BEFORE THE DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C. ) 2007/2008 U.S.-Colombia Combination ) Docket Frequency Allocation Proceeding ) DOT-OST-2007-0006 ) ) December 13, 2007 ANSWER OF THE METRO ATLANTA CHAMBER OF COMMERCE AND HARTSFIELD JACKSON ATLANTA INTERNATIONAL AIRPORT IN SUPPORT OF APPLICATION OF DELTA AIR LINES, INC. The Metro Atlanta Chamber of Commerce and Hartsfield Jackson Atlanta International Airport ("Atlanta/Georgia Parties") strongly support the Application of Delta AIr Lines for seven weekly frequencies in order to operate four weekly nonstop services to Medellin, Colombia, and three weekly nonstop services to Cali, Colombia, from the world's busiest airline hub, Hartsfield-Jackson Atlanta International Airport. Delta's proposed services to Medellin and Cali would greatly enhance the level of competition in the U.S.-Colombia, U.S.-Medellin, and U.S.-Cali markets, and the overall market structure. Moreover, It would provide far greater public benefits in terms of connectivity, aircraft capacity, a new entrant carrier, and a new U.S. gateway for Medellin/Cali service than Spirit or American would provide with their respective Medellin services. The Department should award Delta 7 frequencies for
Atlanta-Medellin/Cali service before awarding such frequencies to any other carrier for Colombia service. I. ATLANTA DESERVES ITS FIRST-EVER NONSTOP SERVICE TO MEDELLIN AND CALI. Georgia is home for more than 9 million people, 5.1 million of whom reside In the Metro Atlanta Area. Atlanta is located In the heart of the demographically and economically strong Southeast region, and It ranks third In Fortune's list of U.S. cities with the most Fortune 500 headquarters; third in Site Selection Magazine's "Top Ten Metros"; first In AARP Magazine's list of "Safer Cities"; fourth among FDI Magazine's "Top Ten Major North American Cities of the Future"; and first among Kiplinger Magazine's "Best Cities for Married with Kids."l Many major companies are based in Georgia, including UPS, Home Depot, The Coca- Cola Company, and Delta Air Lines. Atlanta is fortunate to have the largest hub operation in the United States, ranking first in terms of departures, connecting passengers, and local passengers. 2 (See also DL-308, -309.) The Hartsfield-Jackson Atlanta International Airport ("HJAIA" or "Airport") is "by far the largest 2 2007). See Atlanta Ranklngs for 2007 and 2006, available at http://www.metroatlantachamber.com. How U.S. Hub A;rports Rank (Chart), Aviation Week & Space Technology, at 44 (January 8, 2
single-carrier airport operation In the world In terms of departures,,,3 and dwarfs the operations at other proposed gateways In this proceeding. Its capacity was recently expanded with the opening of its 5 th runway and an end-around taxiway.4 HJAIA serves more than thirty foreign and domestic passenger airlines, and Its total annual regional economic impact exceeds $23.5 blillon. s Notably, Delta and the Atlanta Airport have developed substantial International service from Atlanta, and the people and businesses of the Metro Atlanta area and the State of Georgia have responded, steadfastly supporting the international services offered at the Airport. In that regard, Atlanta currently offers nonstop passenger flights to 79 international destinations on five continents, Including nine destinations in South America. (DL-302.) Of particular relevance here, the Metro Atlanta Area and the State of Georgia have deep and extensive communities-of-interest with Colombia. For example, major Georgia corporations, like Bell South Corporation, Coca-Cola Company, Inter-Continental Hotels, and UPS have operations in Colombia. Georgia exported more than $126,000,000 worth of goods to Colombia in 2006, representing an 81 0 /0 Increj3se in :3 2007). Arrivals: New View on U.S. Hubs, Aviation Week & Space Technology, at 44 (January 8. 4 See Airport Celebrates 1 at Anniversary ofsr' Runway. HJAIA Press Release (May 21, 2007); End Around Taxiway Opens at Hartsfield-Jackson, HJAIA Press Release (April 23, 2007). 3
