## BEFORE THE DEPARTMENT OF TRANSPORTATION

**WASHINGTON, D.C.**

2013/2014 U.S.

- Brazil Combination

Frequency Allocation Proceeding

Docket DOT

- OST

- 2013

- 0072

ANSWER	OF LOS	ANGELES	WORLD	AIRPORTS,	OPERATOR	OF	LOS	ANGELES

INTERNATIONAL	AIRPORT, IN	SUPPORT	OF AMERICAN	AIRLINES

Communications	with	respect	to	this	document	should	be	addressed	to:

Ms.	Gina	Marie	Lindsey

Executive	Director

Los	Angeles	World	Airp orts

One	World	Way

Los	Angeles,	CA	90045

glindsey@lawa.org

Ms.	Celine	Cordero

Sr.	Director,	External	Affairs

Los	Angeles	World	Airports

One	World	Way

Los	Angeles,	CA	90045

ccordero@lawa.org

Ms.	Patti	M acJennett

SVP Business	Affairs

LA Tourism &	Convention	Board

Los	Angeles,	CA	90071

pmacjennett@LATourism.org

May	14 ,	2013Los	Angeles	World	Airports (“ LAWA ”)	and	its	partner	the	LA	Tourism &	Convention

B oard,	support the	application	of American Airl ines	for	seven (7) weekly	frequencies

in November 2013	 to start daily	 nonstop	 service from Los	 Angeles	 International

Airport (“ LAX ”)	to	São	Paulo,	Brazil

, Guarulh os International	Airport ( “ GRU ” )

. LAWA

is	a	City	of	Los	Angeles	Department	that	owns	and	operates	a	system	of	three	airports

including	 LAX,	 LA/Ontario	 International	 Airport (“ONT”) and	 Van	 Nuys	 Airport

(“ VNY ”)

. The	LA	Tourism	&	Convention	Board’s	mission is	to	advance	the	prosperity

of	LA's	visitor	economy	and	the	livelihoods	that	depend	on	it.

LAWA and	 LA	 Tourism	 believes strongly	 that American	 Airlines	 proposal	 for	 daily

nonstop	service	between	LAX

- GRU	is	the	only	application	that	should	be	considered

am ong	the	candidate	cities for	the	following	reasons:

• Los	Angeles	is	the	only	market	with	sufficient	demand (O&D) to	Sao	Paulo and

is	the	largest	market population without	daily nonstop service

• Los	Angeles	is	the	largest	airport	without	daily nonstop servi ce

• Los	Angeles’	largest	South	American	O&D	market	is	Sao	Paulo

• Los	Angeles	is	the	forth	largest	US O&D market for	GRU,	ranked	behind	three

US cities with	frequent	daily nonstop service

• Los	Angeles	has	the	largest	community	of	interest	without	daily nonstop

service

• Los	Angeles is	the	larg est	city	among	the	top	US	destinations most	frequented

by	Brazilian	visitors without daily	nonstop	serviceLAX	 is	 the sixth	 (6 th )	 busiest	 airport	 in	 the	 world

. It	 is	 also	 the gateway	 airport

serving Greater	Los	Angeles,	 the	second	(2 nd ) most	populated metro	area in	 the	U

. S.

GRU rank s	as	the forty

- fifth	(45 th ) 1 busiest	airport	worldwide	and	has	the ninth	(9 th ) 2

largest population in	the	world.	Despite	these	rankings ,	the	Los	Angeles

– Sao	Paulo

market is	 extremely	 underserved and	 lacks daily nonstop service that	 can	 be

supported	by	existing	demand

.

