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

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1 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of DELTA AIR LINES, INC. AEROLINEAS ARGENTINAS S.A. and AUSTRAL LINEAS AEREAS-CIELOS DEL SUR S.A. for statements of authorization pursuant to 14 C.F.R. Part 212 and related exemptions pursuant to 49 U.S.C (reciprocal codesharing) ) ) ) ) ) ) ) ) ) ) ) ) Docket DOT-OST JOINT APPLICATION OF DELTA AIR LINES, INC., AEROLINEAS ARGENTINAS S.A., AND AUSTRAL LINEAS AEREAS-CIELOS DEL SUR S.A. Communications with respect to this document should be sent to: Charles F. Donley II Squire, Sanders & Dempsey (US) LLP 1201 Pennsylvania Ave., N.W. Suite 500 Washington, D.C (202) cdonley@ssd.com For AEROLINEAS ARGENTINAS S.A. and AUSTRAL LINES AEREAS-CIELOS DEL SUR S.A. Alexander Van der Bellen, Managing Director, Government Affairs and Associate General Counsel Jeff Morgan Regional Director, Government Affairs DELTA AIR LINES, INC New York Avenue NW, Suite 200 Washington, DC (202) sascha.vanderbellen@delta.com August 15, 2011

2 BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. Joint Application of DELTA AIR LINES, INC. AEROLINEAS ARGENTINAS S.A. and AUSTRAL LINEAS AEREAS-CIELOS DEL SUR S.A. for statements of authorization pursuant to 14 C.F.R. Part 212 and related exemptions pursuant to 49 U.S.C (reciprocal codesharing) ) ) ) ) ) ) ) ) ) ) ) ) Docket DOT-OST JOINT APPLICATION OF DELTA AIR LINES, INC., AEROLINEAS ARGENTINAS S.A., AND AUSTRAL LINEAS AEREAS-CIELOS DEL SUR S.A. Delta Air Lines, Inc. ( Delta ), Aerolineas Argentinas S.A. ( Aerolineas ), and Austral Lineas Aereas-Cielos del Sur S.A. ( Austral ) (collectively, the "Joint Applicants") hereby apply for Statements of Authorization pursuant to 14 C.F.R. Part 212, and for codeshare-only exemptions pursuant to 49 U.S.C to engage in reciprocal codeshare services. By codesharing across their respective networks, the Joint Applicants will each be able to offer a broader network and enhanced service options to customers. The Joint Applicants propose to start reciprocal codeshare services on or about October 15, Specifically, the Joint Applicants request the following authorities: (a) an exemption under 49 U.S.C permitting Delta to provide service on a codeshare only basis on Aerolineas and Austral flights to the full extent allowed under the U.S.-Argentina Air Services Agreement, including specifically: (1) scheduled foreign air transportation of persons, property, and mail between any points in the United States and four (4) points in Argentina,

3 Joint Application of Delta, Aerolineas, and Austral Page 2 and beyond to any point or points in South America, 1 (2) scheduled foreign air transportation of persons, property, and mail between any points in the United States and five (5) additional points in Argentina on a codeshare basis only, and (3) scheduled foreign air transportation of persons, property, and mail between any points in the United States and five (5) additional points in Argentina on a codeshare basis only in conjunction with a designated airline of Argentina; (b) an exemption under 49 U.S.C permitting Aerolineas to provide service on a codeshare only basis on Delta and Delta Connection flights to the full extent allowed under the U.S.-Argentina Air Services Agreement, including specifically: (1) scheduled foreign air transportation of persons, property, and mail between points in Argentina and fourteen (14) points in the United States, and beyond to three (3) points in Canada, four (4) points in Asia (except Japan, China, and the Philippines), eight (8) points in Europe, four (4) points in Mexico, and points in the Caribbean, Central America, and South America, (2) scheduled foreign air transportation of persons, property, and mail between points in Argentina and five (5) additional points in the United States on a code-share basis only, and (3) scheduled foreign air transportation of persons, property, and mail between points in Argentina and five (5) additional points in the United States on a code-share basis only, in conjunction with a designated airline of the United States; (c) a blanket statement of authorization under 14 C.F.R. Part 212 permitting the display of Aerolineas AR* code on flights operated by Delta to the full extent allowed under the U.S.-Argentina Air Services Agreement, including 1 Delta already holds authority to serve all initial planned third country beyond points except Santa Cruz, Bolivia.

