Atlantic Southeast Airlines, Inc.

OST-2005-23174 - Exemption - Los Angeles-Guadalajara

November 28, 2005

Application for an Exemption

Atlantic Southeast Airlines, Inc. hereby applies for an exemption authorizing it to engage in scheduled foreign air transportation of persons, property and mail between Los Angeles, California and Guadalajara, Mexico, and to combine this exemption authority with all of ASA's existing certificate and exemption authority, consistent with applicable international agreements. ASA requests that its exemption authority remain in effect for at least two years, or until 90 days after the Department's final determination on an ASA application for Los Angeles-Guadalajara certificate authority, whichever occurs first.

ASA plans to introduce twice-daily nonstop service on the Los Angeles-Guadalajara route using 70-seat CRJ-700 aircraft beginning on or about March 1, 2006, ASA will operate this service under the DL* designator code of Delta Air Lines, Inc. as a "Delta Connection" carrier in place of existing Delta mainline service. Delta currently operates a single daily flight. Under the proposed arrangement with ASA, Delta will be able to offer the traveling public improved service options with a choice of two daily Delta Connection flights. ASA urges that requested exemption be granted as soon as possible to facilitate advance marketing of the proposed new Los Angeles-Guadalajara services.

Delta is authorized to provide service on the Los Angeles-Guadalajara route by its Certificate of Public Convenience and Necessity for Route 630, as issued by Order 92-5-20.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

December 20, 2005

Response of Frontier Airlines

Frontier believes that this would be an important market for it to enter. Since it is apparent that Delta is no longer interested in serving the market, the Department should institute a proceeding to allow another carrier to enter the market. To allow these opportunities to be fully considered, the Department should institute a proceeding to award this authority to the carrier that has the best service proposal.

Since Delta and Alaska hold designations for this route, no additional routes are available even under the current revision of the bilateral agreement. We further note that Aeromexico, one of Delta's other codeshare partners, also operates in this market. Therefore, the route is controlled by the Delta "family."

Counsel: Frontier and Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com

December 29, 2005

Motion for Leave to File and Reply of Delta Air Lines

In the event that Frontier's untimely "response" is accepted in the above-captioned proceeding, Delta requests leave to file this brief reply. On November 28, 2005, ASA filed an exemption application and requested a designation so that Delta and ASA could, through their cooperative service arrangement, double the frequency of service that Delta provides on the Los Angeles-Guadalajara route with mainline aircraft. For the reasons described in ASA's application, the proposed Delta Connection service is clearly in the public interest.

No carrier filed an answer to ASA's application by the December 13 due date required by the Department's Rules of Practice. See Rule 302.307. On December 20, 2005, a week late and without seeking leave to file, Frontier filed a "response" erroneously claiming that "Delta is no longer interested in serving the market." (Page 2) Frontier asks the Department to reject Delta's proposed arrangement with ASA, and to institute a carrier selection proceeding for the designation. Frontier's untimely response is without merit and should be summarily rejected.

Contrary to Frontier's assertions, Delta does not suggest that it may assign its route authority to ASA. Only the Department has the authority to transfer the designation -- which is precisely what is requested by ASA's application. However, the record is clear that the only circumstance under which Delta will surrender its Los Angeles-Guadalajara designation is if ASA is authorized to provide the proposed twice daily Delta Connection service.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com

January 4, 2006

Additional Response of Frontier Airlines

On December 29, 2005, Delta Airlines, Inc., once again asked the Department of Transportation to allow it to designate Atlantic Southeast Airlines, Inc. to serve Los Angeles, CA - Guadalajara Mexico. Delta's motion was filed in response to a filing made by Frontier Airlines, Inc. in which Frontier stated that it was not Delta's responsibility to decide which U.S. carrier would receive international authority to serve international routes including L.A.-Guadalajara.

In its December 29th response, Delta claims that it "has keen interest in continuing to serve, and indeed expand services on the Los Angeles-Guadalajara route." Delta then notes that it wants to have the authority to transfer the route to ASA.

On November 28, 2005, ASA applied for an exemption authorizing it to engage in scheduled foreign air transportation of persons, property and mail between Los Angeles, California and Guadalajara, Mexico. ASA said it will operate twice-daily nonstop service on the Los Angeles-Guadalajara route using 70-seat CRJ aircraft. ASA also said that it will operate this service under the DL* designator code of Delta Air Lines, Inc. as a "Delta Connection" carrier in place of existing Delta mainline service.

No matter how Delta or ASA attempts to explain this, Delta/ASA are asking the Department to approve a transfer of this route authority from one carrier to another carrier. If the Department approves this transaction, it would be opening the door for any carrier to complete the same type of international route transfer to any other carrier. There is no authority for a carrier to make this type of decision. Despite statements by Delta pretending an interest in continuing this route, it is clear that it no longer wants to serve Los Angeles-Guadalajara, although it states that if its wish to transfer the authority to ASA is not granted it would operate the flight.

Frontier again asks that the Department reject the Delta-ASA "transaction" and institute a proceeding to provide all parties time to properly apply for this authority.

Counsel: Wiley Rein, Edward Faberman, 202-719-7402, efaberman@wrf.com

January 31, 2006

Motion to Withdraw Application

Atlantic Southeast Airlines, Inc. hereby moves to withdraw its application filed on November 28, 2005 in the above-captioned docket. Delta Air Lines, Inc. has informed ASA that due to operational efficiency considerations, Delta will continue to serve the Los Angeles-Guadalajara route with a single daily mainline flight. Accordingly, there is no designation available to support ASA's request.

Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999, recohn@hhlaw.com