- Rio de Janeiro service, and they comply with all applicable FAA requirements. US Airways’ Charlotte

- Sao Paulo schedules are set forth below.

Schedules
Summer Schedule (effective June 8, 2013)

Flight Origin Departure Time Destination Arrival Time Equipment Block Hours Frequency Time Difference 802 CLT 1750 GRU 0430+1 B767

- 200 9:40 Daily +1 hr 803 GRU 0825 CLT 1725 B767

- 200 10:00 Daily

- 1 hr

US Airways is working with Brazilian authorities to improve its Summer Schedule, which is expected to occur in late October 2013.Winter Schedule (effective November 2013)
Flight Origin Departure Time Destination Arrival Time Equipment Block Hours Frequency Time Difference 802 CLT 2030 GRU 0900+1 A330

- 200 9:30 Daily +3 hrs 803 GRU 0045 CLT 0745 A330

- 200 10:00 Daily

- 3 hrs

Winter Schedule assumes US Airways is able to work with the Brazilian authorities to remove the GRU infrastruct ure constraints that currently prevent overnight service in both directions.

US Airways will obtain fuel through normal channels used currently to supply fuel to US Airways for its domestic and international operations. US Airways has confirmed with its current fuel suppliers that sufficient fuel will be available to US Airways for its Charlotte

- Sao Paulo service. US Airways’ fuel consumption statistics are set forth below. Projected Fuel Burn (Twelve months ending October 1, 2015) Charlotte

- Sao Paulo Daily Roundtrip : 10.5 million gals/year (B767

- 200) or 12.5 million gals/year (A330

- 200)Philadelphia

- Sao Paulo US Airways’ Philadelphia

- Sao Paulo flights will be operated with Airbus A330

- 200 aircraft seating a total of 253 passengers in two classes, with 19 First/Envoy Class and 234 coach class seats. This aircraft’s cargo capacity ranges from 41,380 to 68,560 lbs. in the winter, and 42,670 to 76, 142 lbs. in the summer. US Airways has on hand and operates Airbus A330

- 200 aircraft. These aircraft a re the largest and newest in US Airways’ fleet, and offer passengers the benefits of lie

- flat beds in Envoy Class, comfortable leather seats in coach class,
and on

- demand personal entertainment. US Airways’ A330

- 200 aircraft comply with all applicable FAA requirements. US Airways’ proposed Philadelphia

- Sao Paulo schedules are set forth
below. Proposed Schedules
Summer Schedule

Flight Origin Departure Time Destination Arrival Time Equipment Block Hours Frequency Time Difference 804 PHL 2100 GRU 0740+1 A330

- 200 9:40 Daily +1 hr 805 GRU 2235 PHL 0740+1 A330

- 200 10:05 Daily

- 1 hr

Winter Schedule
Flight Origin Departure Time Destination Arrival Time Equipment Block Hours Frequency Time Difference 804 PHL 2100 GRU 0945+1 A330

- 200 9:45 Daily +3 hrs 805 GRU 0020 PHL 0740 A330

- 200 10:20 Daily

- 3 hrsUS Airways will obtain fuel through normal channels used currently to supply fuel to US Airways for its domestic and international operations. U S Airways has confirmed with its current fuel suppliers that sufficient fuel will be available to US Airways for its Philadelphia

- Sao Paulo service. US Airways’ fuel consumption statistics are set forth below. Projected Fuel Burn (Twelve months ending O ctober 1, 2015) Philadelphia

- Sao Paulo Daily Roundtrip (A330

- 200) : 12.6 million gals/year2. **A brief description of the types of service the applicant currently provides, if any, between the United States and Brazil, including the**  **types of service (sta te whether the services are code**  **- share operations,**  **seasonal or year -**  **round, charter, and/or scheduled) and include frequency levels and type (restricted or unrestricted) by city**  **- pair**  **market.**
US Airways currently operates with its aircraft daily scheduled c ombination service between Charlotte and Rio de Janeiro. This service is operated year

- round using frequencies awarded to US Airways by the Department in April 2009 by Order 2009