exports from 2002. 6 Imports from Colombia via the Savannah Customs District exceeded $78,000,000 in 2004, which marked an Increase of almost 204% from 2004. 7 Indeed, to facilitate trade and commerce between Georgia and Colombia even more, the State of Georgia led a trade mission to Colombia In October 2006. The Georgia-Colombia link Is further strengthened through a Consulate General of Colombia, which maintains a presence in Atlanta. Yet, as a result of the artificial limitations in the governing bilateral agreement, Georgia does not have any nonstop service to Medellin or Cali, despite having over 9 million residents, despite these substantial connections with Colombia, and despite the.. unsurpassed network connectivity offered by Delta at Atlanta. Indeed, Atlanta Is more than 650 miles from the nearest nonstop U.S.-Medellin and U.S.-Call services in Miami. First-ever nonstop service from Atlanta to Medellin and Cali would fill this critical gap, saving passengers to/from Atlanta several hours of roundtrip travel time over current routings and giving passengers in more than 120 behind-atlanta communities their first and/or additional one-stop service options to Medellin and Call. (DL-311, -316.) 5 6 See HJAlA Fact Sheet. available at http://www.atlanta-airport.com/. Benefits from the U.S.-Colombia Trade Promotion Agreement - Georgia, International Trade Administration, U.S. Department of Commerce (August 2007). 7 See Georgia-Colombia Connection, available at www.georgia.orq. 4
Delta's proposal to establish" Atlanta as a new gateway to Medellin and Cali service should receive a higher priority for 7 U.S.-Colombia frequencies than the proposal of other applicants to merely add service to existing well-served gateways. II. SERVICE FROM ATLANTA TO MEDELLIN AND CALI WILL SUBSTANTIALLY ENHANCE INTER-GATEWAY COMPETITION AND GREATLY BENEFIT THE OVERALL MARKET STRUCTURE. The vast majority of flights in the U.S.-Colombia market are to/from Miami and, among U.S. carriers, operated by American Airlines. The U.S.-Medellin market has nonstop service by two carriers (American, Avianca) from two gateways (Miami, New York). The U.S.-Call market enjoys nonstop service by three carriers (American, Continental, Avlanca) from two gateways (Miami, Houston). Injecting nonstop competition by an experienced international carrier (Delta) from a proven (and world's busiest) gateway (Atlanta) will best enhance the overall market structure, one of the Department's stated principal objectives in this proceeding. A. Atlanta and Delta Would Be a Powerful Competitive Combination for Service to Medellin and Cali: A New Gateway and A New Entrant Carrier. Atlanta has no nonstop service to Medellin or Cali, and Delta does not operate any service to either city. Accordingly, Atlanta would be a new entrant gateway for services in the U.S.-Medellin and U.S.-Cali markets, and Delta would be a new entrant carrier In both of those 5
markets. The combination of an internationally experienced new entrant carrier and a proven new gateway would provide unmatched benefits for the traveling public and the competitive structure of the U.S.-Colombia, U.S.-Medellin, and U.S.-Cali markets. Neither American nor Spirit, the only other carriers seeking frequencies to serve a city other than Bogota, provides the same powerful combination. American is the largest U.S. carrier in the U.S. Colombia market, with 60% of the frequencies, and it already operates daily Miami-Medellin service. Therefore, American Is neither a new entrant carrier, nor is Miami/Fort Lauderdale a new gateway for service to Medellin (American's proposal). Although Spirit would be a new entrant for service to Medellin, MiamI/Fort Lauderdale is already extremely well served to Medellin with a total of 22 weekly nonstop flights (including the American frequencies at issue here). Accordingly, Delta/Atlanta is the only true new entrant/new gateway combination for service to Medellin. As noted, Spirit and American propose service to Medellin from the Miami-Fort Lauderdale gateway, which already receives 22 total weekly frequencies to Medellin. Against that background, Miami/Fort Laud~rdale does not need more nonstop service to Medellin when major metropolitan areas like Atlanta do not have any nonstop service to Medellin or Cali. It simply would not enhance "the overall competitive 6