4 Joint Application of Delta, Aerolineas, and Austral Page 3 specifically (1) between points in the United States, (2) between points in the United States and points in Argentina, and (3) between points in the United States and points in third countries, pursuant to the U.S.-Argentina Air Services Agreement. Delta requests that this blanket statement of authorization extend to its Delta Connection 2 regional affiliates which operate service for Delta within North America; (d) a blanket statement of authorization under 14 C.F.R. Part 212 permitting the display of Delta s DL* code on flights operated by Aerolineas to the full extent allowed under the U.S.-Argentina Air Services Agreement, including specifically (1) between points in Argentina, (2) between points in Argentina and points in the United States, and (3) between points in Argentina and points in third countries, pursuant to the U.S.-Argentina Air Services Agreement; and (e) a blanket statement of authorization under 14 C.F.R. Part 212 permitting the display of Delta s DL* code on flights operated by Austral to the full extent allowed under the U.S.-Argentina Air Services Agreement, including specifically between points in Argentina. The requested authorities are identical to those previously granted to the American Airlines/Lan Argentina codeshare partnership. 3 These authorities will be used to transport only passengers traveling in foreign air transportation. In support of this Application, the Joint Applicants submit the following: 1. Delta, Aerolineas, and Austral have entered into codesharing agreements which will create substantial benefits for passengers traveling between the United States and 2 Atlantic Southeast Airlines, Inc., Chautauqua Airlines, Inc., Comair, Inc., Compass Airlines, Inc., Mesaba Aviation, Inc., Pinnacle Airlines, Inc., SkyWest Airlines, Inc., and Shuttle America Corporation. 3 See NOAT June 11, 2009 in Docket DOT-OST

5 Joint Application of Delta, Aerolineas, and Austral Page 4 Argentina and beyond. Redacted copies of the codeshare agreements are attached. 2. The Joint Applicants initial codeshare markets are set forth in Appendix A. The Joint Applicants propose that service to new points be subject to the Department s standard 30 day notice condition. However, consistent with the Department s administration of similar blanket statements and codeshare-only exemptions travel via alternative gateways and paths would not require additional notice; and, notice by Delta or any of the Delta Connection carriers would be deemed notice given for all (except in the case of Mexico where operator-specific notices will continue to be supplied for Delta/Delta Connection services). Similarly, notice by Aerolineas or Austral would be deemed notice given by both carriers. 3. The Joint Applicants request that the Statements of Authorization be issued for an indefinite period, so long as their codeshare agreements continue in effect, and will notify the Department if the agreements should cease to be effective. 4. The Joint Applicants request that their codeshare-only exemptions be issued for a period of at least two years. 5. Delta holds underlying route authority to serve between Atlanta and Buenos Aires (Route 798, Order , renewal application pending in Docket DOT-OST ) and between New York and Buenos Aires (NOAT June 17, 2008 in Docket DOT-OST , renewal application pending). By this application, Delta seeks additional exemption authority as required to display its DL* code on Aerolineas and Austral operated flights consistent with the U.S.-Argentina Air Services Agreement. Delta requests that the Department take official notice of the information on file with the Department which establishes Delta s fitness to provide the proposed service, pursuant to Rule 24 of the Department s Rules of Practice. 6. Aerolineas has long held permit authority to serve the United States (Order ) and currently provides nonstop service between Buenos Aires and Miami. By this application, Aerolineas seeks additional exemption authority as required to display its AR* code

6 Joint Application of Delta, Aerolineas, and Austral Page 5 on Delta and Delta Connection operated flights consistent with the U.S.-Argentina Air Services Agreement. Aerolineas requests that the Department take official notice of the information on file with the Department which establishes Aerolineas fitness to provide the proposed service, pursuant to Rule 24 of the Department s Rules of Practice. 7. Austral has separately applied for the necessary underlying economic authority to conduct the codeshare service described herein. Austral will not hold out service to/from the U.S. under its own code; Austral will only serve as operating carrier for Delta marketed flights between non-u.s. points. 8. The proposed codeshare services are fully consistent with the U.S.-Argentina Air Services Agreement ( ASA ), as amended. Article VI, Paragraph 7 of the ASA states: In operating or holding out the authorized services on the agreed routes, any designated airline of one Party may enter into cooperative marketing arrangements such as blocked space, code sharing or leasing arrangements, with an airline or airlines of either party and/or an airline or airlines of a third country; provided that all airlines in such arrangements (a) hold the appropriate authority and (b) meet the requirements normally applied to such arrangements. Under Section 1(B) of Annex I to the ASA, Delta is entitled to serve a total of 14 points in Argentina (4 points plus 10 codeshare-only points) plus unlimited beyond points in South America. 4 Aerolineas is entitled to serve a total of 24 U.S. points (14 points plus 10 codeshare-only points) and named third-country points. The initial codeshare markets listed in Exhibit A (covering DL* on Aerolineas/Austral to points in Argentina and beyond and AR* on Delta/Delta Connection to points in the U.S. and beyond) fall within these limits. 9. The codeshare services proposed by the Joint Applicants are consistent with the public interest and DOT policy: Code sharing and other cooperative marketing arrangements can provide a cost-efficient way for carriers to enter new markets, expand their systems and obtain additional flow traffic to support their other operations 4 To the extent necessary, Delta requests that the U.S. government designate to the government of Argentina any Argentina points listed in Appendix A that have not already been designated for service pursuant to the ASA.