- 4

- 6. These frequencies may be used to serve any Brazilian point other
than GRU until infrastructure

- related constraints at GRU are removed (bilateral Type 1D frequencies). US Airways currently leases from United seven unrestricted frequencies (bilateral Type 1A). These frequencies will be used by US Airways to commence
new dail y scheduled combination service between Charlotte and Sao Paulo (GRU) on June 8, 2013. This service will be operated year

- round. US Airways’ lease with United will expire October 25, 2014, requiring the return of the frequencies to
United. To continue i ts Charlotte

- Sao Paulo service in operation beyond October 25, 2014, US Airways requires an allocation of seven unrestricted frequencies available October 1, 2014. US Airways currently places its two

- letter designator code on flights operated by United in the Washington, D.C.

- Dulles

- Sao Paulo, Chicago

- Sao Paulo and Sao Paulo

- Rio de Janeiro markets. US Airways also has a codeshare agreement in place with TAM

- Linhas Aereas S.A. However, this codeshare arrangement pertains only to intra

- Brazilflights opera ted by TAM. US Airways does not codeshare on TAM’s Brazil

- U.S. or
Brazil

- third country flights, nor does TAM codeshare on any flights operated by US Airways. US Airways holds no ownership interest in TAM or any other Brazilian carrier and does not benefi t from any frequency or slot holdings of any Brazilian
carrier.3
**. If the carrier seeks an award for both the October 2013 and October**  **2014 frequencies and/or seeks authority to serve more than one city****** **pair market, indicate the carrier’s order of prefere nce for selection.**  **Also provide, for each city -**  **pair market request, the minimum number of frequencies that the carrier would accept to institute service.**  Charlotte

- Sao Paulo US Airways will commence Charlotte

- Sao Paulo daily nonstop roundtrip flights on June 8, 2013. To operate these flights, US Airways will utilize seven combination frequencies leased currently from another carrier. However, the lease term will expire on October 25, 2014, prior to the implementation of full open skies on October 1, 201 5. To maintain its Charlotte

- Sao Paulo service during this interim period, US Airways requires no fewer than seven unrestricted combination frequencies available October 1, 2014. Philadelphia

- Sao Paulo US Airways’ service proposal is premised upon the ope ration of daily nonstop roundtrip flights between Philadelphia and Sao Paulo, which is the minimum necessary to offer commercially attractive and competitive service. To offer this service, US Airways requires no fewer than seven unrestricted combination frequencies available October 1, 2014, permitting it to operate to Sao Paulo.

If US Airways were only awarded seven of the fourteen unrestricted frequencies available October 1, 2014, US Airways would use these frequencies to ensure the uninterrupted ope ration of its Charlotte

- Sao Paulo service.4
**. Should the Department decide to make backup awards in this**  **proceeding, provide a statement as to whether the carrier will accept backup authority with a condition that (a) permits it to implement the**  **authority within the first year should the primary carrier withdraw from**  **the market; and (b) should the authority not be activated, the authority expires at the end of one year.**  Should the Department award backup authority to US Airways, it agrees to accept condi tions (a) and (b).

### ANNE X A

### ANNEX B

### ANNEX C

### ANNEX D

### ANNEX E

### ANNEX F

### ANNEX G

### ANNEX H

### ANNEX ICERTIFICATE OF SERVI CE I hereby certify that on April 24, 2013, a copy of the Supplement of US Airways, Inc. was served via e

- mail on each of the following: urskr@state.gov (D epartment of State) paul.gretch@dot.gov (Department of Transportation) esta.rosenberg@dot.gov (Department of Transportation) brett.kruger@dot.gov (Department of Transportation) brian.hedberg@dot.gov (Department of Transportation) francis.heil@aa.com ( American) robert.wirick@aa.com (American) steve.morrissey@united.com (United) dan.weiss@united.com (United) richa.himani@united.com (United) karine.faden@united.com (United) sascha.vanderbellen@delta.com (Delta) mark.gale@phl.org (Philadelphia Inter national Airport) tjorr@charlotteairport.com (Charlotte Douglas International Airport)

____________________ ____ Benjamin T. Slocum