Sao	 Paulo is	 LAX’ 29 th largest O&D market	 with	 128,094 annual passengers ( 12

months	ended March	2013 )

, up	almost	16 percent	from	the	previous	year. Sao	Paul o

is	also LAX’ larg est	Sou th	American	destination,	even	with out	daily	nonstop s ervice

,

demonstrating	a	high	level	of	demand	exists

. {Exhibit	1 }

The	last	 decade	experienced unprecedented air	 service	 challenges starting with	 the

tragic	events	of	9

- 11.	 I n	2000, LAX ’	peak	 traffic	 year, three	 (3 ) foreign	 flag carriers

,

including	 Varig,	 JAL	 and	 Korean 3 provided 18 weekly	 nonstop	 flights	 between	 LAX

and	GRU. After 9

- 11

, JAL and	Korean airlines discontinued service	and	by	2006	Varig

dissolved

. For	 18	months	 th e LAX

- GRU market	lacked	 nonstop	 service	 until Korean

Airlines re

- entered with	limited	frequencies	of three	( 3 ) weekly	operations.

Despite	 the	 service	 declines/disruptions,	 the	O&D	at	 LAX has	 continued	 to	increase

over	the	last	decade .	From	2002 through	YE MAR2013,	GRU

- LAX	traffic	has	grown	by

more	than six	( 6 ) percent annually

. When	compared	to	the	other	propose d	gateways

for new GRU frequencies,	LAX’	incremental	traffic	has increased second	only	to	JFK.	It

is	important	to	note	that	while	LAX	experienced de clining	service	levels over	the	last

1 ACI	2011	World	Airport	Rankings

2 2012	World	Atlas

3 From	1994

- 1999	four	carriers	served	LAX

- GRU:	Vasp,	Varig,	JAL,	and	Korean;	Vasp

left	in	1999	and	ceased	operations	after	a	long	bankruptcydecade ,	 JFK’s	 operations	 increased	 by	 2	 daily	 flights	 to	 its	 current level of	 five	 (5).

{Exhibit	2 }

A	comparison	of the proposed	gateways shows that	average	daily demand	in	the local

market	 is	 most	 underserved	 at	 LAX	 among	 the	 cities	 with existing service. The

number	of average daily	nonstop	seats in	Los	Angeles	does	not	adequately	serve	its

local	demand,	falling	short	by	over	46	percent. The	other	candidate	cities	with	flights

have	more	than	adequate	levels	of	service. {Exhibit	3}

Los	Angeles	has	the	forth	(4 th )	largest	Brazilian	ancestry	population	in	the	US	behind

three	extremely	well	served	cities	to	Brazil,	including	Miami,	New	York	and	Orlando 4

.

A dditionally,	 Los	 Angeles	 i s the	 fifth	 (5 th )	 most frequent ed	 US	 cities	 by	 Brazilian

visitors.	In	2012, approximately	114 ,000 visitors came	to	Los	Angeles from	Bra zil, up

almost	7	percent	 from	2011 5

. Clearly	 there	is	a	high	interest	by	Brazilian	visitors	 to

travel to	Los	Angeles	and	s trong	ties	b etween	LA	and	Brazil.	{Exhibit	4 }

Los	Angeles	is	also	a	top	market	for	Sao	Paulo,	ranking as	GRU’s forth (4 th )	largest	US

O&D	 market behind	 thr ee	 extremely	 well	 served	 destinations including	 Miami,

Orlando	and	New	York	City.	Los	Angeles’	high	r anking	is	impressive	given	the	lack	of

daily nonstop	seats.	{Exhibit 5}

F lights operated by	a	US	carrier	would	greatly	enhance	se rvice	levels	in the	local LA

market. American	 Airlines	 has a strong	 market	 presence at	 LAX with	 almost	 a

seventeen	(17 )	percent share	of	total	seat	capacity 6

. American serves	41	markets	and

has	 160 daily departures at	 LAX	and	its	 proposed GRU flight	will	 su pport	 the	large

local	 market	 as	 well	 as provide	 many	 online	 connections. American	 Airlines has

4 Daily	flights	to	GRU :	M IA =6 ,	MCO =2 and	JFK =5	in	winter,	4	in	summer

5 Dept

. of	Commerce,	O ffice	of	Travel	and	Tourism	Industries

6 Worldwide	flight	schedules,	May	2013enjoyed	a	long	history	of	servi ce	in	Brazil and has the	largest	market	share	between

the	US	and	Brazil	as	measured	by	seats	and	departures

. American	Airlines belie ves in

the	potential	of the	LAX

- GRU	market as	they	have propos ed that if	they	are awarded

only Chicago exemptions	in 201 4	 th ey	will	defer that service	until	 full	open	skies	in

late	2015	and instead serve	LAX. Daily	nonstop	flights	between	LAX

- GRU	will provide

significant	 consumer	 benefit	 to	 an	 extremely	 large market	 in	 the	 US	 that	 is	 clearly

underserved and will	increase competition and	provide more options	for	travel ers

.