7 Joint Application of Delta, Aerolineas, and Austral Page 6 by using existing facilities and scheduled operations. Because these cooperative arrangements can give the airline partners new or additional access to more markets, the partners will gain traffic, some stimulated by the new service, and some diverted from incumbents. In this way, cooperative arrangements can enhance the competitive positions of both partners in such a relationship. Increased international code sharing and other cooperative arrangements can benefit consumers by increasing international service options and enhancing competition between carriers, particularly for traffic to or from cities behind major gateways. By stimulating traffic, the increased competition and service options should expand the overall international market and increase overall opportunities for the aviation industry The Joint Applicants agree to abide by the consumer notification requirements of 14 C.F.R. Part 257, as well as the other usual conditions applicable to codeshare services operated to or sold in the United States. 11. Delta's engagement in these codeshare services will not affect its commitment of aircraft to the CRAF program. 12. Delta s compliance statements on Aerolineas and Austral s IOSA codeshare safety audits were presented to and approved by the Federal Aviation Administration. The FAA has rated Argentina a Category 1 country. WHEREFORE, the Joint Applicants respectfully request the Department to grant them the blanket statements of authorization and exemptions described above. 5 U.S. International Air Transportation Policy Statement, 60 Fed. Reg , (May 3, 1995).

8 Joint Application of Delta, Aerolineas, and Austral Page 7 Respectfully Submitted, /s/ Charles F. Donley II Charles F. Donley II For AEROLINEAS ARGENTINAS S.A. and AUSTRAL LINEAS AEREAS-CIELOS DEL SUR S.A. Alexander Van der Bellen For DELTA AIR LINES, INC

9 Delta on Aerolineas Argentinas/Austral* Trunk Routes Appendix A: Initial Codeshare Markets Miami, USA (MIA)-Buenos Aires, Argentina (EZE) To/From Buenos Aires, Argentina (EZE): San Carlos de Bariloche, Argentina (BRC) Cordoba, Argentina (COR) Calafate, Argentina (FTE) Iguazu, Argentina (IGR) Mendoza, Argentina (MDZ) Rio Grande, Argentina (RGA) Rosario, Argentina (ROS) Ushuaia, Argentina (USH) Santa Cruz, Bolivia (VVI) Rio de Janeiro, Brazil (RIO) Sao Paulo, Brazil (SAO) Santiago, Chile (SCL) Asuncion, Paraguay (ASU) Montevideo, Uruguay (MVD) To/From Buenos Aires, Argentina (AEP): Rio de Janeiro, Brazil (RIO) Sao Paulo, Brazil (SAO) Santiago, Chile (SCL) To/From Santiago, Chile (SCL): Mendoza, Argentina (MDZ) *Austral operates only domestic Argentina routes Aerolineas Argentinas on Delta/Delta Connection Trunk Routes Atlanta, USA (ATL)-Buenos Aires, Argentina (EZE) To/From Atlanta, USA (ATL): San Juan, PR USA (SJU) Orlando, USA (MCO) Miami, USA (MIA) Washington, DC USA (WAS) Philadelphia, USA (PHL) New York City, USA (NYC)

10 Boston, USA (BOS) Chicago, USA (CHI) New Orleans, USA (MSY) Dallas, USA (DAL) Houston, USA (HOU) Denver, USA (DEN) Los Angeles, USA (LAX) San Francisco, USA (SFO) Seattle, USA (SEA) Toronto, Canada (YYZ) Montreal, Canada (YUL) Vancouver, Canada (YVR) To/From Miami, USA (MIA): Orlando, USA (MCO) Washington, D.C., USA (WAS) New York City, USA (NYC) Los Angeles, USA (LAX) Note: The Joint Applicants request flexibility to serve any of the above-named codeshare points via any U.S.-Argentina gateway or intermediate routing flown by the carriers.

11 CERTIFICATE OF SERVICE A copy of the foregoing Joint Application has been served this 15th day of August, 2011 upon the following persons via carl.nelson@aa.com dan.weiss@coair.com steve.morrissey@united.com thomas.bolling@united.com howard.kass@usairways.com benjamin.slocum@usairways.com cefelts@fedex.com nssparks@fedex.com anita.mosner@hklaw.com (for UPS) jennifer.nowak@hklaw.com (for UPS) esta.rosenberg@dot.gov george.wellington@dot.gov brian.hedberg@dot.gov UrsKR@state.gov john.allen@faa.gov info@airlineinfo.com

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