environment, Including [the] effects on the market strueture and the level of competition in the U.S.-Colombia market" to add yet more Miami/Fort lauderdale-medellin service as Spirit and American propose, when Delta's Medellin/Cali service would open a new (and powerful) gateway to those destinations and the first competitive U.S.-flag gateway to Medellin. DOT Order 2007-11-23, at 4. B. The Atlanta Gateway Would Extend the Benefits ofany Frequency Award to Dozens of Communities on Delta's Atlanta Network. Delta offers more than 1,000 daily departures from Atlanta to 243 destinations around the world. (DL-304, -307.) It is the aviation center of the Southeast. (DL-310.) This depth and breadth of services translates into unparalleled conneetivity, whereby nonstop service from Atlanta to Medellin and Cali would provide many U.S. communities behind/beyond Atlanta with first-time or additional one-stop service to these two cities in Colombia. The increased service options, greater convenience, and shorter travel times associated with the proposed Atlanta-Medellin and Atlanta-Cali flights would readily benefit passengers from these beyond/behind Atlanta communities, with: nonstop-to-nonstop service to Medellin and Cali for 123 and 121 U.S. communities, respectively; the first one-stop service to Medellin and Cali for 90 and 51 U.S. points, respeetlvely; and the first competitive one-stop service to Medellin and Cali for an additional 33 and 49 U.S. points, respectively. 7
These extensive connecting opportunities at Atlanta offer passengers throughout the eastern half of the United States with competitive service, schedule, and routing options, competing v~orously with the incumbent U.S. carriers, foreign carriers, and U.S. gateways serving Medellin and Cali. The Medellin proposals of Spirit and American offer no such level of connectivity. Rather, Spirit claims a mere 13 beyond-fll (one-stop) connections for Its single daily Medellin proposal, and American claims 34 beyond-miami connections. (NK-2, at p. 3; AA-118.) In relative terms, Delta's Medellin/Cali service offers connections to over 9 times more beyond-points than Spirit's, and 3 times more than American's. In fact, Delta's Atlanta-Medellin/Cali service would result In far more connections (with the resulting expansion of benefits) than any other carrier's service proposal In this proceeding, Including JetBlue's Orlando/Fort Lauderdale- Bogota, Continental's Houston-Bogota, and US Airways' Charlotte- Bogota. (See generally DL-R Exhibits.) c. An Award of Frequencies To DeltalAtlanta Would Inject a Substantial Amount of Additional Capacity into This Frequency-Constrained Market. The Department has also considered \'aircraft capacity" as a factor In past comparative selection proceedings. In this case, Delta would use its 160-seat B-737 aircraft on the Atlanta-Medellin/Cali route. As a result, It would provide far more capacity than Spirit's A-319 (with 144 \\\ 8
seats) and American's B-737 (with 148 seats), providing U.S. passengers with 8,760-11,680 more seats annually than Spirit or American would offer to Medellin. (See generally DL-R Exhibits.) Indeed, Delta's B-737 for Atlanta-Medellin/Cali service would add far more seats to the U.S. Colombia market than JetBlue's A-320 (for MCO/FLL-Bogota), US Airways' A-319 (for CLT-Bogota), and Continental's B-737 (for IAH Bogota), as well. (See generally DL-R Exhibits.) This Is yet another compelling fact demonstrating that Delta's Atlanta-Medellin/Cali service should be given priority for 7 U.S.-Colombia frequencies over any other carrier's U.S.-Colombia proposal. CONCLUSION Delta's proposed services to Medellin and Cali would greatly enhance the level of competition in the U.S.-Colombia, U.S.-Medellin, and U.S.-Cali markets, and the overall market structure. Moreover, it would provide far greater public benefits in terms of connectivity, aircraft capacity, a new entrant carrier, and a new U.S. gateway for Medellin/Call service than Spirit or American would provide with their respective Medellin services. The Department should award Delta 7 frequencies for Atlanta-Medellin/Call service before awarding such frequencies to any other carrier for Colombia service. 9