Sao	Paulo and	the	whole	of Brazil	are	important	to	Los	Angeles.	The current	market

size	is	large	and	the O&D growth between	LAX

- GRU	has	been	strong despite	the daily

nonstop	access	challenges.	Brazil	is	a n	important and	growing visitor	market for Los

Angeles .	American	Airlines	will	 be	a	 strong	 competitor in	 the	market and	it	is	clear

that	Lo s	Angeles	can	support	more frequencies. In	addition,	new	daily	international

service	 will	 provide	 significant	 economi c	 benefit	 to	 Los	 Angeles.	 According	 to	 an

economic	 impact	 analysis	 performed	 for	 the	 City,	 e ach new international	 flight

operating	 at LAX provides $623	 million	 annually	 and	 supports	 3,120	 direct	 and

indirect	jobs. 7 For	all	these	reasons,	Los	Angeles	World Airports and	the	LA	Tourism

and	Convention	Board	support American	Airlines	proposal	 for daily nonstop	service

in	 the	 LAX

- GRU	 market .	We	 believe	 by	 large	 measure, the	 LA	 market	 provides	 the

best	use	for	these	exemptions.

Ms.	Gina	Marie	Lindsey

Executive Director

Los	Angeles	World	Airports

7 Economic	impact	of	international	service	at	LAX,	2007	LA	Economic	Dev.	Corp,	HR&A	studyCERTIFICATE	OF	SERVICE

I	hereby	certify	that	I	have	on	May	14

, 2013	served	the	foregoing	Reply	of Los	Angeles

World	Airports	and	LA	Tourism	and	Convention	Board in	Support	of American

Airlines on	the	following	email	addresses	by	electronic	mail:

Francis.Heil@aa.com

Robert.Wirick@aa.com

howard.kass@usairways.com

benjamin.slocum@usairways.com

dan.weiss@united.com

thomas.bolling@united.com

Sascha.Vanderbellen@d elta.com

paul.gretch@dot.gov

esta.rosenberg@dot.gov

brian.hedberg@dot.gov

brett.kruger@dot.gov

urskr@state.gov

joe.cambron@wcaa.us

louis.miller@atlanta

- airport.com

Steve.Luben@atlanta

- airport.com

info@airlineinfo.com

/s/ Sonjia	T.	Murray

Sonjia	T.	Murray

Air	Service	Development

Los	Angeles	World	Airports

One	World	Way

Los	Angeles,	CA	90045

- 5803

310

- 709

- 7277

424

- 646

- 5020

### Exhibit	1



## LAX	Top	International	O&D	Markets

O&D	Psgrs Y/Y YEMar13 Wkly

No. Destination YEMar13 YEMar2012 Chg PDEW N/S	Svc

1 London 703,076 705,519

- 0.3% 963 57

2 Guadalajara 618,547 677,155

- 8.7% 847 45

3 Seoul 550,925 710,350 -

22.4% 755 36

4 TYO

- Narita 504,174 472,675 6.7% 691 47

5 Mexico	City 490,916 505,090

- 2.8% 672 60

6 Vancouver 467,911 505,399

- 7.4% 641 70

7 Sydney 409,356 361,761 13.2% 561 36

8 Toronto 398,865 378,876 5.3% 546 50

9 Taipei 381,916 390,852

- 2.3% 523 29

10 Manila 376,375 375,061 0.4% 516 11

11 Paris 357,325 366,667

- 2.5% 489 15

12 Shanghai 338,091 304,637 11.0% 463 22

13 San	Jose	del	Cabo 329,464 298,533 10.4% 451 33

14 Hong	Kong 272,684 276,468

- 1.4% 374 20

15 Cancun 236,303 210,735 12.1% 324 13

16 Beijing 218,910 208,141 5.2% 300 14

17 Melbourne 203,387 200,046 1.7% 279 10

18 San	Salvador 189,559 182,868 3.7% 260 19

19 Saigon 183,912 180,398 1.9% 252

-

20 Guatemala 178,942 175,476 2.0% 245 14

21 Calgary 169,671 160,431 5.8% 232 29

22 Tel	Aviv 158,635 148,427 6.9% 217 4

23 Pappeet 157,068 149,786 4.9% 215 12

24 Brisbane 156,013 155,293 0.5% 214 10

25 Auckland 151,504 140,276 8.0% 208 14

26 Frankfurt 147,237 126,439 16.4% 202 9

27 Bangkok 143,108 156,023

- 8.3% 196

-

28 Puerto	Vallarta 141,259 137,982 2.4% 194 10

29 Sao	Paulo 128,094 110,765 15.6% 175 3

30 Lima 127,936 87,759 45.8% 175 13

Subtotal	Above 8,891,163 8,859,888 0.4% 12,180

Source:	MIDT	Psgr Bookings,	Sabre

### Exhibit	2

SUMMARY	OF	PASSENGER	ACTIVITY

2002

- YEMAR13	SELECT	US	GATEWAYS	FOR	GRU	SERVICE

O&D	Psgrs N/S	Wkly	Svc Absolute

Proposed	Mkts CY2002 YEMar13 AAG Aug

- 03 May

- 13 Increase

JFK

- New	York 129,555 407,281 12.1% 21 35 277,726

Los	Angeles 69,561 128,094 6.3% 7 3 58,533

CHI

- O'Hare 31,235 70,114 8.4% 7 7 38,879

Atlanta 20,422 28,200 3.3% 7 7 7,778

Detroit 15,467 24,588 4.7% 0 1 9,121

Philadelphia 8,052 8,482 0.5% 0 0 430

Charlotte 4,178 7,143 5.5% 0 0 2,965

Source:	MIDT	passenger	bookings,	Innovata	worldwide	schedules	5/13,	2003	latest	data	available



### Exhibit	3



## Summary	of	Avg	Daily	Seats	and	Psgr	Demand

Avg	N/S Daily	Seats	Filled

Market PDEW Daily	Seats w/	Local	Psgrs

JFK

- New	York 558 1,128 49%

Los	Angeles 175 120 146%

ORD

- Chicago 96 271 36%

Atlanta 39 246 16%

Detroit 34 215 16%

Philadelphia 12 n/a n/a

Charlotte 10 n/a n/a

Source:	MIDT	Psgr	Bookings	Sabre	and	Innovata	Worldwide	schedules,	5/13;

PDEW=Psgrs	Daily	Each	Way

### Exhibit	4



## Top	US Cities	for	Brazilian	Visitors

2011	Est.

No. City BR	Visitors

1 New	York	City 720,000

2 Orlando 403,000

3 Miami 336,000

4 Las	Vegas 173,000

5 Los	Angeles 107,000

Source: Office	of	Tourism	and	Travel	Int'l	and	DOC

Exhibit	5



### GRU's	Top	US	O&D	Markets

YEMAR13 Wkly	N/S

No. Market Total	O&D Flights

1 Miami 531,439 41

2 Orlando 407,545 14

3 NYC

- JFK/1 407,281 23

4 Los	Angeles 128,094 3

5 Newark 96,895 7

6 Las	Vegas 94,101 0

7 Chicago 70,114 7

8 San	Francisco 61,751 0

9 Washington 47,286 7

10 Boston 40,402 0

Source:	Innovata	worldwide	schedules,	May	2013

Note:	JFK	service peaks	at	36/wkly	flights	Oct

- Mar