BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Application of AMERICAN AIRLINES, INC. for a frequency allocation (DFW-Rio de Janeiro) ) ) ) ) ) ) ) Docket DOT-OST-2010-0179

ANSWER OF DELTA AIR LINES, INC.

Communications with respect to this document should be addressed to:

Glen Hauenstein Executive Vice President – Network Planning and Revenue Management Robert J. Cortelyou Senior Vice President – Network Planning Andreas Renner Director – International Network Planning Chris Kennedy General Manager – International Network Analysis DELTA AIR LINES, INC. 1030 Delta Boulevard Atlanta, Georgia 30320 Andrea Fischer Newman Senior Vice President – Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005

Alexander Van der Bellen Managing Director – Government Affairs & Associate General Counsel Jeff Morgan Regional Director – Government Affairs DELTA AIR LINES, INC. 1212 New York Avenue, N.W. Washington, D.C. 20005 (202) 842-4184 sascha.vanderbellen@delta.com

July 23, 2010BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Application of AMERICAN AIRLINES, INC. for a frequency allocation (DFW-Rio de Janeiro) ) ) ) ) ) ) ) Docket DOT-OST-2010-0179

ANSWER OF DELTA AIR LINES, INC.

Delta Air Lines, Inc. (“Delta”) opposes American’s application for three additional unrestricted frequencies for DFW-Rio de Janeiro service. With 58 unrestricted Brazil frequencies at its disposal, American has more than twice the unrestricted Brazil frequencies of any other U.S. carrier, and American’s holdings comprise nearly half the entire U.S. flag total. American’s request comes on the heels of the recently concluded Brazil allocation proceeding where American was just awarded 11 additional unrestricted frequencies. The award of further unrestricted frequencies to American here would be contrary to the public interest because it would frustrate the introduction of competitive services by Delta and other U.S. carriers. American expressed its first and only interest in DFW-Rio de Janeiro only after Delta requested surplus frequencies from the unallocated pool that are necessary to fund Delta’s planned expansion on the Detroit-Sao Paulo route. American expressed no interest in DFW-Rio de Janeiro when the Department invited applications on March 24, 2010. And American expressed no interest in the remaining frequencies at the conclusion of the route case until after Delta filed its request. It is highly ironic that American would accuse Delta of filing “an anticompetitive application” which wouldAnswer of Delta Page 2 “empty[] the unallocated pool of unrestricted frequencies, and thereby prevent[] another carrier from providing new service . . .” 1 That is exactly what American is trying to do. Delta’s proposal, by contrast, will promot e new entry and competition against American, the dominant carrier in the U.S.-Brazil marketplace. Delta has been very consistent and very candid that it is seeking additional unrestricted frequencies in order to fund the expansion of service on the Detroit-Sao Paulo route. Delta will begin that service in October, but Delta’s limited frequency holdings only allow it to offer two weekly flights -- which is below the level necessary to attract business passengers who demand r egular and frequent service. American’s preemptive application for DFW-Rio de Janeiro is designed to deprive Delta of the limited entry rights that are necessary to establish a long-term, viable, competitive

service at Detroit. Today, Delta is filing a new application which seeks three additional unrestricted frequencies for Atlanta-Rio de Janeiro service. This will enable the redeployment of unrestricted frequencies to Detroit-Sao Paulo, so that the new Detroit flight can commence at a level of five weekly flights in October. Thus, Delta will fully and immediately use these rights. There is significant unmet demand for U.S.-Sao Paulo service, whereas Rio de Janeiro is saturated with new service. In the last two years US Airways commenced daily nonstop Charlotte-Rio de Janeiro serv ice and Continental began daily Houston-Rio de Janeiro service – immediately adjacent to American’s proposed DFW gateway. American itself was just awarded seven frequencies for JFK-Rio de Janeiro – a route ithas struggled to operate for more than a decade. American has yet to absorb its JFKRio de Janeiro award – and its motives for seeking still more Rio de Janeiro capacity

1 AA Application at 3; AA Answer OST-2010-0162 at 1.Answer of Delta Page 3 from Dallas are suspect. American’s tactics here are reminiscent of the 2007/2008 U.S.- Colombia case where American sought to occupy and maneuver frequencies in order to block competitive applications by new entrant s. The Department would not stand for it in Colombia, and, we believe, the Department should not permit American to engage in

similar tactics in Brazil. See Order 2008-5-27. Based on MIDT data for the year ended May, 2010, Detroit-Sao Paulo generated over 12,000 O&D passengers compared to just 5,000 local passengers traveling between DFW and Rio de Janeiro. DFW contributes little in terms of network benefits, since American already serves virtually all points claimed in its application from Miami (with more to be duplicated from New York this year). Delta does not have enough Sao Paulo frequencies to adequately fund its Detroit service and, in terms of its overall competitiv e footprint at Sao Paulo, is at a serious disadvantage to American. Today, Delta operates just 14 weekly Sao Paulo frequencies from Atlanta and JFK. American, on the other hand, operates an astonishing 37 weekly Sao Paulo frequencies from Miami, New York and DFW. Given American’s commanding share of U.S. flag frequencies to Brazil, Delta does not believe that the award of any further authority to American is warranted at this time. However, Delta filed a letter today informing the Department of Delta’s intent to return three northern/regional frequencies effective September 7, 2010. Delta has determined to cease service to Fortaleza and has no further plans for these frequencies. If the Department were inclined, it could grant these three northern/regional frequencies to American, enabling American to shift three of its 11 recently-awarded unrestricted frequencies from northern/regional routes to DFW-Rio de Janeiro.Answer of Delta Page 4 Respectfully submitted,

_________________________________ Alexander Van der Bellen Managing Director, Government Affairs & Associate General Counsel DELTA AIR LINES, INC.CERTIFICATE OF SERVICE A copy of the foregoing Answer has been served this 23rd day of July, 2010, upon the following persons via email:

carl.nelson@aa.com howard_kass@usairways.com benjamin.slocum@usairways.com hkamen@coair.com dan.weiss@coair.com rbkeiner@crowell.com jeffrey.manley@united.com steve.morrissey@united.com robert.land@jetblue.com jhill@dlalaw.com dkirstein@yklaw.com jyoung@yklaw.com paul.gretch@dot.gov esta.rosenberg@dot.gov brian.hedberg@dot.gov byerlyjr@state.gov john.allen@faa.gov Emily.Neuberger@wcaa.us Joe.Cambron@wcaa.us mgoldman@sgbdc.com info@airlineinfo.com